2. General Employee Pension Plan
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GENERAL EMPLOYEE PENSION PLAN
14-2-1: NAME AND PURPOSE OF PLAN; HISTORY
14-2-3: PARTICIPATION OF EMPLOYEES
14-2-4: CONTRIBUTIONS BY CITY AND PARTICIPANTS
14-2-5: DETERMINATION AND VESTING OF PARTICIPANTS' INTERESTS
14-2-6: RETIREMENT DATE; DESIGNATION OF BENEFICIARY
14-2-7: DISTRIBUTION FROM TRUST FUND
14-2-8: INSURANCE COMPANY CONTRACTS
14-2-9: GENERAL EMPLOYEE PENSION BOARD
14-2-10: POWERS AND DUTIES OF THE TRUSTEE
14-2-11: CONTINUANCE, TERMINATION AND AMENDMENT OF PLAN
14-2-1: NAME AND PURPOSE OF PLAN; HISTORY: (2464 3319 3447)
(A) The City of Westminster (the “City” or the “Employer”) does hereby establish its General Employee Pension Plan, which is a qualified deferred money purchase pension plan. The Plan is created for the exclusive benefit of the City's eligible employees who qualify as Participants and their Beneficiaries. The Plan is intended to qualify under Code Section 401(a) and the Trust created pursuant to the Plan is intended to be exempt under Code Section 501(a) and all provisions of this Plan shall be construed in accordance with this intention. Since this is a governmental plan, it is not the intention of the City to have the Plan comply with the provisions of the Code after the enactment of the Employee Retirement Income Security Act of 1974, except to the extent that changes to the Code apply to governmental plans.
(B) On October 1, 1977, the City merged the assets of the Police Pension Fund and the Firefighter's Pension Fund into the restated Employee's Pension Plan. Effective January 6, 1986, the City withdrew all employees who were not police officers or firefighters from the Employee's Pension Plan by a transfer of their aggregate interest into the Plan created in this Chapter. The original plan, formerly known as the Employee's Pension Plan and Trust Agreement, was then renamed the Police and Fire Pension Plan.
(C) Prior Coverage Under Other City Funded Pension Plans. Any employee who was formerly a Participant in the Employee's Pension Plan and Trust Agreement or the Police and Fire Pension Plan shall automatically have such interest in such plan, whether held by investment agents, the Trustee, or the City, transferred to this Plan upon becoming eligible to be a Participant in this Plan. Upon transfer of the employee's interest without a break in municipal service, the employee shall have the same Participant status as the employee had under the other plan.
(D) On September 1, 2004, the City transferred the assets of the Firefighter’s Pension Plan to the Fire and Police Pension Association of Colorado defined benefit system and the Firefighter’s Pension Plan was terminated. Participants in the Firefighter’s Pension Plan became Participants in the FPPA defined benefit system. Assets in the retirement medical savings account (RMSA) in the Firefighter’s Pension Plan were transferred to the General Employee’s Pension Plan for use as defined in Section 14-2-7(C)(4).
14-2-2: DEFINITIONS: (2464 3319 3447 3584) When used herein, the following words shall have the following meanings unless the context clearly indicates otherwise and further provided that the masculine gender shall include the feminine, and the singular shall include the plural.
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(A) "BENEFICIARY" Any person or entity who, pursuant to Section 14-2-6(B) becomes entitled to receive all or any part of a Participant's interest upon the Participant's death.
(B) "BOARD" The General Employee Pension Board established in this Chapter.
(C) "CITY" The City of Westminster, Colorado. The City may also be referenced in this Plan as the “Employer.”
(D) “CODE” The Internal Revenue Code of 1986, as it may be amended, or re-enacted or replaced. Reference to a specific section of the Code shall mean the section in effect at the date of adoption of this Plan, or any successor section to such section.
(E) "COMPENSATION" The base pay of a Participant for services rendered to the City, excluding overtime pay, bonuses, insurance premiums, pension and retirement benefits, and all contributions by the City to this Plan, to any health, accident or welfare fund or plan, or any similar benefit. Compensation shall be computed prior to any salary reduction for mandatory contributions picked up by the City or amounts deferred under a deferred compensation plan or a salary reduction plan or pre-tax medical plan. Compensation for part-time employees is the pay earned for the amount of full time equivalents (“FTE's”) budgeted for their positions. For purposes of determining the Compensation applicable to the limitations on annual contributions in Section 14-2-5, Compensation shall be as defined in Section 14-2-5(B)(5).
(F) "CONTRIBUTING PARTICIPANT" Any Employee who is making contributions to this Plan whether or not the City is contributing.
(G) "EMPLOYEE" Any person who fills a City-authorized or temporary intern position in a .5 full time equivalency (FTE) or greater, excluding firefighters and Police Officers, temporary employees, elected officials, independent contractors, volunteers and non-benefited full time and part-time employees.
(H) "FULL PARTICIPANT" Any Employee who is qualified to receive City contributions under this Plan.
(I) "INACTIVE PARTICIPANT" Any person who has been a Contributing Participant to this Plan or a preceding pension plan of the City who is no longer an Employee but who has not received full distribution of all respective interest in the Plan.
(J) "INTEREST" The amount of a Participant's share in the Trust Fund, including City contributions, employee contributions and earnings.
(K) "PARTICIPANT" Any Contributing Participant or Inactive Participant.
(L) "THE PLAN" The Pension Plan established in this Chapter and all subsequent amendments thereto.
(M) "PLAN ADMINISTRATOR" The person appointed by the City Manager to administer the Plan.
(N) "PLAN YEAR" The City's fiscal year which is the calendar year, which shall be the fiscal year of the Trust Fund established pursuant to this Plan.
(O) "POLICE OFFICER" Any person who is employed by the City as a police officer as defined by Title III of this Westminster Municipal Code, and who reports to the Chief of Police.
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(P) "TERMINATION OF EMPLOYMENT" The cessation of a person's status as an "Employee" as defined in this Section. If the person, upon termination of employment, becomes eligible to participate in the Police Pension Plan, without a break in municipal service, the employee's interest shall be transferred to that plan and the person shall retain status as a Participant. Termination due to dismissal shall become effective on the date after the employee's grievance rights, if any, have lapsed or, if a grievance is filed, on the date of the final decision by the City.
(Q) "TOTAL DISABILITY" A disability which permanently renders a Participant unable to perform satisfactorily the Participant’s usual duties of employment with the City as determined by the Board and which results in the Participant’s termination of employment with the City.
(R) "TRUST FUND" The assets of the trust established pursuant to this Plan out of which the benefits under this Plan shall be paid including all income of whatever nature earned by the Trust Fund and all increases in fair market value.
(S) "TRUSTEE" The trustee of the Trust Fund established pursuant to this Plan who shall always be the current acting Finance Director of the City of Westminster and any duly qualified corporate co-trustee appointed pursuant to Section 14-2-10 and any duly appointed and qualified successor trustees.
14-2-3: PARTICIPATION OF EMPLOYEES: (2464 3319 3447)
(1) Contributing Participant. Each Employee hired on or after January 6, 1986 shall become a Contributing Participant in the Plan on the date the Employee becomes a regular or qualified part-time employee and has attained the age of eighteen (18). By accepting employment with the City, each Employee shall be deemed to have consented to the terms and provisions of this Plan.
(2) Full Participant. No matter when an Employee becomes a Contributing Participant, each Employee shall become a Full Participant, eligible to receive City contributions on the first day of the pay period coinciding with or immediately following the date on which the Employee has completed twenty-two (22) months of service with the City and has attained the age of eighteen (18).
