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Res. No. 066-04-11845RESOLUTION NO.66-04-1 1 84 5 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI,FLORIDA,AUTHORIZING THE CITY MANAGER TO OFFER TO CITY EMPLOYEES THE OPPORTUNITY TO PARTICIPATE IN THE INTERNATIONAL CITY MANAGER'S ASSOCIATION (ICMA)401A MONEY PURCHASE PLAN PROVIDING AN EFFECTIVE DATE. WHEREAS,theCityhasanoptional457Deferred Compensation Planwhichallows employeestocontributeuptotheamountallowedbytheEconomicGrowthandTaxRelief Reconciliation Act (EGTRRA);and WHEREAS,asan alternative,employees wouldhavethe opportunity to enroll intothe 401A MoneyPurchasePlanwhichallowsforhighercontributionlimitsbyemployees,atno additional costtotheCity;and WHEREAS,thisoptionwillprovideemployeeswithotheroptionstoinvesttheirmonies for the future: NOW.THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF SOUTH MIAMI,FLORIDA.THAT: Section l.TheCityManagerbe.andherebyis,authorizedtooffertoCity of SouthMiami employeesthe opportunity toenrollintheICMA 401A MoneyPurchasePlan. Section 2.This resolution shall take effect immediately upon approval. PASSEDANDADOPTEDthis 20th dayofApril.2004. ATTEST:APPROVED: CTTY CLERK /*MAYOR Cl (~ READ AND APPROVED AS TO FORM: CITY ATTORNEY COMMISSION VOTE:4-0 Mayor Russell:Yea Vice Mayor Palmer:Yea Commissioner Wiscombe:not present Commissioner Marie Birts-C ooper:Yea Commissioner Sherar:Yea TO: FROM: The Request MayorandCity Commission MarjaV.Davis,Gity Manager US DATE:April20,2004 Re:AgendaItem #_ OfferingOptionalRetirementPlan to City Employees A RESOLUTION OF THE MAYOR AND CITY COMMISSION OFTHE CITY OF SOUTH MIAMI,FLORIDA,AUTHORIZING THE CITY MANAGER TO OFFER TO CITY EMPLOYEES THE OPPORTUNITY TO PARTICIPATE IN THE INTERNATIONAL CITY MANAGER'S ASSOCIATION (ICMA)401A MONEY PURCHASE PLANPROVIDINGANEFFECTIVEDATE. Background and Analysis Currently,the City offers the following retirement plans for its employees: CitvofSouthMiamiGeneraland Police Pension Plan -Any employees starting after October 1,1995 are required to join the Pension Plan.There are,however,several employees that started prior to October 1,1995,who are not required to enroll in the pension.The City is responsible to contribute towards the pension an amount actuarially determined,on a yearly basis. 457DeferredCompensationPlan(ICMA)-Thisisan optional planofferedtoall employees wherein they contribute amounts on a biweekly basis (amounts are determined by the employee accordingtoIRSguidelines). There are several employees that are enrolled in both the Pension and the ICMA Deferred Compensation plan;however,the City only contributes to the City's Pension Plan,not both. Offering this 401A Money Purchase Plan to employees will allow them the flexibility of selecting between the 457 Deferred Compensation Plan and the 401A Money Purchase Plan giving them alternative retirement options.Currently,the 457 Deferred Compensation Plan allows employees to contribute up to $13,000 per year.The 401A Money Purchase Plan would allow employees to contribute up to $40,000 per year.Offering the choice would not incur any additional costs tothe City,since this is an optional retirement plan and requires no employer contributions. RECOMMENDATON Commissionapprovalis recommended. ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN &TRUST ADOPTION AGREEMENT Account Number 10- The Employer hereby estabHshes aMoney Purchase Plan and Trust to be known as (the "Plan")in the form of the ICMA Retirement Corporation Governmental Money Purchase Plan and Trust.The Plan shall be known as:[906] This Plan is an amendment and restatement of an existing defined contribution money purchase plan. •Yes Q No If yes,please specify the name of the defined contribution money purchase plan which this Plan hereby amends and restates:: I.Employer Name:•.P02* II.The Effective Date of the Plan shall be the first day of the Plan Year during which the Employer adopts the Plan,unless an alternate Effective Date is hereby specified: III.PlanYear will mean: Q The twelve (12)consecutive month period which coincides with the limita tion year.(See Section 5.04(i)ofthe Plan.)[803] Q The twelve (12)consecutive monthperiod commencing on and each anniversary thereafter.[803] IV.Normal Retirement Age (not to exceed age 65)shall be age .