CC - Item III.C - Authorizing The Establishment Of The Pars Supplemental Retirement Planstaf epor
TO: HONORABLE MAYOR
AND MEMBERS
ROSEMEAD CITY COUNCIL
FROM: RANK G. TRIPEPI, CITY MANAGER
DATE: JULY 6, 2000
RE: RESOLUTION NO. 00 -40 AUTHORIZING THE ESTABLISHMENT OF THE
PARS SUPPLEMENTAL RETIREMENT PLAN TO BE ADMINISTERED BY
PHASE II SYSTEMS, PARS TRUST ADMINISTRATOR
At the June 6, 2000 Budget Study Session, the City Council adopted Resolution No. 00 -28
approving a supplemental retirement benefit and authorizing staff to contract for the benefit and
administration. Attached for your consideration is Resolution No. 00 -40 authorizing a
supplemental longevity retirement plan for those employees and Councilmembers who are
current members of the PERS Retirement System. It would upgrade the current PERS System of
2% at 55 to 3% at 55. In order for an employee to qualify for this benefit, they would be
required to be an employee of the City at the time of retirement and have a minimum of 20 years
of service with the City of Rosemead. Councilmembers would be required to have served a
minimum of 12 years on the Council in order to qualify.
The plan includes a tier II which would be available to those employees who have a minimum of
10 years of service and are at least 60 years of age at the time of retirement. Their retirement
would be based on a 2.5% at 60 formula.
In addition to the resolution I have attached the following documents:
ATTACHMENT I - An Executive Summary and Service and Fee
Summary A summary of the Plan and the projected cost for the
first year.
ATTACHMENT II - Trust Administration Agreement This
document retains the services of Phase II Systems as Trust
Administrator to the PARS Trust. They will provide
administrative and consulting services. , .,
JUL 112000
1—
PARS Supplemental Retirement Plan
July 6, 2000
Pagetwo
ATTACHMENT III - Trust Document The legal document
required by the Internal Revenue Service,
ATTACHMENT IV - Retirement Plan The actual plan document
which details the benefits and the eligibility requirements.
The City Attorney and the auditors have reviewed the documents and have had all their questions
answered.
RECOMMENDATION
It is recommended that the Rosemead City Council adopt Resolution No. 00 -40 which adopts by
reference the Trust Administrative Agreement, the Trust Document, and the Retirement Plan,
and appropriate the necessary funds from unappropriated reserves.
Ccstaff.pm
Resolution No. 00 -40
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD. CALIFORNIA
AUTHORIZING THE ESTABLISHMENT OF THE PARS SUPPLEMENTAL RETIREMENT
PLAN TO BE ADMINISTERED BY PHASE II SYSTEMS, PARS TRUST ADMINISTRATOR.
WHEREAS, on June 6, 2000 the City Council adopted Resolution 00 -28 finding that it is in the best
interest of the City to provide a competitive retirement plan to attract and retain City employees; and
WHEREAS, Resolution 00 -28 declared the City's intention to become a member of PARS and adopt
the PARS Supplementart Retirement Plan for Rosemead City employees and officials currently in the
PERS system; and
WHEREAS, Resolution 00 -28 instructed the staff to negotiate and bring to the City Council for final
approval the legal documents to implement the PARS plan, with said plan effective July 1, 2000; and
WHEREAS, the CITY is eligible to be a member of the Public Agency Retirement System (PARS),
and provide to its' employees a governmental plan, qualifying under relevant sections of the
Internal Revenue Code and the California Government Code.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ROSEMEAD, CALIFORNIA, DOES
RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
1. The COUNCIL does hereby adopt the PARS Trust, including the PARS Supplementary
Retirement Plan (SRP) for City employees effective July 1, 2000.
2. The CITY's PARS Administrator is hereby authorized to execute the PARS legal and
administrative service documents on behalf of the CITY to implement a PARS
supplemental plan to CaIPERS. In addition, if the CITY's PARS Administrator finds that the
PARS supplemental plan benefit must be limited under Section 415 of Internal Revenue
Code, then the Plan Administrator will implement a replacement benefit program at no
additional cost to the City.
The COUNCIL hereby appoints the City Manager, or the designee of the City Manager, as
CITY Administrator for PARS, and further authorizes him /her to implement the Plans and to
take whatever additional actions are necessary to maintain the participation of the CITY in
PARS and to maintain PARS compliance with relevant regulations issued or as may be
issued by the Federal or State government or agencies.
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
The City Clerk of the City of Rosemead, CALIFORNIA, hereby certifies that the above and
foregoing resolution was duly and regularly adopted by the said CITY at a regular meeting thereof
held on the 11" day of July, 2000 and passed by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF I have hereunto set my hand seal this
City Clerk
ATTACHMENT I
City of Rosemead
PADS Suppleme Retirement Plan: Proposed Plan Design
Plan Effective Date:
July 1 2000
Eligibility: .
Age 55 with 20 years of City Service for Full -Time
Miscellaneous Employees for a 3.0% at 55 plan
.
Age 60 with 10 years of City Service for Full -Time
Miscellaneous Employees for a 2.5% at 60 plan
.
Age 55 with 12 years of City Service for City
56 - - - - 3.00% 3.00%
Council members for a 3.0% at 55 plan
.
Retirement from CalPERS under a regular service
58 - - - - 3.00% 3.00%
retirement basis while under City employment
Service Credit Recognition:
Based on continuous City of Rosemead miscellaneous
60+ 2.50% 3.00% 3.00%
service only (with the exception of the City Council)
Final Pay
Single Highest Year
Vesting:
0% Vested until meeting eligibility requirements
Benefit Level:
Age factor based on Age and Service Requirements
(city council)
Age Factor Age Factor Age Factor
Age with 10 years with 20 years with 12 years
of S of Service of Service
55 - - - - 3.00% 3.00%
56 - - - - 3.00% 3.00%
57 - - - - 3.00% 3.00%
58 - - - - 3.00% 3.00%
59 - - - - 3.00% 3.00%
60+ 2.50% 3.00% 3.00%
COLA
2.00% Compounding COLA effective on the
anniversary date of retirement
Benefit Distribution Optio ^s .
Lifetime Benefit
.
100% Joint-an U - '- Survivor
Employer Contributions:
Based on Funding Strategy selected
Employee Contributions:
None
Benefit Limitations:
415 Limits for Defined Benefit governmental
employees (Excess Benefit Plan may be required)
City of Rosemead
Supplementary Retirement Plan
Service and Fee Summary
• Prepare Analysis of Alternative Plan Designs and Costs
• Draft and Finalize Legal Documents
• IRS Letter of Determination Coordination
• Participant Orientations
• Investment Strategy Coordination
With Trustee
• Total Fee $12,000 (one -time)
Administration (fee paid from plan assets):
• Monitor Receipt of Contributions
• Perform Regular Accounting of Plan assets
• Answer Participant Inquiries
• Process Enrollments and Benefit Illustrations
• Coordinate Distribution Payments with Trustee
• Coordinate Tax Filings with Trustee
• Monthly Summary Report of Plan Activity to Agency
• Preparing Annual Report to Participants and Agency
• Coordinate and Select Actuary to Perform Report to Comply with
Governmental Accounting Standards Board Requirements
• Prepare and Submit Annual State Controllers Report
• Monthly Fees are $1,500, subject to annual 3% COLA, and annual
asset fee equal to 0.50% of first $1 million in plan assets, 0.30
of plan assets between $1 million and $2 million, and 0.10% of
plan assets above $2 million
• Fees equal to actuarial expenses with licensed actuary beginning
with conclusion of second plan year to perform periodic actuarial
valuations of Plan.
• Total 1•` Year Fee is $18,790 ($1,500 /mo. X 12 + 158,000 x
0.50 %)
• • • • 1 .. • • • � 1 • • • 1 1 • 1 1 1 1
1
• Plan Contributions: $ 158,000
• One -Time Set -Up: 12,000
• Monthly Administration: 18,790
• Total Plan Costs 1" Year 188,790
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ATTACHMENT II
AGREEMENT FOR ADMINISTRATIVE SERVICES
This agreement ( "Agreement ") is made this 6th day of June, 2000, between Phase II Systems
( "Phase II Systems "), a corporation organized and existing under the laws of the State of
California and the City of Rosemead ( " Agency ").
WHEREAS, Agency is desirous of retaining Phase II Systems, as Trust Administrator to the
PARS Trust, to provide administrative and consulting services;
NOW THEREFORE, the parties agree:
1. Services. Phase II Systems will provide the services pertaining to the Plan ( "Services ")
as described in the exhibit attached hereto as "Exhibit 1 A" in a timely manner, subject to
the further provisions of this Agreement.
2. Fees for Services. Phase II Systems will be compensated for performance of Services as
described in the exhibit attached hereto as "Exhibit 1 B ".
3. Payment Terms. Payment for Services will be remitted directly from Plan assets unless
otherwise stated in Exhibit 1 B. In the event that the Agency chooses to make payment
directly to Phase II Systems, it shall be the responsibility of the Agency to remit payment
directly to Phase II Systems based upon an invoice prepared by Phase II Systems and
delivered to the Agency. If payment is not received by Phase II Systems within thirty
(30) days of the invoice delivery date, the balance due shall bear interest at the rate of
1.5% per month. If payment is not received from the Agency within ninety (90) days of
the invoice delivery date, payment plus accrued interest will be remitted directly from
Plan assets, unless Phase II Systems has previously received written communication
disputing the subject invoice that is signed by a duly authorized representative of the
Agency.
4. Fees for Services Beyond Scope. Fees for services beyond those specified in this
Agreement will be billed to the Agency at the rates indicated in Phase II Systems'
standard fee schedule in effect at the time the services are provided, subject to the terms
established in Section 3 of this Agreement. Before any such services are performed,
Phase II Systems will provide the Agency with written notice of the subject services,
terms, and an estimate of the associated fees.
5. Information Furnished to Phase II Systems. Phase II Systems will provide the Services
under this Agreement contingent upon the Agency providing Phase II Systems
information ( "Data "), as specified in the exhibit attached hereto as "Exhibit 1C ". It shall
be the responsibility of the Agency to certify the accuracy, content and completeness of
the Data so that Phase II Systems may rely on such information without further audit. It
shall further be the responsibility of the Agency to deliver the Data to Phase II Systems in
such a manner that allows for a reasonable amount of time for the Services to be
performed. Unless specified in Exhibit IA, Phase II Systems shall be under no duty to
question Data received from the Agency, or compute contributions made to the Plan, or
determine or inquire whether contributions are adequate to meet and discharge liabilities
under the Plan, or determine or inquire whether contributions made to the Plan are in
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compliance with the Plan or applicable law. Furthermore, Phase II Systems shall not be
liable for non - performance of Services if such non - performance is directly caused by
erroneous and/or late delivery of Data from the Agency. In the event that the Agency
fails to provide Data in a complete, accurate and timely manner, and pursuant to the
specifications in Exhibit 1C, Phase II Systems reserves the right, notwithstanding the
further provisions of this Agreement, to terminate this Agreement upon written notice of
ninety (90) days.
6. In the Event of Suspension of Contributions. In the event contributions are suspended,
either temporarily or permanently, prior to the complete discharge of Phase II Systems'
obligations under this Agreement, Phase II Systems reserves the right to bill the Agency
for Services under this Agreement at the rates indicated in Phase II Systems' standard fee
schedule in effect at the time the services are provided, subject to the terms established in
Section 3 of this Agreement. Before any such services are performed, Phase II Systems
will provide the Agency with written notice of the subject services, terms, and an
estimate of the associated fees.
7. Records. Throughout the duration of this Agreement, and for a period of five (5) years
after termination of this Agreement, Phase II Systems shall provide duly authorized
representatives of Agency access to all records and material relating to calculation of
Phase II Systems' fees under this Agreement. Such access shall include the right to
inspect, audit and reproduce such records and material and to verify reports furnished in
compliance with the provisions of this Agreement. All information so obtained shall be
accorded confidential treatment as provided under applicable law.
8. Confidentiality. Phase II Systems shall not disclose any information relating to the Plan
except to duly authorized officials of Agency, subject to applicable law, and to parties
retained by Phase II Systems to perform specific services within this Agreement. Agency
shall not disclose any information relating to the Plan to individuals not employed by the
Agency without the prior written consent of Phase II Systems, except as such disclosures
may be required by applicable law.
9. Independent Contractor. Phase II Systems is and at all times hereunder shall be an
Independent Contractor. As such, neither the Agency nor any of its officers, employees
or agents shall have the power to control the conduct of Phase II Systems, its officers,
employees or agents, except as specifically set forth and provided for herein. Phase II
Systems shall pay all wages, salaries and other amounts due its employees in connection
with this Agreement and shall be responsible for all reports and obligations respecting
them, such as social security, income tax withholding, unemployment compensation,
workers' compensation and similar matters.
10. Indemnification. Phase II Systems and Agency agree to indemnify each other and to
hold the other harmless, including their respective officers, directors, employees, agents
and attorneys, from any claim, loss, demand, liability, or expense, including reasonable
attorneys' fees and costs, incurred by the other as a consequence of Phase II Systems' or
Agency's, as the case may be, negligent acts, intentional acts or errors or omissions with
respect to the performance of their respective duties hereunder.
Page 2
11. Omissions. In the event that either party hereto discovers any material omission in the
provisions of this Agreement which such party believes is essential to the successful
performance of this Agreement, the party may so inform the other party in writing, and
the parties hereto shall thereafter promptly negotiate in good faith with respect to such
matters for the purpose of making such reasonable adjustments as may be necessary to
perform the objectives of this Agreement.
12. Compliance with Applicable Law. The Agency shall observe and comply with federal,
State and local laws in effect when this Agreement is executed, or which may come into
effect during the term of this Agreement, regarding the administration of the Plan. Phase
II Systems shall observe and comply with federal, State and local laws in effect when this
Agreement is executed, or which may come into effect during the term of this
Agreement, regarding Plan administrative services provided under this Agreement.
13. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California. In the event any party institutes legal
proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in any
state court of competent jurisdiction sitting in Orange County, California.
14. Force Majuere. When satisfactory evidence of a cause beyond a party's control is
presented to the other party, and nonperformance is unforeseeable, beyond the control
and not due to the fault of the party not performing, a parry shall be excused from
performing its obligations under this Agreement during the time and to the extent that it
is prevented from performing by such cause, including but not limited to: any incidence
of fire, flood, acts of God, commandeering of material, products, plants or facilities by
the federal, state or local government, or a material act or omission by the other party.
