HomeMy WebLinkAbout4775 RESOLUTION NO. 4 7 7 5
A RESOLUTION OF THE CITY COUNCIL OF TME
, CITY OF AUBURN, WASHINGTON, AUTHORIZING
THE MAYORAND CITY CLERK TO EXEGUTE AND
PUBLISH AN AMENDED DEFERRED
COMPENSATION PLAN FOR THE CITY OF
AUBURN THAT COMPLIES WITH THE NEW
PROVISIONS�OF FEDERAL LAW THAT DEAL WITH
GOVERNMENT DEFERRED COMPENSATION
PLANS
WHEREAS, the Aubum City Council, at its regular meeting of June 15,
1981, adopted Ordinance No. 3644, which adopted a deferred compensation
plan for the City of Auburn; and
WHEREAS, that plan was last updated in 2002 to comply with the
provisions of the Economic Growth and Tax Relief Re�ronciliation Act
(EGTRRA) of 2001, which provided a number of enhancements to Section 457
of the Internal Revenue Code ; and.
WHEREAS, federal tax laws and regulations conceming deferred
compensation continue to change; and
WHEREAS, the Ciry and its deferred compensation providers must
comply with those changes; and
WHEREAS, it is expecteti that periodically there will be other changes to
the laws and/or regulations related to the plan which do hot adversely afFect the
Resolution No.4775
November 9, 2011
Page 1 of 3
plan and that do not materially affect participant choices, over which the City
has no control; and
WHEREAS, it would be appropriate that any such future changes to the
plan 6e addressed administratively by the Mayor or designee without the matter
having to come back before the City Council for a,ction.
NOW, THEREFORE; THE CITY COUNCIL OF THE CITY OF AUBURN,
KING COUNTY, WASHINGTON; HEREBY RESOLVES as follows:
Section 1. The Mayor of the Ciry of Aubum and the Aubum Ciry Clerk
a�e here6y authorized to execute and publish the amended Deferred
Compensation Plan, which Plan shall be in substantial conformity with the Plan
attached hereto as 6chibit "A."
Section 2. The Mayor is hereby authorized to implement such
administrative procedures as may be necessary to carry out the directives of
this legislation, including the authorization to implement and make changes to
the plan consistent with those periodic changes to the laws and/or regulations
related to the plan which do not adversely affect the plan and that do not
materially affect participant choices without the need for bringing such plan
changes back to the City Council for action.
Section 3. This resolution shall be in full force and effect upon
passage and signatures here.on.
Resolution No.4775
November 9, 2011
Page 2 of 3
µ
Dated and signed this ��day of , 2011
/
i �
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PETERB. LEWIS, MAYOR
ATfE8T:.
�.(Q� ��'�-�
Danielle E. Daskam, City Clerk
APP VE S TO FORM:
aniel . ity Atto
Resolution No.4775
November 9,2011
Page 3 of,3
EXHIBIT A
CITY OF AUBURN. -
DEFERRED COMPENSATION PLAN
Exhibit A 1 '
Resolution 4775
November 10,201 l
CONTENTS
Introduction ................................................................................................................... 1
Article1 — Defnitions.................................................................................................... 1
Article II - Participation in the Plan .............................................................................3
Article III — Deferral Limits............................................................................................3
ArticleV— Benefits......................................................................................................6�
Article VI'—wthdrawals forUnforeseeable Emergencies.........................................9
Article Vll— Intentionally Deleted............................................................................... 10
Article VIII — Plan to Plan Transfers........................................................................... 11
Article IX—Administration.......................................................................................... 13
Article X—Assignment of Benefits...............................................................:........:... 14 .
ArticleXI —Plan Assets .............................................................................................. 16
Article XII —Amendment or Termination of Plan ...................................................... 17
ArGcle XIII — Relationship to other Plans ......................................:........................... 17
Article XIV— Interpretation ......................................................................................... 97
E�chibit A 2
Resolution 4775
November10,2011
IntroducUon
The Empioyer adopted a Deferred Compensation Pian on June 22, 1981 to attract and
retain employees. The Plan ha§ been amended from time to time. In order to further fhe
purposes of the Plan and to comply with recent changes in law, the Employer hereby adopts the
following.amended and restated Plan generally effective January 1, 2011. Certain spec�c
provisions have earlier effective dates as required by law and as proVided herein. This
amended and restated Plan is intended as good faith compliance with the requiremerrts of all
applicable law and guidance up to and inGuding the"2010 Cumulative List" (IRS Notice 2010-
90). The Plan shalF be construed in accordance with all applicable law and guidance in order to
maintain its status as an eligible deferred compensation pian under Code section 457(b).
Article 7 —Deflnitions
1.01 APPROVED INSTITUTION: Any insurance company, bank, or other financial institution
approyed by the Plan Administrator to provide annuity contracts, trust accounts, or
custodial accounts to the Participarrts under the Plan. The custodian of any custodial
account created pursuant to the Plan must be a bank, as described in secGon 408(n) of
the Code, or a person who meets the nonbanktrustee requirements of paragraphs (2)-
(6) of section 1.408-2(e) of the Income Tax Regulations relating to the use ofnon-bank
trustees. An insurance company issuing any annuity contracts must be qualifieii to do
business in the state where the contrad was issued. Any corrtrad or account
established pursuant to this section 1.01 shali satisfy the requirements of Code section
401(� and shall be deemed a Plan asset held in trust in accordance with Article XI.
1.02 BENEFICIARY. Any person or entity designated by the Participant to receive benefrts
payable after the death of,the Participant. Any such designation shail be in writing
delivered to the Plan Administrator before the death of the Participar�t, and shail revoke
all prior designations. If the Participant has not designated a Beneficiary, or if no
designated Beneficiary survives the Participar�t, then the Beneficiary is the ParticipanYs
estate. A Ben�ciary is deemgd not to have survived the Participant if he or she dies
within 30 days after the Participant. A beneficiary designation may be joint or contingent
or both. Unless othervvise stated,Joint Beneficiaries are entitled to equal shares. A
contingent Beneficiary 'is entitled to a benefit only if there is no surviving primary
Beneficiary. A benefd election made by a Participant may be binding on any such
Beneficiary subject to 4he right of a Beneficiary to defer payments to the extent permitted
under section 5.06 of the Plan.
