Ord 91-119
ORDINANCE NO.
91-119
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF FEDERAL WAY, WASHINGTON, RELATING TO SOCIAL
SECURITY, AMENDING THE CITY OF FEDERAL WAY
EMPLOYEES' RETIREMENT SYSTEM TO PROVIDE THAT
PART-TIME, SEASONAL AND TEMPORARY EMPLOYEES
SHALL CONTRIBUTE TO SOCIAL SECURITY IN LIEU OF
PARTICIPATING IN THE CITY'S PLAN; AND THAT THE
CITY COUNCIL MEMBERS SHALL CONTRIBUTE TO A
SECTION 457 I.R.S. DEFERRED COMPENSATION PLAN
IN LIEU OF PARTICIPATING IN THE CITY'S PLAN;
AND TO PROVIDE FURTHER THAT THE PARTICIPANT
ACCOUNTS IN THE PLAN ARE TO BE VALUED
QUARTERLY, RATHER THAN ANNUALLY AS NOW
PROVIDED. (AMENDING ORDINANCE 90-74 AND
ORDINANCE 91--1UL).
WHEREAS, under the Federal Social Security Act (42 USCA,
§4l8(g)), the city council had previously established an employee
retirement system in lieu of employee and employer contributions to
the Federal Social Security Program; and
WHEREAS, such a system was established by creating a Plan
and a Trust to provide a defined contribution plan providing
retirement and other related benefits for the employees of the city
eligible to participate; and
WHEREAS,
the
adopted
Plan,
as
a
social
security
alternative program, provides employees of the city of Federal Way
with benefits that equal or exceed the current or future Social
Security benefits system; and
WHEREAS, it is the intent of the Council that the Plan
qualify for approval under sections 401 and 410 through 417 of the
Internal Revenue Code; and
WHEREAS, on September 23,
1991, the Internal Revenue
Service issued a favorable determination on the Plan, conditioned
upon the City Council adoption of certain amendments thereto; and
WHEREAS, on this same date the City Council of the City
of Federal Way having adopted the Federal Way Retirement System
Plan which contained the amendments required for Internal Revenue
approval;
and
WHEREAS, subsequent to the approval by the I.R.S.
of the
Plan, the City found it necessary and desirable to further modify
the
Plan
to
provide
that
part-time,
seasonal
and
temporary
employees
shall
contribute
to
Social
Security,
in
lieu
of
participating in the City's Plan;
and that that city Council
members
shall
contribute
to
a
section
457
I.R.S.
deferred
compensation plan, in lieu of participating in the City's Plan; and
to provide further that the participant accounts in the Plan are to
be valued quarterly, rather than annually as now provided; NOW,
THEREFORE,
THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON,
DOES HEREBY ORDAIN AS FOLLOWS:
section 1.
The City Council hereby amends the City of
Federal Way Employees'
Retirement System as is set forth more
particularly in "city of Federal Way Employees' Retirement System"
attached hereto and by this reference incorporated herein.
section 2.
All prior acts and actions of employees and
the city prior to the effective date of this ordinance that are in
compliance with such plan are hereby ratified.
section 3.
The amendments to the Plan are specifically
enacted with the intent that the Plan continue to qualify for
approval under sections 401 and 410 through 417 of the Internal
- 2 -
Revenue Code and that the Trust qualify for approval under §501 of
the Internal Revenue Code now or as hereinafter enacted.
section 4.
Should any section, sentence, clause, phrase,
or subsection of this ordinance or the Plan adopted herein or the
application of the ordinance or Plan to a specific person or set of
circumstances be declared unconstitutional
or
invalid
for any
reason,
such
decision
shall
not
affect
the
validity
or
constitutionality of any other section, sentence, clause or phrase
of this ordinance, this Plan or their application to any other
person or set of circumstances.
section 5.
Effective Date.
This ordinance shall be
effective
five
(5)
days
after passage
and publication
of
an
approved summary consisting of the title to this ordinance.
this
PASSED by the city council of the city of Federal Way
/7"4 day of ;;)£t' Þ'~ , 1991.
CITY OF FEDERAL WAY
ÐÞ 1u. J ~~
MAYOR, DEBRA ER EL
FILED WITH THE CITY CLERK: 12/17/91
PASSED BY THE CITY COUNCIL: 12/17/91
PUBLISHED: 12/20/91
EFFECTIVE DATE: 12/25/91
ORDINANCE NO. 91-119
CAL/RETIRE
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CITY OF FEDERAL WAY
EMPLOYEES' RETIREMENT SYSTEM
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PREAMBLE
The purpose of this System, consisting of a Plan and Trust, is to provide a defined
contribution plan providing retirement and other related benefits for those
Employees of the Employer who are eligible to participate hereunder.
The Plan has been created with the intent that it qualify for approval under Sections
401 and 410 through 417 of the Internal Revenue Code. The Trust has been
created with the intent that it qualify for approval under Section 501 of the Code. In
case of any ambiguity in the Plan's language, it wifl be interpreted to accomplish the
Plan's intent of qualifying under the Code.
This System is created exclusively for the benefit of the eligible Employees and their
Beneficiaries. Neither the Employer, the Plan Administrator nor the Trustee will
apply or interpret the terms of the Plan in any manner that permits discrimination in
favor of Highly Compensated Employees. All Employees under similar
circumstances will be treated alike.
The undersigned Employer and Trustees hereby adopt this restatement of the Plan
and Trust to be effective as of and for Plan Years beginning on and after January 1,
1992 and agree to be bound by the terms and conditions of this document.
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TABLE OF CONTENTS
ARTICLE 1
1.01
1.02
1.03
1.04
1.05
1:06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.23
1.24
1.25
1.26
1.27
1.28
1.29
1.30
1.31
1.32
1.33
1.34
1.35
PAGE NO.
- DEFINITIONS ...............................................................................1
- Account .........................................................................................1
- Accounting Period, Valuation Period .............................................1-1
- Accrued Benefit .....................:........:..............................................1
- Beneficiary •.••••
..............................................................
- Cash-Out Distribution ........................:...........................................1
- Code ..................................................................................:...........
- Collective Bargaining Agreement . ...............................................1-2
- Compensation Definitions .............................................................1-2
- Date Definitions ..............................................................................1
- Eligible Employee Classification ....................................................1-5
- Employee Definitions .....................................................................1-5
- Employer Definitions .....................................................................1-6
- Forfeiture .......................................................................................1
- Highly Compensated Qefinitions ..:.........:......................................1-7
- Reserved -
.....................,...............................................................1 11
- Leave of Absence .......................................................................1-11
- Reserved .............:.......................................................................1
- Optional Benefit Form .................................................................1-12
- Participant Definitions ...........................:......................................1-12
- Payroll Withholding Agreement ...................................................1-13
- Plan .............................................................................................
- Plan Administrator .......................................................................1-14
- Plan Assets, Trust Fund ...............................................;..............1-14
- Reserved .....................................................................................1
- Reserved .....................................................................................1-14
- Qualified Election ........................................................................1-14
- Retirement Age Definitions ..........................................................1-15
Service Definitions .......................................................................1-16
- Spouse, Surviving Spouse ..........................................................1-17
- Reserved .....................................................................................1-18
- Trust Definitions ..........................................................................1-18
- Reserved ...... ............................................................................1-18
- Vested Accrued Benefit ...............................................................i-18
- Written Resolution .......................................................................1-19
- Year Definitions ...........................................................................i-19
ARTICLE 2 - PARTICIPATION ..........................................................................2-1
2.01 - Participation ..................................................................................2-1
2.02 - Participation After Reemployment .................................................2-1
2.03 - Change in Employment Classification ...........................................2-1
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ARTICLE 3 - PARTICIPANT ACCOUNTS ........................................................3
3.01 - Participant Contribution Account ...................................................3-1
3.02 - Voluntary Contribution Account............ .....................................3-1
....
3.03 - Employer Contribution Account ...........................,.........................3
3.04 - Rollover Account ...........................................................................
3.05 Nondiscrimination Requirements ...................................................3-3
ARTICLE 4- ACCOUfaITING AND VALUATION ...............................................4-1
4.01 - General Powers of the Plan Administrator ....................................4-1
4.02 - Accounting Procedure ...................................................................
ARTICLE 5 - RETIREMENT BENEFITS ............................................................5
5.01 - Valuation of Accounts ................. ......... ....................................5-1
... ...
5.02 - Normal Retirement ..........................................:.............................
5.03 - Disability Retirement .....................................................................
5.04 - Termination of Employment ..........................................................5
5.05 - Form of Benefit Payment ..............................................................
5.06 - Commencement of Benefit ...:........................................................5
ARTICLE - DEATH BENEFIT .........................................................................
6.01 - Valuation of Accounts:...........,. ......................................................6
6.02 - Pre-Retirement Death Benefit .......................................................6
6.03 - Post-Retirement Death Benefit ......................................................6-1
6.04 - Designation of Beneficiary .............................................................6
ARTIGLE 7- LIMITATIONS ON BENEFITS .....................................................7-1
7.01 - Limitation on Annual Additions ......................................................7-1
7.02 - Where Employer Maintains Another Qualified Plan ......................7-2
ARTICLE 8 - MISCELLANEOUS ......................................................................
8.01 - Employment Rights of Parties Not Restricted ...............................8-1
8.02 - Alienation ......................................................................................
8.03 - Qua(ification of Plan ......................................................................8
8.04 - Construction ................................................. ..............................8-2
...
8.05 - Fiduciaries ............................:........................................................
8.06 - Reserved .......................................................................................
8.07 - Adoption and Withdrawal by Other Organizations ........................8-3
8.08 - Employer Contributions .................................................................8
ARTICLE 9 - ADMINISTRATION ......................................................................9
9.01 - Plan Administrator .........................................................................9
9.02 - Powers and Duties of the Plan Administrator ................................9-1
9.03 - Actions of the Plan Administrator ..................................................9-2
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9.04 - Reliance on Plan Administrator and Employer ..............................9-2
9.05 - Reserved .......................................................................................
9.06 - Bond ......:..................
.. ...... .......................................................9-3
... ...
9.07 - Compensation of Plan Administrator ..............,..............................9-3
9.08 - Claims Procedure ..........................................................................
9.09 - Liability of Fiduciaries ....................................................................
9.10 - Expenses of Administration ...........................................................9
9.11 - Distribution Authority .....................................................................9
ARTICLE 10 - AMENDMENT OR TERMINATION OF PLAN .................:........10-1
10.01 - Right of Employer To Amend or Terminate ...............................10-1
10.02 - Allocation of Assets Upon Termination of Plan .........................10-1
10.03 - Exclusive Benefit ..........................................................
10.04 - Failure To Qualify ......................................................................
10.05 - Mergers, Consolidations or Transfers of Plan Assets ...............10-2
10.06 - Effect of Plan Amendment on Vesting Schedule .......................10-2
ARTICLE 11
11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09
11.10
11.11
11.12
11.13
11.14
11.15
11.16
11.17
- TRUSTEE AND TRUST FUND ................................................11-1
- Acceptance of Trust ..................................................................1
- Trust Fund ........:........................................................................
- Receipt of Contributions ............................................................11
- Powers of the Trustee ...............................................................1
- Investment in Common or Coltective Trust Funds ....................11-4
- Investment in Insurance Company Contracts -
...................
- Fees and Expenses from Fund .................................................11-6
- Records and Accounting ...........................................................11-6
- Distribution Directions ...............................................................1
- Th:ird Party .................................................................................
- Professional Agents ..................................................................11
- Valuation of Trust ......................................................................
- Liability of Trustee ......:............... ..................11-7
.............................
- No Bond .......................:............................................................
- Ancillary Trustee .......................................................................11
- Removal or Resignatian and Successor Trustee ......................11-8
- Appointment of Investment Manager ....................:...................11-9
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9.04 - Reliance on Plan Administrator and Employer ......:.......................9-2
9.05 - Reserved .......................................................................................9-3
9.06 - Bond ..............................................................................................9-3
9.07 - Compensation of Plan Administrator .............................................9-3
9.08 - Claims Procedure .......................................................:..................9-3
9.09 - Liability of Fiduciaries ....................................................................9-4
9.10 - Expenses of Administration ...........................................................9-5
9.11 - Distribution Authority .....................................................................9-5
ARTlCLE 10 - AMENDMEN7 OR TERMINATION OF PLAN ..........................10-1
10.01 - Right of Employer To Amend or Terminate ...............................10-1
10.02 - Allocation of Assets Upon Termination of Plan .........................10-1
10.03 - Exclusive Benefit .......................................................................10-1
10.04 - Failure To Qualify ......................................................................10-1
10.05 - Mergers, Consolidations or Transfers of Plan Assets ...............10-2
10.06 - Effect of Plan Amendment on Vesting Schedule ...........:...........10-2
ARTICLE 11 - TRUSTEE AND TRUST FUND., ..............................................11-1
11.01 - Acceptance of Trust ................:.................................................11-1
11.02 - Trust Fund .................................................................................11-1
11.03 - Receipt of Contributions .............................................................11-2
11.04 - Powers of the Trustee ...............................................................11-2
11.05 - Investment in Gommon or Collective Trust Funds ....................11-4
11.06 - Investment in Insurance Company Contracts ...........................11-5
11.07 - Fees and Expenses from Fund .................................................11-6
11.08 - Records and Accounting ...........................................................11-6
11.09 - Distribution Directions ...............................................................11-7
11 .10 - Third Party .................................................................................11-7
11.11 - Professional Agents .........................................................:........11-7
11.12 - Valuation of Trust ......................................................................11-7
11.13 - Liability of Trustee .........., ..:.......................................................11-7
11.14 - No Bond ............................................................:.......................11-8
11.15 Ancillary Trustee ............................................. .......................11-8
11.16 - Removal or Resignation and Successor Trustee ......................11-8
11.17 - Appointrnent of Investment Manager ........................................11-9
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ARTICLE 1
DEFtNITIONS
•
As used in this document, unless otherwise defined or required by the context, the
following terms have the meanings set forth in this Article 1. Some of the terms used
in the Plan and Trust are not defined in this Article 1, but for convenience are
defined as they are introduced in the text.