15. Ownership of Reports and Documents. The originals of all letters, documents, reports,
and data produced for the purposes of this Agreement shall be delivered to, and become
the property of the Agency. Copies may be made for Phase II Systems but shall not be
furnished to others without written authorization from Agency.
16. Designees. The Plan Administrator of the Agency, or their designee, shall have the
authority to act for and exercise any of the rights of the Agency as set forth in this
Agreement, subsequent to and in accordance with the authority granted by the Governing
Board of the Agency. Any officer of Phase II Systems, or their designees, shall have the
authority to act for and exercise any of the rights of Phase II Systems as set forth in this
Agreement.
17. Notices. All notices hereunder and communications regarding the interpretation of the
terms of this Agreement, or changes thereto, shall be effected by delivery of the notices
in person or by depositing the notices in the U.S. mail, registered or certified mail, return
receipt requested, postage prepaid and addressed as follows:
(A) To Phase II Systems: Phase II Systems; 3961 MacArthur Boulevard, Ste. 200;
Newport Beach, CA 92660; Attention: President
(B) To Agency: City of Rosemead; 8838 Valley Boulevard, Rosemead, CA 91770;
Attention: City Manager
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18. Term of Agreement. This Agreement shall remain in effect for the period beginning
June 6„ 2000 and ending June 30, 2002 ( "Term "). This Agreement will continue
unchanged for successive twelve -month periods following the Term unless either party
gives written notice to the other party of the intent to terminate prior to 90 days before the
end of the Term.
19. Amendment. This Agreement may not be amended orally, but only by a written
instrument executed by the Designees of the parties as contained in this Agreement.
20. Entire Agreement. This Agreement, including exhibits, contains the entire
understanding of the parties with respect to the subject matter set forth in this Agreement.
In the event a conflict arises between the parties with respect to any term, condition or
provision of this Agreement, the remaining terms, conditions and provisions shall remain
in full force and legal effect. No waiver of any term or condition of this Agreement by
any party shall be construed by the other as a continuing waiver of such term or
condition.
21. Counterparts. This Agreement may be executed in any number of counterparts, and in
that event, each counterpart shall be deemed a complete original and be enforceable
without reference to any other counterpart.
22. Headings. Headings in this Agreement are for convenience only and shall not be used to
interpret or construe its provisions.
23. Effective Date. This Agreement shall be effective on the date first above written, and
also shall be the date the Agreement is executed.
AGENCY:
BY:
TITLE:
DATE:
PHASE II SYSTEMS:
BY:
TITLE:
DATE:
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EXHIBIT IA
SERVICES
Phase II Systems will provide the following services for the City of Rosemead:
1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions,
implementation timelines, benefit communication strategies, data reporting and
contribution submission requirements;
(B) Providing the necessary analysis and advisory services to finalize these elements of
the Plan;
(C) Providing for review by Agency legal counsel the documentation needed to establish
the Plan;
(D) Upon Agency authorization, preparing and submitting application to the Internal
Revenue Service for a determination that the Plan is qualified (the application fee for
which shall be paid by the Agency).
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the
PARS Trust Program ( "Trustee "), based upon information received from the Agency
and the Trustee;
(B) Performing periodic accounting of Plan assets, including the allocation of employer
contributions, distributions, investment activity and expenses (if applicable), based
upon information received from the Agency and/or Trustee;
(C) Acting as on -going liaison between the Participant and the Agency in regard to
distribution payments, which shall include use by the Participants of toll -free
telephone communication to Phase II Systems;
(D) Producing benefit illustrations and processing enrollments;
(E) Coordinating the processing of Participant distribution payments pursuant to
authorized written Agency certification of distribution eligibility, authorized direction
by the Agency, and the provisions of the Plan; and, to the extent possible based upon
Agency - provided Data;
(F) Directing Trustee to liquidate Plan assets (if necessary) and make Participant
distribution payments, which includes the provision of required tax filings in regards
to these distribution payments;
(G) Notifying the Trustee of the amount of Plan assets available for further investment
and management; or, the amount of Plan assets necessary to be liquidated in order to
fund Participant distribution payments;
(H) Coordinating actions with the Trustee as directed by the Plan Administrator within
the scope this Agreement;
Page 5
(I) Preparing and submitting a monthly report of Plan activity to the Agency, unless
directed by the Agency otherwise;
(.1) Preparing and submitting an annual report of Plan activity to participants and to the
Agency;
(K) Coordinating and selection of licensed actuary to perform actuarial valuation on a
periodic basis to comply with state and federal laws (the actuarial certification fee for
which shall be paid by the City);
(L) Preparing and submitting the Annual Report of Financial Transactions to the
California State Controller, as required by law, for the PARS Trust Program,
including the required certified audit of the PARS Trust.
Phase II Systems is not licensed to provide and does not offer tax, accounting, legal,
investment or actuarial advice. In providing the services specified above, we will retain
qualified professional service providers at our cost as we deem necessary if the service
lies outside our area of expertise.
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EXHIBIT 1B
FEES FOR SERVICES
1. Phase II Systems will be compensated for performance of Services, as described in
Exhibit A based upon the following schedule:
(A) A one -time set -up fee upon implementation of Plan not to exceed $12,000.00 ( "Set-
up Fee "), which is based on the standard Phase II Systems hourly fee schedule and
shall be paid directly by the Agency to Phase II Systems;
(B) An on -going administration fee equal to the sum of 1.) and 2.) below:
1.) A monthly fee of $1,500 ( "Monthly Fee ") which is subject to an annual 3% cost
of living increase;
2.) An annual asset fee equal to 0.50% of the first $1 million in plan assets, 0.30% of
plan assets between $1 million and $2 million, and 0.10% of plan assets above $2
million, as calculated at the end of each plan year. These fees are exclusive of
trustee and investment management fees;
(C) A fee equal to actuarial expenses charged to Phase II Systems by an outside
contractor for an actuarial valuation of the City's plan ( "Actuarial Valuation Fee ")
which occurs beginning at the conclusion of the second plan year and every year
thereafter.
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EXHIBIT 1C
DATA REQUIREMENTS
Phase II Systems will provide the Services under this Agreement contingent upon the
Agency providing Phase II Systems the following employee information as required to
process a benefit distribution:
1. Participant Data:
(A) Participant's legal name;
(B) Participant's position;
(C) Participant's social security number
(D) Participant's address;
(E) Participant's phone number;
(F) Participant's birth date;
(G) Participant's hire date;
(H) Participant's highest 3 years of compensation subject to PERS deduction while
employed with the City;
(I) Years of City Service
(.i) Retirement Date;
Page 8
ATTACHMENT III
PUBLIC AGENCY
RETIREMENT SYSTEM (PARS)
TRUST AGREEMENT
PREAMBLE
The Huntington Beach City School District and State Center Community College District
formed and adopted the Public Agency Retirement System Trust ( "PARS Trust") on
July 1,1991 ( "Effective Date "). Subsequent to the Effective Date other California public
agencies adopted the PARS Trust as the funding vehicle for tax qualified retirement
plans for employees. Subsequent to the Effective Date the PARS Trust was amended.
Effective as of July 1, 1999 ( "Amended Effective Date ") the PARS Trust was amended
and restated in its entirety as contained herein. This amended and restated Trust shall
supersede all prior versions of the PARS Trust as of the Amended Effective Date.
TABLE OF CONTENTS
ARTICLE PAGE
ARTICLE I DEFINITIONS 3
ARTICLE II THE PARS TRUST PROGRAM 4
ARTICLE III ADMINISTRATIVE MATTERS 7
ARTICLE IV THE TRUSTEE 12
ARTICLE V INVESTMENTS 18
ARTICLE VI FIDUCIARY RESPONSIBILITIES 25
ARTICLE VII AMENDMENT, TERMINATION AND MERGER 28
ARTICLE VIII MISCELLANEOUS PROVISIONS 30
ARTICLE IX ACKNOWLEDGMENT AND ACCEPTANCE 32
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2567_12 PEL
Article I
DEFINITIONS
1.1 "Act" shall mean California Government Code Sections 53215 - 53224, or their
successor sections.
1.2 "Agreement for Administrative Services" shall mean the agreement executed
between the Member Agency and the Trust Administrator which authorizes the
Trust Administrator to perform specific duties of administering the Member
Agency Plan and related Agency Trust.
1.3 "Amended Effective Date" shall mean July 1, 1999, the date the PARS Trust
Agreement was amended and restated in its entirety.
1.4 "Assets" shall mean all contributions and transfers of assets received by an
Agency Trust on behalf of a Member Agency's Plan, together with the income
and earnings from such contributions and transfers and any increments accruing
to them.
1.5 "Agency Trust shall mean the legally separate and individual trust, whose
provisions are identical to those of the PARS Trust Agreement, that is
established by a Member Agency when it adopts the PARS Trust by executing
an Adoption Agreement.
1.6 "Alternate Trustee" shall mean a trustee, other than the Trustee of the PARS
Trust Program, appointed by a Member Agency to serve as a trustee of a portion
of such Agency Trust's assets as to which the Trustee serves as custodian.
1.7 "Code" shall mean the Internal Revenue Code of 1986 as amended from time to
time.
1.8 "Custodian" shall mean Union Bank of California, N.A. whose duties are limited
to those specified in Section 4.3.
1.9 "Delegatee" shall mean an individual or entity, appointed by the Plan
Administrator or Member Agency to act in such matters as are specified in the
appointment.
1.10 "Effective Date" shall mean July 1, 1991, the date the PARS Trust Program was
established.
1.11 "Investment Fiduciary' shall mean the fiduciary with the authority and duty to
direct the investment and management (including the power to direct the
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2567_12 PEL
acquisition and disposition) of some or all of the Assets of the Agency Trust
appointed by a Member Agency for its Agency Trust.
1.12 "Omnibus Account" shall mean an account, established for record keeping
purposes only, to commingle the Assets of the Agency Trust.
1.13 "Member Agency" shall mean a California public agency that adopts the
provisions of the PARS Trust Agreement.
1.14 "Plan" shall mean the tax qualified plan whose assets the Agency Trust holds.
1.15 "Plan Administrator" shall mean the individual designated by position of
employment at the Member Agency to act on its behalf in all matters relating to
the Member Agency's participation in the PARS Trust Program and Agency
Trust.
1.16 "PARS Trust Agreement" or "Trust Agreement" shall mean the pro forma Public
Agency Retirement System trust document adopted by each Member Agency
upon execution of an Adoption Agreement, as amended from time to time.
1.17 "PARS Trust Program" shall mean the Public Agency Retirement System trust
arrangement.
1.18 "Participant" shall mean individual participating in a Member Agency Plan or that
individual's beneficiary.
1.19 "Trust Administrator' shall mean Phase II Systems.
1.20 'Trustee" shall mean the entity appointed as trustee of the PARS Trust that shall
also serve as trustee of each Agency Trust established pursuant to the
provisions of this trust agreement except where an Alternate Trustee has been
appointed.
Article II
THE PARS TRUST PROGRAM
2.1 Multiple Employer Trust
The PARS Trust Program is a multiple employer trust arrangement established to
provide economies of scale and efficiency of administration to public agencies
that adopt it to hold the assets of their Member Agency Plans maintained for the
benefit of their employees. The PARS Trust Program consists of the Agency
Trusts adopted and not terminated by Member Agencies.
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2.2 Qualified Governmental Retirement Trust
The PARS Trust Program is established pursuant to the provisions of Section
501 of the Internal Revenue Code of 1986, as amended (the "Code "), and
California Government Code Sections 53215 through 53224 providing for
pension trusts established by public agencies.
2.3 Date of Adoption
The date as of which each Member Agency adopts the PARS Trust Program
shall be the "Effective Date' of the PARS Trust Agreement and the Agency Trust,
as defined in Section 2.5, as to that Member Agency.
2.4 Member Agencies
Any California public agency may, by action of its governing body in a writing
accepted by the Trustee, adopt the provisions of the PARS Trust Agreement as
the trust portion of a qualified governmental retirement plan established for the
benefit of its employees. Executing an adoption instrument for the PARS Trust
Program ( "Adoption Agreement "), attached hereto as Exhibit "A ", shall constitute
such adoption, unless the Trustee requires additional evidence of adoption. In
order for such adoption to be effective, the public agency must also execute an
Agreement for Administrative Services with Phase II Systems, the Trust
Administrator, pursuant to section 3.6 of this PARS Trust Agreement. Such
adopting employer shall then become a Member Agency of the PARS Trust
Program.
Each such Member Agency shall, at a minimum, furnish the Trust Administrator
with the following documents to support its adoption of the PARS Trust Program:
(a) a certified copy of the Member Agency governing body resolution
authorizing the adoption of the PARS Trust Agreement and the
appointment of an individual designated by position of employment at the
Member Agency to act on its behalf in all matters relating to the Member
Agency's participation in the PARS Trust Program and Agency Trust
( "Plan Administrator ");
(b) an original of the Adoption Agreement executed by the Plan Administrator
or other duly authorized Member Agency employee;
(c) an original of the Agreement for Administrative Services with Phase II
Systems executed by the Plan Administrator or other duly authorized
Member Agency employee and Phase II Systems;
(d) an address notice; and
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256 12 rri.
(e) such other documents as the Trustee may reasonably request.
2.5 Agency Trust
By adopting the PARS Trust Agreement, as provided in Section 2.4, a Member
Agency shall be deemed to have adopted a legally separate and individual
Agency Trust whose provisions are identical to those of the PARS Trust
Agreement. The Assets of an Agency Trust shall be available only to pay
benefits pursuant to the provisions of the Plan to participants and beneficiaries of
the Member Agency entitled to receive benefits under the provisions of the Plan.
The Agency Trust is created for the purpose of receiving contributions made to
fund the Member Agency's Plan; accumulating, managing and investing those
contributions; and providing benefits to active or retired participants of the Plan,
their joint annuitants, or their beneficiaries. Each Agency Trust shall be used to
fund only a single Plan maintained by the Member Agency. A Member Agency
may establish additional Agency Trusts to fund the assets of additional Plans by
executing one or more additional Adoption Agreement(s).