[288] V.ELIGIBILITY REQUIREMENTS: 1.The following group (s)ofEmployees are eligible to participate in the Plan: AllEmployees All Full-Time Employees SalariedEmployees Non-union Employees ManagementEmployees Public SafetyEmployees General Employees Other (specify below): MPP Adoption Agreement 4/30/2000 The group specified must correspond toa group ofthe same designation that is defined inthe statutes,ordinances,rules,regulations,personnel manuals orother material in effect inthe state or locality ofthe Employer. The Employer hereby waives or reduces the requirement ofa twelve (12)month Period of Service for participation.The required Periodof Service shall be. write N/Aif an Employee is eligible to participate upon employment).r344. If this waiver or reduction is elected,it shall apply to all Employees withinthe Covered Employment Classification. 3.A minimum age requirement is hereby specified for eligibility to participate.The minimumagerequirementis(nottoexceedage21).Write N/A ifnomini mum ageis declared. VI.CONTRIBUTION PROVISIONS 1.TheEmployershallcontributeas follows (chooseone): •Fixed Employer Contributions WithOrWithout Mandatory Participant Contributions. The Employer shall contributeonbehalfofeach Participant %of earningsor$forthePlan Year (subjecttothelimitations of Article Vofthe Plan).Each Participant is required to contribute %of earningsor$forthePlanYearasa condition of participation inthe Plan.(Write "0"ifno contribution is required.) If Participant Contributions are required under this option,a Participant shall not have therighttodiscontinueorvarytherate of suchcontribu tionsafterbecomingaPlanParticipant. The Employer hereby elects to"pickup"theMandatory/Required Participant Contribution. •Yes •No The pick-upprovision specifies thatthe contribution istreated,for federal income tax purposes,as thoughit is made bythe employer.The pick-up provision allows the employee to defer taxes onthe employee mandatory contribution.The actualresultisthesameas if the contribu tionwereareductioninthat employee's salary bytheamount of the contribution.Picked upcontributionsare NOT exempt from Social Security fpv [Note to Employer:A determination letter issued toan adopting Em ployer is nota ruling by the Internal Revenue Service that Participant contributionsthatarepickedupbytheEmployerarenot includable in the Participant's gross income for federal income tax purposes.The Employermayseeksucharuling. 2 MPP Adoption Agreement 4/30/2000 [341] [621] [Picked up contributions are excludable from the Participant's gross income under section414(h)(2)of the Internal Revenue Code of 1986 onlyiftheymeetthe requirements of Rev.Rul.81-35,1981-1 C.B.255. Those requirements are (1)that the Employer must specify thatthe contributions,although designated as employee contributions,are beinc* paid by the Employer in lieu of contributions by the employee;and (2) the employee must not have the option of receiving the contributed amounts directly instead of having them paid by the Employer to the plan.] •Fixed Employer Match of Participant Contributions. The Employer shall contribute on behalf of each Participant %of •EarningsforthePlanYear (subject tothelimitationsofArticleVofthe Plan)for each Plan Year that such Participant has contributed % of Earnings orS.Under this option,there is a single,fixed rate of Employer contributions,buta Participant may decline to make the required Participant contributionsinanyPlan Year,inwhich case no Employer contribution will be made onthe Participants behalf in that Plan Year. •Variable Employer Match Of Participant Contributions. The Employer shall contribute on behalf of each Participant an amount determined as follows (subject tothe limitations ofArticleV of the Plan): .%ofthe contributions made bythe Participant forthePlan Year (not including Participant contributions exceeding %of Earningsor$); PLUS Plan Year in excess of those included inthe above paragraph (butnot including Participant contributions exceeding inthe aggregate % of Earningsor$). .%ofthe contributions madebythe Participant forthe EmployerContributionsonbehalfofaParticipantforaPlan Year shall notexceed $or%of Earnings,whicheveris more or less. Each Participant may make a voluntary (unmatched),after-tax contribution,subject to the limitations of Section 4.05 and Article V of the Plan. •Yes •No MPP Adoption Agreement 4/30/2000 3.Employer contributionsand Participant contributions shall becontributedtotheTrust in accordance with the following payment schedule:(please circle one choice)[611] 0 Bi-Weekly 1 Weekly 2 Semi-Weekly 3 Bi-Monthly 4 Monthly 5 Semi-Monthly 6 Bi-Quarterly 7 Quarterly 8 Semi-Quarterly 9 Bi-Annually 10 Annually 11 Semi-Annually VII.EARNINGS Earnings,asdefined under Section 2.09 of thePlan,shall include: (a)Overtime •Yes •No (b)Bonuses•Yes •No VIII.LIMITATION ON ALLOCATIONS If the Employer maintains or ever maintained another qualified plan in which any Participant in this Plan is (or was)a participant or could possibly become a participant,the Employer hereby agrees to limit contributions to all such plans as provided herein,if necessary in order to avoid excess contributions (as described in Sections 5.02and5.03ofthe Plan). 