(3) Last Pay Period of Contribution. The City shall not make any contribution for the account of a Full Participant for the pay period in which such Participant’s employment by the City shall terminate for any reason unless such Participant is employed by the City on the last date of such pay period. No Participant may make contributions to the Plan, other than changes in the valuation of, or earnings on, the Participant’s undistributed interest in the Plan, after termination of employment or loss of status as an Employee as defined in this Chapter.
(4) Determination of Service. For the purpose of determining eligibility to become a Full Participant, service shall be determined in accordance with the following rules:
(a) An Employee who completes twenty-two (22) months of continuous municipal service as defined in Chapter 24 of Title I of this Westminster Municipal Code, shall be eligible as a Full Participant on the first day of the pay period coinciding with or immediately following the date on which the Employee has completed twenty-two (22) calendar months of service with the City and has attained the age of eighteen (18), provided such Employee is still employed as an Employee on such date and has not severed employment (as provided in subsection (d) of this Section) during such twenty-two (22) month period.
(b) A leave of absence without pay other than for military service shall be considered a break in continuous municipal service unless municipal service is extended pursuant to Section 1-24-10(V) of this Westminster Municipal Code. Neither the City nor the Employee shall be required to contribute to the Participant's account during a leave of absence without pay.
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(c) Any Employee who has entered or enters the armed forces of the United States shall be presumed to be on a leave of absence, regardless of the length of such service, and such leave of absence shall not be considered as a break in continuity of service or a termination of employment, provided the individual returns to the employ of the City within ninety (90) days of the date on which the individual shall have the right to release from military service or from the hospital in the event of service-caused disability, without intervening employment elsewhere.
(d) Dismissal or voluntary termination of employment with the City shall be considered as a break in continuity of service; subsequent re-employment shall be deemed to be new employment, and the employee will be subject to the eligibility requirements as if such employee were a new employee, whether or not such employee was formerly a Full Participant. However, if the City reinstates an employee subsequent to dismissal, this paragraph shall not apply.
(e) The provisions of this paragraph (4) shall be applied to all employees and Participants in a like manner.
(B) Board to Determine Participants.
(1) The City shall deliver to the Board in writing such information from the City's records with respect to Employees and their Compensation as the Board may require in order to determine the identity and interests of the Participants, and otherwise to perform its duties hereunder.
(2) Any information given by the City to the Board pursuant to subsection (B) of this Section shall, for all purposes of this Chapter, be binding on all parties in interest; provided that whenever any Employee proves to the satisfaction of the City that such Employee’s period of employment with the City or such Employee’s Compensation as so given is incorrect, the City shall correct such information and so advise the Board.
(3) The determination of the Board as to the identity of the respective Participants and as to their respective interests shall be binding upon the City and Trustee, all employees, all Participants and all Beneficiaries.
14-2-4: CONTRIBUTIONS BY THE CITY AND PARTICIPANTS (2464 3319 3360 3447)
(A) Contributions by the City.
(1) Determination of Contribution by the City. On and after January 6, 1986, each pay period the City shall contribute to the credit of each Full Participant's account, ten and one-quarter percent (10.25%) of each Full Participant's Compensation for that pay period; provided that during any period in which the City is required to make contributions on behalf of Participants under the Federal Insurance Contributions Act or the Social Security Act, the contribution to this Plan for each Participant shall be offset by the amount of the old age survivors and disability insurance (“OASDI”) portion of the Social Security taxes paid by the City for such Participant. This offset shall not exceed the City contribution.
(2) Time and Method of Payment of Contribution by the City. The contributions of the City shall be made every pay period and shall be credited to the Plan each pay period.
(B) Contributions by Contributing Participants.
(1) Mandatory Employee Contributions.
(a) Each Contributing Participant must contribute to the Trust Fund a percentage of such Participant’s Compensation for each pay period as follows: for the pay periods commencing January 1, 1997, eight percent (8%) and for the pay periods commencing January 1, 1998, and thereafter, ten percent (10%) or the percentage at least equal to the OASDI tax rate. During any period in which the Contributing Participant is required to make contributions under the Federal Insurance Contributions Act
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or the Social Security Act, the mandatory contribution to this Plan by each contributing Participant shall be offset by the OASDI taxes paid by the Participant, except that no offset for OASDI taxes shall reduce the mandatory contribution to this Plan for a Participant to less than two percent (2%) of that Contributing Participant's Compensation for that pay period.
(b) For the pay period commencing December 21, 1987, and thereafter, the contribution provided by this paragraph shall be picked up and paid by the City, as Employer, as provided in Code Section 414(h) and the Participant's gross income shall be reduced by the amount of the contributions picked up by the City.
(c) Each Participant, as a condition to such Participant’s employment with the City, shall be deemed to have authorized the City to reduce the Participant's Compensation by such amount from each paycheck and to transmit such amount directly to the Plan custodian, according to the provisions of this Chapter.
(d) Separate accounts shall be maintained for the mandatory contributions of the Employees prior to the pick up of such contributions by the City and the contributions picked up by the City.
(2) Voluntary Contributions.
(a) Subject to the provisions of Section 14-2-5(B) each Contributing Participant may elect to contribute to the Trust Fund an amount that when combined with the mandatory contributions required in paragraph (1) of this Subsection does not exceed the amount described in Section 14-2-5(B)(1).
(b) The amount, if any, which a Contributing Participant voluntarily contributes to the Trust Fund must be contributed through payroll deductions. A Contributing Participant may have the option of increasing, decreasing or terminating voluntary contributions at any time. No Participant shall have any obligation to make any voluntary contribution.
(c) For purposes of this Section, amounts representing the Participant's interest in another qualified pension plan transferred in accordance with Section 14-2-12(A) shall not be considered voluntary contributions.
(3) Payment of Participant Contributions. The contributions of the Employee shall be withheld every pay period and shall be credited to the Plan each pay period.
(C) Retirement Medical Savings Accounts.
(1) Each Participant shall have the option of designating up to twenty-five percent 25% of the Participant’s combined mandatory and City contributions to be used for future medical expenses as provided for in Code Section 401(h). Contributions to the medical savings accounts will not be taxed at separation from service nor upon use for medical expenses after separation from service. The retirement medical savings accounts will be subject to the rules and requirements issued by the City Manager.
(2) Contributions designated for future health benefits under Code Section 401(h) as described in Subsection C (1) of this Section shall be maintained in separate accounts.
(D) City's Obligations.
(1) The adoption and continuance of the Plan as set forth in this Chapter shall not be deemed to constitute a contract between the City and any employee or Participant, nor to be consideration for, or an inducement or condition of, the City’s employment of any person. Nothing in this Chapter shall be
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deemed to give any Employee or Contributing Participant the right to be retained in the employ of the City, or to interfere with the right of the City to discharge any employee or contributing Participant at any time, nor shall it be deemed to give the City the right to require the Employee or Contributing Participant to remain in its employ, nor shall it interfere with the right of any Employee or Contributing Participant to terminate employment at any time.
(2) The City shall not incur any liability whatsoever to the Trust Fund, any Participant or any Beneficiaries, the Trustee, or any other person, for anything done or omitted by the Trustee, or for the loss or depreciation, in whole or in part, of the Trust Fund.