2.6 Assets of Agency Trust
The assets of the Agency Trust shall consist of all contributions and transfers
received by the Agency Trust on behalf of the Member Agency's Plan, together
with the income and earnings from such contributions and transfers, and any
increments accruing to them ( "Assets "). All contributions or transfers shall be
received by the Trustee in cash or in other property acceptable to the Trustee.
The Trustee shall manage and administer the Assets of the Agency Trust without
distinction between principal and income. The Trustee and the Trust
Administrator shall have no duty to compute any amount to be transferred or paid
to the Agency Trust by the Member Agency and the Trustee and the Trust
Administrator shall not be responsible for the collection of any contributions or
transfers to the Agency Trust.
2.7 Commingling for Investment and Administration
The Assets of more than one Agency Trust may be commingled by the Trustee
or Investment Fiduciary in one or more Omnibus Accounts for investment and
administrative purposes, to provide economies of scale and efficiency of
administration to the Agency Trusts. The responsibility for Plan level accounting
within this Omnibus Account(s) shall be that of the Trust Administrator.
2.8 Trustee Accounting
The Trustee shall be responsible only for maintaining records and maintaining
accounts for the aggregate assets of the PARS Trust Program. The
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responsibility for Plan level accounting for each Agency Trust, based upon the
Omnibus Account(s), shall be that of the Trust Administrator.
2.9 No Diversion of Assets
The Assets in each Agency Trust shall be held in trust for the exclusive purpose
of providing benefits to the Participants of the Plan for which the Agency Trust is
holding assets and defraying the reasonable expenses of such Plan. The Assets
shall not be used for or diverted to, any other purpose.
2.10 Type and Nature of Trust
Neither the full faith and credit nor the taxing power of each Member Agency, the
State of California or any political subdivision thereof other than each Member
Agency is pledged to the distribution of benefits hereunder. Except for
contributions and other amounts hereunder, no other amounts are pledged to the
distribution of benefits hereunder. Distributions of benefits are neither general
nor special obligations of any Member Agency, but are payable solely from the
Assets of each Agency Trust, as more fully described herein. No employee of
any Member Agency or beneficiary may compel the exercise of the taxing power
by any Member Agency.
Distributions of Assets under any Agency Trust are not debts of any Member
Agency, the State of California or any of its political subdivisions within the
meaning of any constitutional or statutory limitation or restriction. Such
distributions are not legal or equitable pledges, charges, liens or encumbrances,
upon any of a Member Agency's property, or upon any of its income, receipts, or
revenues, except amounts in the accounts which are, under the terms of each
Plan, Agency Trust and the Act, set aside for distributions. Neither the members
of the legislative body of any Member Agency nor its officers, employees, agents
or volunteers are liable hereunder.
Article III
ADMINISTRATIVE MATTERS
3.1 Appointment of Trustee
Two thirds or more of the Member Agencies acting jointly, may by a two- thirds or
greater vote, act to appoint a bank, trust company, retirement board, insurer,
committee or such other entity as permitted by California law, to serve as the
trustee of the PARS Trust Program ( "Trustee "). Such action must be in writing.
Upon the written acceptance of such entity it shall become the Trustee of the
PARS Trust Program and, subject to the provisions of Section 3.10, the trustee of
each Agency Trust, By executing an Adoption Agreement, the adopting Member
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Agency hereby appoints the Union Bank of California, N.A. as the Trustee as of
the Amended Effective Date.
3.2 Removal of Trustee
Two thirds or more of the Member Agencies acting jointly, may by a vote of two -
thirds or greater, act to remove the Trustee. Such action must be in writing and
delivered to the Trustee and the Trust Administrator. Upon such removal from
the PARS Trust the Trustee shall also be removed as trustee of each of the
Agency Trusts. The Plan Administrator may remove the Trustee as trustee of an
Agency Trust by giving at least ninety (90) days prior written notice to the Trustee
and the Trust Administrator and withdrawing from the PARS Trust Program.
3.3 Resignation of Trustee
The Trustee may resign as trustee of the PARS Trust Program at any time by
giving at least ninety (90) days prior written notice to the Trust Administrator and
to each Plan Administrator of each Member Agency that has adopted the PARS
Trust Agreement and not terminated its participation in the PARS Trust Program.
Such resignation shall also be deemed a resignation as trustee of each of the
Agency Trusts. The Trustee may resign as trustee of an Agency Trust by giving
at least ninety (90) written notice to the Plan Administrator of such Agency Trust
and to the Trust Administrator. The Member Agency's appointment of a
successor trustee to the Agency Trust will vest the successor trustee with title to
the Assets of its Agency Trust upon the successor trustee's acceptance of such
appointment.
3.4 The Plan Administrator
The governing body of each Member Agency shall have plenary authority for the
administration and investment of the Agency Trust pursuant to the laws and
Constitution of the State of California and applicable -- federal laws and
regulations. Each Member Agency shall by resolution designate a Plan
Administrator. Unless otherwise specified in the instrument the Plan
Administrator shall be deemed to have authority to act on behalf of the Member
Agency in all matters pertaining to the Member Agency's participation in the
PARS Trust Program and in regard to the Agency Trust of the Member Agency.
Such appointment of a Plan Administrator shall be effective upon receipt and
acknowledgment by the Trustee and the Trust Administrator and shall be
effective until the Trustee and Trust Administrator are furnished with a resolution
of the Member Agency that the appointment has been modified or terminated.
3.5 Failure to Appoint Plan Administrator
If a Plan Administrator is not appointed, or such appointment lapses, the Member
Agency shall be deemed to be the Plan Administrator. As used in this document
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Plan Administrator shall be deemed to mean Member Agency when a Plan
Administrator has not been appointed.
3.6 Delegatee
The Plan Administrator, acting on behalf of the Member Agency, may delegate
certain authority, powers and duties to an entity to act in those matters specified
in the delegation ( "Delegatee "). Any such delegation must be in a writing that
names and identifies the Delegatee, states the effective date of the delegation,
specifies the authority and duties delegated, is executed by the Plan
Administrator and is acknowledged in writing by the Delegatee, the Trust
Administrator (if not the Delegatee) and the Trustee. Such delegation shall be
effective until the Trustee and the Trust Administrator are directed in writing by
the Plan Administrator that the delegation has been rescinded or modified.
3.7 Certification to Trustee
The governing body of each Member Agency, or other duly authorized official,
shall certify in writing to the Trustee and the Trust Administrator the names and
specimen signatures of the Plan Administrator and Delegatee, if any, and all
others authorized to act on behalf of the Member Agency whose names and
specimen signatures shall be kept accurate by the Member Agency acting
through a duly authorized official or governing body of the Member Agency. The
Trustee and the Trust Administrator shall have no liability if it acts upon the
direction of a Plan Administrator or Delegatee that has been duly authorized, as
provided in Section 3.6, if that Plan Administrator or Delegatee is no longer
authorized to act, unless the Member Agency has informed the Trustee and the
Trust Administrator of such change.
3.8 Directions to Trustee
Except as provided in Section 5.18 of this Trust Agreement, all directions to the
Trustee from the Plan Administrator or Delegatee must be in writing and must be
signed by the Plan Administrator or Delegatee, as the case may be. For all
purposes of this Trust Agreement, direction shall include any certification, notice,
authorization, application or instruction of the Plan Administrator, Delegatee or
Trustee appropriately communicated. The above notwithstanding direction may
be implied if the Plan Administrator or Delegatee has knowledge of the Trustee's
intentions and fails to file written objection.
The Trustee shall have the power and duty to comply promptly with all proper
direction of the Plan Administrator, or Delegatee, appointed in accordance with
the provisions of this PARS Trust Agreement. In the case of any direction
deemed by the Trustee to be unclear or ambiguous the Trustee may seek written
instructions from the Plan Administrator, the Agency or the Delegatee on such
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matter and await their written instructions without incurring any liability. If at any
time the Plan Administrator or the Delegatee should fail to give directions to the
Trustee, the Trustee may act in the manner that in its discretion seems advisable
under the circumstances for carrying out the purposes of the PARS Trust
Program and /or any Agency Trust which may include not taking any action. The
Trustee may request directions or clarification of directions received and may
delay acting until clarification is received. In the absence of timely direction or
clarification, or if the Trustee considers any direction to be a violation of the
PARS Trust Agreement or any applicable law, the Trustee shall in its sole
discretion take appropriate action, or refuse to act upon a direction.
3.9 Alternate Trustee
A Member Agency may appoint a trustee, other than the Trustee, as to a portion
of the assets in the Agency Trust by designating such person or entity as an
Alternate Trustee on the Adoption Agreement and by specifying which assets
shall be subject to the fiduciary management of the Alternate Trustee. Such
appointment shall not be effective unless it is in writing, specifies clearly the
assets as to which the Alternate Trustee is to have trustee powers, is
acknowledged in writing by the Alternate Trustee, is delivered to and
acknowledged by the Trustee and the Trust Administrator. Only a bank, trust
company, retirement board, insurer, the Member Agency or such entity as
permitted by California law to be a trustee may be appointed an Alternate
Trustee. Such appointment will become effective upon acceptance by the
Alternate Trustee.
3.10 Powers Of Alternate Trustee
The Alternate Trustee shall be deemed to have all of the powers and duties and
responsibilities specified in the PARS Trust Agreement for the PARS Trustee in
Article IV unless otherwise specified in the Adoption Agreement.
3.11 Responsibility of Trustee Upon Appointment of Alternate Trustee
Upon the appointment of an Alternate Trustee, the Trustee shall have no liability
or responsibility for any matters relating to the management, investment or
administration of those assets as to which the Alternate Trustee has been
appointed and shall only have the duties set forth in Section 4.3.
3.12 Trust Administrator
The Member Agencies have appointed Phase II Systems as the Trust
Administrator. The Trust Administrator has accepted its appointment subject to
each Member Agency's delegation of authority, to act as such, pursuant to
Section 3.6 of this PARS Trust Agreement. The Trust Administrator's duties
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involve the performance of the following services pursuant to the provisions of
this trust agreement and the Agreement for Administrative Services:
(a) Performing periodic accounting of the Agency Trust;
(b) Directing the Trustee to make distributions from the. Agency Trust to
Participants pursuant to the provisions of the Member Agency's Plan and
liquidate assets in order to make such distributions;
(c) Notifying the Investment Fiduciary of the amount of Assets in the Agency
Trust available for further investment and management by the Investment
Fiduciary;
(d) Allocating contributions, earnings and expenses to each Agency Trust;
(e) Directing the Trustee to pay insurance premiums, to pay the fees of the
Trust Administrator and to do such other acts as shall be appropriate to
carry out the intent of the Agency Trusts.
(f) Such other services as the Member Agency and the Trust Administrator
may agree in the Agreement for Administrative Services pursuant to
Section 2.4.
3.13 The Trust Administrator shall be entitled to rely on, and shall be under no duty to
question, direction and /or data received from the Plan Administrator, or other
duly authorized entity, in order to perform its authorized duties under this trust
agreement. The Trust Administrator shall not have any duty to compute
contributions made to the Agency Trust, determine or inquire whether
contributions made to the Agency Trust by the Plan Administrator or other duly
authorized entity are adequate to meet and discharge liabilities under the Plan; or
determine or inquire whether contributions made to the Agency Trust are in
compliance with the Plan; The Trust Administrator shall not be liable for non
performance of duties if such non performance is directly caused by erroneous,
and /or late delivery of, directions or data from the Plan Administrator, or other
duly authorized entity.
3.14 Additional Trust Administrator Services
The Plan Administrator may at any time retain the Trust Administrator as its
agent to perform any act, keep any records or accounts and make any
computations which are required of the Member Agency or the Plan
Administrator by this PARS Trust Agreement or by the Member Agency's Plan.
The Trust Administrator shall be separately compensated for such service and
such services shall not be deemed to be contrary to the PARS Trust Agreement.
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3.15 Trust Administrator's Compensation
As may be agreed upon from time to time by the Member Agency and Trust
Administrator, the Trust Administrator will be paid reasonable compensation for
services rendered or reimbursed for expenses properly and actually incurred in
the performance of duties with respect to the Agency Trust and to the PARS
Trust Program in accordance with Section 53217 of the Act.
3.16 Resignation or Removal of Trust Administrator
The Trust Administrator may resign at any time by giving at least one hundred
twenty (120) days written notice to each Member Agency of the PARS Trust
Program and the Trustee. The Member Agencies, by a two- thirds or greater
vote, may remove the Trust Administrator by delivering, at least one hundred
twenty (120) days prior to the effective date of such removal, written notice to the
Trust Administrator and to the Trustee.