1.01 Account
Account means one or more separate accounts maintained for each
Participant reflecting applicable contributions, applicable forfeitures,
investment income (loss) allocated thereto and distributions.
1.02 Accounting Period, Valuation Period
The terms Accounting Period and Valuation Period are used interchangeably
and mean each Plan Quarter.
1.03 Accrued Benefit
A Participant's Accrued Benefit as of a given date is equal to the total value of
his Accounts determined as of the Valuation Date immediately before the
date of determination plus any other amounts withheld from the Participant's
Compensation ar contributed by the Employer after the Valuation Date. A
Participant's Accrued Benefit will not be reduced solely on account of any
increase in the Participant's age or service or on account of an amendment to
the Plan.
A Participant's Vested Accrued Benefit is equal to his Vested Percentage of
his Employer Contribution Account plus 100% of his other Accounts.
1.Q4 Beneficiary
Beneficiary means the person, persons, trust or other entity who is
designated to receive any amount payable upon the death of a Participant.
1.05 Cash-Out Distribution
Cash-Out Distribution means a distribution to a Participant, as described in
Article 5, upon termination of employment of the portion of his Vested
Accrued Benefit which is subject tothe Vesting Schedule.
1.06 Code
Code means the Internal Revenue Code of 1986, as it may be amended from
time to time, and regulations issued thereunder. Reference to a section of the
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Code includes that section and any comparabie section or sections of any
future legislation that amends, supplements or supersedes such section and
any regulations issued thereunder.
1.07 Collective Bargaining Agreement
Collective Bargaining Agreement means an agreement negotiated in good
faith between employee representatives and the Employer or a group of
employers to which the Employer belongs. The term "employee
representatives" does not include any organization more than half of whose
members are officers or executives of the Employer.
1.08 Compensation Definitions
(a) Aggregate Compensation
Aggregate Compensation means a Participant's wages as defined in
Code Section 3401(a) (for purposes of income tax at the source) and
all other payments of compensation to an employee by his emptoyer
for which the employer is required to furnish the employee a written
statement under Code Sections 6041(d) and 6051(a)(3), but
determined without regard to any rules that limit wages based on the
nature or location of the employment or the services performed (such
as the exception for agricultural labor in Code Section 3401(a)(2)).
(b) Compensation
Unless otherwise specifically provided in this Plan, Compensation
means that portion of the Participant's Aggregate Compensation that
does not exceed the Social Security taxable wage base under Code
Section 3121(a)(1) in effect at the beginning of the Plan Year, reduced
by all of the following items (even if includable in gross income):
• Reimbursements or other expense allowances;
• Fringe benefits (cash and noncash);
� Moving expenses;
• Deferred compensation;
• Welfare benefits.
Compensation also includes Withhetd Compensation.
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if a Leased Employee is treated as an Employee, Compensation
includes Compensation received from the leasing organization which
is attributable to services performed for the Employer.
(c) Withheld Compensation
Withheld Compensation means any amount withheld from a
Participant's Compensation under a Payroll Withholding Agreement
and contributed to the Plan by the Employer or any Related Employer
that is not includable in the Participant's gross income due to:
• Code Sec#ion 125 (relating to cafeteria plans);
• Code Section 402{a}(8) (relating to cash-or-deferred
arrangements under Code Section 401(k));
• Code Section 402(h) (relating to simplified employee pensions);
• Code Section 403(b) (relating to tax-sheltered annuities);
• Code Section 457(b) (relating to deferred compensation plans
of state and local governments and tax-exempt organizations};
and
• Code Section 414(h)(2) (relating to employee contributions
under governmental plans that are picked up by the employing
unit and thus treated as employer contributions).
(d) Limitation
Notwithstanding the foregaing, for all purposes under this Plan except
determining the limitations on allocations or benefits under Article 7,
Compensation in excess of $200,000 (as adjusted by the Secretary of
the Treasury under Code Section 415(d)) will be disregarded. In _
determining the Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) apply, except that the
term "family" includes only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before
the close of the Plan Year. If, as a result of the application of such
rules the adjusted $200,000 limitation is exceeded, then the limitation
will be prorated among the affected individuals in proportion to e�ch
individual's compensation as determined under this section before the
application of this limitation.
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1.09 Date Definitions
�
(a) Accounting Date, Valuation Date
The terms Accounting Date and Valuation Date are used
interchangeably and mean the last day of each Accounting Period.
However, if the value of the Trust Fund declines more than 20%
, between the appiicable Accounting Date and the last business day o#
the month immediately preceding the date distribution of an Account
Balance is made or begun, the Accounting Date for purposes of
determining the Account Balance will be the last business day of the
month immediately preceding the date the Account Balance is
distributed or distributions began.
(b) Annuity Starting Date
Annuity Starting Date means the first day on which all events have
occurred that entitle the Participant to receive a benefit.
(c) Effective Date
The Effective Date of the Plan is June 1, 1990. Except as specified
elsewhere in this document, the effective date of this restatement of
the Plan is January 1, 1992.
(d) Employment Commencement Date
The date an Employee first performs an Hour of Service for the
Employer is his Employment Commencement Date.
An "adjusted" Employment Commencement Date may be used to
reflect Periods of Severance so that all Periods of Service can be
aggregated unless such periods can be disregarded under the break-
in-service rules.
(e) Entry Date
Entry Date means an Employee's Employment Commencernent Date.
(f) Normal Retirement Date
A Participant's Normal Retirement Date is the date on which the
Participant attains Normal Retirement Age.
(g) Required Beginning Date
Required Beginning Date means the later of:
April 1 of the first calendar year following the Participant's
attaining age 70 1/2; or
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April 1 of the first calendar year following his retirement.
1.10 Eligible Empfoyee Ciassification
An Eligible Employee Classification is a classification of Employees, the
members of which are eligible to participate in the Plan. The only Eligible �
Employee Classification is Budget Employees. The following Employees are
not members of the Eligible Employee Classification:
• Members of the City Council who are not otherwise Budgeted
Employees;
• Temporary Employees;
• Employees who are covered by a Collective Bargaining Agreement
unless the Collective Bargaining Agreement specifically provides that
covered Employees are eligible to participate in this Plan; and
• For Plan Years beginning on or after June 1, 1990, Leased
Employees.
1.11 Employee Definitions
(a) Employee
An Employee means:
(1) Any person who is employed by the Employer ar a Related or
Adopting Employer; and
(2) Any Leased Employee deemed to be an Employee of any
Employer described in clause (1) as provided in Code Section
414(n) or (o).
The term does not include any person who is a nonresident alien and
who receives no earned income from the Employer which constitutes
income from sources within the United Sfates.
(b) Leased Employee
A Leased Employee means any person who, pursuant to an
agreement between the Employer or any Related Employer
("Recipient Employer") and any other person ("Leasing Organization"),
has perfarmed services for the Recipient Employer on a substantially
fulf-time basis far a period of at least one year and such services are
of a type historicafly performed by employees in the business field of
the Recipient Employer. The term also includes any person treated as
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a Leased Employee as provided in Code Section 414(0) and the
regulations thereunder. Contributions or benefits provided by the
Leasing Organization which are attributable to the services performed
for the Recipient Employer will be treated as provided by the Recipient
Employer.
If all Leased Employees constitute less than 20% of the Employer's
non-highly-compensated work force within the meaning of Code
Section 414(n)(1)(C)(ii), then the preceding sentence will not apply to
any Leased Employee if such Employee is covered by a money
purchase pension plan ("Safe Harbor Plan") which provides:
(1) a nonintegrated employer eontribution rate of at least 10% of
Aggregate Compensation, but including Withheld
Compensation;
(2) immediate participation; and
(3) full and immediate vesting.
Years of Eligibility Service for purposes of eligibility to participate in the
Plan and Years of Vesting Service for purposes of determining a
Participant's Vested Accrued Benefit include service by an Employee
as a Leased Employee.
(c) Budgeted Employee
A Budgeted Employee is any Employee whose position is provided for
in the City budget and who is employed to work 2,080 hours per year.
(d) Temporary Employee
A Temporary Employee is any Employee who is employed to work
2,080 hours per year but who is not a Budgeted Employee and
performs services under a contractual arrangement with the Employer
of two years or less duration. Possible contract extensions will not be
considered in determining the duration of a contractual arrangement
until such time as the Employee becomes a Budgeted Employee.
1.12 Employer Definitions
(a) Employer
The Employer and Plan Sponsor is CITY OF FEDERAL WAY.
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(b) Adopting Employer
An Adopting Employer is any organization which has adopted this Plan
and Trus# in accordance with Section 8.07.
(c) Predecessor Employer
The term Predecessor Employer means any prior employer to which
the Employer is the successor, including any Predecessor Employer
for which the Employer maintains the obligations of a Predecessor
Plan established by the Predecessor Employer and the
preincorporation local governing authority to which the CITY OF
FEDERAL WAY is the successor.
(d) Related Employer
The term Refated Employer means any other corporation, association,
company or entity on or after the Effective Date that is, along with the
Employer, a member of
• a controlled group of corporations (as defined in Code Section
414(b)),
• a group of trades or businesses which are under common
control (as defined in Code Section 414(c)),
• an affiliated service group (as defined in Code Section 414(m)),
or
• any organization or arrangement required to be aggregated with
the Employer by Treasury Regulations issued under Code
Section 414(0).
1.13 Forfeiture
The term Forfeiture refers to that portion, if any, of a Participant's Accrued
Benefit which is in excess of his Vested Accrued Benefit following the
termination of the Participant's employment.
A Forfeiture is considered to occur as of the date determined under Section
5.04.
1.14 Highly Compensated Definitions
(a) Compensation
For purposes of this section, Compensation means Aggregate
Compensation increased by Withheld Compensation.
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(b) Determination Year
Determination Year means the Plan Year.
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(c) Family Member
Family Member means an Employee who is the spouse, a lineal
ascendant or descendant, or the spouse of a lineal ascendant or
descendant of
a 5-percent owner (within the meaning of Code Section 416(i))
of the Employer or any Related Employer who is an active or
former Employee; or
a Highly Compensated Employee who is one of the 10 most
highly compensated employees ranked on the basis of
compensation paid by the Employer during the Determination
Year or the Lookback Year.
For purposes of this section the Family Member and the Highly
Compensated Employee will be considered one Employee. A Family
Member's Compensation and benefits will be aggregated with those of
the Highly Compensated Employee whether or not
the Famity Member is in a category of Employees that may be
exeluded in determining the number of Employees in the Top-
Paid Group; or
the Family Member would otherwise be treated as a Highly-
Compensated Employee.
If an Employee is required to be aggregated as a member of more
than one family group, all eligible employees who are members of
those family groups that include that employee will be aggregated as
one family group.
(d) High/y Compensated Employee
Highly Compensated Employee means any individual who is a Highly
Compensated Active Employee or a Highly Compensated Former
Employee within the meaning of Code Section 414(q) and the
regulations under that section.
(e) Highly Compensated Active Employee
Highly Compensated Active Employee means any individual who
during the Determination Year or the Lookback Year:
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(1) was at any time a 5-percent Owner (within the meaning of Code
Section 416(i)) of the Employer or any Related Employer;
(2) received Compensation from the Employer and all Related
Employers in excess of $75,000 (or any greater amount
determined by regulations issued by the Secretary of the
Treasury under Code Section 415(d));
(3) received Compensation from the Employer and aII Related
Employers in excess of $50,000 (or any greater amount
determined by regulations issued by the Secretary of the
Treasury under Code Section 415(d)) and was in the Top-Paid
Group of Employees; or
(4) was an Officer of the Employer or any Related Employer (as
that term is defined in the regulations under Code section
416(i)) having annual Compensation greater than 50 percent of
the Defined Benefit Dollar Limit described in Section 7.03(d) for
the applicable year. For this purpose, if no Officer -received
enough Compensation to be a Mighly Compensated Employee
under the preceding sentence, the highest-paid Officer will be
treated as a Highly Cornpensated Employee regardless of
whether or not that Employee is includEd in any other category
of Highly Compensated Employees. If the number of Officers
who satisfy the foregoing definitions exceeds 3, the number of
Officers treated as Highly Compensated Active Employees will
not exceed the lesser of 50 Employees or the greater of 3
Employees or 10% of all Employees determined without regard
to statutory or other exclusions.
No individual described in subparagraphs (2), (3) or (4) above will be
treated as a Highly Compensated Active Employee for the
Determination Year unless he was a Highly Compensated Active
Employee for the Lookback Year or was among the 100 most highly
compensated Employees of the Employer and all Related Employers
for the Determination Year.
(f) Highly Compensated Former Employee
Highly Compensated Former Employee means any Former Employee
who had a Separation Year (within the meaning of Treasury
Regulation Section 1.414(q)-1T Q&A-5) and was a Highly
Compensated Active Employee for either the Separation Year or any
Determination Year ending on or after the Employee's 55�h birthday.
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(g) High/y Compensated Group
Highly Compensated Group means all Highly Compensated
Employees.