1.If the Participant is covered under another qualified defined contribution plan main tained bythe Employer,the provisions of Section 5.02(a)through (f)ofthe Plan will applyunless another method has been indicated below. •Other Method.(Provide the method under which the plans will limit totalAnnualAdditionstothe Maximum Permissible Amount,andwill properly reduce any excess amounts;in'a manner that precludes Em ployerdiscretion.) Ifthe Participant is or has ever been a participant ina defined benefit plan maintained bythe Employer,andifthe limitation in Section 5.03 ofthe Plan would be exceeded, then the Participant's Projected Annual Benefit under the defined benefit plan shall be reduced in accordance with the terms thereof tothe extent necessary to satisfy such limitation.Ifsuchplandoesnotprovideforsuchreduction,or if thelimitationisstill exceeded after the reduction,annual additions shall be reduced to the extent necessary in the manner described in Sections 5.02 and 5.02.The methods of avoiding the limita tion described in this paragraph will not apply ifthe Employer indicates another method below. MPP Adoption Agreement 4/30/2000 •Other Method.(NotetoEmployer:Providebelowlanguagewhich will satisfy the1.0 limitation of section 415(e)oftheCode.Such language must preclude Employer discretion.See section 1.415-1 of theRegulationsfor guidance.) 3.Thelimitationyearisthefollowing 12-consecutive month period: DC'VESTING PROVISIONS The Employer hereby specifies the following vesting schedule,subject to (1)theminimum vesting requirements as notedand (2)theconcurrenceofthePlan Administrator. Years of Service Percent Completed •Vesting Zero % One % Two % Three % Four % Five % Six % Seven % Eight % Nine % Ten % X.Loansare permitted under thePlan,asprovidedinArticleXIII: •Yes •No [151] XI.TheEmployerhereby attests thatitisaunitof state orlocalgovernmentoranagencyor instrumentality of oneormoreunits of stateorlocal government. XII.The Plan Administrator herebyagreesto inform theEmployer of any amendments tothe PlanmadepursuanttoSection14.05 of thePlanor of thediscontinuanceorabandonment of the Plan. XIII.The Employer herebyappointstheICMARetirementCorporation as thePlan Administra torpursuanttothetermsandconditions of theICMA RETIREMENT CORPORA TION GOVERNMENTAL MONEY PURCHASE PLAN &TRUST. The Employer hereby agrees tothe provisions ofthePlanandTrust. MPP Adoption Agreement 4/30/2000 5 XIV.The Employerherebyacknowledges it'understands thatfailureto properly fill out this Adoption Agreementmayresultin disqualification of thePlan. XV.An adopting Employer may not rely on a determination letter issued by the National or District Office] of the Internal Revenue Serviceas evidence thatthePlanis qualified under Section 401 of theInter nal Revenue Code.In order to obtain reliance with respecttoplan qualification,the Employer must apply totheappropriatekeydistrict office foradeterminationletter. InWitness Whereof,the Employer herebycausesthis Agreement tobe executed onthis ,200 . EMPLOYER By: Tide: Attest:_ ACCEPTED:ICMA RETIREMENT CORPORATION Tide:Corporate Secretary Attest: day of MPPAdoptionAgreement4/30/2000 Whatisa401 Plan?-ICMA-RC/VantageLink Page 1 of 1 ^ - wWw.icinarc.arg i**ill=S=H*IIJ» ©Account Access \T\ ©EZLink f?l Prod/Svcs Home IRAs 401 Plans 457 Plans After-Tax Investing eDelivery VantageView Online Advice Life Insurance Services for Employers OatmO-^ Link -i r Home Products & Services liie Vantagepciint Funds MarketView Tr.e Public Sector Town Hall Education,Planning &Advice What is a 401 Plan? Explore 401 Plans •401 Plans Home Your 401 plan is a qualified defined contribution retirement plan. With a defined contribution plan,an employee's eventual retirement benefit is based upon the total contributions made by the employee and his or her employer,plus investment earnings on those contributions.It is called a 401 plan