Article IV
THE TRUSTEE
4.1 Powers and Duties of the Trustee
Except as otherwise provided in Article V and subject to Article VI, the Trustee
shall have full power and authority with respect to property held in the Agency
Trust to do all such acts, take all proceedings, and exercise all such rights and
privileges, whether specifically referred to or not in this document, as could be
done, taken or exercised by the absolute owner, including, without limitation, the
following:
(a) To invest and reinvest the Assets or any part hereof in any one or more
kind, type, class, item or parcel of property, real, personal or mixed,
tangible or intangible; or in any one or more kind, type, class, item or issue
of investment or security; or in any one or more kind, type, class or item of
obligation, secured or unsecured; or in any combination of them. To retain
the property for the period of time that the Trustee deems appropriate;
(b) To acquire and sell options to buy securities ( "call" options) and to acquire
and sell options to sell securities ( "put" options);
(c) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose,
including mineral leases), exchange and in any other manner to acquire,
manage, deal with and dispose of all or any part of the Agency Trust
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t
property, for cash or credit and upon any reasonable terms and
conditions;
(d) To make deposits, with any bank or savings and loan institution, including
any such facility of the Trustee or an affiliate thereof provided that the
deposit bears a reasonable rate of interest;
(e) To invest and reinvest the Assets, or any part thereof in any one or more
collective investment trust funds, including common and group trust funds
that consist exclusively of assets of exempt pension and profit sharing
trusts and individual retirement accounts qualified and tax exempt under
the Code, that are maintained by the Trustee or an affiliate thereof. The
declaration of trust or plan of operations for any such common or
collective fund is hereby incorporated herein and adopted into this PARS
Trust Agreement by this reference. The combining of money and other
assets of the Agency Trust with money and other assets of other qualified
trusts in such fund or funds is specifically authorized. Notwithstanding
anything to the contrary in this trust agreement, the Trustee shall have full
investment responsibility over assets of the trust invested in such
commingled funds. If the plan and trust for any reason lose their tax
exempt status, and the Assets have been commingled with assets of other
tax exempt trusts in Trustee's collective investment funds, the Trustee
shall within 30 days of notice of such loss of tax exempt status, liquidate
the Agency Trust's units of the collective investment fund(s) and invest the
proceeds in a money market fund pending investment or other instructions
from the Plan Administrator. The Trustee shall not be liable for any loss or
gain or taxes, if any, resulting from said liquidation;
(f) To place uninvested cash and cash awaiting distribution in one or more
mutual funds and /or commingled investment funds maintained by or made
available by the Trustee, and to receive compensation from the sponsor of
such fund(s) for services rendered, separate and apart.from any Trustee's
fees hereunder. Trustee or Trustee's affiliate may also be compensated
for providing investment advisory services to any mutual fund or
commingled investment funds;
(g) . To borrow money for the purposes of the Agency Trust from any source
with or without giving security; to pay interest; to issue promissory notes
and to secure the repayment thereof by pledging all or any part of the
Assets;
(h) To take all of the following actions as directed by the Investment Fiduciary
or other person with investment discretion over the trust assets: to vote
proxies of any stocks, bonds or other securities; to give general or special
proxies or powers of attorney with or without power of substitution; to
exercise any conversion privileges, subscription rights or other options,
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and to make any payments incidental thereto; to consent to or otherwise
participate in corporate reorganizations or other changes affecting
corporate securities and to delegate discretionary powers and to pay any
assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities or other property held in the Agency Trust;
(i) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(j) To raze or move existing buildings; to make ordinary or extraordinary
repairs, alterations or additions in and to buildings; to construct buildings
and other structures and to install fixtures and equipment therein;
(k) To pay or cause to be paid from the Agency Trust any and all real or
personal property taxes, income taxes or other taxes or assessments of
any or all kinds levied or assessed upon or with respect to the Agency
Trust or the Plan;
(1) As directed by the Trust Administrator, to hold term or ordinary life
insurance contracts on the lives of Participants (but in the case of conflict
between any such contract and the Plan, the terms of the Plan shall
prevail); to pay from the Agency Trust the premiums on such contracts; to
distribute, surrender or otherwise dispose of such contracts; to pay the
proceeds, if any, of such contracts to the proper persons in the event of
the death of the insured Participant; to enter into, modify, renew and
terminate annuity contracts of deposit administration of immediate
participation or other group or individual type with one or more insurance
companies and to pay or deposit all or any part of the Agency Trust
Assets thereunder; to provide in any such contract for the investment of all
or any part of funds so deposited with the insurance.company in securities
under separate accounts; to exercise and claim all rights and benefits
granted to the contract holder by any such contracts;
(m) To exercise all the further rights, powers, options and privileges granted,
provided for, or vested in trustees generally under applicable federal or
California laws, as amended from time to time, it being intended that,
except as herein otherwise provided, the powers conferred upon the
Trustee herein shall not be construed as being in limitation of any authority
conferred by law, but shall be construed as consistent or in addition
thereto.
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4.2 Additional Trustee Powers
In addition to the other powers enumerated above, and whether or not the
Member Agency has retained investment authority or delegated it to an
Investment Fiduciary or Participants in Participant Directed Accounts, the Trustee
in any and all events is authorized and empowered:
(a) To invest funds pending required directions in any type of interest - bearing
account including without limitation, time certificates of deposit or interest -
bearing accounts issued by Union Bank of California N.A., or any mutual
fund or short term investment fund ( "Fund "), whether sponsored or
advised by Union Bank of California or any affiliate thereof; Union Bank of
California, N.A. or its affiliate may be compensated for providing such
investment advice and providing other services to such Fund, in addition
to any Trustee's fees received pursuant to this Trust Agreement;
(b) To cause all or any part of the Agency Trust to be held in the name of the
Trustee (which in such instance need not disclose its fiduciary capacity)
or, as permitted by law, in the name of any nominee, and to acquire for the
Agency Trust any investment in bearer form, but the books and records of
the Agency Trust shall at all times show that all such investments are a
part of the Agency Trust and the Trustee shall hold evidences of title to all
such investments;
(c) To serve as sole custodian with respect to the Agency Trust Assets;
(d) To employ such agents and counsel as may be reasonably necessary in
managing and protecting the Assets and to pay them reasonable
compensation; to employ any broker - dealer, including a broker - dealer
affiliated with the Trustee, and pay to such broker - dealer at the expense of
the Agency Trust, its standard commissions; to settle, compromise or
abandon all claims and demands in favor of or against the Agency Trust;
and to charge any premium on bonds purchased at par value to the
principal of the Agency Trust without amortization from the Agency Trust,
regardless of any law relating thereto;
(e) In addition to the powers listed herein, to do all other acts necessary or
desirable for the proper administration of the Agency Trust, as though the
absolute owner thereof;
(f) To abandon, compromise, contest, arbitrate or settle claims or demands;
to prosecute, compromise and defend lawsuits, but without obligation to
do so, all at the risk and expense of the Agency Trust;
(g) To exercise and perform any and all of the other powers and duties
specified in this Trust Agreement or the Plan;
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(h) To permit such inspections of documents at the principal office of the
Trustee as are required by law, subpoena or demand by United States
agency;
(i) To comply with all requirements imposed by applicable provisions of law;
(j) To seek written instructions from the Plan Administrator or other fiduciary
on any matter and await their written instructions without incurring any
liability. If at any time the Plan Administrator or the fiduciary should fail to
give directions to the Trustee, the Trustee may act in the manner that in its
discretion seems advisable under the circumstances for carrying out the
purposes of this Agency Trust;
(k) As directed by the Plan Administrator or Delegatee if duly authorized, to
cause the benefits provided under the Plan to be paid directly to the
persons entitled thereto under the Plan, and in the amounts and in the
manner specified, and to charge such payments against the Agency Trust
with respect to which such benefits are payable;
(1) To compensate such executive, consultant, actuarial, accounting,
investment, appraisal, administrative, clerical, secretarial, medical,
custodial, depository and legal firms, personnel and other employees or
assistants as are engaged by the Plan Administrator in connection with
the administration of the Plan and to pay from the Agency Trust the
necessary expenses of such firms, personnel and assistants, to the extent
not paid by the Plan Administrator;
(m) To act upon proper written directions of the Plan Administrator or
Delegatee, including directions given by photostatic transmissions using
facsimile signature;
(n) To pay from the Agency Trust the expenses reasonably incurred in the
administration of the Agency Trust as provided in the Plan;
(o) To maintain insurance for such purposes, in such amounts and with such
companies as the Plan Administrator shall elect, including insurance to
cover liability or losses occurring by reason of the acts or omissions of
fiduciaries but only if such insurance permits recourse by the insurer
against the fiduciary in the case of a breach of a fiduciary obligation by
such fiduciary.
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4.3 Custodial Powers
If an Alternate Trustee has been appointed pursuant to Section 3.9, Union Bank
of California, N.A., ( "Bank ") as Custodian, shall only have the following
responsibilities:
(a) Keep records of all transactions entered into for the Agency Trust and
furnish to Alternate Trustee statements no less frequently than quarterly
showing all principal and income transactions and Agency Trust Assets,
which shall be deemed ratified and approved by Alternate Trustee unless
Custodian is advised to the contrary within ninety (90) days of Custodian's
mailing thereof by first class mail to Alternate Trustee;
(b) Receive payments of income and principal on Agency Trust Assets, and
retain or remit in accordance with Alternate Trustee's written instructions;
(c) Hold Agency Trust Assets in Bank's name as Custodian for Alternate
Trustee or in Bank's nominee name, or, as to securities eligible to be held
by the depository trust company or other depository, in its nominee name;
(d) Purchase and sell securities, attend to the exchange of securities, deposit
or exchange securities of companies in reorganization, and tender
securities on redemption or tender offer solely upon direction of Alternate
Trustee;
(e) Sign the name of Alternate Trustee to stock and bond powers and any
other instruments required for the proper exercise of Bank's duties, and
Bank is appointed Alternate Trustee's attorney -in -fact for these purposes;
(f) Forward all proxies and accompanying materials to Alternate Trustee to
be voted unless directed in writing to the contrary. Disclose Alternate
Trustee's name and address in response to requests from issuers of
securities and others to facilitate direct communication for proxy and
tender offer response;
(g) Sell all fractional shares of stock received as a result of stock dividends or
other corporate action;
(h) Notify Alternate Trustee of any inability to collect income or principal if the
securities or other property constituting Assets upon which such amount is
payable is in default, or if payment is refused after due demand. Bank
shall be under no obligation or duty to take any action to effect collection
of defaulted payments, or to file or pursue any bankruptcy or class action
claims with respect to Agency Trust.
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(i) Perform a telephonic verification to Alternate Trustee or Alternate
Trustee's authorized representative or such other security procedure
selected by Alternate Trustee prior to wiring funds or following facsimile
directions as Bank may require. Alternate Trustee assumes all risk of
delay of transfer if Bank is unable to reach Alternate Trustee or Alternate
Trustee's authorized representative, or in the event of delay as a result of
attempts to comply with any other security procedure selected by
Alternate Trustee.
Article V
INVESTMENTS
5.1 Investment Fiduciary
Except as herein provided, the Plan Administrator shall be the Investment
Fiduciary.
5.2 Appointment of Trustee or an Investment Manager as Investment Fiduciary
The Plan Administrator may appoint the Trustee or an investment manager as
the Investment Fiduciary, with the authority and duty to direct the investment and
management of all or any portion of the Assets of the Agency Trust.
5.3 Appointment of Investment Fiduciary
No action of the Plan Administrator pursuant to 5.2 shall be effective until a
certified copy of the revised Adoption Agreement and, if,-required, any such
resolution of the governing body of the Member Agency, or Plan Administrator
action is delivered to the Trustee. Upon receipt and acceptance, the Trustee or
investment manager, as the case may be, shall assume fiduciary responsibility
with respect to the investment and management of such assets of the Agency
Trust as are specified in the resolution or action. Any transfer of investment
authority to the Trustee or to an investment manager may be revoked by
delivering to the Trustee or the investment manager a written notice from either
the Member Agency governing body or the Plan Administrator, as the case may
be.
5.4 Reliance by Trustee on Investment Fiduciary
The appointment, selection and retention of an Investment Fiduciary shall be
solely the responsibility of the Member Agency acting through its governing body
or the Plan Administrator. The Trustee may rely upon the fact that the
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Investment Fiduciary is authorized to direct the investment and management of
the Assets of the Agency Trust until such time as the Plan Administrator shall
notify the Trustee in writing that another Investment Fiduciary has been
appointed to replace the Investment Fiduciary named, or, in the alternative, that
the Investment Fiduciary named has been removed.
5.5 When Trustee is not Investment Fiduciary
The Trustee shall not be the Investment Fiduciary and shall have no
responsibility or authority for the investment and management of assets unless
specifically designated as the Investment Fiduciary as to some or all of the
assets in the Agency Trust and accepts such designation.
(a) During such period or periods of time, if any, as the Plan Administrator or
an Investment Fiduciary is authorized to direct the investment and
management of the Assets of the Agency Trust, the Trustee shall (subject
to the overriding limitations hereinafter set forth) effect and change
investment of the Assets of the Agency Trust as directed in writing by the
Plan Administrator, or Investment Fiduciary, as the case may be, and shall
neither effect nor change any such investments without such direction and
shall have no right, duty or responsibility to recommend investments or
investment changes. The following provisions shall govern the Trustee
during such period or periods of time, if any, during which the Plan
Administrator or an Investment Fiduciary is authorized to direct the
investment and management of the Assets of any Agency Trust:
(b) So long as the Plan Administrator retains or reacquires full power and
responsibility to direct the Trustee with respect to the investment and
management of all or any portion of the Assets of the Agency Trust, the
Trustee shall not be liable nor responsible for losses or unfavorable results
arising from the Trustee's compliance with proper directions of the Plan
Administrator which are made in accordance with the terms of this Trust
Agreement and which are not contrary to the provisions of any applicable
federal or state statute regulating such investment.
(c) In the event an Investment Fiduciary is given authority and responsibility
with respect to the investment and management of the Assets of the
Agency Trust, neither the Trustee nor the Plan Administrator shall be
liable or responsible in any way for any losses or other unfavorable results
arising from the Trustee's compliance with investment or management
directions received by the Trustee from the Investment Fiduciary.
5.6 Investment Directions Must be in Writing
Subject to the provisions of Section 5.18, in order to be valid all directions
concerning investments made by the Plan Administrator, or the Investment
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Fiduciary, or PARS Trustee must be signed by the authorized person or persons
acting on behalf of the Plan Administrator, Investment Fiduciary or Trustee, as
the case may be.
5.7 Trustee Reliance On Directions
(a) The Trustee shall be entitled to rely upon directions which the Trustee
receives. The Trustee shall be under no duty to question any directions of
the Investment Fiduciary or Plan Administrator nor to review any securities
or other property of the PARS Trust or Agency Trust constituting assets
thereof with respect to which an Investment Fiduciary or the Plan
Administrator has investment responsibility, nor to make any suggestions
to the Investment Fiduciary or Plan Administrator in-connection therewith.
The Trustee shall, as promptly as possible, comply with any written
directions given by the Plan Administrator or an Investment Fiduciary
hereunder. The Trustee shall not be liable, in any manner nor for any
reason, for the making or retention of any investment pursuant to such
directions, nor shall the Trustee be liable for its failure to invest any or all
of the Assets of the Agency Trust in the absence of such written
directions. The Trustee shall be under no obligation to seek written
clarification in the event of ambiguity.
(b) During such period of time, if any, as the Plan Administrator, or an
Investment Fiduciary, is authorized to direct the Trustee, the Trustee shall
have no obligation to determine the existence of any conversion,
redemption, exchange, subscription or other right relating to any securities
purchased of which notice was given prior to the purchase of such
securities, and shall have no obligation to exercise any such right unless
the Trustee is informed of the existence of the right and is instructed to
exercise such right, in writing, by the Plan Administrator or the Investment
Fiduciary, as the case may be, within a reasonable .time prior to the
expiration of such right.