1.03 CODE: The Internal Revenue Code of 1986, as amended, or any future United States
intemal revenue law. Reference to any Code section shall also refer to all applicabie
regulations and other binding guidance issued thereunder.
1.04 COMMITTEE: Compensation Committee hereinafter referred to as"Committee,°
established 6y Ordinance No. 3644 of 4he City of Aubum, Washington. The Committee
shall consist of an administrative unit consisting of three persans appointed from time to
time 6y the Employer which shall have the duties defined in this Plan.
1.05 COMPENSATION: The total annual remuneration for employment payable by the
Employer that constitutes wages w'ithin 4he meaning of Code section 3401(a) (for
purposes of income tax withholding at the source) plus amounts that would be included
in wages but for an election underCode section 125(a){cafeteria plans}, 132(�(4)
{qualified transportation finge}, 402(e)(3) {401(k) and 403(b) deferrals}, 402(h)(1)(B)
{SEP contributions}, 402(k){SIMPLE retirement account contributions}, or 457(b){this
and any similar plan(s)}.
1.06 DEFERRAI AGREEMENT: A written agreement between the Employer and a
ParticipanYunder which a designated amount of Compensation not yet eamed will be
deferred in accordance with the provisions of the Plan.
1.07 ELIGIBLE INDIVIDUAL: A regular full-time employee of the Employer, a regular part-
time emplayee of the Employer, or an individual perFortning services for the Employer
either by appointment or election. Eligib�e individual shall not include any temporary
employee (as defined by the Employer), any contract employee (as defined by the
Employer), or any independent contractor not mentioned in the previous sentence (as
that term is defined by the Employer, regardless of whethersuch classification is
controlling for federal employment-tax purposes or under any applicable state law).
1.08 EMPLOYER: City of Aubum, Washington
1.09 INCLUDIBLE COMPENSATION: That amourrt of Compensation includible in the
ParticipanYs federal gross income, determined without regard to any community property
laws. Includible Compensation does not include deferrals under this Plan or any other
amounts excludable from the ParticipanYs gross income under other provisions of the
Code.
1.10 INVESTMENT PRODUCT: Any product offered through,an Approved Institution and
authorized by the Plan Administrator for investment of a Deferred Compensation
Account, provided that such product conforms to the requirements prescribed by law.
1.11 NORMAL RETIREMENTAGE: The Normal Retirement Age is age 70'r4uniess another
age is detertnined as follows:
(a) At ariy time or times prior to severance from employment with the Employer and
prior to any use of the Catch-up Limitation provision of sedion 3.03 of the Plan, the
Participant may elect for his or her Nortnal Retirement Age to be any age which is (i) not
ear(ier than the earliest age at which the Participant has the right to retire and receiVe
unreduced retirement benefits irom 4he Employer's basic pension plan, and (ii) not later
than age 70'h. Any such election shall be made by the Participant'in wnting delivered to
the Plan Administrator.
(b) If a Participant continues in the service of the Employer after age 70'h and has not
used the Catch-up Limitation provision of section 3.03 of the Plan; then his or her
Normal Retirement Age is his or her adual date of severance from employment with the
Employer or any earlier age which the Participan4 may elect prior to any use of the
Catch-up Limitation. Any such election shall be made bythe Participant in writing
delivered to the Plan Administrator.
(c) Once a Participant has to any extent utilized the Catch-up Limitation of section 3.03
of the Pian, such Participan4's Normal Retiremerrt Age shall be determined solely by
reference to that age used for purposes of section 3.03 of the Plan,antl may not
thereafter by changed.
1.12 PARTICIPANT: Any Eligible Individual or fortner Eligibte Individuai who is ar has been
enrolled in the Plan under Artide II of the Plan and who retains the rigM to benefits
. under the Plan.
1.13 PLAN: This Deferred Compensation Flan, as set forth in this documeM, as the same is
now or may hereafter be amended orrestated.
1.14 PLAN ADMINISTRATOR: The Committee.
1.15 PLAN YEAR: The calendar year.
Article il—Participation in the Plan
2.01 ENROLLMENT INTHE PLAN: Any Eligible Individual may become a Participant on the
enrollment date following execution of a Deferral Agreement. For purposes of this Pian,
the enrollment date is the first day of each rrionth of the Plan Year. Compensation.will
be defeRed after a Deferral Agreement is executed by the Participant and approved by
the Plan Administrator, but in no everrt shall such defemal start before the beginning of
the next calendar month after execution of the Deferral Agreement. Pursuant to a
Deferral/�qreement, each ParticipanYs deferral shall be deducted from his or her
paycheck in approximately equal increments throughout the year. The deferral shall not
be included as gross income on a ParticipanYs federal income tax withholding statement
(VN-2 Form).
2.02 MODIFICATION OF DEFERRAL AGREEMENT: A Participant may change the amourrt
deferred Hrith resped to Compensation not yet eamed by entering into a new Deferrai
AgreemeM. Any such change wih be effective the next calendarmonth provided that the
information is received two weeks prior an,d that such new Deferral Agreement is
executed by the Participant and approVed by the Plan Administrator.
2.03 REVOCATION OF DEFERRAL AGREEMENT: A Participant may discontinue deferrals
with respect to Compensation notyet eamed by revoking the existing Deferral
AgreemeM. The Participant must notify the Plan Administrator of such revocation in
writing. Any such revocation is effedive and the ParticipanYs full Gompensation will be
restored in the month following the month in which the Plan Administratorreceives such
written notice.
2:04 RENEWED PARTICIPATION: A Participant who has ceased to be an active PaRicipant
on accaunt of a revocation of his or her Deferral Agreement or a severance from
employment with the Employer may again become an active ParticipaM in the Plan
under section 2.01 of the Plan, effective as of the next enrollment date,at any time he or
she is an Eligible lndividual.