(h) Lookback Year
Lookback Year means the
Determination Year.
12-month period immediately preceding the
(i) Non-Highly Compensated Employee
Non-Highly Compensated Employee means an Employee who is
neither a Highly Compensated Employee nor a Family Member.
(j) Non-Highly Compensated Group
Non-Highly Compensated Group means all Non-Highly Compensated
Employees.
(k) Top-Paid Group
Top-Paid Group means those individuals who are among the top 20
percent of Employees of the Employer and all Related Employers
when ranked on the basis of Compensation received during the year.
In determining the number of individuals in the Top-Paid Group (but
not the identity of those individuals), the following individuals shall be
excluded:
(1) Employees who have not completed 6 months of Service by the
end of the year. For this purpose, an Employee who has
completed One Hour of Service in any calendar month will be
credited with one month of Service;
(2) Employees who normally work less than 17 1/2 hours per week;
(3) Employees who normally work fewer than 6 months during any
year. For this purpose, an Employee who has worked on one
day of a month is treated as having worked for the whole
month;
(4) Employees who have not reached age 21 by the end of the
year;
(5) Nonresident aliens who received no earned income (which
constitutes income from sources within the United States) within
the year from the Employer or any Related Employer; and
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(6) Employees covered by a Collective Bargaining Agreement if
90% or more of aiI Employees of the Employer and all
Related Employers are covered by Collective Bargaining
Agreements; and
this Plan covers only Employees who are not covered
under a Collective Bargaining Agreement.
1.15 Reserved
1.16 Leave of Absence
(a) Authorized Leave of Absence
An Authorized Leave of Absence means a period of time of one year
or less granted to an Employee by the Employer due to illness, injury,
temporary reduction in work force, educational leave or other
appropriate cause or due to mifitary service during which the
Employee's reemployment rights are protected by law, provided the
Employee returns to the service of the Employer on or before the
expiration of such leave, or in the case of military service, within the
time his reemployment rights are so protected. All Authorized Leaves
of Absence are granted or denied by the Employer in a uniform and
nondiscriminatory manner, treating Employees in similar
circums#ances in a like manner.
(b) Maternify or Paternity Leave of Absence
A Maternity or Paternity Leave of Absence means an absence from
work for any period by reason of the Employee's pregnancy, birth of
the Employee's child, placement of a child with the Employee in
connection with the adoption of such child, or any absence �or the
purpose of caring for such child for a period immediately following
such birth or placement. The Hours of Service credited for a Maternity
or Paternity Leave of Absence are those which would normally have
been credited but for such abserace; in any case in which the Plan
Administrator is unable to determine such hours normally credited, 8
Hours of Service per tlay will be credited.
(c) Break in Service
Solely for purposes of determining whether a One Year Break-in-
Service has occurred, a Participant who is absent from work on an
Authorized Leave of Absence or a Maternity or Paternity Leave of
Absence will receive credit for the Hours of Service which otherwise
would have been credited to the Participant but for such absence.
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The Date of Severance for a Participant who is absent from work on a
Maternity or Paternity Leave of Absence is the second anniversary of
the date on which the absence begins. The period between the initial
date of absence and the first anniversary of the initial date of absence
is deemed to be a period of Service. The period between the first and
second anniversaries of the initial date of absence is neither a period
of service nor a period of severance.
1.17 Reserved
1.18 Optional Benefit Form
Any Optional Benefit Form which is provided under the Plan is described in
Section 5.05.
1.19 Participant Definitions
The term Participant means an Emptoyee or former Employee who is eligible
to participate in this Plan and who is or who may became eligible to receive a
benefit of any type from this Plan or whose Beneficiary may be eligible to
receive any such benefit.
(a) Active Participant means a Participant who is currently an Employee
in an Eligible Employee Classification.
(b) Disabled Participant means a Participant who has terminated his
employment with the Employer due to his Disability and who is
receiving or is entitled to receive benefits from fhe Plan.
(c) Retired Participant means a Participant who has terminated his
employment with the Employer after meeting the requirements for his
Normal Retirement Date and who is receiving or is entitled to receive
benefits from the Plan.
(d) Vested Terminafed Participant means a Participant who has
terminated his emptoyment with the Employer and who has a
nonforfeitable right to all or a portion of his or her Accrued Benefit and
who has not received a distribution of the value of his or her Vested
Accrued Benefit.
(e) lnactive Participant means a Participant who has (i) interrupted his
status as an Active Participant without becoming a Disabled, Retired
or Vested Terminated Participant and (ii) has a non-forfeitable right to
all or a portion of his Accrued Benefit and has not received a complete
distribution of his benefit.
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(f) Former Participant means a Participant who has terminated his
employment with the Employer and who currently has no
nonforfeitable right to any portion of his or her Accrued Benefit.
(g) Eligible Participanf
All Participants are Eligible Participants.
1.20 Payroll Withholding Agreement
If a written Payroll Withholding Agreement is required pursuant to the
provisions of Article 3, then each Participant who elects to participate in the
Plan will file s�ch agreement on or before the first day of the Contribution
Period for which the agreement is applicable (or at some other time as
specified by the Plan Administrator). The agreement will be effective for each
Contribution Period thereafter until modified or amended.
The terms of the agreement will provide that the Participant agrees to have
the Employer withhold any whole percentage of his Compensation per payroH
period (or some other amount as allowed by the Plan Administrator under
rules applied on a uniform and nondiscriminatory basis), not to exceed the
limitations of Article 7. In consideration of such agreement, the Employer will
make a contribution to the Participant's proper Account(s) on behalf of the
Participant for each Contribution Period in an amount equal to the total
amount by which the Participant's Compensation from the Employer was
reduced during the Contribution Period pursuant to the Payroll Withholding
Agreement.
However, Payroll Withholding Agreements are governed by the following
general guidelines:
(a) A Payroll Withholding Agreement will apply to each payroll period
during which an effective agreement is on file with the Employer. Upon
termination of employment, the agreement will become void.
(b) The Plan qdministrator will establish and apply guidelines concerning
the frequency and timing of amendments or changes to Payroll
Withholding Agreements. Notwithstanding the foregoing, a Participant
may revoke his Payroll Withholding Agreement at any time and
discontinue all future withholding during the remainder of the
Contribution Period.
(c) The Employer may amend or revoke its Payroll Withholding
Agreement with any Participant at any time, if the Employer
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determines #hat such revocation or amendment is necessary to insure
that
a Participant's Annual Additions for any Plan Year will not
exceed the limitations of Article 7; and
the requirements of Code Section 401(m) have been satisfied
with respect to the amount which may be withheld and
contributed on behalf of the Highly Compensated Group.
Except as provided above, no Payroll Withholding Agreement for any given
Contribution Period may be revoked or amended by either the Participant or
the Employer once it has been made.
1.21 Plan
Plan means CfTY OF FEDERAL WAY EMPLOYEES' RETIREMENT
SYSTEM, the terms of which are established by this Plan document. The
Plan Identification Number assigned for use by the Internal Revenue Service
is 001. This Plan is a Profit Sharing Plan.
The term Predecessor Plan means any qualified plan previously established
and maintained by the Employer and to which this Plan is the successor.
1.22 Plan Administrator
The Plan Administrator is the individual or corporation appointed in the
manner described in Section 9.01. On the date of adoption of this document
the Plan Administrator is CITY OF FEDERAL WAY.
1.23 Plan Assets, Trust Fund
The terms Plan Assets and Trust Fund are used interchangeably and mean
the total cash, securities, real property, insurance contracts and any other
property held by the Trustee.
1.24 Reserved
1.25 Reserved
1.26 Qualified Election �
Qualified Election means the designation of a Beneficiary other than the
Participant's Surviving Spouse. The Qualified Election must be in writing and
must be consented to by the Participant's spouse. The spouse's consent to a
Qualified Election must
be in writing,
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acknowledge the effect of the consent, and
be witnessed by a representative of the Plan Administrator or a notary
public.
Both the waiver and the spouse's consent must include the designation of a
specific Beneficiary which may not be changed without the consent of the
spouse. However, the spouse may execute a generaf consent which permits
the Participant to execute a waiver and change the designate.d Beneficiary
without the further consent of the spouse. The general consent will be invalid
unless it acknowledges that the spouse has the right to limit consent to a
specific Beneficiary and that the spouse voluntarily elects to relinquish that
right. The spouse's consent will not be required if the Participant establishes
to the satisfaction of the Plan Administrator that written consent cannot be
obtained because there is no spouse, the spouse cannot be located or other
circumstances that may be prescribed by Treasury Regulations. Any consent
necessary under this provision will be valid only with respect to the spouse
who signs the eonsent (or in the event of a deemed Qualified Election, the
designated spouse). Additionally, a revocation of a prior Qualified Election
may be made by a Participan# without the consent of the spouse at any time
before the commencement of benefits; however, any Qualified Election which
follows such revocation must be in writing and must be consented to by the
Participant's spouse. The number of Qualified Elections or revocations of
such Qualified Elections will not be limited.
1.27 Retirement Age Definitions
(a) Earliest Refirerr�ent Age
The Earliest Retirement Age under this Plan is the earliest age at
which a Participant could terminate his employment and receive a
distribution. Death and retirement of a Participant are bath treated as a
termination of employment. If a Participant terminates his employment
before the Ear�iest Retirement Age, only his actual Years of Service at
the time of his termination of employment are taken into account.
(b) Normal Retirement Age
A Rar#icipant's Normal Retirement Age is his attained age o� the date
which he satisfies the following requirements:
(a) Attainment of age 65, and
(b) Attainment of the fifth anniversary of the Participant's
Employment Commencement Date.
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1.28 Service Definitions
(a) Hour of Service
An Hour of Service means:
•
(1) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours will be credited to the Employee for the computation
period in which the duties are performed;
(2) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence. No more than 501 Hours of
Service will be credited under this paragraph for any 12-month
period. Hours under this paragraph will be calcufated and
credited pursuant to Section 2530.200b-2 of the Department of
Labor ReguFations which are incorporated herein by this
reference; and
(3) Each hour'for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service will not be credited both under
paragraph (1) or (2), as the case may be, and under this
paragraph (3). These hours will be credited to the Employee for
the computation period or periods to which the award or
agreement pertains rather than the computation period in which
the award, agreement or payment is made.
Hours of Service for all Employees will be determined on the basis of
actual hours for which an Employee is paid or is entitled to payment.
Hours of Service will be credited for employment with any Related
Employer or any Predecessor Employer. Hours of Service will be
credited for any Leased Employee.
(b) One Year Break-in-Service
One Year Break-in-Service means any 365-day period fotlowing a
Participant's Date of Severance in which an Employee does not
perform at least one Hour of Service.
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(c) Years of Service
Years of Service are determined under the Elapsed Time Method.
Under the Elapsed Time Method, Years of Service are based upon an
Employee's Elapsed Time of employment irrespective of the number of
hours actually worked during such period; a Year of Service (including
a fraction thereof) will be credited for each completed 365 days of
Elapsed Time which need not be consecutive. The following terms are
used in determining Years of Service under the Elapsed Time Method:
(1) Date of Severance (Termination) - means the earlier of (A) the
actual date an Employee resigns, is discharged, dies or retires,
or (B) the first anniversary of the date an Employee is absent
from work (with or without pay) for any other reason, e.g.,
disability, vacation, leave of absence, layoff, etc.
(2) Elapsed Time - means the total period of service which has
elapsed between a Participant's Employment Commencement
Date and Qate of Terminatian including Periods of Severance
where a One Year Break-in-Service does not occur.
(3) Period of Severance - is the time between the actual Date of
Severance as defined above and the subsequent date, if any,
on which the Employee performs an Hour of Service.
All periods of employment will be aggregated including Periods of
Severance unless there is a One Year Break-in-Service.
(d) Reserved
(e) Years of Service for Vesting
Years of Service for purposes of computing a Participant's Vested
Percentage are referred to as Years of Vesting Service and are
determined using the Elapsed Time Method.
All of a Participant's Years of Vesting Service are taken into account in
determining his Vested Percentage, including service with any Related
Employer.
1.29 Spouse, Surviving Spouse
Before a Participant's Annuity Starting Date, Spouse means the person who
is married to the Participant at the tirne of the determination. On or after the
Participant's Annuity Starting Date, Spouse means the person who was
married to the Participant on his Annuity Starting Date. Surviving Spouse
means the person who was married to the Participant on the Participant's
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date of death before his Annuity Starting Date. The Plan Fiduciaries may rely
conclusively on a Participant's written statement of his marital status. No Plan
Fiduciary is required at any time to inquire into the validity of any marriage,
the effectiveness of a common-law relationship or the claim of any alleged
spouse which is inconsistent with the Participant's report of his marital status
and the identity of his spouse.
1.30 Reserved
1.31 Trust Definitions
(a) Trust
This term means the Trust established by Article 11 of this Plan that
governs the management of Plan Assets for the exclusive benefit of
Participants and their beneficiaries.
(b) Trusf Fund
This term means the same as Plan Assets.
(c) Trustee
The Trustees are the City Manager, the Finance Director, and the
Personnel Director.
1.32 Reserved
1.33 Vested Accrued Benefit
(a) M Genera!
A Participant's Vested Accrued Benefit as of a given date is equal to
the product of his Accrued Benefit multiplied by his Vested Percentage
as of that same date.