(c) In any event, neither the Plan Administrator nor any Investment Fiduciary
referred to above shall direct the purchase, sale or retention of any Assets
of the Agency Trust if such directions are not in compliance with
applicable law.
5.8 Trustee Fees
As may be agreed upon, in writing, between the Plan Administrator and Trustee,
the Trustee will be paid reasonable compensation for services rendered or
reimbursed for expenses properly and actually incurred in the performance of
duties with respect to the Agency Trust or the PARS Trust.
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256712 PEL
5.9 Contributions
The Plan Administrator shall make all of its contributions to the Trustee, and shall
also transmit all contributions of Plan participants, as may be required or allowed
by the Plan, to the Trustee. Such contributions shall be in cash unless the
Trustee agrees to accept a contribution that is not in cash. All contributions shall
be paid to the Trustee for investment and reinvestment pursuant to the terms of
this Trust Agreement. The Trustee shall not have any duty to determine or
inquire whether any contributions to the Agency Trust made to the Trustee by
any Plan Administrator are in compliance with the Plan; nor shall the Trustee
have any duty or authority to compute any amount to be paid to the Trustee by
any Plan Administrator; nor shall the Trustee be responsible for the collection or
adequacy of the contributions to meet and discharge liabilities under the Plan.
The contributions received by the Trustee from each Member Agency shall be
held and administered pursuant to the terms hereof without distinction between
income and principal.
5.10 Money Market Fund
Pending any investment directions, such cash in the Agency Trust in an amount
as is reasonable in the discretion of the Trustee, may be deposited in a money
market fund selected by the Trustee or the Member Agency.
5.11 Purchase of Contracts
The Trustee shall have the authority to purchase individual or group insurance,
annuity, preliminary term, group pension, and .variable annuity contracts in
accordance with the directions of the Plan Administrator or other insurance
contracts at the direction of the Plan Administrator or Investment Fiduciary if such
contracts are acceptable to the Trustee. The Trustee shall act as custodian of
such contracts if an Alternate Trustee is appointed as to such contracts.
5.12 Records
(a) The Trustee shall maintain accurate records and detailed accounts of all
investments, receipts, disbursements and other transactions hereunder at
the PARS Trust level. Such records shall be available at all reasonable
times for inspection by the Trust Administrator. The Trustee shall, at the
direction of the Trust Administrator, submit such valuations, reports or
other information as the Trust Administrator may reasonably require.
(b) Valuation The assets of the Agency Trust shall be valued at their fair
market value on the date of valuation, as determined by the Trustee based
upon such sources of information as it may deem reliable; provided,
however, that the Plan Administrator shall instruct the Trustee as to
valuation of assets which are not readily determinable on an established
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2567_12 PEL
market. The Trustee may rely conclusively on such valuations provided
by the Plan Administrator and shall be indemnified and held harmless by
the Plan Administrator with respect to such reliance. If the Plan
Administrator fails to provide such values, the Trustee may take whatever
action it deems reasonable, including employment of attorneys, appraisers
or other professionals, the expense of which will be an expense of
administration of the Agency Trust. Transactions in the account involving
such hard to value assets may be postponed until appropriate valuations
have been received and Trustee shall have no liability therefore.
5.13 Statements
(a) Periodically as specified, and within sixty days after June 30, or the end of
the PARS Trust's fiscal year if different, Trustee shall render to the Trust
Administrator as directed, a written account showing in reasonable
summary the investments, receipts, disbursements and other transactions
engaged in by the Trustee during the preceding fiscal year or period with
respect to the PARS Trust. Such account shall set forth the assets and
liabilities of the PARS Trust valued as of the end of the accounting period.
(b) The Trust Administrator may approve such statements either by written
notice or by failure to express objections to such statements by written
notice delivered to the Trustee within 90 days from the date the statement
is delivered to the Trust Administrator. Upon approval, the Trustee shall
be released and discharged as to all matters and items set forth in such
statement as if such account had been settled and allowed by a decree
from a court of competent jurisdiction.
5.14 Wire Transfers
The Trustee shall follow the Plan Administrator's, Delegatee's, or Trust
Administrator's wire transfer instructions in compliance with the written security
procedures provided by the party providing the wire transfers. The Trustee shall
perform a telephonic verification to the Plan Administrator, Trust Administrator, or
Delegatee, of such other security procedure, as selected by the party providing
wire transfer directions, prior to wiring funds or following facsimile directions as
Trustee may require. The Plan Administrator assumes the risk of delay of
transfer if Trustee is unable to reach the Plan Administrator, or in the event of
delay as a result of attempts to comply with any other security procedure
selected by the directing party.
5.15 Exclusive Benefit
The Assets of the Agency Trust shall be held in trust for the exclusive purpose of
providing benefits to the participants and their beneficiaries of the Member
Agency Plan, and defraying reasonable expenses of the Plan, and shall not be
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2567_12 PEL
used for or diverted to any other purpose. No party shall have authority to use or
divert such Plan's Assets for the payment of benefits or expenses of any other
Member Agency's Plan.
5.16 Delegation of Duties
The Plan Administrator, Delegatee, or Trust Administrator, may at any time retain
the Trustee as its agent to perform any act, keep any records or accounts and
make any computations that are required of the Plan Administrator, Delegatee or
Trust Administrator by this Trust Agreement or by the Plan. The Trustee may be
compensated for such retention and such retention shall not be deemed to be
contrary to this Trust Agreement.
5.17 Distributions
All benefits payable pursuant to the Plan shall be paid out of the Assets of the
Agency Trust by the Trustee pursuant to the direction of the Plan Administrator or
Delegatee. The Trustee shall, from time to time, upon the written direction of the
Plan Administrator or Delegatee, make distributions from the Assets of the
Agency Trust to or for the benefit of such persons, in such manner in such
form(s), in such amounts and for such purposes as may be specified in such
directions. The Trustee at the direction of the Plan Administrator or Delegatee
may make any distribution required to be made by it hereunder by delivering to
the Plan Administrator or Delegatee:
Its check payable to the person to whom such distribution is to be made,
for delivery to such person; or
Its check payable to an insurer for the benefit of such person, for delivery
by such insurer; or insurance contracts held on the life of the Participant to
whom or with respect to whom the . distribution is being made, for
redelivery to the person to whom such distribution is to be made; provided
that any contract distributed shall be endorsed as non - transferable.
In directing the Trustee to make distributions, the Plan Administrator or
Delegatee shall follow the provisions of the Plan and shall not direct that any
distribution be made either during the existence or upon discontinuance of the
Plan, which would cause any part of the Assets of the Agency Trust to be used
for or diverted to purposes other than as provided in the Plan and this PARS
Trust. In no event shall the Trustee have any responsibility respecting the
application of such distributions, nor for determining or inquiring into whether
such distributions are in accordance with the Plan.
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5.18 Participant Directed Accounts
The Member Agency may, by written resolution and execution of the Adoption
Agreement, terminate the Plan Administrator's right to direct the investment and
management of all or any portion of the Assets of the Agency Trust and allow
Participants to direct their own account balances ( "Participant Directed
Accounts "). Notwithstanding any other provision of this Trust Agreement, for
Participant Directed Accounts, the Trustee shall be entitled to act upon proper
directions of the Plan Administrator, Trust Administrator, and Participants
including directions in writing, or oral instructions which Trustee in its discretion
may follow without receipt of written instructions, instruction given by photostatic
teletransmission using facsimile signature, or those instructions which are
digitally recorded on the UBOC Voice Response Unit ( "VRU ") or internet website.
Trustee is hereby authorized.to record conversations and transmissions made in
connection with the Agency Trust. Trustee's recording or lack of recording of any
such oral, internet or digital instructions, and /or receipt or lack of receipt of
facsimile transmissions, as reflected in the Trustee's records maintained in the
ordinary course of business shall constitute conclusive proof of Trustee's receipt
or non - receipt of such instructions.
The Trustee and /or Trust Administrator shall not be liable in any manner for
investment or other losses or other liability attributable to Participant's directions,
or lack thereof, or exercise of control over the investments of their Participant
Directed Accounts. Likewise, the Trustee and /or Trust Administrator shall have
no duty or responsibility to review, monitor or make recommendations regarding
investments made at the direction of the Participants or the Plan Administrator.
In order for Member Agency to be relieved of investment fiduciary liability, the
requirements of California law including Section 53213.5 of the California
Government Code must be met. The Plan Administrator shall establish uniform
and nondiscriminatory rules for the operation of the Participant Directed
Accounts, including whether the Participant shall direct the Trustee or direct the
Plan Administrator who directs the Trust Administrator who forwards such
directions to the Trustee. Member Agency shall designate whether Participant
Directed Accounts are to be established pursuant to the provisions of section
5.18(a) or 5.18(b), below:
(a) Participant Direction in Individually Directed Accounts If the Member
Agency has so elected, Participants may have investment direction power
over their own segregated account balances ( "Individually Directed
Account" or "IDA "). Investments may be directed by Participants into
assets administratively acceptable to Trustee, as limited by guidelines
developed by the Plan Administrator (the "Permissible Investment
Guidelines "). Plan Administrator shall notify Participants of the Plan's
Permissible Investment Guidelines as in effect from time to time. In the
absence of directions from a Participant, the Plan Administrator may direct
the investment of the IDA. The Trustee may refuse to comply with the
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2567_12 PEL
directions of the Participant to invest in assets other than those listed in its
Permissible Investments Guidelines or with directions which the Trustee
deems to be improper or contrary to the provisions of the Plan and Agency
Trust or the Internal Revenue Code and shall have no liability for such
refusal.
(b) Participant Directed Account within Plan Administrator Selected
Investment Options ( "SelectBENEFIT Accounts "): If the Member Agency
so elects, the Participant's Account Balance shall be segregated into a
Participant Directed Account ( "SelectBENEFIT Account "), over which the
Participant may direct investment into one or more investment alternatives
( "Investment Options "). The Plan Administrator or its appointed
Investment Fiduciary shall have full responsibility for designating the
Investment Options under the Plan and for selecting the underlying
investment vehicle(s) for each designated Investment Option into which a
Participant may direct investment of his or her SelectBENEFIT Account.
To the extent allowed by law, neither the Member Agency, the Plan
Administrator, the Trust Administrator nor the Trustee shall have any
responsibility for monitoring the directions of the Participant nor shall the
Member Agency, the Plan Administrator, the Trust Administrator or the
Trustee be liable in any manner for investment or other losses or other
liability for following directions of a Participant.
(c) If SelectBENEFIT Accounts are established, notwithstanding any other
provision of this Trust Agreement, the Member Agency may appoint the
Trustee to provide ministerial services as recordkeeper for such accounts
by so indicating in the Member Agency's Adoption Agreement, provided
that an acceptable service agreement has been executed by and between
the Member Agency, the Plan Administrator, the Trustee and the Trust
Administrator.
Article VI
FIDUCIARY RESPONSIBILITIES
6.1 More Than One Fiduciary Capacity
Any one or more of the fiduciaries with respect to the PARS Trust Agreement or
the Agency Trust may, to the extent required thereby or as directed by the Plan
Administrator pursuant to this PARS Trust Agreement and the Plan, serve in
more than one fiduciary capacity with respect to the PARS Trust Agreement, the
Agency Trust and the Plan.
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6.2 Fiduciary Discharge of Duties
Except as otherwise provided in the Code and applicable law each fiduciary shall
discharge such fiduciary's duties with respect to the PARS Trust Agreement and
the Plan:
Solely in the interest of the Participants and for the exclusive purpose of
providing benefits to Participants, and defraying reasonable expenses of
administering the Plan. With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of like
character and with like aims. By diversifying the investments of the Plan and the
Agency Trust so as to minimize the risk of loss and to maximize the rate of
return, unless under the circumstances it is clearly prudent not to do so.
6.3 Limitations on Fiduciary Responsibility
To the extent permitted by applicable law
No fiduciary shall be liable with respect to a breach of fiduciary duty by any other
fiduciary if such breach was committed before such party became a fiduciary or
after such party ceased to be a fiduciary.
No fiduciary shall be liable for a breach by another fiduciary unless the non -
breaching fiduciary knowingly participates in such a breach, knowingly
undertakes to conceal such breach, or has actual knowledge of such breach and
fails to take reasonable steps to remedy such breach.
No fiduciary shall be liable for carrying out a proper direction from another
fiduciary, including refraining from taking an action in the absence of a proper
direction from the other fiduciary possessing the authority. and responsibility to
make such a direction, -which direction the fiduciary in good faith believes to be
authorized and appropriate.
6.4 Indemnification of Trustee by Member Agency
The Trustee shall not be liable for, and Member Agency shall indemnify, defend
(as set out in 6.8 of this Trust Agreement), and hold the Trustee (including its
officers, agents, employees and attorneys) and other Member Agencies and
Alternate Trustees, harmless from and against any claims, demands, loss, costs,
expense or liability imposed on the indemnified party, including reasonable
attorneys' fees and costs incurred by the indemnified party, arising as a result of
Member Agency's active or passive negligent act or omission or willful
misconduct in the execution or performance of its duties under this Trust
Agreement.
2567_12 PEL
6.5 Indemnification of Member Agency by Trustee
The Member Agency shall not be liable for, and Trustee shall indemnify, defend
(as set out in 6.8 of this Trust Agreement), and hold the Member Agency
(including its officers, agents, employees and attorneys) and other Member
Agencies and Alternate Trustees, harmless from and against any claims,
demands, loss, costs, expense or liability imposed on the indemnified party,
including reasonable attorneys' fees and costs incurred by the indemnified party,
arising as a result of Trustee's active or passive negligent act or omission or
willful misconduct in the execution orperformance of its duties under this Trust
Agreement.
6.6 Indemnification of Trustee by Trust Administrator
The Trustee shall not be liable for, and Trust Administrator shall indemnify and
hold the Trustee (including its officers, agents, employees and attorneys)
harmless from and against any claims, demands, loss, costs, expense or liability
imposed on the indemnified party, including reasonable attorneys' fees and costs
incurred by the indemnified party, arising as a result of Trust Administrator's
active or passive negligent act or omission or willful misconduct in the execution
or performance of its duties under this Trust Agreement.