Article III —Deferral Limits
3.01 MINIMUM DEFERRAL: The minimum amourrt which may be defeRed under any
Deferral AgreemeM is $25.00 permonth.
3.02 MAXIMUM ANNUAL DEFERRAL: Except as provided in sections 3.03 and 3.05 ofihe
Plan, the maximum amounYwhich may be deferred unde�the Plan for any taxable year
of the Participant (o4her than rollover amourrts) is the lesser of:
(a)the applicable dollar amourrt; or
(b) 100% of the Includible Compensation of the Participant for the year.
The "applicable doliar amaurrt"for purposes of this section 3.02 of the Pian shall mean
the amount determined in accordance with the following table:
For taxable years beginning in calendar year: The applicable dollar amount:
2011 $16,500 •
2012 $17,000
In the case of taxable years beginning afte�December 31, 2012, the$17,000 applicable
dollar amount sRall be adjusted by the Secretary of the Treasury in accordance wkh
Code section 457(e)(15).
3.03 CATCH-UP LIMITATION: A Participant may trigger the Catch-up Limitation described in
this section 3.03 of the Plan,by eiecting a Nortnal RetijemeM Age pursuant to
section 1.11 of this Plan. The maximum amount which may be deferred under the Plan
for each of the last three taxable years of the Participant entling prior to but not inGuding
the year the Participant aHa'ins Normal Retirement Age is the lesser of:
(a)twice the °applipble dollar amount" (as defined in Code sedion 457(b)(2)(A)); or
(b) the sum of the Nortnal Limitation set foRh in section 3.02 of the Plan (determined
without regard to this gection 3.03 of the Plan) plus the Prior Underutilized Limitation
described in sect'ion 3.04 of the Plan.
A participant may elect to utilize the Catch-up Limitation with respect to only one Normal
Retirement Age in this Flan or eny other similar plan notwithstanding 4he fact that the
PaRicipant may have utilized the Catch-up Limitation in less than all of the tt�ree eligible
years. Thus, if a Farticiparrt uses the Catch-up Limitation and then postpones Nortnal
Retirement Age or retums to work aTter retiring, the lirtiitation shall not be available again
before a subsequent retirement.
3.04 PRIOR UNDERUTILIZED LIMITATION: The Prior Underutilized Limitation is so much of
the Normal Limftation which has been undenrtilized in all prior taxable years since
January 1, 1979, provided that:
(a) during any portion of that taxable year, the Participant.was eligible to participate in
the Plan orany similar plan of the same Employer or of another state or local
govemment employer in the same state; and
(b) during that taxable year,the Plan or similarplan was subject to Code section 457.
3.05 CATCH-UP CONTRIBUTIONS FOR EMPLOYEES AGE 50 AND OVER. Ali Eligible
individuals under this Plan who have attained age 50 before the dose of the Pian Year
shall be eligible to make catch-up contributions in accordance w'ith, and subject to the
limitations of, section 414(v) of the Code. Such catch-up wnVibutions shall not be taken
iMo account for purposes of the provisions of the Plan implementing the required.
limitations of Code section 457. The Plan shall not be treated as failing to safisfy the
provisions of the Plari impletnenting the requirements set forth in Code section
414(v)(3)(B), as applicable, by reason of the making of such catch-up contributions.
The additional elective deferrals which may be deferred under the Plan pursuant to this
section 3.05 of 4he Planfor anytaxable year of the Participant is the lesser of:
(a)the applicable dollar amount; or
(b)the excess (if any)of(i)the participanYs compensation for the year, over(ii) any
other elective deferrals of the participant for sucH year which are made without regard to
section 414(v) of the Code.
The "applicable doilar amount"for purposes of this section 3.05 of the Pian shall mean
the amount determined in accordance with the following table:
For taxable years beginning in: The applicable doilar amount:
2011 $5,500
2012 $5;500
In the case of taxable years beginning after December 31, 2012, the $5,500 applicable
dollar amount shall be adjusted by the Secretary of the Treasury in axordance with
Code section 414(v)(2)(C).
Notwithstanding the foregoing, this section 3.05 of the Plan shall not apply for any year
in which the Catch-up LimRation described in sedion 3.03 of the Plan applies.
3.06 LIMITATION: The maximum amount of compensation of any one individual which may
be deferred under this Pian during any taxable yearshall not exceed the amount in
effect under Code sedion 457(b)(2)(A) (as modified by any adjustment provided under
Code section 457(b)(3)).
3.07 COMPENSATION AT PRESENT VALUE. For the purpose of applying the limits of this
Arfide III of the Plan, Compensation deferted under this Plan shall be taken iMo account
at its present value in the year allocated to the Participant or in such later year in which it
becomes vested.
3.08 ADJUSTMENT OF DEFERRAL AGREEMENTS. The Plan Administrator may adjust
any DefercalAgreement to disallow any deferraf of Compensation under the Plan in
excess of the limitations stated above. However, neither the Employer nor the Plan
Administrator shall be held liable to a Participant if the Plan Administrator fails to disallow
an excess deferral elected underany Deferral P�qreemeM.
Article IV—Deferred CompensaUon Accounts
4.01 ACCOUNTS ESTABU3HED. The Employer shail establish a Deferred Compensation
Account for each Participant. All amourrts of CompensaUon deferred pursuaM to the
Plan, ail property and rights purchased with such amounts, and all income attributable to
such amouMs, property, or rights, such as fhe Deferred Compensation Account, shall be
held in one or more annuity contracts, trusts, or custodial accounts with an Approved
Institution meeting the requirements of Code section 457(g) and held for the exclusive
• benefd of the Participants and Beneficiaries. The assets of any Deferred Compensation
Account may not be used for or diverted to any purposes other than the provision of
benefds under the Plan. For 4his purpose, theterm "annuity contract" does not include a
life, health or accident; property, casualty, or liability insurance coMract.