(b) Vested Percentage
A Participant's Vested Percentage as of a given date is the percentage
determined according to the Vesting Schedule. However, a Participant
is 100% vested upon reaching his Normal Retirement Age. ,
In addition, any Participant who is a part-time, temporary ar seasonal
employee within the meaning of Treas. Reg. Section 31.3121(b)(7)-
2(d)(2)(iii) at any time during the period beginning July 1, 1991 and
ending December 31, 1991 shall be immediately Vested in 25% of the
Employer Contribution made on his behalf during that period plus
earnings accumulated on that amount. For this purpose only, the
following definitions apply:
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A part-time employee is any empfoyee who normally works 20
hours or less per week;
A seasonal employee is any employee who normally works on a
full-time basis less than 5 months in a year; and
A temporary employee is any employee performing services
under a contractua► arrangement with the Employer of two
years or less duration. Possible contract extensions will not be
considered in determining the duration of a contractual
arrangement.
(c) Vesting Schedule
A Participant's Vested Percentage is determined according to the
following table:
Years of Vesting Service
Less than 3 Years
3 Years
4 Years
5 Years
6 Years
7 Years or more
Vested Percentage
0%
20%
40%
60%
80°/a
100%
If a Participant's employment with the Employer terminates as a result
of death qr disability, the Participant's Vested Percentage will be
100%.
1.34 Written Resofution
The terms Written Resolution and Written Consent are used interchangeabfy
and reflect ordinances, resolutions, decisions, authorizations, and other
actions by the City CounciL A Written Resolution will be evidenced by a
written consent signed by the officer or officers duly authorized by the City
CounciL
1.35 Year Definitians
(a) Fiscal Year
Fiscal Year means the taxable year of the Plan Sponsor. ?he Fiscal
Year of the Pfan Sponsor is the 12 month period beginning January
1 st and ending December 31 st.
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(b) Plan Year
The Plan Year is the 12 month period beginning January 1 st and
ending December 31 st. The term Plan Quarter means the 3
consecutive month period ending each March 31, June 30,
September 30 and December 31.
(c) Limitation Year
The Limitation Year coincides with the Plan Year.
(d) Year of Service
Years of Service are determined in the manner described in Section
1.28.
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ARTICLE 2
PARTICIPATION
2.01 Participation
An Employee who is a member of an Eligible Employee Classification will
automatically participate in the Plan on the later of the Effective Date and his
or her Employment Commencement Date.
An Employee who is eligible to participate as of the Effective Date or as of a
given Entry Date will automatically become a Participant as of that date.
2.02 Participation After Reemployment
A Participant or Former Participant who has terminated employment will
participate as an Active Participant in the Plan immediately upon returning to
the employ of the Employer.
2.03 Change in Employment Classification
If a Participant becomes ineligible to participate because he is no longer a
member of an Eligible Employee Classification, the Participant will participate
immediately upon his return to an Eligible Employee C{assification.
If an Employee who is not a member of an Eligible Employee Classification
becomes a member of such a classification, the Employee will begin to
participate immediately.
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ARTICLE 3
ACCOUNTS
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3.01 Participant Contri�ution Account
For Plan Years beginning on or after June 1, 1990, Participant Contribution
Account means the Account of a Participant reflecting Participant
Contributions, investment income or loss allocated thereto and distributions.
A Participant's Participant Contribution Account is 100% vested at all times.
(a) Participant Contributions �
Each Contribution Period, the Employer wilt reduce ea�ch Participant's
Compensation by an amount equal to 6.2% of the Participant's
Compensation and will assume and contribute (pick up) the same
amount to the Participant's Participant Contribution Account in the
manner described in Code Section 414(h)(2). The Gity Council may by
Written Resolution change the above percentage for the following Plan
Year at any time before the beginning of that Plan Year. In the
absence of a Written Resolution, the Participant Contribution
Percentage will remain unchanged.
(b) Confribution Period
The Contribution Period for Participant Contributions is each payroll
period.
(c) Withdrawals
A Participant may not withdraw any portion of hls Participant
Contribution Account before his benefits otherwise become payable
under Article 5.
3.02 Voluntary Contribution Account
Voluntary Contribution Account means the Account of a Participant reflecting
applicable contributions, investment income or loss allocated thereto and
distributions. A Participant's Voluntary Contribution Account is 100% vested
at afl times.
(a) Voluntary Contributions
Each Participant will be entitled to make a Voluntary Contribution each
Contribution Period equal to a minimum of 1% of the Participant's
Compensation not to exceed 14% of the Participant's Compensation.
Such contribution will be designated as a percentage of Compensation
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and will be equal to an even multiple of 1°/a or such other amount as
allowed by the Plan Administrator.
Ali Voluntary Gontributions will be made pursuant to a Payroll
Withholding Agreement.
All Voluntary Gontributions to the Participant's Voluntary Contribution
Account are Employee Contributions and must satisfy the
Nondiscrimination Requirements of Section 3.05 for Plan Years
beginning on or after January 1, 1993.
(b) Contribution Period
The Contribution Period for Voluntary Contributions is each payroll
period.
(c) Withdrawals
A Participant may not withdraw any portion of his Voluntary
Contribution Account before his benefits otherwise become payable in
accordance with the provisions of Article 5.
3.03 Employer Contribution Account
Employer Contribution Account means the Account of a Participant reflecting
applicable contributions, forfeitures, investment income or loss allocated
thereto and distribu#ions. A Partieipant's Employer Contribution Account is
subject to the Vesting Schedule.
(a} Employer Contribufions
Each Contribution Period, the Employer will make an Employer
Contribution to each Eligible Participant's Employer Contribution
Account in an amount determined in the manner described in this
Section subject to the fimitations of Article 7.
For a given Plan Year, the total Employer Contribution made by the
Employer will be equal to 5.2% of the total Compensation of all Eligible
Participants. The City Council will by Written Resolution establish a
new Employer Confribution percentage for each Plan Year no later
than the beginning of that Plan Year. In the absence of a Written
Resolution, the Employer Con#ribution Percentage for the next Plan
Year will remain unchanged from the level at that time.
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(b) Allacation of Contribution
The total Employer Contribution made by the Employer will be
allocated in the ratio fhat each Eligible Participant's Compensation
bears to the total Compensation of all Eligible Participants.
(c) Contribution Period
The Contribution Period for Employer Contributions is each payroll
period.
(d) Application of Forfeitures
Forfeitures from a Participant's Employer Contribution Account will be
added to and alloeated along with Employer Contributions in the Plan
Year in which the Farfeitures are determined to occur.
(e) Withdrawals
A Participant may not withdraw any portion of his Employer
Contribution Account before his benefits otherwise become payabJe
under Article 5.
3.04 Rollover Account
Rollover Account means the Account of a Participant reflecting applicable
contributions, investment income or loss allocated thereto and distributions. A
Participant's Rollover Account is 100% vested at ail times.
(a) Rollover Contributions
Rollover Contribution means a contribution to the Plan by a Participant
where such contribution is the result of a prior distribution from an
Individual Retirement Account, an Individual Retirement Annuity or
another qualified plan. Such prior distribution must be a rollover
amount described in Section 402(a)(5) of the Code or a contribution
described in Section 408(d)(3) of the Code.
(b) Withdrawals
A Participant may not withdraw any portion of his Rollover Account
before his benefits otherwise become payable under Article 5.
3.05 Nondiscrimination Requirements
This Section applies for all Plan Years beginning on or after January 1, 1993.
(a) Contribution Percentage Test
Employee Contributions must satisfy the Contribution Percentage
Test. The Plan Administrator will determine as soon as
administratively feasible after the end of the Plan Year whether the
Contribution Percentage Test has been satisfied. If the Contribution
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Percentage Test is not satisfied, then on or before the close of the
following Plan Year (but preferabiy no later than the 15th day of the
third month following the end of the Plan Year), the Plan Administrator
will forfeit the nonvested portion and distribution the vested portion of
the Excess Aggregate Contribution, together with the income allocable
to it, to the affected Participants of the Highly Compensated Group to
the extent necessary to satisfy the Contribution Percentage Test.
(b) Priority of Reductions
The Excess Aggregate Contribution will be reduced in a manner so
that the Contribution Percentage of the affected Participant(s) with the
highest Contribution Percentage will first be lowered to a point not less
than fhe level of the affected Participant(s) with the next highest
Contribution Percentage. If further overall reductions are required to
satisfy the Contribution Percentage Test, each of the above
Participants' (or groups of Participants') Contribution Percentage will
be lowered to a point not less than the level of the affected
Participant(s) with the next highest Contribution Percentage, and so on
continuing until sufficient total reductions have occurred to achieve
satisfaction of the Contribution Percentage Test.
(c) lncome
The income allocable to any Excess Aggregate Contribution made to a
given Account for a given Plan Year will be equal to the total income
allocated to the Account for the Plan Year, multiplied by a fraction, the
numerator of which is the amount of the Excess Aggregate
Contribution and the denominator of which is the closing balance of
the Account decreased (or increased) by the amount of earnings (or
losses) allocated to the Account for the Plan Year. Income includes all
earnings and appreciation, including interest, dividends, rents,
royalties, gains from the sale of property, and appreciation in the value
of stocks, bonds, annuity and life insurance contracts and other
property, regardiess of whether the appreciation has been realized.
(d) Aggregation of Plans
If the Employer or a Related Employer sponsors one or more other
plans to which Employee Contributions or Matching Contributions are
made, the Employer may elect to treat any two or more such plans as
an aggregated single plan for purposes of satisfying Code Sections
401(a)(4), 401(m) and 410(b). The aggregated plans will be treated
as a single plan for purposes of this Section 3.05. If the Employer
maintains two or more plans which are treated as an aggregated
single plan for purposes of Code Section 401(a)(4} or 410(b), all
Employee Contributions and Matching Contributions made to the
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aggregated plans will be treated as contributed to an aggregated
single plan for purposes of this Section 3.05. Plans may be
aggregated in order to satisfy Code Section 401(m) only if they have
the same Plan Year.
(e) Family Aggregation
The Contribution Percentage for any Highfy Compensated Employee
who is subject to the family aggregation rules of Code Section
414(q)(6) will be the Contribution Percentage determined by
combining the Employee Contributions, Matching Contributions and
Compensation of all the eligible Family Members. If it is necessary to
correct Excess Aggregate Contributions, the Plan Administrator will
take corrective actions in the manner described in Section 1.401(m)-
1(e)(3) of the Treasury Regulations.
(f) Definitions
(1) Compensation
For purposes of this Section 3.05, Compensation means
Aggregate Compensation received during the Plan Year plus
Withheld Compensation. Compensation received while an
Employee is not eligible to participate in the Plan is disregarded.
(2) Contribution Percentage
Contribution Percentage means, for any specified group, the
average of the ratios calculated (to the nearest one-hundredth
of one percent) separately for each Participant in the group, of
the amount of Employee Contributions and Matching
Contributions which are made by or on behalf of each
Participant for a Plan Year to each Participant's Compensation
for the Plan Year.
For purposes of determining the Contribution Percentage, each
Employee who is eligible under the terms of the Plan to make or
to have contributions made on his behalf is treated as a
Participant. The Contribution Percentage of an eligible
Employee who makes no Employee Contribution and receives
no Matching Contribution is zero.
For purposes of determining the Contribution Percentage of a
Participant who is a Highly Compensated Employee, the
Participant's Compensation includes the Compensation of any
Family Member of the Participant. Likewise, the Participant's
Employee Contributions and Matching Contributions include the
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Employee Contributions and Matching Contributions for any
Family Member of the Participant.
The Contribution Percentage of a Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to
make Employee Contributions or receive an allocation of
Matching Contributions allocated to his accounts under two or
more plans which are sponsored by the Employer will be
determined as if the Emp{oyee and Matching Contributions
were°made under a single plan. For purposes of this
paragraph, if a Highly Compensated Employee participates in
two or more such plans which have different Plan Years all
plans ending with or within the same calendar year will be
treated as a single plan.
(3) Contribution Percentage Test
The Contribution Percentage Test is a test applied on a Plan
Year basis to determine whether a plan meets the requirements
of Code Section 401(m). The Contribution Percentage Test
may be met by either satisfying the General Contribution
Percentage Test or the Alternative Contribution Percentage
Test.
The General Contribution Percentage Test is satisfied if the
Contribution Percentage for the Highly Compensated Group
does not exceed 125% of the Contribution Percentage for the
Non-Highly Compensated Group.
The Alternative Contribution Percentage Test is satisfied if the
Contribution Percentage for the Highly Compensated Group
does not exceed the lesser of:
the Contribution Percentage for the Non-Highly
Compensated Group plus 2 percentage points, or
• the Contribution Percentage for the Non-Highly
Compensated Group multiplied by 2.0.
(4) Emp/oyee Contributian
Employee Contribution means any contribution made by an
Employee to any plan maintained by the Employer or any
Refated Employer which is other than an Elective Contribution
within the meaning of Section 1.401(k)-1(g)(3) of the Treasury
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Regulations and which is designated or treated at the time of
contribution as an Employee After-Tax Contribution.
(5) Excess Aggregate Contribution
Excess Aggregate Contribution means, for each member of the
Highly Compensated Group, the amount of Employee and
Matching Contributions which exceeds the maximum which
could be made if the Contribution Percentage Test were to be
satisfied.
(6) Matching Contribution
Matching Contribution means any contribution made by the
Employer to any plan maintained by the Employer or any
Related Employer which is based on an Employee contribution
together with any forfeiture allocated to the Participant's
Account on the basis of Employee Contributions or Matching
Contributions. A Matching Contribution will be taken into
account for a given Plan Year only if:
• The Matching Contribution is allocated to the
Participant's Account as of a date within the Plan Year to
which it relates;
• The aHocation is not contingent upon the Empfoyee's
participation in the Plan or performance of services on
any date after the allocation date;
• The Matching Contribution is actually paid to the
Trustees no fater than 12 manths after the end of the
Plan Year to which the Matching Contribution relates;
and
� The Matching Contribution is based on an Employee
� Contribution for the Plan Year.