6.7 Indemnification of Trust Administrator by Trustee
The Trust Administrator shall not be liable for, and Trustee shall indemnify and
hold the Trust Administrator (including its officers, agents, employees and
attorneys) harmless from and against any claims, demands, loss, costs, expense
or liability imposed on the indemnified party, including reasonable attorneys' fees
and costs incurred by the indemnified party, arising as a result of Trustee's active
or passive negligent act or omission or willful misconduct in. the execution or
performance of its duties under this Trust Agreement.
6.8 Indemnification Procedures
Promptly after receipt by an indemnified party of notice or receipt of a claim or
the commencement of any action for which indemnification may be sought, the
indemnified party will notify the indemnifying. party in writing of the receipt or
commencement thereof. When the indemnifying party has agreed to provide a
defense as set out above that party shall assume the defense of such action
(including the employment of counsel, who shall be counsel satisfactory to such
indemnitee) and the payment of expenses, insofar as such action shall relate to
any alleged liability in respect of which indemnity may be sought against the
indemnifying party. Any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall not be at the expense of the
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2567_12 PEL
indemnifying party unless (i) the employment of such counsel has been
specifically authorized by the indemnifying party or (ii) the named parties to any
such action (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interest between them.
The indemnifying party shall not be liable to indemnify any person for any
settlement of any such action effected without the indemnifying party's consent.
6.9 No Joint and Several Liability
This document is not intended to and does not create any joint powers
agreement or any joint and several liability. No Member Agency shall be
responsible for any contributions, costs or distributions of any other Member
Agency.
Article VII
AMENDMENT, TERMINATION AND MERGER
7.1 No Obligation to Continue Plan and Trust
Continuance of the Agency Trust, participation in the PARS Trust Program and
continuation of the Plan are not assumed as a contractual obligation of the
Member Agency.
7.2 Amendments
(a) The PARS Trust Agreement may only be amended or terminated as
provided herein. A two- thirds majority or greater of the Member Agencies
shall have the right to amend this Trust Agreement from time to time, and
to similarly amend or cancel any amendments. A copy of all amendments
shall be delivered to the Trustee, the Trust Administrator and Plan
Administrators promptly as each is made.
(b) Such amendments shall be set forth in an instrument in writing executed
by the amending party, the Trust Administrator and the Trustee. Any
amendment may be current, retroactive or prospective, provided,
however, that no amendment shall:
(1) Cause the Assets of any Agency Trust to be used for or diverted to
purposes other than for the exclusive benefit of Participants who
have an interest in such Agency Trust or for the purpose of
defraying the reasonable expenses of administering such Agency
Trust.
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(2) Have any retroactive effect so as to reduce the benefits of any
Participant having an interest in the Agency Trust as of the date the
amendment is adopted, except that such changes may be made as
may be required to permit this PARS Trust Agreement to meet the
requirements of applicable law.
(3) Change or modify the duties, powers or liabilities of the Trustee or
the Trust Administrator hereunder without its consent.
(4) Permit the Assets of any Agency Trust to be used for the benefit of
any other Plan of the Member Agency unless the Member Agency
agrees to such use.
7.3 Termination of Plan
A termination of the Plan for which the Agency Trust was established shall not, in
itself, effect a termination of an Agency Trust. Upon any termination of the Plan,
the Assets of the Agency Trust shall be distributed by the Trustee as and when
directed by the Plan Administrator. From and after the date of such termination
of the Plan and until final distribution of the Assets the Trustee shall continue to
have all the powers provided herein as are necessary or expedient for the orderly
liquidation and distribution of such assets and the Agency Trust shall continue
until the interests of all Participants have been completely distributed to or for the
benefit of the Participants in accordance with the Plan.
7.4 Reversion
In the event a Member Agency's Plan is terminated, the vested interest of any
Participant shall not be diminished or adversely affected. Except as may be
provided in this Trust Agreement or the Plan, such termination shall not vest in
the Member Agency any corpus or income under the Agency Trust, nor permit
the Plan to discriminate as to coverage, or as to allocation of contributions or
earnings, in favor of employees who are officers, shareholders, or highly
compensated, nor cause the Agency Trust to lose its exemption pursuant to
501(a) of the Code. No modification, amendment or termination of the Plan shall
be construed to be a termination of the Agency Trust so as to require the Trustee
to make a distribution of any of the Assets of the Agency Trust to any Participant.
In order to make such distribution the Trustee must receive written instructions
from the Plan Administrator or Delegatee in a form acceptable to the Trustee.
If any Member Agency adopts a Plan whose assets are maintained in an Agency
Trust and makes application to the Internal Revenue Service, within one year
from the date of adoption of such Plan, for a determination that such Plan is a
qualified plan under Section 401 (a) of the Code, and if such Plan is determined
by the Internal Revenue Service not to be a qualified Plan, then all contributions
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2567_12 PEL
and investment income attributable to such Plan shall be returned to the Member
Agency upon application to the Trustee.
7.5 Fund Recovery Based on Mistake of Fact
Except as hereinafter provided, the Assets of the Agency Trust shall never inure
to the benefit of the Member Agency. The Assets shall be held for the exclusive
purposes of providing benefits to Participants having an interest in the Plan and
defraying reasonable expenses of administering the Agency Trust. The sole
exception to the foregoing is as follows:
Mistake of Fact. In the case of a contribution which is made by the Plan
Administrator because of a mistake of fact; that portion of the contribution relating
to the mistake of fact (exclusive of any earnings or losses attributable thereto)
may be returned to the Plan Administrator, provided such .return occurs within
one (1) year after discovery by the Plan Administrator of the mistake. If any
repayment is payable to the Plan Administrator, then, as a condition to such
repayment, and only if requested by Trustee, the Plan Administrator shall
execute, acknowledge and deliver to the Trustee its written undertaking, in a form
satisfactory to the Trustee, to indemnify, defend and hold the Trustee harmless
from all claims, actions, demands or liabilities arising in connection with such
repayment.
7.6 Transfers from Other Qualified Plans
Notwithstanding any other provision hereof, there may be transferred to the
Trustee, upon direction of the Plan Administrator, all or any of the assets held
(whether by a trustee, custodian or otherwise) on behalf of any other plan which
satisfies the applicable requirements of Section 401 of the Code, and which is
maintained for the benefit of any persons who are or will become Participants in
the Plan.
7.7 Termination
The PARS Trust Agreement may be terminated only by a unanimous agreement
of all Member Agencies. Such action must be in writing and delivered to the
Trustee and Trust Administrator.
Article VIII
MISCELLANEOUS PROVISIONS
8.1 Nonalienation
To the maximum extent permitted by law, a Participant's interest in the Agency
Trust shall not in any way be liable to attachment, garnishment, assignment or
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2567_12 PEL
other process, or be seized, taken, appropriated or applied by any legal or
equitable process, to pay any debt or liability of the Participant or any other party.
Agency Trust Assets shall not be subject to the claims of the Member Agency or
the claims of its creditors.
8.2 Saving Clause
In the event any provision of this PARS Trust Agreement and each Agency Trust
is held illegal or invalid for any reason, said illegality or invalidity shall not affect
the remaining parts of the PARS Trust and /or Agency Trust, but this instrument
shall be construed and enforced as if said provision had never been included.
8.3 Applicable Law
This PARS Trust Agreement and each Agency Trust . shall be construed,
administered and governed under the Code and the applicable provisions of
California law. To the extent any of the provisions of this Trust Agreement or the
Plan are inconsistent with the Code or applicable California law, the provisions of
the Code or California law shall control. In the event, however, that any provision
is susceptible to more than one interpretation, such interpretation shall be given
thereto as is consistent with the Trust Agreement and the Plan being a qualified
governmental retirement trust and plan within the meaning of the Code.
8.4 Joinder of Parties
In any action or other judicial proceedings affecting this Trust Agreement, it shall
be necessary to join as parties only the Trustee, the Plan Administrator or
Delegatee. No participant or other persons having an interest in any Agency
Trust shall be entitled to any notice or service of process . unless otherwise
required by law. Any judgment entered in such a proceeding or action shall be
binding on all !persons claiming under this Trust Agreement, provided, however,
that nothing in�this Trust Agreement shall be construed as to deprive a participant
of such participant's right to seek adjudication of such participant's rights under
applicable law.
8.5 Employment of Counsel
The Trustee may consult with legal counsel (who may be counsel for the Trustee
or Member Agency Plan Administrator) and charge the Agency Trust.
8.6 Gender and Number
Words used in the masculine, feminine or neuter gender shall each be deemed
to refer to the other whenever the context so requires; and words used in the
singular or plural number shall each be deemed to refer to the other whenever
the context so requires.
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2567_12 PEL
8.7 Headings
Headings used in this Trust Agreement are inserted for convenience of reference
only and any conflict between such headings and the text shall be resolved in
favor of the text.
8.8 Counterparts
The Adoption Agreement of this Trust Agreement may be executed in an original
and any number of counterparts by the Plan Administrator (executing an
Adoption Agreement), the Trust Administrator and the Trustee, each of which
shall be deemed to be an original of the one and the same instrument.
Article IX
ACKNOWLEDGMENT AND ACCEPTANCE
The provisions of the PARS Trust Agreement as contained herein are hereby amended
and restated as of July 1, 1999 (the "Amended Effective Date ")
IN WITNESS WHEREOF, the Plan Administrator (by executing the Adoption
Agreement) the Trust Administrator and Trustee have executed this Trust Agreement by
their.duly authorized agents on this19th day of January, 2000.
ACKNOWLEDGED AND ACCEPTED this 19th day of January, 2000.
THE TRUSTEE
UNION BANK OF CALIFORNIA, N.A.
By: J i C 4
Title: Senior Vice President
THE TRUST ADMINISTRATOR
PHASE II SYSTEMS
M
Title: President
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2567_12 PEL
ATTACHMENT IV
THE CITY OF ROSEMEAD
PUBLIC AGENCY RETIREMENT SYSTEM (PARS)
RETIREMENT ENHANCEMENT PLAN
EFFECTIVE JULY 1, 2000
DEFINED BENEFIT PLAN
FV. CEPARS ME GENCIESV m�cfncd Bcncft Plan B mem(Venion 4).doc -I-
TABLE OF CONTENTS
Page
INTRODUCTION ......................................................................................... ............................... 3
ARTICLE I - PARTICIPATION
1.1 Eligibility for Benefits ........................................................................ ............................... 4
1.2 Commencement of Benefits ................................................................ ............................... 5
ARTICLE II - BENEFITS
2.1
Retirement Benefits ............................................................................ ............................... 6
2.2
Survivor Continuance Benefit ............................................................. ............................... 7
2.3
Pre - Retirement Death Benefits ........................................................... ............................... 7
2.4
Designation of Beneficiary ................................................................. ............................... 7
ARTICLE III - VESTING
3.1 Vesting ...............................................................................................:. ..............................9
3.2 Full or Partial Termination .................................................................. ............................... 9
3.3 Attainment of Normal Retirement Age ............................................... ............................... 9
3 .4 Affect of Vesting ................................................................................. ............................... 9
ARTICLE IV - DISTRIBUTIONS
4.1
Normal Form of Benefit ........................................... ...............................
4.2
Optional Forms of Benefit ....................................... ...............................
4.3
Cash Out of Small Benefits ...................................... ...............................
4.4
Actuarial Equivalence .............................................. ...............................
4.5
Direct Rollovers ....................................................... ...............................
ARTICLE V - ADMINISTRATION AND AMENDMENT OF PLAN
5.1 Member's Rights not Subject to Execution ............. ...............................
5.2 Rules and Regulations .............................................. ...............................
5.3 Military Service ....................................................... ...............................
ARTICLE VII - DEFINITIONS
6 .1 Definitions ................................................................ ...............................
APPENDIX A - ANNUAL ADDITIONAL LIMITS
...... 10
...... 10
...... 11
...... 11
...... 1 I
..... 13
..... 13
..... 13
..... 14
F:LLANCEPNLSB GFNCIFSRO� Bmefi W WVmvu(VU a)tl —2—
INTRODUCTION
The City of Rosemead ( "Employer ") has adopted this tax - qualified governmental defined
benefit plan for the benefit of its eligible employees to provide supplemental retirement benefits
to eligible employees of the Employer in addition to the benefits employees will receive from the
Public Employees' Retirement System ( "PERS "). It is intended that this plan and the trust
established to hold the assets of the plan shall be qualified under section 401(a) and tax - exempt
under Section 501 (a) of the Internal Revenue Code of 1986, together with any amendments
thereto ( "Code "). It is further intended that this plan and the trust established hereunder shall
meet the requirements of a pension trust under California Government Code ( "Act ")
sections 53215 - 53224, or their successor sections (the "Act "). This document, together with
Appendix A — Annual Additional Limits, constitutes the City of Rosemead Public Agency
Retirement System Retirement Enhancement Plan.
r:wv+awnns_nen.�cwv+c�twwmmoe� Bm r no..®mi amo -
ARTICLE I
PARTICIPATION
1.1 Eligibility for Benefits.
a) An Employee shall be eligible to receive Retirement Benefits described under
Section 2.1 Tier 1 if he /she:
(1) is a full -time Miscellaneous Employee of the Employer or a contract city
attorney on or after July 1, 2000;
(2) is at least fifty -five (55) years of age;
(3) has completed twenty (20) or more years of full -time continuous employment
with the Employer as of the last day of employment with the Employer or has
been retained continuously as City Attorney for at least twenty (20) years
immediately prior to termination of duties;
(4) has terminated employment with the Employer;
(5) has applied for benefits under this Plan; and
(6) has retired under PERS.
b) An Employee shall be eligible to receive Retirement Benefits described under
Section 2.1 Tier II if he /she:
(1) is a full -time Miscellaneous Employee of the Employer or a contract city
attorney on or after July 1, 2000;
(2) is at least sixty (60) years of age;
(3) has completed at least ten (10) but not more than twenty (20) years of full-
time continuous employment with the Employer as of the last day of
employment with the Employer or has been retained continuously as City
eu wcE.rnxs nE GENC�o� Be PW u«, (Vi 4)na 4-
Attorney for at least ten (10) but not more than twenty (20) years immediately
prior to termination of duties;
(4) has terminated employment with the Employer;
(5) has applied for benefits under this Plan; and
(6) has retired under PERS.