because it meets the requirements of Section 401(a)of the Internal Revenue Code. •Contributions to Your 401 Plan •Distributions from Your 401 Plan a Borrowing from Your 401 Plan ICMA-RC Send us your comments About Us Contact Us Careers at ICMA-RC Privacy Statement Vantagemail en Espafiol » |Saurwh|q| 3et QLOt=|^| [Home][About Us][Contact Us][Products &Services][Vantagepoint Funds] [MarketView][Public Sector Town Hall][Education,Planning &Advice][Washington Watch] Copyright ©1996-2004 ICMA Retirement Corporation.All Rights Reserved. We appreciate your comments and questions. http://vvAvw.icmarc.org/xp/vl/products_and_services/401 /4/20/04 401 Plan Contributions -ICMA-RC/VantaseLink Page 1 of2 Link w ':i ii "I r www.icmarc.org lorne Products & Services The Vantagepoint Funds MarketView The Public Sector Town Hall Education,Planning &Advice uti'i^miri 0 Account Access I' ©EZLink [_ Prod/Svcs Home IRAs 401 Plans 457 Plans After-Tax Investing eDelivery VantageView Online Advice Life Insurance Services for Employers °A,MOT*" 401 Plan Contributions Your 401 plan may allow contributions to be made by your employer, you,or both. Your Explore 401 Plans •401 Plans Home •Contributions to Your 401 Plan •Distributions from Your 401 Plan •Borrowing from Your 401 Plan contributions may be made on either a mandatory or a voluntary basis.The employer decides on the method of participant contribution,as well as whether participant contributions will be made on a pre-tax (picked-up contributions)or an after-tax basis. The most common method our clients use is direct employer contributions with mandatory participant contributions with the "pick-up provision,".These mandatory contributions are made on a pre-tax basis.Your plan may also allow you to make voluntary contributions on an after-tax basis.These voluntary after-tax contributions are limited to 25 percent of your compensation. Employer contributions to your 401 plan may be made under one of the following methods: 1.The employer may contribute a fixed dollar or percentage amount,either with or without a required employee contribution. 2.The employer may match a fixed percentage of employee contributions. 3.The employer may match the participant contribution within a given range (i.e.a variable employee match). Effective January 1,2002,the maximum amount that may be contributed each year to your 401 plan account is 100 percent of your compensation,not to exceed $40,000 (indexed)per year.This maximum includes both your contributions and your employer's contributions to your account. You are always fully vested in any of your own participant contributions.Your employer may establish a vesting schedule for employer http://www.icmarc.org/xp/vl/products_and_services/401/cont.xml ICMA-RC Send us your comments About Us Contact Us Careers at ICMA-RC Privacy Statement Vantagemail en Espahol a |Search |S |GetQLOts| 4/20/04 401 Plan Contributions -ICMA-RC/VantageLink r Page2of2 contributions to the plan.This vesting schedule determines when you acquire "ownership"of the employer contributions and related accrued investment earnings in your plan.When you separate from service,the vesting schedule will determine how much of your account is "owned"by you and may be paid to you. All investment earnings in your 401 plan account accrue on a tax-deferred basis.You will not pay income tax on pre-tax contributions or earnings until you take a distribution from your account. Assets in the plan are held ina tax-favored trust for the exclusive benefit of participants and their beneficiaries. Participants may contribute to a 457 plan as well as to a 401 plan. [Home][About Us][Contact Us][Products &Services][Vantagepoint Funds] [MarketView][Public Sector Town Hall][Education,Planning &Advice][Washington Watch] Copyright ©1996-2004 ICMA Retirement Corporation.All Rights Reserved. We appreciate your comments and questions. http://www.icmarc.org/xp/vl/products_and_services/401 /contxml 4/20/04 Perspective Newsletter Data On-line Inanimportantsteptobring investment informationtoyou sooner,ICMA-RC is pleased to announce itis making quarterly fund performance andinvest ment data available on-line through VantageLink. Now you can access the quarterly fund writeups through VantageLink (www.icmarc.org/funds).The Vantagepoint newsletter will still be mailed to you but The Perspective will no longer be included. ICMA-RC is taking this initiative as a result of participant requests and