(7) Highly Compensated Group
Highly Compensated Group means all Highly Compensated
Employees of the Employer.
(8) Non-Highly Compensated Emp/oyee
Non-Highly Compensated Employee means an Employee who
is neither a Highly Compensated Employee nor a Family
Member of a Highly Compensated Empfayee.
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(9) Non-Highly Compensated Group
Non-Highly Compensated Group means ali Non-Highty
Compensated Empioyees of the Employer.
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ARTICLE 4
ACCOUNTING AND VALUATION
4.01 General Powers of the PFan Administrator
The Plan Administrator may establish whatever rules and guidelines it
believes necessary or appropriate governing accounting procedures and the
timing and method of contributions to and withdrawals from the Plan. These
rules and guidelines will be applied on a uniform and non-discriminatory
basis.
4.02 Accounting Procedure
As of each Valuation Date, the Plan Administrator will determine from the
Trustee the fair market value of Trust assets and will, subject to the
provisions of this Article, determine the allocation of such value among the
Accounts of the Participants; in doing so, the Plan Administrator will in the
following order:
(a) Credit or charge, as appropriate, to the proper Accounts all ,
payments, forfeitures, withdrawals or other distributions made to or
from each Account during the current Plan Year that have not been
previously credited or charged.
(b) Credit or charge, as applicable, each Account that is in existence on
the Valuation Date with its pro rata portion of the appreciation or
depreciation in the fair market value of the Trust Fund since the prior
Valuation Date. Appreciation or depreciation will reflect investment
income, realized and unrealized gains and losses, other investment
transactions and expenses paid from the Trust Fund. Pro rata crediting
or charging will be based upon the current amounts of the Accounts as
adjusted by the above step (a). The Plan Administrator will establish
#he guid�elines under which any appreciation or depreciation is
allocated to the various Accounts as of the first Valuation Date for the
Plan.
(.c) Credit to the proper Accounts all contributions and any reallocated
forfeitures which are to be credited for the current Accounting Period.
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ARTICLE 5
RETIREMENT BfNEFITS
5.01 Valuation of Accounts
For purposes of this Article, the value of a Participant's Accounts will be
determined as of the Valuation Date that coincides with or immediately
precedes the Annuity Starting Date. For Plan Years beginning before
January 1, 1992 only, distributions will bear interest at a reasonable rate, to
be determined by the Plan Administrator in a uniform and nondiscriminatory
manner, from the most recent Valuation Date through the last day of the
month immediately preceding the date of distribution.
5.02 I�ormal Retirement
After an Active Participant reaches his Normal Retirement Date, he may elect
to retire. Upon retirement he wiH become a Retired Participant and his
Accrued Benefit will become distributable to him. No later than his attainment
of Normal Retirement Age, his Accrued Benefit will become 100% Vested.
The form of benefit payment will be governed by the provisions of Section
5.05.
5.03 Disability Retirement
In the event of a Participant's termination due to Disability, he will be entitled
to begin to receive a distribution of his Accrued Benefit which wifl become
nonforfeitable as of his date of termination. The form of benefit payment will
be governed by the provisions of Section 5.05.
Disability will be determined by the Plan Administrator in a uniform and non-
discriminatory manner. Disability means that a Participant is, in the opinion of
a qualified m�dical authority appointed by the Plan Administrator, unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.
5.04 Termination of Employment
(a) ln General
If a Participant's employment terminates for any reason other than
retirement, death or disability, his Vested Accrued Benefit will become
distributable to him as of the Valuation Date that coincides with or next
follows the date of termination. The Plan Administrator may, in a
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uniform and nondiscriminatory manner, establish an earlier date on
which the Vested Accrued Benefit becomes distributable. The form of
benefit payment will be governed by the provisions of Section 5.05.
The undistributed portion of the Participant's Accrued Benefit will be
maintained and will continue to share in appreciation or depreciation of
the Trust Fund in the manner described in Section 4.02(b) until
distributed or forfeited. The Participant will forfeit the nor�vested
portion of his Accrued Benefit as of the date he completes a period of
5 consecutive one-year breaks in service.
(b) Jnvoluntary Cash-Out Distribution
lf the total value of a Vested Terminated Participant's Vested Accrued
Benefit has never exceeded $3,500 at the time of any Distribution, the
Plan Administrator will, without the request or approval of the
Participant or the Participant's spouse, if any, direct immediate
distribution to the Participant in cash or in kind of the total value of his
Vested Accrued Benefit. This paragraph (b) does not apply after the
Participant's Annuity Starting Date.
(c) Request for Early Disfribution
A Vested Terminated Participant will be entitled, upon written request
at any time after his termination of employment, to the immediate
distribution in a lump sum of the entire amount of his Vested Accrued
Benefit.
5.05 Form of Benefit Payment
The Plan Administrator will direct the Trustee to make the payment of any
benefit provided under this Plan upon the event giving rise to such benefit
within the time prescribed by this Article. The forrn of benefit will be a lump
sum payment.
If a Participant's Vested Accrued Benefit has ever exceeded $3,500 at the
time of any distribution, any payment of benefits before the Participant's
Normal Retirement Date will be subject to the Participant's written consent.
Upon request, the Participant may receive his benefit either in any form of
nonforfeitable, nontransferable annuity contract then available from an
insurer or in a series of substantially equal annual or more frequent
installments over a period certain not extending beyond the earlier of
the end of the period measured by the joint life and last survivor
expectancy of the Participant and his spouse, or
20 years
,
4
2
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The Plan Administrator and the Trustee may establish any rufes and
guidelines which may be necessary or appropriate with regard to the
purchase of the annuity contract or the payment of benefits under the
installment payment form.
5.06 Commencement of Benefit
(a) General
Unless the Participant elects otherwise in writing, payment of benefits
will begin no later than the 60th day after the close of the Plan Year
during which the latest of the following events occurs
the earlier of the Participant's Normal Retirement Age or the
Participant's 65th birthday;
the 1 Oth anniversary of the Participant's first participation in the
Plan; or
the Participant's termination of service with the Employer.
For purposes of Code Section 401(a)(14) and the first sentence of this
Section 5.06(a) only, and not for any other purpose under this Plan,
failure of the Participant (or the Participant's spouse, if applicable) to
consent to immediate distribution of benefits when they are payable
befare the Participant has attained the later of age 62 or Normal
Retirement Age will be treated as an election to defer commencement
until that age.
(b) Mandatory Dlstribution to Participant
Notwithstanding anything contained in this Plan, the payment of
benefits must meet the requirements of the regulations issued under
Code Section 401(a)(9) and the regulations issued under that Section.
Payment of a Participant's benefits must begin no later than his
Required Beginning Date. A Participant's benefits must either be
distributed in the calendar year which contains his Required Beginning
Date or must be paid over a period not exceeding one of the following
periods
the lifetime of the Participant;
the Jifetime of the last survivor of the Participant and the
Participant's designated Beneficiary;
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• •
the life expectancy of the Participant; or
the joint life and fast survivor expectancy of the Participant and
the Participant's designated Beneficiary.
(c) Mandatory Distribufion to Beneficiaries
If the Participant dies after distribution of his or her interest has begun,
the remaining partion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used before
the Participant's death.
If the Participant dies before distribution of his or her interest begins,
the Participant's entire interest will be distributed no later than five
years after the Participant's death except to the extent that an election
is made to receive distributians as follows:
if any portion of the Participant's interest is payable to a non-
spouse designated Beneficiary, such portion may be distributed
in substantially equal installments over the lifetime or life
expectancy of the designated Beneficiary. Such distributions
must commence no later than one year after the Participant's
death; -
if any portion of the Participant's interest is payable to the
Participant's spouse, such portion may be. distributed in
substantially equal installments over the lifetime or life
expectancy of the spouse. Distribution will cammence no later
than the later of December 31 of the calendar year immediately
following the calendar year in which the Participant died and
December 31 of the calendar year in which the Participant
wouJd have attained age 70-1/2. If the spouse dies before
payments begin, later distributions will be made as if the spouse
had been the Participant.
(d) Additional Ru/es
For purposes of this Section 5.06, life expectancies are to be
computed by the use of the return multiples contained in Section 1.72-
9 of the Income Tax Regulations. Life expectancy of the Participant
and the Spouse or Surviving Spouse will be recalculated annually, but
only if requested by the Participant or the Spouse or Surviving Spouse;
otherwise, any life expectancy will be calculated at the time payment
first begins without further recalculation.
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For purposes of this Section, any amount paid to a child of the
Participant will be treated as if it had been paid to the Surviving
Spouse if the amount becomes payable to the Surviving Spouse when
the child reaches the age of majority.
If the Participant's Spouse is not his designated Beneficiary, no
method of payment to the Participant may provide more than
incidental benefits to the Benefieiary. The Plan must satisfy the
minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code Section 401(a)(9) for
distributions made on or after the Participant's Required Beginning
Date and before the Participant's death. To satisfy the MDtB
requirement, the Plan Administrator will compute the minimum
distribution required by this Seetion 5.06 by substituting the applicable
MDIB divisor for the applicable life expectancy factor, if the MDIB
divisor is a lesser number. Following the Participant's death, the Plan
Administrator will compute the minimum distribution required by this
Section 5.06 solely on the basis of the applicable life expectancy factor
and will disregard the MD(B factor. The Plan Administrator will
determine whether benefits to the Beneficiary are incidental as of the
Participant's Annuity Starting Date or as of any date the Plan
Administrator redetermines the payment period to the Participant.
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ARTICLE 6
DEATH BENEFIT
6.01 Valuation of Accounts
For purposes of this Article, the value of a Participant's Accrued Benefit will
be determined as of the Valuation Date which coincides with or immediately
precedes the Annuity Starting Date.
6.02 Pre-Retirement Death Benefit
If a Participant dies before his Annuity Starting Date, the Participant's
Surviving Spouse will be entitled to receive the value of the Participant's
Vested Account Balance.
The Participant's designated Beneficiary will be entitled to receive the value
of the Participant's Vested Account Balance in a lump sum if:
a Surviving Spouse does not exist,
the Participant is legally separated or the Partieipant has been
abandoned (within the meaning of iocal law) and the Participant has a
court order to that effect, or
the Participant has designated a Beneficiary other than his Surviving
Spouse by a Qualified Election.
6.03 Post-Retirement Death Benefit
If a Retired Participant or a Disabled Participant dies after his Annuity Starting
Date, the Participant's Surviving Spouse or Beneficiary will be entitled to
continue receiving payments from the Participant's Vested Account Balance
in the form elected under Article 5.
6.04 Designation of Beneficiary
Each Participant will be given the opportunity to designate a Beneficiary or
Beneficiaries, and from time to tirne the Participant may file with the Plan
Administrator a new or revised designation on the form provided by the Plan
Administrator. If a Participant is married, any designation of a Beneficiary
must be consented to by the Participant's Spouse pursuant to a Qualified
Election.
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If a Participant dies without designating a Beneficiary, or if the Participant is
predeceased by all designated Beneficiaries and contingent Beneficiaries,
the Plan Administrator will distribute all benefits which are payable in the
event af the Participant's death in the following manner and to the first of the
following (who are listed in order of priority) who survive the Participant by at
least 30 days:
• All to the Participant's surviving spouse;
• Equally among the then living children of the Participant (by birth or
,adoption);
• Among the Participant's then living lineal descendants by right of
representation; or
• The Participant's estate.
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ARTICLE 7
LIMITATIONS ON BENEFITS
7.01 Limitation on Annual Additions
The amount of the Annual Addition which may be allocated under this Plan to
any Participant's Aceount as of any Valuation Date will not exceed any
applicable limitation imposed by Code Section 415, the provisions of which
are incorporated into this document by reference.
If the Annual Addition under this Plan on behalf of a Participant is to be
reduced as of any Valuation Date as a result of the next preceding
paragraph, the reduction will be, to the extent required, made in the following
order:
(a) The amount of the reduction consisting of Employee Contributions will
be paid to the Participant as soon as administratively feasible.
(b) The amount of the reduction consisting of Forfeitures will be allocated
and reallocated to the Accounts of the other Participants according to
the Plan formula fior allocating Forfeitures to the extent they do not
cause the additions to any other Participant's Accounts to exceed the
lesser of the Defined Contribution Limit or any other limitation provided
in the Plan.
(c) The amount of the reduction consisting of Employer Contributions will
be allocated and reallocated to the Accounts of the other Participants
according to the Plan #ormula for allocating Forfeitures to the extent
they do not cause the additions to any other Participant's Accounts to
exceed the lesser of the Defined Contribution Limit or any other
limitation provided in the Plan.
(d) To the extent that the reductions described in paragraph (b) or (c)
cannot be allocated to otherParticipant's Accounts, the reductions will
be allocated to a suspense account as Forfeitures and held therein
until the next succeeding Valuation Date on which Forfeitures could be
applied under the provisions of the Plan. All amounts held in a
suspense account must be applied as Forfeitures before any
additional contributions, which would constitute annual additions, may
be made to the Plan. If the Plan terminates, the suspense accou�t will
revert to the Employer to the extent it may not be allocated to any
Participant's Accounts. If a suspense account is in existence at any
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• •
time during a Limitation Year pursuant to this Section, it will not
participate in the allocation of the Trust Fund's investment gains and
losses.