C) An Employee shall be eligible to receive Retirement Benefits described under
Section 2.1 Tier III if he /she:
(1) is a City Council member of the Employer on or after July 1, 2000;
(2) is at least fifty -five (55) years of age;
(3) has completed twelve (12) or more years of service as a City Council member
with the Employer as of the last day of employment with the Employer;
(4) has terminated employment with the Employer;
(5) has applied for benefits under this Plan; and
(6) has retired under PERS.
1.2 Commencement of Benefits
Benefits shall commence as of the first day of the month after an Employee meets the
eligibility requirements of section 1.1.
FILANC2VAR$_R GE C@SAOmudIDeNCI Sa UP DMmTI(VC 4) d —5—
ARTICLE II
BENEFITS
2.1 Retirement Benefits
Tier 1: The benefit shall be paid in the Normal Form of Benefit and shall be equal to an
amount equal to one - twelfth of the difference between (1) and (2) described below:
(1) The number of full and partial years of full -time continuous employment with
the Employer and the number of full and partial years retained as city attorney completed as of
the Member's retirement (treating each month in which the Member was at any time employed
on a full -time basis as one - twelfth of a year), times the Member's Final Pay, times three percent
(3 %).
(2) The number of full and partial years of full -time continuous employment with
the Employer and the number of full and partial years retained as city attorney completed as of
the Member's retirement (treating each month in which the Member was at any time employed
on a full -time basis as one - twelfth of a year), times the Member's Final Pay, times the PERS
Benefit Factor.
Tier II: The benefit shall be paid in the Normal Form of Benefit and shall be equal to an
amount equal to one - twelfth of the difference between (1) and (2) described below:
(1) The number of full and partial years of full -time continuous employment with
the Employer and the number of full and partial years retained as city attorney completed as of
the Member's retirement (treating each month in which the Member was at any time employed
on a full -time basis as one - twelfth of a year), times the Member's Final Pay, times two- and -one
half percent (2.50 %).
FY.M=M88 GEN� 8m M Dwvmn(VV 4)J —6—
(2) The number of full and partial years of full -time continuous employment with
the Employer and the number of full and partial years retained as city attorney completed as of
the Member's retirement (treating each month in which the Member was at any time employed
on a full -time basis as one - twelfth of a year), times the Member's Final Pay, times the PERS
Benefit Factor.
Tier III: The benefit shall be paid in the Normal Form of Benefit and shall be equal to
an amount equal to one - twelfth of the difference between (1) and (2) described below:
(1) The number of full and partial years of employment as a City Council member
with the Employer completed as of the Member's retirement (treating each month in which the
Member was at any time employed on a full -time basis as one - twelfth of a year), times the
Member's Final Pay, times three percent (3%).
(2) The number of full and partial years of full -time continuous employment with
the Employer completed as of the Member's retirement (treating each month in which the
Member was at any time employed on a full -time basis as one - twelfth of a year), times the
Member's Final Pay, times the PERS Benefit Factor.
2.2 Survivor Continuance Benefit
No Survivor Continuance Benefit shall be provided unless the Member elects to have the
benefit paid in an Optional Form of Benefit.
2.3 Pre - Retirement Death Benefits
No Pre - Retirement Death Benefits shall be provided.
2.4 Designation of Beneficiary
Each Member shall have the right to designate a Beneficiary to receive the death benefits,
if any, that are payable to a Beneficiary from this Plan. Such designation does not permit the
FLLAIIQIPe�RS _RF.PAGEUCff9AmenoRDefuN Bm I Oac (Va m4). o -7-
Member to change a person identified under another provision of the Plan as being eligible to
receive a benefit. Such designation must be evidenced by a written instrument filed with the
Employer, on a form prescribed by the Employer, and signed by the Member.
The Beneficiary for a married Member shall be the Member's spouse at the date of death, unless
the written consent of such spouse is provided upon a form acceptable to the Employer. Each
such designation for death benefits must be evidenced by a written instrument filed with the
Employer, on a form prescribed by the Employer, and signed by the Member. If no such
designation is on file with the Employer at the time of the death of the Member, or if for any
reason at the sole discretion of the Employer, such designation is defective, then the spouse of
such Member shall be conclusively deemed to be the Beneficiary designated to receive such
benefit.
The signature of the Member's spouse shall be required on a designation of beneficiary form or
an application for a benefit under the Plan if the spouse is not the beneficiary, unless the Member
declares in writing that one of the following conditions exists:
(1) The Member is not married;
(2) The Member does not know, and has taken all reasonable steps to determine,
the whereabouts of the spouse;
(3) The spouse is incapable of executing the acknowledgment because of an
incapacitating mental or physical condition;
(4) The Member and spouse have executed a marriage settlement agreement that
makes the community property laws inapplicable to the marriage; or
(5) The current spouse has no identifiable community proprietary interest in the
benefits.
F.%M'CEV _UE GENC� B�a % Ca 1(V --a1. -8-
ARTICLE III
VESTING
3.1 Vesting
A Member will be fully vested in his Retirement Benefit upon meeting the requirements
of Section 1.1.
3.2 Full or Partial Termination
Notwithstanding the vesting schedule, upon the complete discontinuance of Employer
contributions to the Plan or upon any full or partial termination of the Plan, the Member's
Retirement Benefit shall become one hundred percent (100 %) Vested.
3.3 Attainment of Normal Retirement Age
A Member shall be fully vested in his Retirement Benefit upon attainment of Normal
Retirement Age and fulfilling all requirements established in Section 1.1.
3.4 Affect of Vesting
Vesting shall entitle a Member to payment during his lifetime of the Retirement Benefit
at the times and upon the conditions specified herein, and shall entitle the Member's survivor or
Beneficiary to any death benefits provided herein. Any unpaid Retirement Benefits are forfeited
upon the Member's death.
F:LLANCklPAHS PFA�GENC�Slllwvnort�DGuN Bme(B Pbo Oeau�m�ryavoo ��Jx —9—
ARTICLE IV
DISTRIBUTIONS
4.1 Normal Form of Benefit
Unless the member elects an optional form of benefit under Section 4.2, payments to a
Member of a Retirement Benefit shall be made in the form of monthly payments commencing
with the first day of the month following the Member's retirement on or after Normal Retirement
Age and ending on the first day of the month in which the Member's death occurs, in the amount
specified in Section 2.1. The Retirement Benefit shall be subject to an annual 2% compounding
cost -of- living adjustment effective on the anniversary date of commencement of the Retirement
Benefit. This form of payment shall be the "Normal Form of Benefit."
4.2 Optional Forms of Benefit
In lieu of the Normal Form of Benefit, a Member may elect a form of benefit payment of
Actuarial Equivalent value to the Normal Form of Benefit in one of the following forms:
a) Survivor Continuance. Under this form of payment:
(1) The Member receives a reduced monthly benefit, and if the Member
predeceases the Beneficiary, the Beneficiary will receive a monthly payment for the life
of the Beneficiary equal to 100% of such reduced monthly benefit.
(2) If the beneficiary predeceases the Member, the Member's reduced monthly
payment will not increase.
(3) The Member's designation of a Beneficiary shall become irrevocable upon the
Member's retirement if electing this form of payment.
M.WCE B GB C� Bm W �,VC h -10-
4.3 Cash Out of Small Benefits
If the Actuarial Equivalent of a Member's Normal Retirement Benefit is less than $5,000
at the time of termination of employment, such benefit shall be paid as a single cash lump sum in
lieu of any other benefits hereunder.
4.4 Actuarial Equivalence
For the purpose of establishing Actuarial Equivalence between the Normal and an
Optional Form of Benefit, the mortality assumption shall be the 1983 Group Annual Mortality
Table with 6% interest per annum and 6% load and the interest assumption shall be 6% per
MU1u111M
4.5 Direct Rollovers
This section applies to all distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this plan, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct rollover.
Definitions
(1) Eligible rollover distribution
An eligible rollover distribution is any distribution of all or any portion of the balance to
the credit of the distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is required under
P _R GENC� Bm a Plan B (VV a)� -11-
Section 410(a)(9) of the Internal Revenue Code, any hardship distribution, and the portion of any
distribution that is not includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
(2) Eligible retirement plan
An eligible retirement plan is an individual retirement account described in
Section 408(a) of the Code, an individual retirement annuity described in Section 408 (b) of the
Code, or a qualified trust described in Section 401(a) of the Code that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement plan, individual
retirement account, or an individual retirement annuity.
A distributee includes an Employee or former Employee in addition, the Employee's or
former Employee's surviving spouse and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a qualified domestic relations order, as defined in
Section 414 (p) of the Code, are distributees with regard to the interest of the spouse or former
spouse.
(3) Direct Rollover
A direct rollover is a payment by the Plan to the eligible retirement plan specified by the
distributee.
P:LLANCE\PARS_"E GENCB:ARa�lw BmvlE Dw ,(Vef .'), o -12-
ARTICLE V
ADMINISTRATION AND AMENDMENT OF PLAN
5.1 Member's Rights Not Subject To Execution
The right of a Member to a benefit under this Plan is not assignable and is not subject to
execution or any other process whatsoever, except to the extent permitted by the Code of Civil
Procedure and the Family Code of the State of California. Any payment hereunder required
under the California Family Code to a person other than the Member must not alter the form or
amount of benefits hereunder, except that to the extent provided in a valid court order, an
Actuarial Equivalent payment may be made to the spouse or child of a beneficiary pursuant to a
qualified domestic relations order (as defined in Code Section 414(p) prior to the Member's
retirement.
5.2 Rules and Regulations
The Employer has full discretionary authority to supervise and control the operation of
this Plan in accordance with its terms and may make rules and regulations for the administration
of this Plan that are not inconsistent with the terms and provisions hereof. The Employer shall
determine any questions arising in connection with the interpretation, application or
administration of the Plan (including any question of fact relating to age, employment,
compensation or eligibility of Employees) and its decisions or actions in respect thereof shall be
conclusive and binding upon any and all persons and parties.
5.3 Military Service
Notwithstanding any provision of this Plan to the contrary, contributions, benefits, and
service credit with respect to qualified military service will be provided in accordance with
section 414(u) of the Code.
PWANCCMA0.S_M1 GE CIESJfo�[mei�BeN B�d PI CO.(Va n.). o —13—
ARTICLE VI
DEFINITIONS
6.1 Definitions
Whenever the following terms are used in the Plan, with the first letter capitalized, they
shall have the meanings specified below.
"Act" means California Government Code.
"Anniversary Date" means July 1.
"Beneficiary" means any person or persons, other than the Employer or the Trustee,
designated by a Participant to receive any benefits, which may be due upon the Participant's
death. The Beneficiary of a married Participant shall be the Spouse of the Participant and may
not be changed unless Spousal Consent is obtained.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Compensation" means all compensation for that portion of the Plan Year during which
the Employee was a Member, paid in cash by the Employer to the Member for personal services.
Compensation in excess of $150,000 shall be disregarded. Such amount shall be adjusted for
increases in the cost of living in accordance with Code Section 401(a)(17), except that the dollar
increase in effect on January 1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year. For any short Plan Year the Compensation limit
shall be an amount equal to the Compensation limit for the calendar year in which the Plan Year
begins multiplied by a ratio obtained by dividing the number of full months in the short Plan
Year by twelve (12).
"Effective Date" means July 1, 2000.
F :LLANCYVAPS_REPAGENCffSpgmaTpUlyd Oms0lMm OO�wW(VaYeo l)6x -14-
"Eligible Employee" is an employees who meets the requirements of one of the three
tiers as described in Section 1.1 and is eligible to receive Retirement Benefits.
"Employee" means a full -time miscellaneous employee of the Employer or the contract
city attorney of the Employer.
"Employer" means the City of Rosemead that has adopted this Plan.
"Final Pay" means the highest average annual compensation paid to an Employee during
any twelve consecutive months of employment with the Employer.
"Member" means an Employee eligible to receive benefits under this Plan.
"Normal Form of Benefit" is the form of benefit described in Section 4.1.
"Normal Retirement Age" means fifty -five (55) years of age.
"Normal Retirement Date" means the first day of the month coincident with or next
following the date on which the Member attains Normal Retirement Age.
"PERS" means the California Public Employees' Retirement System.
"PERS Benefit Factor" means the age factor used by the PERS Local Miscellaneous 2%
at 55 plan, which is determined at the Member's age at retirement.
"Plan" means the City of Rosemead PARS Retirement Enhancement Plan.
"Plan Year" means the consecutive twelve -month period beginning on July 1 and ending
on June 30.
"Plan Administrator" means the individual or position designated by the Employer to
act on behalf of the Employer in matters relating to this Plan. If no designation is made, the
Employer shall be the Plan Administrator. If a Plan Administrator has been appointed the word
"Employer" as used in this Plan shall mean Plan Administrator unless the context indicates a
different meaning is intended.
F�AP$_N GE C� Bm N �(VU 4), oc -15-
"Public Agency" means an employer authorized under California Government Code
Article 1.5, sections 53215 through 53224 to establish a pension trust.
"Retirement Benefits" means the benefits payable to the Member following retirement,
as described in Article II.
"Regulations" means the regulations adopted or proposed by the Department of Treasury
from time to time pursuant to the Code.
"Trust" means the trust established as part of the Public Agency Retirement Trust to hold
the assets of the Plan.
"Trustee" means the trustee of the Trust.
"Vested" means the nonforfeitable portion of any account maintained on behalf of a
Member.
F:LLANCFP� U_ GENC@SBOUn�Il E BmeIL Plan Caamvu(VV n<)tl -16-
APPENDIX A
ANNUAL ADDITIONAL LIMITS
A.1 Definitions
As used in this Appendix A, the following terms shall have the meanings
specified below.
"Affiliated Company" means a company required to be aggregated with the
Employer for Purposes of Code Sections 414(b) and (c), provided, however, the determination
under Section 414 (b) and (c) of the Code shall be made as if the phrase "more than 50 percent"
were substituted for the phrase "at least 80 percent" each place it is incorporated into Section 414
(b) and (c) of the Code.
"Annual Benefit" means a benefit payable annually in the form of a straight life
annuity (with no ancillary benefits) under a plan to which Employees do not contribute and
under which no rollover contributions are made, or to which assets have been transferred from a
qualified plan that was not maintained by the Employer. If the benefit is payable in a form other
than a straight life annuity, such form must be adjusted actuarial to the equivalent of a straight
life annuity before applying the limitations of Section A.2(a). No actuarial adjustment is
required for the following: qualified joint and survivor annuity benefits, pre- retirement disability
benefits, preretirement death benefits, post- retirement medical benefits, and the value of post -
retirement cost -of- living increases made in accordance with the Code and Treas. Reg.