focus group surveys indicating readers want to receive quarter ly information sooner,have access to the data through the Internet,and view the information ina format that they prefer. Making the information available on-line will also eliminate print ing and mailing costs,thereby contributing to ICMA-RC's com mitment to reducing plan administration expenses. When you visit VantageLink you'll find the same investment infor mation you see in the printed version,including Vantagepoint Fund writeups,fund performance results for the prior quarter,and fund characteristics fortheMutualFund Series.Theinformation you need to make investment decisions will only be a mouse click away. In addition tothe general fund information available on VantageLink,you can view your plan specific performance and fund line up by logging onto Account Access.On Account Access you will be able to view the profiles for all the funds in your plan or view profiles for justthe funds thatyouare invested in.Profiles for all the funds in your plan will be available under the Investments Tab and profiles for just the funds you are invested in will be available under the My Account Tab.If you prefer,you can print the data.For participants without Internet access you can still receive data by calling Investor Services and requesting a report. Providing retirement plan participants convenient access to infor mation they need to better manage their investments is a long standingcommitmentofICMA-RC.Lookforadditionalinforma tion onour Web site in the coming months about this new VantageLink feature. (Sign-up,from page 1) Sign up for eDelivery Enrolling is easy.Just log onto Account Access,click onthe eDelivery link on the left side of the page,which takes you to the eDelivery registration page.Next,you click on the box to indicate you want to receive quarterly statements via eDelivery,andthen select whetheryouwouldliketo receive emailnotificationofwhen your statement is available for viewing. After you submit your request,a confirmation will appear showing you have successfully signed up for eDelivery.(Once you are enrolled you will geta notification inthe Message Centeron where to find your most recent statement.)That's all you need to do. Viewing your statement ICMA-RC's eDelivery service will notify you via email shortly after the quarter ends that your statement is ready for viewing.Log in toyouraccount,clickontheReportsTab,thenclickonthe eDocs optionandyou will seeyourquarterlystatement. In addition,confirmation of certain transactions isalso available through eDelivery.Look for "Confirmation"as an eDelivery option onthe eDelivery registration page. Take Advantage of Higher Contribution Levels Increasing contributions to your 457 deferred compensation or 401 defined contribution plan has always been a good idea.But this year,thereisevenabetterreason:theEconomicGrowthand TaxReconciliationAct of 2001(EGTRRA)raisedthemaximum contribution levels for both types of plans. This year,457 plan participants can defer a maximum of 100 per centofyour "gross compensation"*oran annual dollar limit, whichever is less.For2003,thecontributionlimitis$12,000.For 401 owners,the maximum amount that may be contributed each year toyouraccountis100percentofyour compensation,notto exceed $40,000 (indexed)per year.This maximum includes both your contribution and your employers contributions to your account. To take advantage of these higher contribution levels,ask your employer to increase the percentage of your payroll contributions going to your retirement plan.Raising the amount of your yearly contributions by just a small amount may allow you to achieve your retirement goals.For example,say you are 30 years oldand currently contribute $100 biweekly into your account.At age 60, if you earned 8%on your investment,you would have $306,620. But if you contributed just $25 more biweekly in 2003,you would have $383,275.** Saving additional money buildingyourretirement contributions today. Your gross co/npensation must firstbereduced by any mandatory pre-tax ("picked-up")employee 401 plan contributions. '*Not an actual account -for illustration pur poses only.Past per formance isnotindica tive offuture returns. this year may go a long way toward nest egg.Startnowby increasing your Helpful Plan Contact Information VantageD'ne /rfe Your 24-hour service line^"^ 1-800-669-7400 VantageZ.//7/r Manage your retirement investing andplanning on-line _1 www.icmarc.org