7.02 Where Employer Maintains Another Qualified Plan
(a) Where Employer Maintains Another Defined Contribution P/an
If the Employer maintains this Plan and one or more other qualified
defined contribution plans, one or more welfare benefit funds (as
defined in Code Section 419(e), or one or more individual medical
accounts (as defined in Code Section 415(I)(2), all of which are
referred to in this Article 7 as "qualified defined contribution plans", the
annual additions allocated under this Plan to any Participant's
Accounts will be limited in accordance with the allocation provisions of
this Section 7.02(a).
The amount of the Annual Additions which may be allocated under this
Plan to any Participant's Accounts as of any Valuation Date will not
exceed the Defined Contribution Limit (based upon Aggregate
Compensation up to the allocation date) reduced by the sum of any
allocations of Annual Additions made to the Participant's Accounts
under this Plan and any other qualified defined contribution plans
maintained by the Employer as of any earlier Valuation Date within the
Limitation Year.
If a Valuation Date of this Plan coincides with a Valuation Date of any
other plan deseribed in the above paragraph, the amount of Annual
Additions to be allocated on behalf of a Participant under this Plan as
of such date will be an amount equal to the product of the amount
described in the next preceding paragraph multiplied by a fraction (not
to exceed 1.0), the numerator of which is the amount to be allocated
under this Plan without regard to this Article during the Limitation Year
and the denominator of which is the amount that would otherwise be
allocated on this Valuation Date under all plans without regard to this
Article 7.
If the Annual Addition under this Plan on behalf of a Participant is to be
reduced as of any Valuation Date as a result of the next preceding two
paragraphs, the reduction will be, to the extent required, effected by
first reducing Participant contributions (which increase the annual
addition), then Forfeitures (if any), and then any Employer
contributions, to be allocated under this Plan on behalf of the
Participant as of the Valuation Date.
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If as a result of the first four paragraphs of this Section 7.02 the
allocation of additions is reduced, the reduction will be treated in the
manner described in the third paragraph of Section 7.01.
(b) Where Employer Mainfains a Qualified Defined Benefit Plan
If the Employer maintains (or has ever maintained), in addition to this
Plan, one or more qualified defined benefit pfans, then for any
Limitation Year, the sum of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction wilt not exceed 1.0. ff, in any
Limitation Year, the sum of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction for a Participant would exceed 1.0
without adjustment to the amount that can be allocated to the accoun#
of the Participant under this Plan, then the amount that can be
allocated to the account of the Participant under this plan will be
reduced to the extent necessary to reduce the sum of the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction for
the Participant to 1.0.
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ARTICLE 8
MISCELLANEOUS
•
8.01 Employment Rights of Parties Not Restricted
The adoption and maintenance of this Plan will not be deemed a contract
between the Employer and any Empioyee. Nothing in this Plan will give any
Employee or Participant the right to be retained in the employ of the
Employer or to interfere with the right of the Employer to discharge any
Employee or Participant at any time, nor will it give the Employer the right to
require any Employee or Participant to remain in its employ, or to interfere
with any Employee's orParticipant's right to terminate his employment at any
time.
8.02 Alienation
(a) General
No person entitled to any benefit under this Plan will have any right to
sell, assign, transfer, hypothecate, encumber, commute, pledge,
anticipate or otherwise dispose of his interest in the benefit, and any
attempt to do so will be void. No benefit under this Plan will be subject
to any legal process, levy, execution, attachment or garnishment for
the payment of any claim against such person.
(b) Exceptions
Section 8.02(a) will not apply to the extent a Participant or Beneficiary
is indebted to the Plan, for any reason, under any provisions of this
Plan. At the time a distribution is to be made to or for a Participant's or
Beneficiary's benefit, the Trustee will withhold the portion of the
amount to be distributed which is equal to the indebtedness and apply
it against or discharge the indebtedness. Before making a payment,
however, the Plan Administrator must give written notice to the
Participant or Beneficiary that the indebtedness is to be so paid in
whole or part from the Participant's Account Balance. If the Participant
or Beneficiary does not agree that the indebtedness is a valid claim
against his Vested Account Balance, he will be entitled to a review of
the validity of the claim under the procedures described in Section
9.08.
Section 8.02(a) will not apply to a qualified domestic relations order
("QDRO") as defined in Code Section 414(p), or any other domestic
relations order entered before January 1, 1985. The Administrator will
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estabiish a written procedure to determine the qualified status of
domestic relations orders and to administer distributions under
QDROs. Further, to the extent provided under a QDRO, a former
spouse of a Participant will be treated as the spouse or Surviving
Spouse for all purposes under the Plan. All rights and benefits,
including eleetions, provided to a Participant under this Plan will be
subject to the rights afforded to any "alternate payee" under a
"qualified domestic relations order" as such terms are defined in Code
Section 414(p).
8.03 Qualification of Plan
The Employer will have the sole responsibility for obtaining and retaining
qualification of the Plan under the Internal Revenue Code with respect to the
Employer's individual circumstances.
8.04 Construction
This Plan will be construed according to the laws of the State of Washington.
Words used in the singular will include the plural, the masculine gender will
include the feminine, and vice versa, whenever appropriate.
8.05 Fiduciaries
(a) Allocation of Functions
The authority to control and manage the operation and administration
of the Plan and Trust created by this instrument will be allocated
between the Trustee and the Plan Administrator, both of whom are
designated as Fiduciaries with respect to the Plan, and the Employer.
The Employer reserves the right to allocate the various responsibilities
for the present execution of the functions of the Plan among itself and
the Fiduciaries. Any persan or group of persons may serve in more
than one fiduciary capacity.
(b) Respvnsibilities of the Employer
The Employer will have the following authority and responsibility:
To appaint or remove the Plan Administrator and furnish the
Trustee with certified copies of any resolutions of the Employer
with regard thereto;
To appoint and remove the Trustee;
To appoint a successor Trustee or additional Trustees;
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To communicate information to the Plan Administrator and the
Trustee as needed for the proper performance of the duties of
eaeh; and
To appoint an investment manager in the manner described in
Section 11.17 (or to refrain from such appointment), to monitor
the performance of the investment manager so appointed, and
to terminate such appointment.
(c) Limitation on Obligafions of Fiduciaries
No Fiduciary will have authority or responsibility to deal with matters
other than as delegated to it under this Plan or by opEration of law. No
Fiduciary will be liable for breach of fiduciary responsibility or
obligation by anather fiduciary (including Fiduciaries) if the
responsibility or authority of the act or omission deemed to be a
breach was not within the scope of the Fiduciary's authority or
delegated responsibility.
(d) Standard of Care and Skill
Each Fiduciary will carry out his or its duties with the care, skill,
prudence and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of like character and with
like objectives.
(e) Interest of Participants Paramount
In the discharge of his or its duties, each Fiduciary will act solely in the
interest of the Participants and Beneficiaries of the Plan and Trust and
for the purpose of providing benefits to Participants and Beneficiaries.
8.06 Reserved
8.07 Adoption and Withdrawal by Other Organizations
(a) Procedure for Adoption
Subject to the provisions of this Section 8.07, any organization now in
existence or hereafter formed or acquired, which is not already an
Adopting Employer under this Plan and which is otherwise legally
eligible may, in the future, with the consent and approval of the
Employer, by formal Written Resolution (referred to in this Section as
Adoption Resolution), adopt the Plan and Trust hereby created for all
or any classification of persons in its employment and thereby, from
and after the specified effective date, became an Adopting Employer
under this Plan. Such consent will be effected by and evidenced by a
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Written Resolution of the Empfoyer. The Adoption Resolution may
contain such specific changes and variations in Plan terms and
provisions applicable to the Adopting Employer and its Employees as
may be acceptable to the Employer and the Trustee. However, the
sole, exclusive right of any other amendment of whatever kind or
extent to the Plan is reserved to the Employer. The Adoption
Resolution will become, as to the adopting organization and its
Employees, a part of this Plan as then amended or thereafter
amended. It will not be necessary for the adopting organization to sign
or execute the original or then amended Plan and Trust document or
any future amendment to the Plan and Trust document. The effective
date of the Plan for the adopting organization will be that stated in the
Adoption Resolution and from and after such effective date the
adopting organization will assume all the rights, obligations and
liabilities as a Participating Emp�oyer under this Plan. The
administrative powers of and control by the Employer as provided in
the Plan, including the sole right of amendment and of appointment
and removal of the Plan Administrator and the Trustee, will not be
diminished by reason of the participation of the adopting organization
in the Plan.
(b) Withdrawal
Any Adopting Employer may withdraw from the Plan at any time,
without affecting the Emptoyer or other Adopting Employers not
withdrawing, by complying with the provisions of the Plan. A
withdrawing Adopting Employer may arrange for the continuation by
itsetf or its successor of this Plan in separate forms for its own
employees, with such amendments, if any, as it may deem proper, and
may arrange for contEnuation of the Plan by merger with an existing
plan and transfer of plan assets. The Employer may, in its absolute
discretion, terminate an Adopting Employer's participation at any time
when in its judgment the Adopting Employer fails or refuses to
discharge its obligations under the Plan,
(c) Adoption Contingent Upon Inifial and Continued Qualiflcations
The adoption of this Plan by an organization as provided is hereby
made contingent and subject to the condition precedent that said
adopting organization meets all the sta�utory requirements for qualified
plans, including, but not lim ited to, Sections 401(a) and 501(a) of the
Internal Revenue Code for its Employees. If the Plan or the Trust, in its
operation, becomes disqualified, for any reason, as to the adopting
organization and its Employees, the portion of the Plan assets
allocable to them will be segregated as soon as is administratively
feasible, pending either the prompt (1) requalification of the Plan as to
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the organization and its employees to the satisfaction of the Internal
Revenue Service so as not to affect the continued qualified status
thereof as to other Employers, (2) withdrawa{ of the organization from
this Plan and a continuation by itself or its successor of its plan
separately from this Plan, or by merger with another existing plan, with
a transfer of its said segregafed portion of Plan assets, or (3)
termination of the Plan as to itself and its Employees.
8.08 Employer Contributions
Employer contributions made to the Plan and Trust are made and will be held
for the sole purpose of providing benefits to Participants and their
Beneficiaries. In no event will any co evert the Emp oyer or oth rwise be
Plan and Trust or mcome therefrom
used or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries. (However, Employer contributions and
the income therefrom may be used to pay the ongoing costs of maintaining
and administering the P{an and Trust). In addition, Employer contributions
may be refunded to the Employer on written demand within one year of the
event giving rise to the right to refund and upon presentation to the Trustee of
evidence of the right to and amount of the refund, but only to the extent that
the refunds do not, in themselves, deprive the Plan of its qualified status,
under the following circumstances and subject to the following limitations
(a) Any contribution which is made in whole or in part by reason of a
mistake of fact (for example, incorrect information as to the eligibility or
compensation of a Participant, or a mathematical or actuarial error),
may be returned to the Employer.
(b) Notwithstanding any other provision of the Plan and Trust, if the
Internal Revenue Service determines initially that the Plan, as adopted
by the Employer, does not qualify under applicable sections of the
Code and applicable Treasury Department Regulations, and the
Employer declines either to amend this Plan and Trust so that it meets
the objections of the Internal Revenue Service or to contest the
determination of the tnternal Revenue Service in court, the Trustee will
distribute the value of alf assets to the Employer. Thereafter, the
Employer's participation in this Plan and Trust will be considered
rescinded and of no force or effect.
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ARTfCLE 9
ADMINISTRATtON
9.01 Pian Administrator
The Plan Administrator will have the responsibility for the general supervision
and administratian of the Plan and will be a fiduciary of the Plan. The
Employer may, by Written Resolution, appoint an individual or a committee of
at least 3 persons to serve as Plan Administrator. If the Employer does not
appoint an individual or a committee as Plan Administrator, the Employer will
function as Plan Administrator. The Employer may at any time, with or
without cause, remove an individual as Plan Administrator or as a member of
the Committee and substitute another individual therefor.
9.02 Powers and Duties of the Plan Administrator
The Plan Administrator will be charged with and will have delegated to it the
power, duty, authority and discretion:
• to interpret and construe the provisions of this Plan in its discretion;
• to determine in its discretion the facts of any individual case and to
apply the Plan's meaning and intent (as determined above) to those
facts,
• to determine in its discretion the rights and benefits of, Participants or
the eligibility of Employees;
• to give necessary instructions and directions to the Trustee and the
Insurer as herein provided or as may be requested by the Trustee and
the Insurer from time to time; and
• generally to direct the administration of the Plan according to its terms.
All decisions of the Plan Administrator in matters properly coming before it
according to the terms of this Plan, and all actions taken by the Plan
Administrator in the proper exereise of its administrative powers, duties and
responsibitities, will be #inal and binding upon all Employees, Participants and
Beneficiaries and upon any person having or claiming any rights or interest in
this Plan unless it can be shown that the decision, action, interpretation or
determination was arbitrary and capricious. The Employer and the Plan
Administrator will make and receive any reports and information, and retain
any records necessary or appropriate to the administration of this Plan or to
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address. If the Plan Administrator notifies the Participant or Beneficiary by
certified mail (return receipt requested) at his last known address that he is
entitted to a distribution and also notifies him of the provisions of this
paragraph, and the Participant or Beneficiary fails to claim his benefits under
the Plan or provide his current address to the Plan Administrator within one
year after such notification, the distributable amount will be forfeited and used
to reduce the Employer's next contribution to the Plan. If the Participant or
Beneficiary is later located, the benefit will be restored.