Section 1.415- 3(c)(2)(iii). Subject to Revenue Ruling 98 -1, the adjusted benefit shall be equal to
the greater of (x) an adjustment based on 5% and the mortality table specified in Section
415(b)(2)(E) of the Code or (y) an adjustment based on the factors specified in the Plan to adjust
the applicable form of benefits.
FT. CET ME GENCMSV...d�6,.e B<nelit Plug Mmt(Vmim 4). dm A—I
"Average 415 Compensation" means the average Section 415 Compensation
during a Member's high three years of service, which period is the actual number of consecutive
calendar years (or, the actual number of consecutive years of employment for those Employees
who are employed for less than three consecutive years with the Employer) during which the
Employee had the greatest aggregate Section 415 Compensation from the Employer.
"Defined Contribution Fraction" means for any Limitation Year: (a) the sum of
the annual additions to the Member's account under the defined contribution plans maintained by
the Employer as of the close of the Limitation Year, divided by: (b) the sum of the lesser of the
following amounts determined for the Limitation Year and for each prior year of his service for
the Employer: (i) the product of 1.25, multiplied by the dollar limitation determined under
Sections 415(b) and (d) of the Code in effect under Section 415(c)(1)(A) of the Code for the
Limitation Year (determined without regard to Section 415(c)(6) of the Code) , or (ii) the product
of 1.4, multiplied by an amount equal to 25% of the Member's Section 415 Compensation for the
Limitation Year.
Notwithstanding the foregoing, the numerator of the Defined Contribution Plan
Fraction shall be adjusted pursuant to Treas. Reg. Section 1.415- 7(d)(1), Questions T -6 and T -7
of Internal Revenue Service Notice 83 -10, and Questions Q -3 and Q -14 of Internal Revenue
Service Notice 87 -21.
"Defined Benefit Fraction" means for any Limitation Year:
The Projected Annual Benefit of the Member under this Plan and any Related
Plan determined as of the close of the Limitation Year, divided by the lesser of: (a) the product
of 1.25, multiplied by the dollar limitation determined for the Limitation Year under
Sections 415(b) and (d) of the Code and in accordance with Section A.2(b) in effect under
F.V. CEWABS_R GENCMSViou adOefined Benefit Plan D mmt(Vmion a).dm A-2
Section 415(b)(1)(A) of the Code for the Limitation Year, or (b) the product of 1.4, multiplied by
100% of the Member's Average Section 415 Compensation, including any adjustments under
Section 415(b) of the Code.
If the Employee was a Member as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of this fraction will not be
less than 125% of the sum of the Annual Benefits under such plans which the Member had
accrued as of the close of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the term and conditions of the Plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 of the Code for all Limitation Years beginning before
January 1, 1987.
"Employer" means the Employer and any Affiliated Company that adopts this
Plan.
"Limitation Year" means a twelve- consecutive month period ending on the
Anniversary Date. If the Limitation Year is amended to a different 12- consecutive month period,
the new Limitation Year must begin on a date within the Limitation Year in which the
amendment is made.
"Related Plan" means any other defined benefit plan (as defined in
Section 415(k) of the Code) maintained by the Employer.
"Section 415 Compensation" means a Member's earned income, wages, salaries,
fees for professional service and other amounts received (without regard to whether an amount is
paid in cash) for personal services actually rendered in the course of employment with an
F:LL.ANCEIPARS REPNGENC@S�Rmemea&Deined Bmeft Pin D=ment(Vmian 4),dO A-3
Employer maintaining the Plan to the extent that the amounts are includable in gross income
(including, but not limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursements, and expense allowances) and excluding the following: (a) Employer
contributions to a plan of deferred compensation to the extent contributions are not included in
gross income of the Employee for the taxable year in which contributed, or on behalf of an
Employee to a simplified employee pension plan to the extent such contributions are deductible
under Section 219(b)(2) of the Code, and any distributions from a plan of deferred compensation
whether or not includable in the gross income of the Employee when distributed; (b) amounts
realized from the exercise of a nonqualified stock option, or when restricted stock (or property)
held by an Employee becomes freely transferable or is no longer subject to a substantial risk of
forfeiture; (c) amounts realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option; and (d) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction agreement)
towards the purchase of a 403(b) annuity contract under Section 403(b) of the Code (whether or
not the contributions are excludable from the gross income of the Employee), contributions made
by the Employer for medical benefits (within the meaning of Section 401(h) or 419A(f)(2) of the
Code) which is otherwise treated as an annual addition, or any amount otherwise treated as an
annual addition under Section 415(1)(1) or 419A(d)(2) of the Code. Section 415 Compensation
for any Limitation Year is the Section 415 Compensation actually paid or includable in gross
income during such Limitation Year.
"Social Security Retirement Age" shall mean the age used as the retirement age
for the Member under Section 216(1) of the Social Security Act, except that such section shall be
F:LL.ANCE AU REPWGENCffi Oa ad fined Benefit Plan DOC wt(Vmion 4) dm A-4
applied without regard to the age increase factor and as if the early retirement age under Section
216(1)(2) of such Act were 62.
"Year of Participation" means the Member shall be credited with a Year of
Participation (computed to fractional parts of a year) for each accrual computation period for
which the following conditions are met: (a) the Member is credited with at least the number of
Hours of Service (or period of service if the elapsed time method is used) for benefit accrual
purposes, required under the terms of the Plan in order to accrue a benefit for the accrual
computation period, and (b) the Member is included as a Member under the eligibility provisions
of the Plan for at least one day of the accrual computation period. If these two conditions are
met, the portion of a Year of Participation credited to the Member shall equal the amount of
benefit accrual service credited to the Member for such accrual computation period. A Member
who is permanently and totally disabled within the meaning of Section 415(c)(3)(C)(i) of the
Code for an accrual computation period shall receive a Year of Participation with respect to that
period. In addition, for a Member to receive a Year of Participation (or part thereof) for an
accrual computation period, the Plan must be established no later than the last day of such
accrual computation period. In no event will more than one Year of Participation be credited for
any 12 -month period.
A.2 Limitation on Benefits
Notwithstanding any other provision of the Plan:
(a) the Annual Benefit payable with respect to a Member under the Plan for
any Limitation Year shall not exceed an amount equal to the lesser o£ (i) $90,000, (or, such
other dollar limitation determined for the Limitation Year by automatically adjusting the $90,000
limitation by the cost of living adjustment factor prescribed by the Secretary of the Treasury
P:U CEtPAR - MR GENCIFSVtm.c.Mt fi. dHen ft Plan D...t(Vmi.n 4) d. A-5
under Section 415(d) of the Code in such manner as the Secretary shall prescribe); or (ii) only for
Limitation Years commencing on or before December 31, 1994, 100% of the Member's Average
Section 415 Compensation. The new dollar limitation shall apply to Limitation Years ending
within the calendar year of the date of the adjustment.
(b) If the Member has less than ten Years of Participation with the Employer,
the dollar limitation in Section A.2(a) shall be reduced by multiplying it by a fraction, the
numerator of which is the Member's full and partial Years of Participation, and the denominator
of which is ten. To the extent provided in regulations or in other guidance issued by the Internal
Revenue Service, the preceding sentence shall be applied separately with respect to each change
in the benefit structure of the Plan. If the Member has less than ten years of service with the
Employer, the compensation limitation in Section A.2(a) shall be reduced by it by a fraction, the
numerator of which is the Member's full and partial years of service. For Limitation Years
commencing after December 31, 1994, the reductions provided in this paragraph do not apply to
payments made to the Member if his payments commence after he has become disabled (within
the meaning of Code Section 415(b)(2)(1)), and do not apply to payments made on account of the
Member's death.
(c) If the Annual Benefit of a Member commences prior to age 62, the dollar
limitation in Section A.2(a) shall not apply and the dollar limitation shall be the actuarial
equivalent of an Annual Benefit beginning at age 62, reduced for each month by which benefits -
commence before the month in which the Member attains age 62. To determine actuarial
equivalence, subject to Revenue Ruling 98 -1, the adjustment is the greater of (x) an adjustment
based on 5% and the mortality table specified in Section 415(b)(2)(E) of the Code or (y) the
early retirement factors specified in the Plan that are applicable to the Member's benefit. Any
P.E. CEP HEPUGENCESU semeftned Henefit Plan DO ment(Vemon 4) &c A -6
decrease in the dollar limit determined in accordance with this Section A-2(c) shall not reflect
the mortality decrement to the extent that benefits will not be forfeited upon the death of the
Member. The reduction provided in this Subsection A.2(c) shall not reduce the limitation of
Subsection A.2(a) below (x) $75,000 if benefits begin after age 55, or (y) if the benefit begins
before age 55, the equivalent of the $75,000 limit at age 55. Furthermore, the reduction in this
Subsection A.2(c) shall not apply for a Member who is a "qualified participant," as defined in
Code Section 415(b)(2)(H).
(d) If the Annual Benefit of a Member commences after age 65, the dollar
limitation in Section A.2(a) as reduced in Section A.2(b), if necessary, shall be increased so that
it is the actuarial equivalent of an Annual Benefit of such dollar limitation beginning at age 65.
To determine actuarial equivalence, subject to Revenue Ruling 98 -1, the adjustment is the lesser
of (x) an adjustment based on 5% and the mortality table specified in Section 415(b)(2)(E) of the
Code or (y) the late retirement factors specified in the Plan that are applicable to the Member's
benefit. Any increase in the dollar limit determined in accordance with this Section A -2(d) shall
not reflect the mortality decrement to the extent that benefits will not be forfeited upon the death
of the Member.
(e) If the benefit the Member would otherwise accrue in a Limitation Year
would produce an Annual Benefit in excess of the limitation under Section A.2(a), the rate of
accrual will be reduced so that the Annual Benefit will equal the limitation under Section A.2(a).
(f) The limitation in Section A.2(a) is deemed satisfied if the Annual Benefit
payable to a Member is not more than $1,000 multiplied by the Member's number of years of
service or parts thereof (not to exceed ten) with the Employer, and the Employer has not at any
time maintained a defined contribution plan, a welfare benefit plan as defined in Section 419(e)
F:V..WCE ARS_rt MGE CESNatemeadlDeFnMBmeft Plan Dommmt(Vmion C).d A -7
of the Code, or an individual medical account as defined in Section 415(1)(2) of the Code in
which such Member participated.
(g) If the Employer maintains, or has ever maintained, one or more defined
contribution plans covering an Employee who is also a Member in this Plan, a welfare benefit
fund as defined in Section 419(e) of the Code, or an individual medical account as defined in
Section 415(1)(2) of the Code, the sum of the Defined Contribution Plan Fraction and the
Defined Benefit Plan Fraction, cannot exceed 1.0 for any Limitation Year commencing before
January 1, 2000.
For the purpose of this Section A.2(h), Employee contributions to a qualified
defined benefit plan are treated as a separate defined contribution plan. In addition, all defined
contribution plans of the Employer are to be treated as one defined contribution plan and all
defined benefit plans of the Employer are to be treated as one defined benefit plan, whether or
not such plans have been terminated.
If the sum of the Defined Contribution Plan Fraction and the Defined Benefit Plan
Fraction exceeds 1.0, the sum of the fractions will be reduced to 1.0 as follows: (i) voluntary
nondeductible Employee contributions made by a Member to this Plan which constitute an
Annual Addition to a defined contribution plan, to the extent they would reduce the sum of the
fractions to 1.0, will be returned to the Member; (ii) if additional reductions are required for the
sum of the fractions to equal 1.0, voluntary nondeductible Employee contributions made by a
Member to the defined contribution plans which constitute an Annual Addition to a defined
contribution plan, to the extent they would reduce the sum of the fractions to 1.0, will be returned
to the Member; (iii) if additional reductions are required for the sum of the fractions to equal 1.0,
the Annual Benefit of a Member under this Plan will be reduced (but not below zero and not
FU NCEtP B GENCMSBOUmtadtDefnedBenefit Plan D mmt (Vmion 4) dm A-8
below the amount of the Member's Accrued Benefit to date) to the extent necessary to prevent
the sum of the fractions, computed as of the close of the Limitation Year from exceeding 1.0;
and (iv) if additional reductions are required for the sum of the fractions to equal 1.0, the
reductions will then be made to the Annual Additions of the defined contribution plans.
If the Employer maintains one or more defined benefit plans, in addition to this
Plan, covering an Employee who is also a Member in this Plan, the sum of the Annual Benefits
of all the plans will be treated as a single benefit for the purposes of applying the limitations of
Section A.2(a). If these benefits exceed, in the aggregate, the limitations of Section A.2(a), the
Normal Retirement Benefits under this Plan will be reduced (but not below zero) until the sum of
the benefits of the Related Plan(s) satisfy the limitations. In the case of an individual who was a
Member in one or more defined benefit plans of the Employer as of the first day of the first
Limitation Year beginning after December 31, 1986, the application of the limitations of this
Section A.2 shall not cause the Limitation under Section A.2(a) for such individual under all
such defined benefit plans to be less than the individual's Current Accrued Benefit. The
preceding sentence applies only if such defined benefit plans met the requirements of
Section 415 of the Code, for all Limitation Years beginning before May 6, 1986. For purposes
of this Section A.2(k), an individual's Current Accrued Benefit means a Member's Accrued
Benefit under the Plan, determined as if the Member had separated from service as of the close
of the last Limitation Year beginning before January 1, 1987, when expressed as an annual
benefit within the meaning of Section 415(b)(2) of the Code. In determining the amount of a
Member's Current Accrued Benefit, the following shall be disregarded: (i) any change in the
terms and conditions of the Plan after May 5, 1986; and (ii) any cost of living adjustments
occurring after May 5, 1986.
F:LLA C�ARS_B GENCffSR ...d fined Benefit Plan (Vc.wn 4) d. A-9
ADOPTION OF THE CITY OF ROSEMEAD PARS
RETIREMENT ENHANCEMENT PLAN
The City of Rosemead PARS Retirement Enhancement Plan is hereby adopted effective
July 1, 2000.
mm
Title:
Date:
F:LL NCEIP ME GENCIESUt ..d�ind Bcnfit Plan I .mt (V.ion 4) d.