4.02 ELECTIVE DEFERRALS. The Employer shall deposft the amount deferred under a
DefeRai Agreement to the Deferred Compensation Account of the PartiapaM within a
period that is not longer than is reasonable for fhe properadminis4rafian ofthe accourrts
of Participants. To comply with this requirement, all amounts of Compensation deferred
under the Plan shall be transferred to a contract described in section 4p1(f� of the Code.
not later than 15 business days after the end of the month in which the Compensation
would othervvise have been paid to the employee. �
4.04 INCOMEAND LOSS ON ACCOUNTS. The Deferred Compensation Account of each
Participant shall be adjusted for the net income, gains, and losses realized by such
Account.
4.05 INVESTMENT OF ACCOUNTS. Pursuant to procedures established by the Plan
Administrator, each ParticipanY may from timeto time designate the Investment Product
in which his or her Deferred Compensation Account will be invested. The Employer,and
Plan Administrator shall not be responsible for the inyestment or performance resufts of :
_
any Investment Product. The Pian Administrator may:from time to time change the
Investment Product(s) available under the Plan. The Participants shall have no right to
require the Administrator to select or retain any Investmerrt Product. If the Adminishator
eiiminates an Investmenf Produd, the Plan Administratormay require all amounts
irnested in that option to.be reinvested in another InpestmeM Product available under
the Plan. If at any time a ParticipaM fails to designate the Investment Produd(s) in
which his or her Deferred Compensation Account is to be invested or re-invested, then .
the'Plan Administrator may make such designation.
Article V— Benefits
5.01 AMOUNT OF BENEFITS. The benefds payable under the Plan,to a Participant orhis or
her Beneficiary shall equal the balance in the ParticipanYs Deferred Compensation
Account. Afterbenefits commence,the ParticipanYs Deferced Compensation Account
shall con6nue to be adjusted for the net income, gains, or losses realized by such
Account.
5.02 RESTRICTIONS ON DISTRIBUTIONS. No benefits.or other amounts will be payable
under this Plan to a Participant or his or her Benefciary earlier than:
(a) the calendar year in which 4he Participant attains age70'/z;
(b)the ParticipanYs severance from employment with the Employer; or
(c) an Unforeseeable Emergency of the Participant as provided in Article VI of the Pian.
5.03 FORM OF BENEFITS. Unless otherwise elected under this provision, benefits under the
Plan shall be paid in the form of a lump sum. If the'Deferred Compensation Account of a
. Participant is greater than $5;000, then, subject to the requirements of Article IV of the
Plan, the Participant ar Beneficiary may elect fo have benefds paid in any altemative
fortn of paymeM available to the Participant from the Approved InstRution holding the
DefeRed Compensation Account at any time before the benefd becomes payable. To
the extent permitted bythe Approyed Institution, the Participant may also elect3o receive
benefds in the form of an in-kind disfibution of the assets of the Deferred Compensation
Account. Any such elections must be made at least thirty (30) days prior to the date
payments are to begin.
5.04 COMMENCEMENT OF BENEFITS. Benefits under the Fian shall normally be payable
sixty (60) days after the close of the Plan Year in which the Participarrt has a severance
from employment with the Employer; provided, however, the Participantmay elect, sixty
(60) calendar days prior to such normal or any deferrecl commencement date, to defer
the beginning of such payments, or any portion of such payments,to a later fixed and
determinable date provided 4hat it is no later than sixty (60) days afterthe end of the
Plan Year in which the Participant will attain Normal Retirement Age; provided further,
that a Participant is also errtitled to the additional deferral election described in sedion
5.09 of this Plan.
5.05 MINIMUM DISTRIBUTIONS DURING LIFE. The Required Beginning Date for a
Participant is April 1 of the calendar year following the later of(i)the calendar year in
which the Participant attains age 70'/:, or(ii)the calendar year in which the Participant
retires. No later than the Required Beginning Date:
(a) the entire Deferred Compensation Account of a Participant must be paid in full; or
(b) distributions from the Deferred Campensation Accourrt of a Participant must begin, in
accordance with Treasury Regulations under Code section 401(a)(9), over the I'rfe of
such Partiapant or over the lives of such Participarrt and a designated Beneficiary (or
over a period not e�Rending beyond the life expectancy of such Participant or the I'rfe
expectancy of such Participant and a designated Beneficiary).
All distributions made hereunder shall be made in accordance with the requirements of
Code section 401(a)(9) and theTreasury regulationsthereunder. Notwithstanding this
section 5.05 and sections 5.06-5.07, this Plan shall be deemed to have complied with
the minimum distribution requirements for all applicable years in which the Plan complies
with a reasonable and good-faith interpretation of Code section 401(a)(9), including
provisions relating to the suspension of minimum distribution requirements for 2009.
5.06 MINIMUM DISTRIBUTIONS AFTER DEATH. If a Participant dies after the distribution of
the Participarrt's interest has begun in accordance with section 5.05(b) of the Plan, but
before the ParticipanYs entire interest has been distributed to him or her, the remaining
portion of the Deferred Compensa4ionAccount of the Participarrt must corrtinue.to be
distributed at least as rapidly as under the method of distribution being used prior to the
ParticipanYs death. All payments made after the death of the Participant must continue
to meet the incidental death benefR requirements of Code section 401(a)(9)(G) and
section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
If the Participant dies before distribution of his or her iMerest begins, distribuution of the
ParticipanYs entire inte�est shall be completeH by December 31 of the caleniiar year
containing the frfth anniversary of the ParticipanYs death except to the extent that an
, election is made to receive distributions in accordance with (a) or(b) below:
(a) if any portion of the Participant's interest is payable to a designated Beneficiary,
distributions may be made overihe life or over a period certain not greater than the life
expectancy of the designated Beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar yearin which the Partiaparrt died;
(b) if the designated Beneficiary is the ParticipariYs surviving spouse, the date
distributions are required to 6egin in accordance with (a) ebove shall not be earlierthan
the later of(1) December 31 of the calendaryear immetliately following the calendar
year in which the ParticipaM died, and (2) December3l of the calendar year in which
the Participant would have attained age 70-1/2.