9.09 Liability of Fiduciaries
The Plan Administrator or the Employer may purchase insurance to provide
indemnification for the Plan Administrator, the Employer and any Employees
against liability or losses occurring by reason of act or omission in their
capacity as fiduciaries or agents for the Plan. Except for a breach of fiduciary
responsibility due to gross negligence or willful misconduct, the Plan
Administrator will not incur any individual liability for any decision, act, or
failure to act hereunder. The Plan Administrator may engage agents to assist
it and may engage legal counsel who may be counsel for the Employer. The
Plan Administrator will not be responsible for any action taken or omitted to
be taken on the advice of counsel. All reasonable expenses incurred by the
Plan Administrator will be paid by the Employer.
If there is more than one person serving as a fiduciary in any capacity (for
example, co-Trustees), each will use reasonable care to prevent the other or
others #rom committing a breach of this Plan. Nothing contained in this
Section will preclude any agreement allocating specific responsibilities or
obligations among the co-fiduciaries provided that the agreement does not
violate any of the terms and provisions of this Plan. In those instances where
any duties have been allocated between co-fiduciaries, a fiduciary will not be
iiable for any loss resulting to the Plan arising from any act or omission on the
part of another co-fiduciary to whom responsibilities or obligations have been
allocated except under the following circumstances:
If he participates knowingly in, or knowingly undertakes to conceal, an
act or omission of a co-fiduciary knowing the act or omission is a
breach; or
If by his failure to comply with his specific responsibilities which give
rise to his status as a fiduciary, he has enabled the other fiduciary to
commit a breach; or
If he has a knowledge of a breach by a co-fiduciary, unless he makes
reasonable efforts under the circumstances to remedy the breach.
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9.10 Expenses of Administration
The Empioyer does not and will not guarantee the Plan Assets against loss.
The Employer may in its sole discretion, but wiil not be obligated to, pay the
ordinary expenses of establishing the Plan and Trust, including the fees of
consultants, accountants and attorneys in connection therewith. The
Employer may, in its soie discretion (but will not be obligated �o), pay other
costs and expenses of administering the Plan, the taxes imposed upon the
Trust, if any, and the fees, charges or commissions with respect to the
purchase and sale of Plan Assets. Unless paid by the Employer, such costs
and expenses, taxes (if any), and fees, charges and commissions will be a
charge upon the Plan Assets and deducted from Plan Assets by the Trustee.
9.11 Distribution Au#hority
If any person entitled to receive payment under this Plan is a minor, declared
incompetent or is under other legal disability, #he Plan Administrator may, in
its sole discretion:
• Distribute directly to the person entitled to the payment;
• Distribute to the legal guardian or, if none, to a parent of the person
. entitled to payment or to a respansible adult with whom the person
entitled to payment maintains his residence;
• Distribute to a custodian for the person entitled to payment under the
. Uniform Gifts to Minors Act if permitted by the laws of the state in
which the person entitled to payment resides; or
• Withhold distribution of the amount payable until a court of cornpetent
jurisdiction determines the rights of the parties thereto or appoints a
guardian of the estate of the person entitled to payment.
If there is any dispute, controversy or disagreement between any Beneficiary
or person and any other person as to who is entitled to receive the benefits
payable under this Plan, or if the Plan Administrator is uncertain as to who is
entitled to receive benefits, or if the Rlan Administrator is unable to locate the
person who is entitled to benefits, the Plan Administrator may with
acquittance interplead the funds into a court of competent jurisdiction in the
judicial district in which the Employer maintains its principal place of business
and, upon depositing the funds with the clerk of the court, be released from
any further responsib'rlity for the payment of the benefits. If it is necessary for
the Plan Administrator to retain legal counsel or incur any expense in
determining who is entitled to receive the benefits, whether or not it is
necessary to institute court action, the Plan Administrator will be entitled to
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reimbursement from the benefits for the amount of its reasonable costs,
expenses and attorneys' fees incurred.
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ARTICLE � 0
AMENDMENT OR TERMINATION OF PLAN
10.01 Right of Employer To Amend or Terminate
The Employer reserves the right to alter, amend, revoke or terminate this
Plan. No amendment will deprive any Participant or Beneficiary of any vested
right nor will it reduce his Accrued Benefit (Account Balance), except as may
be required to maintain the Plan as a qualified plan under the Code. No
amendment will change the duties or responsibilities of the Trustee without its
express written consent thereto. �
Aplan amendment which has the effect of eliminating an Optional Benefit
Form will, with respect to benefits attributable to Service before the
amendment, be treated as reducing Accrued Benefits.
10.02 Allocation of Assets Upon Termination of Plan -
If this Plan is revoked or terminated (in whole or in part) or if contributions are
completely discontinued the Aecounts of all affected Participants will become
non-forfeitable. The Employer will then arrange for allocation of all assets
among Participants so affected by the total or partial terminafion in
accordance with the requirements of all applicable law and the regulations
and requirements of the Internal Revenue Service. All allocated amounts will
be retained in the Plan to the credit of the individual Participants until
distribution as directed by the Employer. Distribution to Participants may be in
the form of cash or other Plan assets or partfy in each..
10.03 Exclusive Benefit
At no time will any part of the principal or income of the Plan assets be used
or diverted for purposes other than the exclusive benefit of Participants in the
Plan and their Beneficiaries, nor may any portion of the Plan assets revert to
the Employer.
10.04 Failure To Qualify
Notwithstanding any of the foregoing provisions, if this Plan, upon adoption
by the Employer, is submitted to the Internal Revenue Service which then
determines that the Plan as initially adopted by the Employer is not a
qualified plan under the Code, the Employer may elect to terminate this Plan
by giving written notice thereof. Such termination will have the same effect as
if the Plan were never adopted, all Policies and Contracts will be canceled,
and all contributions, to the extent recoverable from the Trustee, will be
returned to their source. If any amendment to this Plan is submitted to the
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Internal Revenue Service within the period allowed under Code Section
401(b) which then determines that the Plan as amended is not a qualified
plan under the Code, the Empioyer may cancel or modify any or alf
provisions of the amendment retroactive to the effective date of the
amendment in order to maintain the qualified status of the Plan, whereupon
written notice thereof will be furnished to all affected Employees, Participants
and Beneficiaries.
10.05 Mergers, Consolidations or Transfers of Plan Assets
In the event this Plan is merged or consolida#ed with another plan which is
qualified under Code Sections 401(a) (and 501(a) if applicable), or in the
event of a transfer of the assets ar liabitities of this Plan to another plan which
is qualified under Code Sections 401(a) (and 501(a) if applicable), the benefit
which each Participant would be entitled to receive under the successor plan
or other plan if it were terminated immediately after the merger, consolidation
or transfer will be equal to or greater than the benefit which the Participant
would have received immediately before the merger, consolidation or transfer
if this Plan had then terminated.
Any transfer of assets and/or liabilities to (or from) this Plan from (or to)
another plan qualified under Code Sections 401(a) (and 501(a) if applicable)
will be evidenced by a Written Resolution by the Plan Sponsor of each
affected plan which specifically authorizes such transfer of assets and/or
liabilities.
No transfer of assets and liabilities of the Fund to another trust fund that
results in the elimination or reduction of benefits protected by Code Section
411(d)(6) may be made unless the Participant has made a voluntary, fully
informed election to transfer his accrued benefit to the other fund. The
election is subject to the consent of the Participant's Spouse (if any) and must
comply in all respects with the requirements of Treasury Regulation Section
1.411(d)-4 Q&A 3(b)(1), the provisions of which are incorporated by
reference into this Section 10.05.
10.06 Effect of Ptan Amendment on Vesting Schedule
No amendment to the Vesting Schedule will deprive a Participant of his
nonforfeitable right to his Vested Accrued Benefit as of the later of the date
the amendment is adopted or its effective date. Further, if the Vesting
Schedule of the Plan is amended, or if the Plan is amended in any way that
directly or indirectly affects the computation of a Participant's non-forfeitable
percentage, each Participant with at least 3 Years of Vesting Service as of
the date of the change may elect, within a reasonable period after the
adoption of the amendment, to have his Vested Percentage computed under
the Plan without regard to such amendment. The period during which such
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election may be made will commence with the date the amendment is
adopted and wili end 60 days after the latest of:
the date the amendment is adopted;
the date the amendment becomes effective or,
the date the Employer issued written notice of the amendment to the
Participant.
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ARTICLE 11
TRUSTEE AND TRUST FUND
11.01 Acceptance of Trust
The Trustee, by signing this Agreement, accepts this Trust and agrees to
perform the duties of the Trustee in accordance with the terms and conditions
set forth herein.
11.02 Trust Fund
(a) Purpose and Nature
The Employer and the Trustee will establish and maintain a Trust
Fund for purposes of providing a means of accumulating the assets
necessary to provide the benefits which become payable under the
Plan. The Trustee will receive, hold and invest all contributions made
by the Employer and the Participants, including the investment
earnings thereon. The Trust Fund arising from such contributions and
earnings will consist of all assets held by the Trustee under the Plan
and Trust. All benefits payable under the Plan will be paid by the
Trustee from the Trust Fund.
Any person having any claim under the Plan will look solely to the
assets of the Trust Fund for satisfaction. In no event will the Plan
Administrator, the Employer, any Employees, any officer of the
Employer or any agents of the Employer or the Plan Administrator be
liable in their individual capacities to any person whomsoever, under
the provisions of this Plan and Trust, except as provided by law.
The Trust Fund will be used and applied only in accordance with the
provisions of the Plan and Trust, to provide the benefits thereof, and
no part of the carpus or income of the Trust Fund will be used for, or
diverted to, purposes other than for the exclusive benefit of the
Participants or their Beneficiaries entitled to benefits under the Plan,
except to the extent specifically provided elsewhere in this Plan.
(b) Operation of Trust Fund
The Trust Fund will be maintained in accordance with the accounting
requirements of the Plan. No Participan# will have any right to any
specific asset or any specific portion of the Trust Fund before
distribution of benefits. Withdrawals from the Trust Fund will be made
to provide benefits to Participants and Beneficiaries in the amounts
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.
specified by the Plan, and to pay expenses authorized by the Plan
Administrator.
(c) Investment Policy
An Investment Committee appointed by the Employer (or, if there is no
Investment Committee, the Plan Administrator) will establish an
investment policy for the Trust Fund, bearing in mind the fiduciary
requirements of state law, the possible need for asset liquidity
including benefit payment requirements, the need for investment
growth, and the short-run and long-run goals of the Plan and Trust.
The Plan Administrator wi11 communicate the investment policy to the
Trustee, or the Investment Manager if one has been appointed
pursuant to Sectian 11.17, who will invest the assets of the Trust Fund
according to the investment policy.
11.03 Receipt of Contributions
The Trustee will be accountable to the Employer for the funds contributed to
it, but will have no duty to see that the contributions received comply with the
provisions of the Plan. The Trustee will not be obligated to collect any
contributions from the Employer or the Participants, nor be obligated to see
that funds deposited with it are contributed according to the provisions of the
Plan.
11.04 Powers of the Trustee
Subject to the provisions and limitations contained elsewhere in this Plan, the
Trustee will have full discretion and authority with regard to the investment of
the Trust Fund. The Trustee will invest Plan Assets according to the
investment policy communicated to it by the Plan Administrator. The Trustee
is authorized and empowered, but not by way of limitation, with the following
powers, rights and duties
(a) To invest any part or all of the Trust Fund in any common or preferred
stocks, open-end or closed-end mutual funds, United States retirement
plan bonds, corporate bonds, debentures, convertible debentures,
commercial paper, U.S. Treasury bills, book entry deposits with the
United States Federal Reserve Bank or System, Master Notes or
similar arrangements sponsored by the Trustee or any other financial
institution as permitted by law, improved or unimproved real estate
situated in the United States, mortgages, notes or other property of
any kind, real or personal, as a prudent man would so invest under like
circumstances with due regard for the purposes o# this Plan. Any
investment made or retained by the Trustee in good faith will be proper
but must be of a kind constituting a diversification considered by a law
suitable for trust investments;
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(b) To maintain any part of the assets of the Trust Fund in cash, or in
demand or short-term time deposits bearing a reasonable rate of
interest (including demand or short-term time deposits of or with the
Trustee), or in a short-term investment fund (which fund may be
maintained in cash balances or in other cash equivalents having ready
marketability, including, but not limited to, U.S. Treasury Bills,
commercial paper, certificates of deposit (including such certificates of
deposit af or with the Trustee), and similar types of short-term
securities, as may be deemed necessary by the Trustee in its sole
discretion;
(c) To manage, sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any
term even though commencing in the future or extending beyond the
term of the Trust, and otherwise deal with all property, real or
personal, in such manner, for such considerations and on such terms
and conditions as the Trustee will decide;
(d) To credit and distribute the Trust as directed by the Plan Administrator
or any agent of the Plan Administrator. The Trustee will not be obliged
to inquire as to whether any payee or distributee is entitled to any
payment or whether the distribution is proper or within the terms of the
Plan, or as to the manner of making any payment or distribution. The
Trustee will be accountable only to the Plan Administrator for any
payment or distribution made by it in good faith on the order or
direction of the Pian Administrator or any agent of the Plan
Administrator;
(e) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge;
(f) To compromise, contest, arbitrate, or abandon claims and demands, in
its discretion;
(g) To have with respect to the Trust all of the rights of an individual
owner, including the power to give proxies, to participate in any voting
trusts, mergers, consolidations or liquidations, and to exercise or sell
stock subscriptions or conversion rights;
(h) To hold any securities or other property in the name of the Trustee or
its nominee, or in another form as it may deem best, with or without
disclosing the trust relationship;
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(i) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageaus management,
investment and distribution of the Trust;
(j) To retain any funds or property subject to any dispute without liability
for the payment of interest, and to decline to make payment or delivery
of the funds or property until final adjudication is made by a court of
competent jurisdiction;
(k) To file all tax forms or returns required of the Trustee;
(I) Ta begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee will not be
obligated to or required to do so unless indemnified to its satisfaction;
and
(m) To keep any or all of the Trust property at any place or places within
the United States or abroad, or with a depository or custodian at such
place or places, provided, however, that the Trustee may not maintain
the indicia of ownership of any assets of the Plan outside the
jurisdiction of the District Courts of the United States, except as may
be expressly authorized in U.S. Treasury or U.S. Department of Labor
regulations.