(E) Contributions for Periods of Qualified Military Service. The Employer shall make all contributions to the Plan required by Code Section 414(u) which are attributable to periods of qualified military service. In addition, the Employer shall allow any Participant to make mandatory Employee contributions and voluntary contributions for periods of qualified military service as required by Code Section 414(u). The Employer may elect to make additional contributions based upon such qualified military service based upon employer contributions made during the applicable period, provided such election by the Employer is made on a nondiscriminatory basis applicable to all similarly-situated employees who have qualified military service. Any contributions made under this Subsection shall be subject to the provisions of Code Section 414(u) and the provisions of this Plan shall be applied considering any such contributions as having been made during the Plan Year to which the contributions relate. For the purposes of this Section, “qualified military service” means service in the uniformed services of the United States (as defined in Chapter 43 of Title 38 of the United States Code) by any individual if such individual is entitled to re-employment rights with respect to such service.
14-2-5: DETERMINATION AND VESTING OF PARTICIPANTS' INTERESTS: (2464 3319 3447 3584)
(A) Allocation of Employer Contributions. The contributions made by the Employer to the credit of the account of each Full Participant shall be allocated to the account of each such Participant as of the end of each pay period. Any allocation shall be subject to the limitations set forth in subsection (B) of this Section.
(B) Limitations on Allocations.
(1) General Rule. In no event may a Participant receive an allocation for any Plan Year which, when combined with a Participant-related allocation under any other defined contribution plan established by the City, exceeds the lesser of one hundred percent (100%) of the Participant’s Compensation for such year or $40,000, provided such figure shall be adjusted as provided in Code Section 415(d). For limitation years beginning before January 1, 2002, the foregoing percentage limitation is 25% and the foregoing dollar limitation is $30,000, as adjusted pursuant to Code Section 415(d). For the purpose of applying the foregoing limitation, the limitation year shall be the Plan Year. If a short limitation year is created as a result of a change in the limitation year, the dollar limitation for such short limitation year shall be the dollar limitation set forth in this Subsection multiplied by a fraction, the numerator of which is the number of months in such short year and the denominator of which is twelve (12).
(2) Allocations. For the purpose of applying the limitations of this Section, the allocation to the Participant shall include the following amounts allocated to the account of a Participant for a limitation year: Employer contributions, forfeitures, and nondeductible contributions made by the Participant, provided that for years beginning before 1987, only nondeductible contributions in excess of six percent (6%) of the Participant’s Compensation for the year, or one-half (1/2) of the nondeductible contributions made by the Participant, whichever shall be less, shall be counted as an allocation. Except that, for the Plan Years beginning on or after January 1, 1994, allocations may not be based on compensation in
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excess of the annual limitation of $150,000, subject to adjustment as provided for by law or regulation, for the account of any individual Participant. For the purpose of applying the limitations of this Section, compensation from and allocations received under any retirement plan maintained by any other employer which is a common member with the Employer of either a controlled group of businesses or an affiliated service group, as prescribed by law or regulation, shall be counted.
(3) Excluded Amounts. Any amount not mentioned in paragraph (2) of this Subsection shall not be considered an allocation. The amounts not considered as allocations include deductible Participant contributions, rollover contributions and transfers from other qualified plans allocated to the account of a Participant.
(4) Treatment of Excess. In the event an allocation would otherwise exceed the limitations of this Section, any non-deductible voluntary contribution by the Participant which is counted as part of such allocation shall be returned to such Participant to the extent necessary to reduce such allocation on a level in compliance with the limitations of this Section.
If after such return of contributions there still remains an excess, the excess over such limitations shall be held in a suspense account until such amount can be applied to reduce the next contribution by the Employer. If the Employer maintains more than one qualified defined contribution plan, the excess shall be considered to have first occurred in the Plan to which the contribution of the Employer is discretionary and, if there is no such plan, the excess shall be treated as having occurred in all defined contribution plans on a pro rata basis based upon the Employer contribution to each of the plans. If this Plan is terminated when there is an amount held in such a suspense account, the amount held in such account, which cannot be allocated to Participants without exceeding the foregoing limits, shall be returned to the Employer.
This Section 14-2-5(B)(4) shall not apply in any limitation year beginning on or after July 1, 2007. With respect to any limitation year beginning on or after July 1, 2007, if there is any excess allocation with respect to a Participant, the Plan shall only correct the excess allocation in accordance with the Employee Plans Compliance Resolution System (“EPCRS”) as set forth in Revenue Procedure 2008-50 or any superseding guidance, including, but not limited to, the preamble of the final Section 415 Regulations.
(5) Compensation. For the purposes of applying the limitations of this Subsection (B), Compensation means the total amount paid by the Employer to a Participant for services rendered to the Employer which are included in the taxable income of the Participant, including any amounts paid to the Participant by the later of (x) two and one-half months after the Participant’s separation from employment or (y) the end of the limitation year that includes such date of the Participant’s separation from employment if, absent such separation from employment, such amounts would have been paid to the Participant while the Participant continued in employment with the Employer. For limitation years beginning after December 31, 1997, Compensation for the purposes of this Section shall not be reduced by voluntary salary deferrals or reductions for a Participant under a plan established under Code Section 125, 132(f)(4), 402(g)(3), 457, 401(k) or 403(b). The “Annual Compensation” of each Participant taken into account in determining allocations for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(b). For limitation years beginning prior to January 1, 2002, the dollar amount in the foregoing sentence is $150,000. “Annual Compensation” means Compensation during the Plan Year or such other consecutive 12-month period over which Compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.
(C) Allocation of Earnings, Losses, Charges and Changes in Fair Market Value of the Net Assets of the Trust Fund. Earnings and losses of the Trust Fund and changes in the fair market value of the net assets of the Trust Fund shall be allocated under the direction of the Trustee at least quarterly to the Participants
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as of each regular evaluation date, in the ratio that the total dollar value of the interest of each such Participant in the Trust Fund bears to the aggregate dollar value of all of such interests of all such Participants. Third party and administrative charges shall be allocated in the ratio that the total dollar value of the interest of each such Participant in the Trust Fund bears to the aggregate dollar value of all of such interests of all such Participants or equally to all Participants.
(D) Participant's Accounts. The Board shall maintain, or cause the City or Trustee to maintain, an account for each Participant showing the dollar value of such Participant’s current interest in the Trust Fund resulting from any contributions made by the City, which account shall be known as the City contributions account. Separate accounts to be known as Participants' contributions accounts shall also be kept, showing the contributions of each Participant and the earnings, losses and changes in fair market value thereof.
(E) Evaluation Dates. The regular evaluation dates of the Trust Fund shall be at least the last bank business day of each calendar quarter at which time the Board shall determine, or cause the Trustee to determine, the value of the net assets of the Trust Fund, i.e., the value of all of the assets of the Trust Fund at fair market value thereof, less all liabilities, both as known to the Trustee, including the value of the contributions of the City and the Participants for that quarter. If an event described in Section 14-2-7 (A) occurs between regular evaluation dates requiring a distribution of any part of a Participant's interest in the Trust Fund, the dollar value of such Participant's interest shall be adjusted to reflect the contributions made after the last evaluation date without any earnings, losses or other changes. The dollar value of a Participant’s interest as so adjusted shall be the amount which shall be distributed to such Participant or such Participant’s Beneficiary.
(F) Vesting of Participants’ Interests.