5.07 UFE'EXPECTANCY GALCULATIONS. For the purpose of sections 5.05 and 5.06 of the
Plan, life expectanaes are computed using the expeded retum muitiples in Tables V
and VI of section 1 J2-9 of 4he Income Tax Regulations.. The I'rfe expectancies of the
Participant and a spouse Ben�ciary shalt be recalculated annually unleSs periodic
payments for a fixed period begin irrevocably (subjed to acceleration) by the date
payments are required to begin. The I'rfe expectancy of any other Ben�ciary may not
be recalculated.
5.08 CASH-OUT OF SMALL ACCOUNTS. The Deferred'Compensation Account of a
PaRicipant shall be distributed to the Participant in a lump sum payment (at the request
of the Participarrt)within sixty (60) days after any Plan Year, provided that all of the
following conditions are met:
(a) the total value of the Deferred Compensation Account does not exceed $5,000 (or
the dollar limit under section 411(a)(11) of the Code);
(b) the Participant has not deferred any amount of Compensation under the Plan during
the two-year period ending on the date of distribuUon; and
(c) there has been no prior in-service distribution of the total amount payable to the .
Participant under the Plan.
Effective March 28, 2005 and notwithstanding anything to the contrary in this section
5.08, in the event of any mandatory distribution of an accouM having a value greater
than $1,000, such amount shall be paid in a direot rollover to an individual retirement
account designated by the, Plan,unless the Participar�t elects to (i) receive the distribution
directly or (ii) have such distribution paid direc4ly to an "eligible re4irement plan" in a
direct rollover(in accordance with the dired rollover provisions of the Plan). A
mandatory distribution means a,distribution without the ParticipanYs consent and before
the Participant attains Normal Retirement Age. A distribution to a surviving spouse or
altemate payee is not considered.a mandatory distribution.
5.09 ADDITIONAL DEFERRAL ELECTION. If a Participanf has elected, in accordance with
the Plan,to defer the commencement of distribudons beyond the first permissible payout
date, then the Participant may make an additional election to further defer the
commencement of distributions, provided that the election is filed before distributians
actua�ly begin and the latec commencement date meets the required distribution
commencement date provisions of sections 401(a)(9) and 457(d)(2) of the Code. A
Participantmay not make more than one such additional deferral election after the frst
permissible payou4 date. For purpos.es of the this segtion, the"first permissible payout
date" is the earliest date on which the Plan pertnit5 paymeMsto begin after separation
from service, disregarding payments to a ParticipaM who has an unforeseeable
emergency orattains age 70 1/2, or under the in-service distribution provisions of the
Plan. This section shall apply notwithstanding that a ParticipanYs prior election fortn
regarding the commencement of distributions indicated that such election was
irrevocable.
5.10 USERRA DEATH BENEFITS. In the case of a paRicipant who dies while performing
qualfied military service (as defined in Code section 414(u) ), the survivors of the
particiPant sfiall be entitled to any additional benefits (other than benefit accruals rela6ng
to the period of quaiified military service) provided under the plan had the participant
resumed and then terminated employmeM on account of death.
Article VI—�thdrawals.for Unforeseeable Emergencies
6.01 WITHDRAWALS FOR UNFORESEEABLE EMERGENCY: The Participant may
withdraw an amount from his or her Deferred Compensation Account to the extent that
the Plan Administrator detertnines that such amouM is reasonably necessary to satisfy
an unforeseeable emergency of the PaRicipant or his/her ben�ciary, the participanYs or
beneficiary's spouse, or the participanYs or ben�aary's dependerrt as defined in Code
section 152(a). The emergency need must be one that cannot reasonably be relieved
through reimbursement or compensation by insurance or othervvise, liquidation of the
assets of the Participant or those of the ParticipanYs spouse or minor children (to the
e�Rent that such a liquidation would not itself cause severe financial hardship), other
distributions orioansfrom any employer plan, cessation of elective or voluntary
contributions to any employer plan, or borrowing from banks, creditvnions, or other
commercial sources, or any combination of the foregoing.
6.02 UNFORESEEABLE EMERGENCY DEFINED. For purposes of this Article VI of the
Plan, the term "unforeseeable emergency" means a severe financial hardship caused by
a sudden and unexpected illness or accident incurred by the Participant or his/her
beneficiary, the particiPant's orbeneficiary's spouse, or the participanYs or ben�ciary's
dependent as defined in Code section 152(a), loss of the ParticipanYs property due to
casualty, or othersimilar eutreordinary and unforeseeable circumstances arising from
events beyond the PartiapaM's coMrol. This does not include foreseeable expenditures
normally budgetable, such as the purchase of a home or automobile or school
expenses, nor does it indude a divorce or separation.
6.03 EFFECT ON BENEFITS. A withdrawal for an unforeseeable emergency may be made
before or after benefits commence under Article V of the Plan, however, the terms of an
optional form of payment may limit the availability of such a wkhdrawal. In no event shall
the amount of a uvithdrawal for uriforeseeable emergency exceed the 6alance in the
Deferred Compensation AccouM at fhe time of withdrawal, and any remaining benefits
payable from the Deferred Compensation Account.will be appropriately reduced to
reflect the withdrawal.
Article Vll-I�ntional.ty Deleted.
Article VIII—Plan to Plan Transfers
8.01 ROILOVER CONTRIBUTIONS TO THIS PLAN.
The Plan will accept partioipant rollover contributions and/or direct rollovers of
distributions made after December 31, 2001, from the following: (a) a qualified plan
described in secGon 401(a) or.403(a) of the Code; inGuding after-tax employee
coMributions; (b) an annuity corrtrad described in section 403(b) of the Code, excluding
after-tax employee contributions; and (c) an eligible plan under section 457(b) of the
Code which is maintained by a state, politicai subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state.
The Plan will also accept a partiapant roilover contribution of the portion of a distribution
from an individuai retirement aocount or annuity described in section 408(a) or 408(b) of
the Code that is eligible to be rolled over and would otherwise be includible in gross
income.
Any such transfer shall be in cash or in such form as the Plan Administrator may
determine acceptable. Any amounts transferred to the Plan shall be held and
administered under the terms of fhis Plan.