11.05 Investment �n Common or Collective Trust Funds
Notwithstanding the provisions of Section 11.04, the Employer specifically
authorizes the Trustee to invest all or any portion of fhe assets comprising
the Trust Fund in any common or cotlective trust fund which at the time of the
investment provides for the poofing of the assets of plans qualified under
Code Section 401(a). The authorization applies only if such common or
collective trust fund:
is exempt from taxation under Code Section 584 or 501(a);
if exempt under Code Section 501(a), expressly limits participation to
pension and profit sharing trusts which are exempt under Code
Section 501(a) by reason of qualifying under Code Section 401(a);
prohibits that part of its corpus or income which equitably belongs to
any participant trust from being used for or diverted to any purposes
other than for the exclusive benefit of the Employees or their
Beneficiaries who are entitfed to benefits under such participating
trust;
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prohibits assignment by participating trust of any part of its eguity or
interest in the group trust; and
the sponsor of the group trust created or organized the group trust in
the United States and maintains the group trust at all times as a
domestic trust in the United States.
The provisions of the common or collective trust fund agreement, as
amended by the Trustee from time to time, are by this reference incorporated
within this Plan and Trust. The provisions of the common or coliective trust
fund will govern any investment of Plan assets in that fund.
11.06 Investment in Insurance Company Contracts
The Trustee may invest any portion of the Trust Fund in a deposit
administration, guaranteed investment or similar type of investment confract
(hereinafter referred to as Contract); provided however that no such Contract
may provide for an optional form of benefit which would not be provided for
under the provisions of this Plan. The Trustee will be the complete and
absolute owner of Contracts hetd in the Trust Fund.
The Trustee may convert from one form to another any Contract held in the
Trust Fund; designate any mode of settlement; sell or assign any Contract
held in the Trust Fund; surrender for cash any Contract held in the Trust
Fund, agree with the insurance company issuing any Contract to any release,
reduction, modification or amendment thereof; and, without limitation of any
of the foregoing, exercise any and all of the rights, options and privileges that
belong to the absolute owner of any Contract held in the Trust Fund that are
granted by the terms of any such Contract or by the terms of this Agreement.
The Trustee will hold in the Trust Fund the proceeds of any sale, assignment
or surrender of any Contract held in the Trust Fund and any and all dividends
and other payments of any kind received in respect to any Contract held in
the Trust Fund.
The Trustee will have power to execute all necessary receipts and releases
to any insurance company issuing any Contract or Contracts held in the Trust
Fund, and wil{ make reasonable effarts to collect such sums as may appear
to be due; but the Trustee will have no duty to begin or maintain any action,
suit or legal proceeding to collect the proceeds of any Contract unless it is in
possession of funds sufficient for the purpose or unless it has been
indemnified to its satisfaction for its counsel fees, costs, disbursements and
all other expenses and liabilities to which it, in its judgment, may be subjected
by beginning or maintaining the action, 5uit or other legal proceeding. The
Trustee may use the proceeds of any Contract held in the Trust Fund to
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defray the expenses incurred in connection with enforcing payment of that
Contract. The Trustee wilf have power to compromise and adjust claims
arising out of any Contract held in the Trust Fund upon such terms and
conditions as it may deem just, and the discretion of the Trustee will be
binding and conclusive upon all persons interested in the Trust Fund.
No insurance company which may issue any Contract based upon the
application of the Trustee will be responsible for the validity of this Plan, be
required to look into the terms of this Plan, be required to question any act of
the Plan Administrator or the Trustee hereunder or be required to verify that
any action of the Trustee is authorized by this Plan. If a conflict shou(d arise
between the terms of the Plan and any such Contract, the terms of the Plan
will govern.
11.07 Fees and Expenses from Fund
The Trustee will be entitled to receive reasonable annual cornpensation as
may be mutually agreed upon from #ime to time between the Employer and
the Trustee. The Trustee will pay all expenses reasonably incurred by it in its
administration and investment of the Trust Fund from the Trust Fund unless
the Employer pays the expenses. No person who is receiving full pay from
the Employer will receive compensation for services as Trustee.
11.08 Records and Accounting
The Trustee will keep full and complete records of the administration of the
Trust Fund which the Employer and the Plan Administrator may examine at
any reasonable time. As soon as practical after the end of each Plan Year
and at such ather reasonable times as the Employer may direct, the Trustee
will prepare and deliver to the Employer and the Plan Administrator an
accounting of the administration of the Trust, including a report on the
valuation of all assets of the Trust Fund, such valuation to be based upon the
fair market value on the valuation date. The Employer and the Plan
Administrator will accept or disapprove such accounting within 90 days. If the
Employer and the Plan Administrator fail to explicitly accept or disapprove
such accounting within 90 days, they will be deemed to have accepted such
accounting as of the close af the 90-day period. Upon acceptance by the
Employer and the Plan Administrator, the accounting will be conclusive and
binding on all parties and the Trustee will be relieved of any further liability or
accountability with respect to the matters accounted for. No Employee,
Participant or Beneficiary nor any other person will be entitled to or have the
right to demand any further or different accounting by the Trustee.
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11.09 Distribution Directions .
If no one claims a payment or distribution made from the Trust, the Trustee
will notify the Plan Administrator and will dispose of the payment as directed
by the Plan Administrator in the manner described in Section 9.11.
11.10 Third Party
No person dealing with the Trustee will be obliged to see to the proper
application of any money paid or property delivered to the Trustee, or to
inquire whether the Trustee has acted pursuant to any of the terms of the
Plan. Each person dealing with the Trustee may act upon any notice, request
or representation in writing by the Trustee, or by the Trustee's duly
authorized agent, and will not be liable to any person whomsoever in so
doing. The certification of the Trustee that it is acting in accordance with the
Plan will be conclusive in favor of any person relying on the certification.
11.11 Professional Agents
The Trustee may employ and pay from the Trust Fund reasonable
compensation to agents, attorneys, accountants and other persons to advise
the Trustee as in its opinion may be necessary. The Trustee may delegate to
any agent, attorney, aceountant or other person selected by it any non-
Trustee power or duty vested in it by the Plan, and the Trustee may act or
refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.
11.12 Valuation of Trust
The Trustee will value the Trust Fund as of the last day of each Plan Year to
determine the fair market value of the Trust, and the Trustee will value the
Trust Fund on such other date(s) as may be necessary to carry out the
provisions of the Plan.
11 13 Liability of Trustee
The Trustee will be liable only for the safeguarding and administration of the
assets of this Trust Fund in accordance with the provisions hereof and any
amendments hereto and no other duties or responsibilities will be implied.
The Trustee will not be required to pay any interest on funds paid to or
deposited with it or to its credit under the provisions of this Trust, unless
' pursuant to a written agreement between the Employer and the Trustee. The
Trustee will not be responsibfe for the adequacy of the Trust Fund to meet
and discharge any liabilities under the Plan and will not be required to make
any payrnent of any nature except from funds actually received as Trustee.
The Trustee may consult with legal counsel (who may be legal counsel for
the Employer) selected by the Trustee and will be fully protected for any
action taken, suffered or omitted in good faith in accordance with the opinion
of said legal counsel. It will not be the duty of the Trustee to determine the
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identity or mailing address of any Participant or any other person entitled to
benefits hereunder, such identity and mailing addresses to be furnished by
the Employer, the Plan Administrator or an agent of the Plan Administrator.
The Trustee will be under no liability in making payments in accordance with
the terms of this Ptan and the certification of the Plan Administrator or an
agent of the Plan Administrator who has been granted such powers by the
Plan Administrator.
11.14 No Bond
Except to the extent required by applicab{e state law, no bond or other
security for the faithful performance of duty hereunder will be required of the
Trustee.
11.15 Ancillary Trustee
1Nhenever and as often as the Trustee deems such action desirable, it may
by written instrument appoint any person or corporation in any state of the
United States to act as Ancillary Trustee with respect to any portion of the
assets then held or about to be acquired on behalf of the Trust. Each
Ancillary Trustee will have such rights, duties and discretionary powers as
are delegated to it by the Trustee, but will exercise the same subject to the
limitations or further directions of the Trustee as such be specified in the
instrument evidencing its appointment. The Ancillary Trustee may resign or
may be removed by the Trustee, as to all or any portion of the assets so
delivered one to the other, and the Trustee may thereupon appoint another
Ancillary Trustee or successor to whom the assets will be transferred, or may
itself receive such assets in termination of the ancillary trusteeship to that
extent. Such Ancillary Trustee will be accountable solely to the Trustee and
will be entitled to reasonable eompensation.
11.16 Removal or Resignation and Successor Trustee
A Trustee may resign at any time upon giving 30 days prior written notice to
the Employer or, with the consent of the Board of Directors, a Trustee may
resign with less than 30 days prior written notice.
The Board of Directors may, at any time and from time to time, without order
of any,court and without amending this Plan and Trust, remove a Trustee by
giving at least 30 days prior written notice to the Trustee.
Upon such remova( or resignation of a Trustee, the Board of Directors will
appoint and designate a successor Trustee which will be one or more
individual successor Trustees or a corporate Trustee organized under the
laws of the United Sates or of any state thereof with authority to accept and
execute trusts. Any successor Trustee must accept and acknowledge in
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writing its appointment as a successor Trustee before it can act in such
capacity.
Title to all property and records or true copies of such records necessary to
the current operation of the Trust Fund held by the Trustee hereunder will
vest in any successor Trustee acting pursuant to the provisions hereof,
without the execution or filing of any further instrument. Any resigning or
removed Trustee will execute all instruments and do all acts necessary to
vest such title in any successor Trustee of record. Each successor Trustee
will have, exercise and enjoy all the powers, both discretionary and
ministerial, herein conferred upon his predecessor. No successor Trustee will
be obligated to examine the accounts, records and acts of any previous
Trustee or Trustees, and each successor Trustee in no way or manner will be
responsible for any action or omission to act on the part of any previous
Trustee.
Any corporation which results.from any merger, consolidation or purchase to
which the Trustee may be a party, or which succeeds to the trust business of
the Trustee, or to whieh substantially all the trust assets of the Trustee may
be transferred, will be the successor to the Trustee hereunder without any
further act or formality with like effect as if such successor Trustee had
originally been named Trustee herein; and in any such event it will not be
necessary for the Trustee or any successor Trustee to give notice thereof to
any person, and any requirement, statutory or otherwise, that notice will be
given is hereby waived.
11.17 Appointment of Investment Manager
One or more Investment Managers may be appointed by the Employer, the
Plan Administrator or an Investment Committee appointed by the Employer to
exercise fufl investment rnanagement authority with respect to all or a portion
of the Trust assets. Authorized payment of the fees �nd expenses of the
Investment Manager(s) may be made from the Trust assets. For purposes of
this agreement, any lnvestment Manager so appointed will, during the period
of his appointment, possess fully and absolutely those powers, rights and
duties of the Trustee (to the extent defegated by the Employer or the Plan
Administrator) with respect to the investment or reinvestment of that portion
of the Trust assets over which the Investment Manager has investment
management authority. The Investment Manager must be one of the
following:
(a) Registered as an investment Advisor under the Investment Advisors
Act of 1940; �
(b) A Bank, as defined in the Investment Advisors Act of 1940; or
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(c) An Insurance Company qualified to manage, acquire, or dispose of
such Plan assets under the laws of more than one state.
Any Investment Manager will acknowledge in writing to the Employer or the
Plan Administrator and to the Trustee that he or it is a fiduciary with respect
to the Plan. During any period of time when the Investment Manager is so
appointed and serving, and with respect to those assets in the Plan over
which the Investment Manager exercises investment management authority,
the Trustee's responsibility will be limited to holding such assets as a
custodian, providing accounting services, disbursing benefits as authorized,
and executing such investment instructions only as directed by the
Investment Manager. The Trustee will not be responsible for any acts or
omissions of the Investment Manager. Any Certificates or other instruments
duly signed by the Investment Manager (or the authorized representative of
the Investment Manager), purporting to evidence any instruction, direction or
order of the Investment Manager with respect to the investment of those
assets of the Plan over which the Investment Manager has investment
management authority, will be accepted by the Trustee as conclusive proof
thereof. The Trustee will also be fully protected in acting in good faith upon
any notice, instruction, direction, order, certificate, opinion, letter, tefegram or
other dacument believed by the Trustee to be genuine and from the
Investment Manager (or the authorized representative of the Investment
Manager). The Trustee will not be liable for any actiontaken or omitted by
the Investment Manager or for any mistakes of judgment or other action
made, taken or omitted by the Trustee in good faith upon direction of the
Investment Manager.
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IN WITNESS WHEREOF, this instrument has been executed by the duly authorized
and empowered officers of the Employer, this 17th day of December, 1991.
CITY OF FEDERAL WAY
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Brent McFall, City Manager
The Trustees agree to serve as Trustees under the terms of this instrument.
Trustee
Trustee
Trustee
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