CITY OF PASADENA
AMENDED AND RESTATED
DEFERRED COMPENSATION PLAN
ARTICLE I. NAME
The Employer hereby amends and restates the Employer's Deferred Compensation Plan dated January 26, 1998, as amended, to comply with the applicable provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"), the Job Creation and Workers Assistance Act of 2002 ("JOCWA"), and final regulations issued by the Internal Revenue Service under Section 457 of the Internal Revenue Code. The name of this plan is the City of Pasadena Deferred Compensation Plan hereinafter referred to as the Plan. The Plan consists of the provisions set forth in this document and the Trust contained in Exhibit "A" hereto which is incorporated herein by reference. Except as otherwise provided herein, this amendment and restatement of the Plan is effective January 1, 2003.
ARTICLE II. PURPOSE
2.01The primary purpose of the Plan is to provide retirement income and other deferred benefits to the Employees of the Employer and the Employees Beneficiaries in accordance with the provisions of Section 457 of the Internal Revenue Code of 1986, as amended (the Code).
2.02The Plan shall be an agreement solely between the Employer and participating Employees. The Plan and Trust, forming a part hereof, are established and shall be maintained for the exclusive benefit of eligible Employees and their Beneficiaries. No part of the corpus or income of the Trust shall revert to the Employer or be used for, or diverted to, purposes other than the exclusive benefit of Participants and their Beneficiaries.
2.03The Employer does not, and cannot, represent or guarantee that any particular federal and state income, payroll or other tax consequences will occur by reason of an Employee's participation in this Plan. The Participant should consult with his own attorney or other representative regarding all tax or other consequences of participation in this Plan.
ARTICLE III. DEFINITIONS
For the purposes of the Plan, certain words or phrases used herein will have the following meanings:
3.01Account: The bookkeeping account maintained for each Participant reflecting the cumulative amount of the Participant's Deferred Compensation, including any income, gains, losses, or increases or decreases in market value attributable to the investment of the Participant's Deferred Compensation, and further reflecting any distributions to the Participant or the Participant's Beneficiary, and any fees or expenses charged against such Participant's Deferred Compensation.
3.02Beneficiary: Any person, trust or the estate of the Participant, or any combination of the foregoing, designated by a Participant to receive benefits under the Plan. Designation shall be by written instrument executed by the Participant, unless otherwise provided. Beneficiary may be singular or plural, primary or contingent.
3.03Contract Administrator: An administrator employed under contract authorized by and under the direction of the Plan Administrator to administer the Plan.
3.04Deferred Compensation: The portion of Compensation which the Participant and the Employer mutually agree to defer in accordance with the provisions of this Plan, including any amount credited to a Participant's Account by reason of a transfer under Section 9.01, or any other amount which the Employer agrees to credit to a Participant's Account under this Plan.
3.05Deferred Compensation Oversight Committee. Deferred Compensation Oversight Committee shall administer the assets of the Plan in accordance with the duties and responsibilities set forth in Article XVI and the Trust Agreement and shall consist of five members elected or appointed pursuant to the terms of the Trust Agreement.
3.06Employee: Any individual who provides services for the Employer, whether as a common law employee or officer of the Employer.
3.07Employer: Shall mean the City of Pasadena.
3.08Inclusive Compensation: The amount of a Participant's wages or salary paid by the Employer during the Plan Year within the meaning of Internal Revenue Code Section 415(c)(3). The amount of a Participant's Inclusive Compensation shall be determined without regard to any community property laws.
3.09Normal Compensation: The amount of compensation which would be payable to a Participant by the Employer for a taxable year if no Participation Agreement were in effect to defer compensation under this Plan.
3.10Normal Retirement Age: Normal Retirement Age shall mean age 65. A Participant's alternate Normal Retirement Age shall be any date elected by the Participant in a written instrument filed with the Plan Administrator. Such date shall be no earlier than the earliest date that the Participant will become eligible to retire (without the consent of the Employer) and to receive retirement benefits under the California Public Employees' Retirement System without actuarial or similar reduction because of retirement before an age which is later than such alternate age. A Participant may designate an age greater than 65 if the Participant continues employment after attaining age 65, not having previously elected an alternate Normal Retirement Age. However, the Participant's alternate Normal Retirement Age shall not be later than the mandatory retirement age, if any, established by the Employer, or the age at which the Participant actually separates from service (if the Employer has no mandatory retirement age). If the Participant will not become eligible to receive benefits under the California Public Employees Retirement System, the Participant's alternate Normal Retirement Age may not be earlier than attainment of age 65.
3.11Participant: Any member of the Plan who has elected, pursuant to the Plan, to defer a portion of his compensation, or the portion of the Employer's compensation into his Account, and who fulfills the requirements of participation in the Plan.
3.12Participation Agreement: An agreement entered into between an Employee and the Employer, including any amendments or modifications, thereof. Such agreement shall:
(a)fix the amount of Deferred Compensation;
(b)specify a preference among the Providers designated by the Employer;
(c)designate the Employee's Beneficiary or Beneficiaries; and
(d)incorporate the terms, conditions, and provisions of the Plan by reference.
3.13Plan Administrator: The Plan Administrator shall be the Director of Finance or his/her designee.
3.14Plan Year: The calendar year.
3.15Provider: An institution providing investment or deposit vehicle(s) for a deferred compensation plan.