8.02 TRUST TO TRUST TRANSFERS ("DIRECT ROLLOVERS"). Notwithstanding any
provision of the Plan to the contrary that would othervvise limit a distributee's election
under this Article, a distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion ofan eligible rollover distribution paid directly
to an eligible retirement plan specified by the distributee in a direct rollover. If any
portion of the balance to the crgdft of an employee in the Plan is paid to the emp�oyee in
an eligible rollover distribution, the employee transfers any portion of the property such
employee reoeives in such distribution to an eligible retiremeM plan, and in the case of a
d'istribufiomof property other 4han money, the amount so transferred consists of the
property distritiuted, then such distribution (to the exteM transferred) shall not be
includible in gross income for the taxable year in which paid.
8.02A DIRECT ROLLOVER OF NON-SPOUSE BENEFICIARY DISTRIBUTION.
Non-spouse benefrciary rollover right. For distributions after December 31, 2009, a non-
spouse beneficiary who is a"designated beneficiary° under Code section 401(a)(9)(E)
and the regulations thereunder may roll over, by a direat trust-to-trust transfer, all or any
portion of his/her distributiori to an individual retirement account (including a Roth IRA).
This provision shall apply only fo a distribution that otherwise satisfies the definition of an
eligible rolloVer distribution.
Cerfain requireme�s not applicable. The ability of a non-spouse beneficiary 4o make a
dired roll over shall not make any such distribution subject to the dired rollover
requirements of Code §401(a)(31), the notice requirements of Code g402(�, or the
mandatory withholding requirements of Code §3405(c). If a non-spouse beneficiary
receives an actual distribution from the Plan, the distribution is not eligible for a "60-day"
indirect rollover.
Tiust beneficiary. If the Participarrt's named beneficiary is a trust; the Pian may make a
direct rollover to an individual retirement account on behalf of the trust; provided tFie trust
satisfies the requirements to be a designated beneficiary within the meaning of Code
§401(a)(9)(E).
Required minimum distributions not eligible for rollover. A non-spouse beneficiary may
not rolloveran amount which is a required minimum distri6ution, as detertnined under
applicable Treasury regulations and other IRS guidance.
Mandatory default rollover not applicable. The mandatory default rollover provisions of
the Plan under Code§401(a)(31)(B) (corrtained in Plan section 5.05, relating to
mandatory distributions of an eligible rollover distribution greater than $1,000), do not
apply to distributions to a non-spouse ben�ciary.
8.03 DEFINITIONS.
(a) Eligible RolloverDistribution. 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 frequenUy than annually) made for the
Iffe (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of
the clistributee and the distributee's designated Beneficiary, o�for a spe�ed period of
ten years or more; any distribution to the exteM such distribution is required under
section 401(a)(9) of fhe Code; andthe poRion of any distribution that is not includable in
gross income (detertnined without regard to the exclusion for net unrealized appreciation
with respect to employer securities); and any amount that is distributed on account of
hardship (incluiiing unforeseeable emergency as defined in Article VI). A portion of a
distribution shall not fail to be an eligible rolloverdistribution merely because the portion
consists of after-tax employee con4ribufions which are not includible in gross income.
However, such portion may be transferred only to an individual retirement account or
annuity described in secGon 408(a) or(b) of the Code, or to a quat�ed defined
contritiution plan described in section 401(a) or 403(a) of the Code that agrees to
separately account for amounts so transferred, including separately accounting for the
portion of such distribution which is includible in gross income and the portion of such
distribution which is not so includible.
(b) Eligible Retirement Plan. An eligible retiremerrt plan is an individual retirement
accouM described in sedion 408(a) of the Code, an individual retirement annuity
described in sedion 408(b) of the Code, an annuity plan described in section 403(a) of
the Code, a qualified trust described in section 401(a) of the Code, an annuity contrad
described in section 403(b) of the Code, or an eligible plan under section 457(b) of the
Code which is maintained by a,state, political subdiVision ofa state, or any agency or
instrumentaliry of a state or political subtlivision of a state and which agrees to
separately account for amounts transferred into suoh plan from this Plan, that accepts
the distributee`s eligible rollover distribution. The definition of eligible retirement plan
shall also apply in the case of a distribution to a surviving spouse, or to a spouse or
former spouse who is the Altemate.Payee under a Qualrfied Domestic Relation Order,
as defined in sedion 414(p) of the Code.
(c) Distributee.. A distributee 'inGudes an Employee or fortner Employee. In
addition, the fmployee's or former Employee's sunriving spouse and the Employee's or
former Employee's spouse orformer spouse who is the altemate payee under a
qual�ed domestic relations order, as defined in section 414(p) of the Code, are
distri6utees with regard to the interest of the spouse or former spouse.
(d) Dired Roiloyer. A direct rolloyer is a paymerit by the Plan to the eligible
retirement plan spe�ed by tFie distributee.
8.04 TRUSTEE TO TRUSTEE TRANSFERS TO PURCHASE PERMISSIVE SERVICE
CREDIT: No amount shall be includible.in gross income by reason ofa direct trustee-
to-trusteetransfer to a d�ned benefit govemmerital pian(as d�ned in Code section
414(d)) if such transfer is_(1)for the purchase af permissive service credit (as defined in
Code sedion 415(n)(3)(A)) under such plan, or(2) a repayment to which Code section
415 does not apply by reason of subsection (k)(3)thereof.
8.05 WRITTEN EXPLANATION TO RECIPIENTS OF DISTRIBUTIONS ELIGIBLE FOR
ROLLOVER TREATMENT. The Plan Administrator§hall, within a reasonable period of
time before making an eligible rollover distribution, provide a written explanation to the
recipient:
(1) of the provisions under which the recipierrt may have the distribution directly
transferred to an eligible retirement plan and of the automatic rollover
provisions applicabie to mandatory distributions of amourits greater than
$1,000;
(2) that mandatory withholding of tax applies to eligible rollover distributions not
directty transferred to an eligible retirement plan;
(3) of the ability to avbid tax on a distribution pursuant to a voluntary, traditional
rollover made within 60 days after the date of distribution; and
(4) , that distributions from an eligible reUremeM plan that receives a dired
rollover from this'Plan may be subject to restrictions and tax consequences
which differ from this Plan.