(1) A Participant's interest in the contributions made by him and the earnings, losses and changes in fair market value thereof, shall be fully vested at all times. The interest of a Participant in the contributions made by the City, and the earnings, losses and changes in fair market value thereof, shall be fully vested at all times. Upon attaining normal retirement age, a Participant’s interest in the contributions made by the Participant and the contributions made by the City, and the earnings losses and changes in the fair market value thereof, shall be fully vested.
(2) Any interest in the Trust Fund shall be and become payable to a Participant or such Participant’s Beneficiaries only as and to the extent provided in this Chapter; and a Participant who dies having designated a Beneficiary shall cease to have any interest hereunder or in the Participant’s separate trust account, and the Participant’s Beneficiary shall become entitled to distribution thereof as herein provided by virtue of the terms of this Chapter and not as a result of any transfer of said interest or account.
(G) Vesting Upon Termination of Plan or Discontinuance of Contributions. Notwithstanding the provisions of subsection (F) of this Section, upon the termination of the Plan or upon the complete discontinuance of contributions under the Plan to the Trust Fund, the interests of all Participants shall become fully and completely vested and nonforfeitable for all purposes.
(H) Investment of Participant’s Account. A Participant’s account shall be invested in the investment options in accordance with the investment elections specified by the Participant. A Participant may change the investment of contributions and may reallocate amounts in such Participant’s account among the investment options in a manner determined by the Plan custodian and subject to such provisions as the Plan Administrator may adopt. Allocation of assets among investment options is solely the responsibility of each Participant. The fact that an investment option is available for investment to Participants under the Plan shall not be construed as a recommendation for investment in that investment option.
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14-2-6: RETIREMENT DATE; DESIGNATION OF BENEFICIARY: (2464 3319 3390 3447 3584)
(A) Retirement Date.
(1) Normal Retirement. The normal retirement age for each Participant shall be age sixty (60) and, on the last day of the month in which the Participant attains normal retirement age, the Participant shall be entitled to retire voluntarily. The City may, if it so desires, continue a Contributing Participant in active service after the Participant has attained normal retirement age with the consent of such Participant and, at any time thereafter the City may, at its option, retire such Participant or such Participant may voluntarily retire. Until actual retirement, a Contributing Participant shall continue to participate in the Plan.
(1) Designation of Beneficiaries. Each Participant shall have the right to designate one or more Beneficiaries and one or more contingent Beneficiaries to receive the Participant’s interest in the Trust Fund upon the Participant’s death, such designation to be made in the form prescribed by and delivered to the Board. The Participant shall have the right to change or revoke any such designation from time to time by filing a new designation or notice of revocation with the Board, and no notice to any Beneficiary nor consent by a Beneficiary shall be required to effect any such change or revocation. Any Beneficiary designation shall be effective when received by the Board.
(2) Determination of a Beneficiary When There Is No Designated Beneficiary. If a Participant shall fail to designate a Beneficiary before the Participant’s death, or if all designated Beneficiaries, or contingent Beneficiaries should die, cease to exist before the Participant’s death, or if all designated Beneficiaries or contingent Beneficiaries disclaim their interests or die prior to distribution, the Board shall direct the Trustee to pay the Participant's entire interest in the Trust Fund to the Participant’s surviving spouse, if any or, if none, then to the personal representative of the Participant’s estate. If, however, no personal representative shall have been appointed, and actual notice thereof given to the Board within one hundred twenty (120) days after the Participant’s death, the Board may direct the Trustee to pay the Participant's entire interest to such person or persons as may be entitled thereto under the intestate laws of Colorado, and in such case, the Board may require such proof of right or identity from such person or persons as the Board may deem necessary.
(3) Insurance Policies. The Beneficiary of any insurance on a Participant's life shall be determined and designated as provided in Section 14-2-8(A).
14-2-7: DISTRIBUTION FROM TRUST FUND (2464 3319 3390 3447 3584)
(A) When Interests Become Distributable and Effect Thereof. When a Participant dies, suffers Total Disability, retires or terminates employment for any other reason, the Participant’s interest in the Plan shall thereupon become distributable. When a Participant's interest shall have become distributable, such Participant's interest shall remain a part of the Trust Fund until it is distributed.
(B) Information to be Furnished to the Board. For the purpose of enabling the Board to determine the Participant's distributable interest in the Trust Fund, the Board shall be entitled to rely upon information provided to the Board by the City with respect to the date of the Participant's termination of employment and other such information as is needed and requested.
(C) Distribution of Interests.
(1) Insurance. If there has been an investment in life insurance for the benefit of any Participant whose interest becomes distributable for any reason other than death, such Participant may, subject to any limitation set forth elsewhere in this Plan, obtain an absolute assignment of any such life insurance by informing the Board of such election. If said election is not exercised within thirty (30) days after the Participant’s termination of employment and the conversion election provided for is not made, the Board shall cause said contract to be surrendered no later than the end of the policy year and shall add the proceeds of such surrender to the interest of said Participant. After December 31, 1996, no new life insurance contracts may be adopted as pension investments under the Plan.
(2) Election to Defer Benefits. A Participant may elect to defer the commencement of distribution of the Participant’s benefit, but in no event shall the commencement of distribution be later than the required distribution commencement date specified in subsection (E) of this Section.
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(3) Distribution of Participant’s Accounts. Any other provision of this Subsection (C) to the contrary notwithstanding, a Participant, in the event of termination of employment for any reason, shall be entitled to receive payment in one lump sum of the Participant’s interest in the Trust Fund provided the Participant makes written demand therefor upon the Board.
(4) Benefits Payable from the 401(h) Account.
(a) Benefits are payable from the retirement medical savings account only upon retirement, separation of service, death or Total Disability.
(b) Benefits payable from a 401(h) account shall include only payments or reimbursements for medical care, as defined in Code Section 213(d)(1).
(c) Medical care payments shall only be paid pursuant to a reimbursement application.
(d) No refunds of contributions shall be made. All contributions remain in the 401(h) account until used for medical care payments.
(e) Reimbursements may not be made for any expense for which the retired Participant or the Participant’s spouse or dependents receive, or are eligible to receive, payment or reimbursement from another source.
(f) In order to receive benefits from the 401(h) account, the retired Participant must agree to provide appropriate documentation of the medical care expenditure.
(D) Transfers Between Qualified Plans.
(1) In General. The Trustee and the Plan custodian, upon their mutual agreement, are authorized to receive and add to the interest of any Participant the Participant’s vested interest in the assets held under any other qualified employee retirement plan or individual retirement account if such transfer satisfies the requirements under law for transfers between qualified plans or rollover contributions. In such event, the assets so received shall be fully vested and shall be held in a separate account and shall be administered and distributed pursuant to the provisions of this Plan and Trust concerning Employer contributions. The Trustee is also authorized, at the direction of the Plan custodian and at the request of the Participant, to transfer such Participant's vested interest which has become distributable under Subsection (A) hereof, directly to another qualified plan or an individual retirement account for the benefit of such Participant, provided such transfer satisfies the requirements under law for such transfers.
(2) For Distributions Made On or After January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.
(3) For Distributions Made After December 31, 2001. An eligible retirement plan, as defined in subsection 4, below, shall also mean an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Code Section 414(p). The Plan shall be permitted to accept rollovers from any type of eligible retirement plan except to the extent limited in this Section 14-2-7.