Article IX—Administration
9.01 DUTIES OF THE PLAN ADMINISTRATOR. The Plan Administrator shall representihe
Employer in all'matters conceming the administration of this Plan. The Plan
Administrator shall have full power and authority:
(a)to adop#rules and regulations for the administration of the Plan, provided they are
not incons'istent with the provisions of the Plan, Gode section 457 or any Treasury
regulations promulgated thereunder or any other applipble law:
(b) to interpret,alter, amend, or reyoke any rules and regulations so adopted;
(c) to enter into contracts on 6ehalf of the Employer wiUi respect to this Plan;
(d)to enter into Defemal AgreemeMs on behalf of the Employer;
(e)to make discretionary decisions under this Plan;
(fl to demand satisfactory proof of the occurrence of any event that is a condition
precedenYto the payment of any benefit under the Pian;
(g)topertorm any and all administrative duties under Mis Plan; and
(h)to make any determinations under the Plan in the sole discretion of the Plan
Administretoc
Except as expressly provided herein, eyery actiontaken by the Plan Administrator shall
be final and binding on all parties, and stiall be presumed to be a fair and reasonable
exercise of the authority yested in or the duties imposed upon the Pian Administrator.
The Plan Administrator shalf be deemed to have exercised reasonable care, diligence,
and prudence and to have acted impartially as to all persons interested; unless the
contrerybe proven by affirmetive eyidence. The Pian Administrator shall not be liable
foramounts payable under the Plan.
9.02 CONFUCTS OF INTEREST. The Plan Administrator, or any individual acting on behalf
of the Plan Administrator, may also 6e a Participant in the Plan, but such individual shall
no4 be er�ti�ed to participate in discretionary deasions relating to such individual's own
participation in the Plan.
9.03 ADMINISTRATIVE COSTS. The internal costs related to any Investment Product shall
be charged to 4hose Deferred Compensation AccouMs'which invest in it. Other
administrative costs of the Plan may be paid by the Employer, or if not, shall be charged
to the Deferred Compensation Accounts on a pro rata basis.
9.04 CLAIM PROCEDURES. Claims for benefits under the Plan shall be filed with the Plan
Administrator in writing on such forms as the Plan Administrator may designate. The
Plan Administrator shall fumish the claimant with written notice of the disposition ofhis
or her claim within ninety (90) days. Ifspecial circumstances require and timely notice is
given by the Plan Administrator to the claimant, the period for response may be
extended for an add'Rional niriety (90) days. If the claim is denied, such notice shall set
forth the reasons for the deniai, ate_peRineM provisions of the Plan, describe the claim
reView procedures, and, where appropriate, provide and explanation of how the ciaim
may be perfected.
� 9.05 CLAIM REVIEW PROCEDURES. .If a claim has been denied in whole or in part under
section 9.04 of3he Plan,the daimarrt or his or her authorized represeMative may
request that the Plan AdminisVator give fuRher consideration 4o such Gaim by filing a
written request for review wifhin sixty (60) days of receipt of the notice of denial. Such
request shall include a written statement of the reasons why the claimant believes the
denial to have been in error, and shall inGude•any and all evidence in support of the
ctaim. The Plan Administrator shall notify the Gaimard of 4he finai decision on his or her
claim in writing within sixty (60) days ofthe receipt of the request for:review. If special
circumstances require and timely notice is given by the Plan Administrator to the
claimant, the period for a final deasion may be extended for an additional sixty (60)
days. The notice shall set foRh the reasons for the final decision and cite pertineM
provisions of the Plan.
Article X—Assignment of Benefits, ,
10.01 ASSIGNMENTS PROHIBITED. No Participant orBen�ciary shall have,any rigM to
commute, sell, assign, pledge, transfer, or"otherwise corney or encumber the rigM to
ben�ts under this Plan, which benefds are expressly deGared to be unassignable and
non-transferabie, and any attempt to do so shail be void. The benefits under this Plan
shall not be subject to attachment, gamishment, or execution for the paymeM of any
debts,judgments, alimorry,_orseparate maiMenance owed by the Participant or
Beneficiary, or be transferable by'operation of law in 4he event of bankruptcy or
insolvency, to the fullest extent permitted by law.
10.02 QUALIFIED DOMESTIC RELATIONS ORDERS.
(a) Generaliy. The benefds of a Participant may be transferred to an Altemate
Payee under a domestic relations order meeting the requiremeMs of Code
section 414(p).
(b) Plan Procedures. Notwithstanding any otFie�Plan provision, the following
procedures shall apply when any domestic relations.order is received by the Plan
with respect to a Participant.
The Plan Administratoc shall promptly notify the Participant and (a)each person
named in the order as entitled to payment of Plan benefits; and (b) any other
person entitied to any partion of the ParticipanYs Pian benefits (persons referred
to in (a) and (b) are hereafter Altemate Payees) of the receipt of such order and
of the Plan Administrator's procedures for detertnining the qual�ed status of the
order. The Plan Administrator shall pertnit each Altemate Payee to designate a
representative for receipt of copies of notices.
Immediately upon receipt of a domestic relaUons order, the Plan Administrator
shall separately axount for the amounts which would have been payable to the
_ _ .
Altemate Payee during such period if the order had been detertnined to be a
Quaiified Domestic Relations Order.
The Plan Administrator shall determine,within a reasonable time after receipt of
the domestic relations order, whether the order is a Qual�ed Domestic Relations
Order. The Plan Administrator shall then notify the Participant and each
Akemate Payee of its decision.
A Qualified Domestic Relations Order is any judgment, decree or Order
(including approval of a property settlement agreement)that:
(i) relates to the provision of child support, alimony payments, or
maritall property rights'4o a spouse, fortner spouse, child, or other
dependent of the Participant;
(ii) is made pursuaM to a state domestic relations law(induding a
commLnity property law);and
(iii) creates or recognizes the:existence of an Altemate Payee's right
to reoeive all or a portion of a the benefits payable with respect to
a participaM under the Plan.
7he Plan Administrator's decision shali be final unless the Pa�ticipaM or an
Alterimate Payee gives written notice of appeal within 60 days after receipt of the
decision.
If within 18 months after the date on which the first payment would be required to
be made under the order;an order is finally determined to be a Qual�ed
DomesticRelations OrcJer, 4he segregated amouMs including any interest
thereon shall be paid to the persons entitled thereto, and thereafter the Altemate
Payee shall receive payments pursuant to the terrns of the order. Amounts
subject to the order which are not in pay statusshall be transferred to a separate
account in the name of the Altemate Payee and thereafter held for such payee's
benefd pursuant to the tertns of the order. If within 18 morrths after the date in
which the first payment would be required to 6e made under the order, the order
is determined not to be a Qualfied Domestic Relations Order, or if the issue has
not been finally determined, the Plan Administretar shall instrud theApproved
Institution and/or issuer of the Investment Product to pay the segregated
amounts (includ'ing any interest thereon)to the person who would have otherwise
been entitled thereto if there had been no order. Any determination that an arder
is qual�ed after the dose of the 7&month period shall be applied prospectively
only.
The Pian Administrator's procedures shall generally conform to this Plan's claims
procedures.
(c) Timing of Benefit Payment Notwithstanding any provisions of this Plan to the
contrary, an Altemate Payee pursuant to a Qual�ed Domestic'Relafions Order
shall be errtitled to elect to receive a distribution from the Plan following the date
such order is determined by the Pian Administrator to be a Qual�ed Domestic
Relations Orderand as specified in such Order(to the extent not othervvise
limited by the Investment Praduct). Provided, however, that forpurposes of such
a distribution, the amount distributed shall be valued as of the valuation date
immediately preceding the date the withdrawal is processed, with payment(s)
commencing as soon as reasonably possible after such valuation date:
Paymerrts made pursuaM to this paragraph shall not be treated as a violation of
the requirements of section 457(d) of the Code.
(d) Spouse or Fortner Spouse Treated as Distributee: Pursuant to Code section
414(p)(12), an Altemate Payee who 'is 4he spouse or fartner spouse of the
participaM (and not the Participant)shall be treated as the distributee of any
distribution or paymeM;made to such Altemate Payee by the Plan pursuant to a
Qualified Domestic Relations Order.
Artide XI— Plan Assets
All assets and income of the Plan shall be held in trust for the exclusive benefd of
participants and their beneficiaries. Plan assets shall include all Deferred Compensation
Accounts underthe Plan, and all property and rights wh'ich may be purchased with such
Accourrts, and all income attribuhable to such Acxounts., Plan assets shall remain (until
made available to the Participant o�Ben�ciary) solely the property and rights of the
Plan and shall not be subject to the claim of general creditors of the Employer.
Article Xtl —Amendment or Termination of Plan
12.01 AMENDMENT OR TERMINATION. The Employer may amend or terminate the Plan at
any time; provided, however, no tertnination or amendment shall affed the rights of a
PaRicipant or Beneficiary to the balance in his or her Deferred Compensation Account.
12.02 EFFECT OF TERMINATION. Upon any termination of the Plan, the Participants in the
Plan will be deemed to have withdrawn from the Plan`as of fhe date of such termination
and each Defemal Agreement shall be canceled. The full Compensation of all
Participants will be 4hereupon restored on a non-defemed basis. The Plan Administrator
shall not distribute Plan benefits at the time of such termination; but shall retain all
Deferred Compensation Accounts uritil benefits are payable under the terms of Article V
or Article VI of the Plan.
Article XIII— RelaUonship to other Plans
It is intended that, pursuant to section 457 of the Code, Compensation deferced under
the Pian will not be considered current Compensation for purposes of Federal income
taxation. Such amounts wiil; however, be included as Compensation to the extent
' required under the Federai Insurance Contributions Act(FICA). Payments under this
Plan will supplement retirement and death benefits under the Employer's group
insurance and retiremerrt plans, if any.
Article XIV—Interpretation
14.01 CONSISTENCY WITH SECTION 457. This Plan is intended to be an eligible deferred
compensation plan within the meaning of section 457(b) of the Code, and shall be
interpreted so as to be consisterrt with such Code section.
14.02 NOT E,MPIOYMENT CONTRACT. Nothing coMained in this Plan shall be deemed to
cbnstitute an employment contrad or agreement for services between the Participant
and the Employer nor shall it.be deemed to give a Participant any right to be retained in
the employ of, or under contract to, the Employer. No4hing herein shall be construed to
modify the terms of any employment contract or agreement for services between a
Participant and the Employer other than to modify the time for payment of Compensation
deferred under this Plan.
14.03 INVESTMENTS NOT GUARANTEED. The Employer, the Plan Administrator, and their
agents, employees, or representatives, do not make any endorsemerit, guarantee, or
any other representation, and shall not be liable to the Plan or to any Participant,
Beneficiary, or any other person;with respeG to the financial soundness, investment
perfortnance, fitness, or suitability of any Investmerrt Product offered under the Plan. A
Participant should consuR with professional tax advisors to detertnine the tax
consequences of his orher participation in this Plan. Furthermore, the Employer, the
PlanAdministrator, and their agents, employees, ar representatives, do not represent or
guarantee successful inyestment of deferrals, and shall not be required to repay any loss
which may result from such investmerrt or ladc of invesfinent.
14.04 NUMBER AND GENDER: 1Nords used herein in the singular shall include the plural and
the plural the singular where applicable, and one gender or the neuter shall include the
other gender or the neuterwhere appropriate.
94.05 HEADINGS. The headings of articles, sections, or other subdivisions hereof are
included solely for convenience of reference, and if there is any conflid 6etinreen such�
headings and the 4ext of the Plan, the text shall control.
14.06 STATE LAW: The Plan shall be construed in accordance with applicable federal law
and, to the exteM otherwise applicable,,the iaws of Washington.
- IN WITNESS WHEREOF the.Employ has caused this Plan to be executed by its duly
authorized officer(s) on the�day of �.,/.u.✓ , 2011.
. Witness: City of ub ,
Attest;� ��J�� By: �f�
Title: �-"H�'�'T� Title:�VO �