(a) Eligible Rollover Distribution. An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: (I) any distribution that is one of a series of substantially equal period payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s designated beneficiary, or for a specified
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period of ten years or more; (II) any distribution to the extent such distribution is required under Code Section 401(a)(9); (III) any hardship distribution as described in Code Section 401(k)(2)(b)(I)(iv) (applicable only to distributions after December 31, 1999); and (IV) the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities). Any amount that is distributed on account of hardship shall not be an eligible rollover distribution and the distributee may not elect to have any portion of such a distribution paid directly to an eligible retirement plan. A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includable in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Code Section 408(a) or (b), or to a qualified defined contribution plan described in Code Section 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable. The Plan shall accept a rollover of after-tax employee contributions.
(b) Eligible Retirement Plan. An eligible retirement plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee’s eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.
(c) Distributee. A distributee includes an employee or former employee. In addition, the employee’s or former employee’s surviving spouse and the employee’s or former employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse.
(d) Direct Rollover. A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee.
(E) Withdrawals While Employed. A Participant who has attained age sixty-two (62) may elect to begin distributions from the Trust Fund according to the rules described in this Section 14-1-7 if the Participant’s current annual base salary at the time of election is at least twenty-five percent (25%) less than the Participant’s highest annual base salary.
(F) Required Distribution Commencement Date. Distribution of a Participant's interest in the Plan must begin no later than the April 1 of the calendar year following the later of the year the Participant attains the age of seventy and one half (70-1/2) or the year the Participant retires.
(G) Spendthrift Provisions.
(1) General Rule. Except as otherwise provided in this Chapter, all amounts payable pursuant to this Chapter by the Trustee shall be paid only to the person or persons entitled thereto, and all such payments shall be paid directly into the hands of such person or persons and not into the hands of any other person or corporation whatsoever, and such payments shall not be liable for the debts, contracts or engagements of any such person or persons, or taken in execution by attachment or garnishment or by any other legal or equitable proceedings; nor shall any such person or persons have any right to alienate, anticipate, commute, pledge, encumber or assign any such payments or the benefits, proceeds or avails thereof.
(2) Qualified Domestic Relations Order. Paragraph (1) of this Subsection shall not apply to the creation, assignment or recognition of a right to any benefit payable with respect to a Participant or alternate payee pursuant to a qualified domestic relations order (“QDRO”) setting forth the agreement of the parties with respect to the division of benefits in compliance with 26 U.S.C. Section 414(p) and Colorado Revised Statutes, Section 14-10-113. The QDRO must specifically address the division of any 401(h) Retirement Medical Savings Account, if applicable. A lump sum distribution will be made pursuant to such QDRO within one hundred twenty (120) days after the date on which a certified court order approving such an agreement permitting such a distribution has been submitted to and received by the Board. Procedures for submitted a QDRO may be obtained from the City’s Pension Administrator.
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The Board shall establish such reasonable procedures as are necessary to determine the compliance of a domestic relations order with the requirements of Colorado Revised Statutes, Section 14-10-113 and to administer distributions under such qualified order. Such procedures may be at the discretion of the Board, including standardized forms to be used for such marital agreements and orders. A person who obtains a right to a benefit payable to a Participant pursuant to a qualified domestic relations order shall have no rights to vote in elections held pursuant to this Plan.
(H) Manner of Distribution. A Participant's interest in the Plan may be distributed by one or more of the following methods:
(1) Lump Sum Distribution. The Participant's interest in the Plan may be paid to the Participant or the Participant’s Beneficiary by the distribution of the total balance of the Participant’s Plan account in one lump sum. The Participant, or the Participant’s Beneficiary in the event of the Participant's death, shall have the right to have the distribution made in a lump sum by filing a written election with the Trustee within such time as the Board shall prescribe.
(2) Installments. The Participant's interest in the Plan may be paid to the Participant or the Participant’s Beneficiary in substantially equal periodic installments over a period of time not to exceed the joint life expectancy of the Participant and the Participant’s Beneficiary (or until the account is exhausted) and not in installment frequency greater than monthly. This maximum period shall be determined under the applicable IRS Tables at the time the initial monthly installment payment becomes payable. The Participant, or the Participant’s Beneficiary in the event of the Participant's death, shall have the right to have the distribution made in this manner by filing a written elective with the Trustee within such time as the Board shall prescribe.
(3) Other Methods. Notwithstanding the foregoing provisions, any interest which has become distributable for any reason may be distributed at such time or times, in such amount or amounts, and in such manner, as the Board and the recipient of such distribution may mutually determine, including a transfer to another qualified plan or individual retirement account.
(I) Limitation on Duration of Payments.
(1) No distribution shall be made over a period exceeding the joint life expectancy of the Participant and the Participant’s Beneficiary. To the extent distribution is made after the Participant attains the age of seventy and one-half (70-1/2), if not paid in a lump sum, the distribution must be made in substantially equal periodic installments at least annually over the period prescribed in this Subsection subject to a once yearly change that may accelerate payment at the election of the Participant or Beneficiary. The present value of the benefits payable solely to the Participant under any elected method must exceed fifty percent (50%) of the total benefits payable to the Participant and the Participant’s Beneficiaries, unless distribution is in the form of a qualified joint and survivor annuity.
(2) Notwithstanding anything in this Chapter to the contrary, all distributions from the Plan shall conform to the final regulations issued under Code Section 401(A)(9), including the incidental death benefit provisions of Code Section 401(A)(9)(G).
(J) Withdrawals. Except as provided in Section 14-2-7(E), a Participant may not at any time withdraw any part of the Participant’s interest in the Trust Fund, except upon death, disability, retirement or termination of service as provided in this Chapter.
(K) Special Rules for Distributions after the Participant's Death.
(1) Distributions Commencing Prior to Death. If distribution of a Participant's interest in the Plan has commenced prior to the Participant's death in accordance with subsection (I) of this Section, the remaining interest of the Participant shall be distributed at least as rapidly as under the method of distribution being used as of the date of the Participant’s death.
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(2) Distributions Commencing After Death. If distribution of a Participant's interest in the Plan did not commence prior to the Participant’s death, the entire interest of the Participant shall be distributed within five (5) years after the death of the Participant, provided that a distribution commencing within one (1) year after the Participant's death to or for the benefit of a designated Beneficiary over the longer of the life or the life expectancy of the designated Beneficiary will be treated as having been distributed within such five (5) year period. If the surviving spouse of the Participant is the designated Beneficiary, distribution is not required to commence until the date on which the Participant would have attained the age of seventy and one-half (70-1/2) and, if distribution had not commenced as of the date of death of such surviving spouse, the provisions of this paragraph shall be applied as if such spouse were the Participant.
(3) Beneficiaries. If a Participant should die after receiving some part, but not all, of the Participant’s Plan account, the remaining balance thereof shall be distributed to the Participant’s Beneficiary in a manner determined pursuant to this Subsection. If the Beneficiary of the Participant should die, cease to exist, or disclaim an interest in the Participant’s account prior to the completion of distribution of the Participant's interest, the remaining distribution shall be made to the contingent Beneficiary designated by the Participant, if any. If any contingent Beneficiary should die or disclaim an interest in the Participant’s Plan account, distribution of the remainder of the Participant's interest shall be distributed in a manner determined pursuant to this Subsection to the recipient determined pursuant to Section 14-2-6.
(4) Distribution to IRA of Nonspouse Beneficiary. A Participant’s nonspouse Beneficiary may elect payment of the portion of the deceased Participant’s account to which the Participant is entitled in a direct trustee-to-trustee transfer to an individual retirement account or annuity described in Code Section 402(C)(8)(B)(I) or (II) that is established to receive the Plan distribution on behalf of the Beneficiary. For purposes of this Section, a trust maintained for the benefit of one or more designated beneficiaries may be the Beneficiary to the extent provided in rules prescribed by the Secretary of Treasury. If the Participant dies after the Participant’s required beginning date as defined in Section 14-2-7(F), the required minimum distribution in the year of death may not be transferred according to this Section. The requirements of Code Section 402(C)(11) apply to distributions under this Section.
14-2-8: INSURANCE COMPANY CONTRACTS: (2464 3447)
(A) Insurance or Annuity Contracts.
(1) If a Participant has, under the provisions of the prior City retirement plan, already purchased an ordinary life or retirement income insurance contract, the account of the Participant on whose life the contract is obtained shall be charged with the amount of all premiums thereon. The Trustee shall continue to have the right to receive each payment that may be due during the Participant's lifetime. Any death benefit shall be payable directly to the Beneficiary named in any such contract on the Participant's life and the Participant shall have the right, either directly or through the Trustee, to change the Beneficiary from time to time on any such contract and to elect settlement options thereunder for the benefit of the Beneficiary. The Trustee shall have the right to exercise all other options and privileges contained in the contract.
(2) A Participant may not purchase any individual insurance or annuity contract through the Plan.
(3) After December 31, 1996, the City shall not purchase any new group insurance or annuity contracts for pension Participants.
(B) Limitations on Life Insurance or Annuity Contracts for Participants' Benefit. All investments in life insurance or annuity contracts (other than "key man insurance") shall be subject to the following limitations:
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(1) The aggregate premiums for such life insurance or annuity contracts, in the case of each Participant, shall be no more than thirty-five percent (35%) of the aggregate of the City's contributions allocated to him at any particular time;
(2) The Board shall direct the Trustee to convert the entire value of any such life insurance contract at or before the Participant's actual retirement to provide either cash value or periodic income, or the Board may direct the Trustee to distribute the insurance contract directly to the Participant at retirement;
(3) In the event payment of any premium would cause aggregate premiums to exceed the limitation set forth in paragraph (1) of this Subsection, then such payment shall not be made, but, on the contrary, each insurance or annuity contract pertaining thereto shall be thereupon converted to a paid up contract, or the face amount of such contract shall be reduced to a face amount, the premium payments on which would not exceed the limitation prescribed in paragraph (1) of this Subsection; and
(4) If the Board directs the Trustee to invest any portion of the Trust Fund in such insurance or annuity contracts, such investment shall be made in such a manner that the operation of this Chapter shall be fair and equitable (and nondiscriminatory) in its application to all Participants.
(C) Dividends. If dividends are paid on any contract issued by the Insurer, they shall, in the discretion of the Board, either be used to provide additional benefits under such contract or used and applied in reduction of the next premium due and payable thereon.
(D) Limitation of Participant's Rights in Insurance or Annuity Contracts. The fact that any contract is issued or based on the life of a Participant shall not vest any right, title or interest in such contract in such Participant except at the time or times and upon the terms and conditions especially set forth in this Chapter. Subject to the provisions of Section 14-2-8(A) the Trustee shall be the sole owner of all right title and interest in and to each such contract, but the Board shall nevertheless direct the Trustee as to the exercise of all rights, options and privileges in each such contract.
(E) Protective Provisions for Life Insurance Company. No life insurance company shall be deemed to be a party to the Plan nor shall it be responsible for the validity of the Plan. The certificate of the Trustee as to any matter may be relied upon by any life insurance company as conclusive evidence of any matters mentioned therein, and such company shall be fully protected in taking or permitting any action on the faith thereof and shall incur no liability or responsibility for so doing. No such company shall be required to examine the provisions of this Chapter or to question any act of the Trustee or the Board, nor shall such company be required to ascertain that any act of the Trustee or the Board is authorized by this Chapter.
14-2-9: GENERAL EMPLOYEE PENSION BOARD: (2464 3199 3447)
(A) Appointment of Board.
(1) The Board shall consist of five (5) members: one (1) shall be the current City Finance Director; one (1) shall be appointed by the City Manager to serve at the City Manager’s pleasure; and three (3) shall be Contributing Participants elected by a majority of the voting Participants. One of the three elected members shall be an unclassified employee as defined in the City’s Personnel Rules and Regulations. In no case shall more than one elected member be from the same department. The Trustee shall serve as Chairperson of the Board.
(2) The three (3) members to be elected shall be elected for three (3) year staggered terms, with the term of one such member expiring in December of each year. The procedure to be followed in initially electing such members shall be established by the Trustee. After the first year of the election, procedures shall be established by the Board.
(B) Duties and Powers of the Board. The Board shall be charged with the administration of this Plan and shall decide all questions arising in the administration, interpretation and application of the Plan,
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including all questions relating to eligibility, vesting and distribution, to supply omissions and to resolve inconsistencies and ambiguities arising under the Plan. The decisions of the Board shall be conclusive and binding on all parties.
(1) The Board shall, from time to time, direct the Trustee concerning the payments to be made out of the Trust Fund pursuant to this Chapter. The Board shall also have the power to direct the Trustee with respect to all investments and reinvestments of the Trust Fund, and shall have such other powers respecting the administration of the Trust Fund as may be conferred upon it in this Chapter. The Board may employ for the Trust Fund an investment advisor (”Investment Advisor”) and may rely on such Investment Advisor's recommendations with respect to the investment of all or a portion of the Trust Fund. If the Board shall employ an Investment Advisor, it shall execute any letters or agreements necessary for the employment of such Investment Advisor or it may direct the Trustee to execute any such letters or agreement. The fees of such Investment Advisor shall be paid from the Trust Fund as an expense of the Trust. The Trustee shall be fully protected from any action of such Investment Advisor and shall not be liable to any person or organization for any investments made by such Investment Advisor or for any acts or omissions made upon the direction or recommendation of such Investment Advisor.
(2) The Board shall have the power to direct the Trustee to enter into and execute contracts as investment vehicles for the Trust Funds. The Board shall have the further power to direct the Trustee to terminate any such contract at any time subject to the provisions of such contract.
(3) If the Trustee enters into a contract at the direction of the Board which permits the right of Participants to direct the investment of their interest in the Trust Fund in forms of investments offered, the Board shall provide the opportunity to Participants to make options as to investments. The Board shall adopt various investment options for the investment of contributions by the Participant and shall monitor and evaluate the appropriateness of the investment options offered by the Plan. The Board may remove or phase out an investment option if the investment option has failed to meet the established evaluation criteria or for other good cause as determined by the Board. Neither the Trustee, the Board, the Plan Administrator nor the City shall be held liable for any losses or changes to a Participant's interest that result from that Participant's choice of investment options.
(C) Organization and Operation of Board. The Board may adopt such rules and procedures as it deems desirable for the conduct of its affairs, appoint one of its own members chairman, and appoint a secretary or other agents, none of whom need be a member of the Board, but any of whom may be, but need not be, an officer or employee of the City. It may delegate to any agent such duties and powers, both ministerial and discretionary, as it deems appropriate, excepting only that all matters involving investment of funds, interpretation of the Plan and settlement of disputes shall be determined by the Board. Any determination of the Board may be made by a majority of the Board at a meeting thereof, or without a meeting by a resolution or memorandum signed by all members, and shall be final and conclusive on the City, the Trustee, all Participants and Beneficiaries claiming any rights under this Chapter, and as to all third parties dealing with the Board or with the Trustee. All notices, directions, information and other communications from the Board to the Trustee shall be in writing.
(D) Matters Affecting Board Members. In any matter affecting any member of the Board in an individual capacity as a Participant under this Chapter, separate and apart from such individual’s status as a member of the group of Participants, such interested member shall have no authority or vote as a member of the Board in the determination of such matter, but the Board shall determine such matter as if said interested member were not a member of the Board; provided, however, that this shall not be deemed to take from said interested member any rights as a Participant. In the event that the remaining members of the Board should be unable to agree on any matter so affecting an interested member because of an equal division of voting, the matter shall be deemed to have been defeated.
(E) Compensation and Expenses of Board. The members of the Board shall serve without compensation in addition to their regular City compensation. All members shall be reimbursed by the City for any necessary expenditures incurred in the discharge of their duties as members of said Board.
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Such reimbursement, and the compensation of all agents, counsel or other persons retained or employed by the Board, shall be fixed by the Board and shall be paid from the Trust Fund or, in the discretion of the City Manager, by the City.
(F) Records of the Board. The Board shall keep a record of all of its proceedings and shall keep or cause to be kept all such books of account, records and other data as may be necessary or advisable in its judgment for the administration of this Chapter and properly to reflect the affairs thereof, and to determine the amount of vested and/or forfeitable interests of the respective Participants in the Trust Fund, and the amount of all Plan benefits. As a part thereof, it shall maintain or cause to be maintained separate accounts for each Participant as provided for in Section 14-2-5(A)(3). Any person dealing with the Board may rely on, and shall incur no liability in relying on, a certificate or memorandum in writing signed by the secretary of the Board or by a majority of the members of the Board as evidence of an action taken or resolution adopted by the Board.
(G) Immunity from Liability. No bond or other security shall be required of any member of the Board except as may be otherwise required by law. No member of the Board shall be liable or responsible to any person or party for any matter or thing whatsoever, except only for such member’s own gross negligence or willful misconduct.
(H) Resignation and Removal of Members; Appointment of Successors.
(1) Any member of the Board may resign at any time by giving written notice to the other members and to the City Manager, effective as therein stated, otherwise upon receipt of such notice.
(2) Whether or not the Board member remains a Participant, no Board member may remain on the Board if the individual terminates employment with the City for whatever reason.
(3) No appointed Board member may remain on the Board if the individual ceases to hold one of the positions designated.
(4) No elected Board member may remain on the Board as an elected member if the individual transfers, for whatever reason, to a department in which another elected Board member works.
(5) Upon the death, resignation or removal of any elected Board member, a successor to complete the Board member’s term shall be elected within thirty (30) days in the manner set forth in subsection (A) of this Section.
(6) A member of the Board may be removed from the Board in the manner defined in Section II(F) of the City of Westminster Police and General Employee Pension Plan By-laws.
14-2-10: POWERS AND DUTIES OF THE TRUSTEE: (2464 3199 3447 3584)
(A) Investment of Trust Fund.
(1) It shall be the duty of the Trustee to hold the funds from time to time received from the City and the Participants and, subject to the direction of the Board, to manage, invest and reinvest the Trust Fund and the income therefrom pursuant to the provisions of this Chapter, without distinction between principal and income. The Trustee shall be responsible only for such sums as shall actually be received. The Trustee shall have no duty to collect any sums from the City or the Participants.
(2) The Trustee shall have the power to invest and/or reinvest any and all money or property of any description at any time held by it and constituting a part of the Trust Fund without previous application to, or subsequent ratification of, the City Council, the City Manager, any court, tribunal or commission, or any Federal or State governmental agency, in accordance with the following powers:
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(a) The Trustee may invest in real property and all interests therein, in bonds, notes, debentures, mortgages, commercial paper, preferred stocks, common stocks, or other securities, rights, obligations or property, real or personal, including shares or certificates of participation issued by regulated investment companies or regulated investment trusts, shares or units of participation in qualified common trust funds or qualified pooled funds, and in life insurance and annuity contracts. In making investments or reinvestments, the Trustee shall not be limited by the proportion which the investments to be made, either alone or with any property of the same or similar character then held or acquired, may bear to the entire amount of the Trust Fund, and the Trustee shall not be bound as to the character of any investment provided by any constitutional provision, statute, rule of court or custom governing the investment of trust funds, providing only that the Trustee shall exercise the judgment and care, under the circumstances then prevailing, which people of prudence, discretion and intelligence exercise in the management of their own affairs.
(b) The Trustee, in the matter of the investment of the Trust Fund, shall be held harmless in every respect in exercising its discretion as to how much of the Trust Fund shall remain uninvested and in cash temporarily awaiting investment or for the expected cash distributions out of the Trust Fund in accordance with the provisions of this Chapter.
(c) If directed by the Board, the Trustee shall enter into contracts as investment vehicles for the Plan, which contracts shall then become a part of this Plan. The Trustee shall then be authorized to sign such other documents and take such other actions as might be necessary or appropriate to carry out the terms of such contracts. The Trustee may enter into such contracts as Trustee of this Plan alone, or as Trustee of this Plan and as trustee of the City's Police Pension Plan in which case the funds of the two plans may be co-mingled for investment purposes.
(d) To the extent the Trustee is directed by the Board to make a particular investment, the Trustee shall be held harmless from any loss or other liability arising therefrom.
(B) Administrative Powers of the Trustee. The Trustee shall have all powers necessary or advisable to carry out the provisions of this Plan and all inherent, implied and statutory powers now or hereafter provided by law, including specifically the power to do any of the following:
(1) To cause any securities or other property to be registered and held in its name as Trustee or in the name of one or more of its nominees, without disclosing the fiduciary capacity, or to keep the same in unregistered form payable to bearer.
(2) To sell, grant option to sell, exchange, pledge, encumber, mortgage, deed in trust or use any other form of hypothecation, or otherwise dispose of the whole or any part of the Trust Fund on such terms and for such property or cash, or part cash and credit, as it may deem best, and it may retain, hold, maintain or continue any securities or investments which it may hold as part of the Trust Fund for such length of time as it may deem advisable.
(3) To abandon, compromise, contest and arbitrate claims on demands; to institute, compromise and defend actions at law (but without obligation to do so), all at the risk and expense of the Trust Fund.
(4) To borrow money for this Trust, with the approval of the Board, upon such terms and conditions as the Trustee shall deem advisable, and to secure the repayment thereof by the mortgage or pledge of any asset of the Trust Fund.
(5) To vote in person or by proxy any shares of stock or rights held in the Trust Fund; to participate in reorganization, liquidation or dissolution of any corporation, the securities of which are held in the Trust Fund and to exchange securities or other property in connection therewith.
(6) To pay any amount due on any loan or advance made to the Trust Fund, all taxes of any nature levied, assessed or imposed upon the Trust Fund, except for any taxes imposed with respect to any prohibited transaction as defined in Code Section 4975(c), and all reasonable expenses and attorney fees necessarily incurred by the Trustee with respect to any of the foregoing matters.
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(C) Immunity of Trustee. No bond or other security shall be required of the Trustee or any successor trustee except as otherwise provided by law. The Trustee shall not be liable for any mistake of judgment or other action taken in good faith or for any loss to the Trust Fund unless such loss results from its gross negligence, willful misconduct or bad faith.
(D) Advice of Board or Counsel.
(1) If, at any time, the Trustee is in doubt concerning any action which it should take in connection with the administration of the Trust, it may request the Board to advise it with respect thereto and shall be protected in relying upon the advice or direction of the Board.
(2) The Trustee may also consult with legal counsel, who may be counsel for the City, or Trustee's own counsel, with respect to the meaning or construction of this Chapter or Trustee's obligations or duties, and the Trustee shall be fully protected from any responsibility with respect to any action taken or omitted by the Trustee in good faith pursuant to the advice of such counsel.
(E) Taxes, Expenses and Fees of the Trustee. The Trustee shall charge against and pay from the Trust Fund any taxes which may be imposed upon the Trust Fund or the income thereof, or upon or with respect to the interest of any person therein which the Trustee is required to pay; provided that the Trust Fund shall not pay or assume any taxes imposed with respect to any prohibited transaction as defined in Code Section 4975(c).
(1) The reasonable expenses of the Trustee incurred in the administration of the Plan, including the fees of any corporate co-trustee which might be appointed as may be mutually agreed upon from time to time by the Trustee and the Board, and attorney's fees incurred by the Trustee, shall be chargeable to and paid by the Trust Fund, provided that the City may pay all or part of such expenses and fees in the discretion of the City Manager.
(2) All expenses incurred in the preparation and adoption of the Plan shall be paid by the City.
(F) Records and Accounts of the Trustee. The Trustee shall keep all such records and accounts which may be necessary in the administration and conduct of this Chapter. The Trustee's records and accounts shall be open to inspection by the City, the Board, and the Participant of the Participant’s own accounts, during business hours.
(1) All income, profits, recoveries, contributions, forfeitures, and any and all moneys, securities and properties of any kind at any time received or held by the Trustee shall be held for investment purposes as a commingled Trust Fund. Separate accounts or records may be maintained for operational and accounting purposes, but no such account or record shall be considered as segregating any funds or property from any other funds or property contained in the commingled fund, except as otherwise provided in this Chapter.
(2) After the close of each year of the Trust, the Trustee shall render to the City and the Board an accounting of the Trust Fund for such year. If no objections to any such accounting are filed within a period of sixty (60) days after it has been delivered to the City and the Board, it shall be deemed to have been approved and shall constitute a full and complete discharge and release to the Trustees from the City and the Board and all other persons having or claiming any interest in the Trust Fund.
(G) Resignation and Removal of Trustee. The City, by action of the City Manager, may in its discretion appoint an additional non-voting Trustee to act as co-trustee with the City Finance Director, which may, but need not, be a bank or trust company organized under the laws of Colorado or the United States authorized by law to administer trusts and maintaining and operating a full-time trust department.
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(1) Any Trustee other than the City Finance Director may resign from serving as a Trustee at any time by filing with the City Manager an appropriate written resignation. No such resignation shall take effect until thirty (30) days from the date thereof, provided that if a successor Trustee shall have been appointed prior to the expiration of said period, the resignation shall be effective immediately.
(2) Any Trustee other than the City Finance Director may be removed by the City, by action of the City Manager, at any time by giving thirty (30) days notice in writing to such Trustee. Such removal shall be effected by delivering to such Trustee written notice of removal, executed by the City Manager.
(3) All the provisions set forth in this Chapter with respect to the Trustee shall relate to all successor Trustees and if more than one Trustee is then acting, reference to the term "Trustee" shall mean "Trustees".
(4) In any event any corporate co-trustee at any time acting hereunder shall be merged, or consolidated with, or shall sell or transfer substantially all of its assets and business to another corporation, whether State or Federal or shall be in any manner reorganized or reincorporated, then the resulting or acquiring corporation shall thereupon be substituted ipso facto for such corporate co-trustee hereunder without the execution of any instrument and without any action upon the part of the City, any Participant or Beneficiary of any deceased Participant, or any other person having or claiming to have an interest in the Trust Fund or under the Plan.
14-2-11: CONTINUANCE, TERMINATION AND AMENDMENT OF PLAN (2464 3447)
(A) Continuance of the Plan Not a Contractual Obligation of the City. It is the expectation of the City that it will continue this Plan indefinitely, but the continuance of the Plan is not assumed as a contractual obligation by the City, and the right is reserved to the City by action of its City Council to discontinue this Plan at any time. The discontinuance of this Plan by the City shall, in no event, have the effect of re-vesting any part of the Trust Fund in the City.
(B) Termination of Plan. This Plan shall continue in full force and effect until terminated or discontinued by the City by action of its City Council. Notice of such termination shall be given to the Trustee by an instrument in writing executed by the City Manager pursuant to the action of its City Council.
(C) Distribution of Trust Fund on Termination of Plan. If the Plan shall, at any time, be terminated by the terms of this Section, the Trustee shall immediately convert the entire Trust Fund, other than insurance and annuity contracts, to cash. The value of the interest of each respective Participant or Beneficiary in the Trust Fund shall be vested in its entirety as of the date of the termination of the Plan. The Trustee shall, as soon as possible, distribute to each Participant or Beneficiary outright, in a lump sum cash payment, such Participant’s or Beneficiary’s entire interest in the Trust Fund.
(D) Amendments to the Plan.
(1) The City, by action of its City Council, may at any time amend this Chapter; provided, however, that no such amendment shall:
(a) Divert the Trust Fund to purposes other than for the exclusive benefit of the Participants and their Beneficiaries;
(b) Decrease any Participant's share of this Plan; or
(c) Discriminate in favor of employees who are officers, persons whose principal duties consist in supervising the work of other employees, or highly compensated employees.
12/08 14-2-11(D) 14-2-12
(2) Notwithstanding anything herein to the contrary this Chapter may be amended, if necessary, without requiring the approval of the Plan Participants to conform to the provisions and requirements of the Code or any amendments thereto, and no such amendment shall be considered prejudicial to the interest of any Participant or Beneficiary hereunder.
14-2-12: MISCELLANEOUS (2464 3319 3447)
(A) Benefits to be Provided Solely from the Trust Fund. All benefits payable under this Plan shall be paid or provided for solely from the Trust Fund, and the City assumes no liability or responsibility therefor.
(B) Notices from Participants to be Filed with Plan Administrator, the Board or the Trustee. Whenever provision is made that a Participant may exercise any option or election or designate any Beneficiary, the action of each Participant shall be evidenced by a written notice therefor signed by the Participant on a form furnished by the Plan Administrator, the Board or the Trustee, as may be applicable, for such purpose and filed with the Plan Administrator, the Board or the Trustee, as applicable, which shall not be effective until received by the Plan Administrator, the Board or the Trustee, as applicable.
(C) Text to Control. The headings of sections and subsections are included solely for convenience or reference. If there be any conflict between such headings and the text of this Chapter, the text shall control.
(D) Law Governing. This Plan shall be construed, under the laws of the State of Colorado and the Trustee shall be liable to account only in the courts of Colorado. All contributions received by the Trustee pursuant to this Chapter shall be deemed to have been received in Colorado.
(E) Severability. In the event any provision of this Chapter shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions. On the contrary, such remaining provisions shall be fully severable and this Chapter shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein.
(F) Plan for Exclusive Benefit of Participants; Reversion Prohibited. This Plan has been entered into for the exclusive benefit of the Participants and their Beneficiaries. Under no circumstances shall any funds contributed to or held by the Trustee hereunder at any time revert to or be used by or enjoyed by the City nor shall any such funds or assets at any time be used other than for the exclusive benefit of the Participants or their Beneficiaries.