3.16Required Beginning Date: April 1 of the calendar year following the calendar year in which the Participant attains age 70½ , or separates from service, whichever is later.
3.17Severance from Employment: The Participant's Severance from Employment with the Employer for any reason, including death, retirement or disability and within the meaning of Section 402(e)(4)(A)(iii) of the Internal Revenue Code.
3.18Trust: The Trust created under Article VIII of the Plan, which shall consist of all compensation deferred under the Plan, plus any income and gains thereon, less any losses, expenses and distributions to Participants and Beneficiaries.
3.19Trustee: The City of Pasadena.
3.20Eligible Deferred Compensation Plan or Eligible Plan: Any plan defined in Section 457(b) of the Internal Revenue Code and which includes this Plan, among others.
3.21Total Deferral Amount: The aggregate amounts deferred during a calendar year under Article VI hereof.
ARTICLE IV. ADMINISTRATION
4.01The Plan shall be administered by the Plan Administrator, but may also be administered through a Contract Administrator under the direction of the Plan Administrator. If a Contract Administrator is utilized, Participants receiving services from said Contract Administrator may be charged a fee for said services. The Plan Administrator shall determine said fees in a manner deemed fair and equitable. The Plan Administrator may withhold or collect, or have withheld or collected, such fee, in such manner as it deems equitable, from the compensation deferred pursuant to the Plan, or the income produced from the compensation deferred pursuant to the Plan.
4.02Duties of the Plan Administrator: The Plan Administrator shall have the authority to make all discretionary decisions affecting the rights or benefits of Participants which may be required in the administration of this Plan.
4.03Duties of the Provider: The Provider, as agent for the Employer and Trustee, shall perform non-discretionary administrative functions in connection with the Plan, including the maintenance of Participants' Accounts, the provision of periodic reports of the status of each Account, and the disbursement of benefits on behalf of the Employer and Trustee in accordance with the provisions of this Plan.
ARTICLE V. PARTICIPATION IN THE PLAN
5.01Employer and Participant mutually acknowledge that the compensation of each Employee is as set forth in the salary resolution or personnel ordinance of the Employer, and that said compensation includes the dollar amount of funds deferred under this Plan. Each Employee may elect to become a Participant, and to defer payment of part of his compensation, by executing and delivering to the Employer a written Participation Agreement.
5.02Employer and Participant further mutually acknowledge that Participant has the option to make an election to contribute compensation received under the cash option of the Employer's Section 125 Cafeteria Plan to the Plan in addition to amounts deferred pursuant to Section 5.01. In the event Participant fails to make an affirmative election with regard to compensation received under the cash option, the Participant shall be deemed to have elected to contribute the cash amount to the Plan hereunder.
5.03Initial Participation: An Employee may become a Participant by executing a Participation Agreement prior to the beginning of the calendar month in which the Participation Agreement is to become effective to defer compensation not yet earned. The minimum deferral is ten dollars ($10.00) per pay period. At the Employer's option, there may be established one or more entry dates during the year. If such entry dates are established, each Participation Agreement shall be deemed effective as of the entry date next succeeding the date on which it is executed and delivered to the Employer.
5.04Amendment of Participation Agreement: A Participant may amend an executed Participation Agreement to change the amount of compensation not yet earned which is to be deferred (including the reduction of such future deferrals to zero) or to change his investment preference (subject to such restrictions as may result from the nature of terms of any investment made by the Employee). Such amendments for deferral increases shall become effective as of the beginning of the next payroll period commencing after the date the amendment is executed. A Participation Agreement shall remain in full force and effect from month to month unless modified, revoked or superseded by a new Participation Agreement. No compensation previously deferred shall be payable to an Employee upon revocation of his Participation Agreement unless otherwise due pursuant to Article X.
5.05A Participant may designate in writing a Beneficiary to receive any benefits which may be payable under the Plan upon the death of such Participant. A Participant may at any time amend his Participation Agreement to change the designated Beneficiary and such amendment shall become effective as of the date of delivery to the Employer. If no designated Beneficiary survives the Participant, and benefits are payable following the Participant's death, the Plan Administrator may direct that payment of benefits be made to the person or persons in the first of the following classes of successive preference Beneficiaries: (1) the Participant's spouse, (2) the Participant's children, including adopted children, and (3) then to the Participant's estate.
ARTICLE VI. LIMITATIONS ON DEFERRALS
6.01Normal Limitation: Except as provided in Section 6.02, the maximum amount of the compensation of any Participant which may be deferred under the Plan for each calendar year shall not exceed the lesser of:
(a)the "applicable dollar amount" determined for the calendar year pursuant to Section 457(e)(15) of the Internal Revenue Code, as follows:
2002$11,000
2003$12,000
2004$13,000
2005$14,000
2006 or thereafter$15,000; or
(b)1005 of the Participant's Inclusive Compensation.
For plan years beginning after December 31, 2006, the applicable dollar amount specified in Subsection 6.01(a) hereof shall be adjusted in accordance with Section 457(d)(15) of the Internal Revenue Code.
6.02Catch Up Limitation: For each of the last three (3) taxable years of a Participant ending before his attainment of Normal Retirement Age, the maximum Total Deferral Amount shall be the lesser of: (i) an amount equal to twice the amount of the "applicable dollar amount" specified in Section 6.01(a) above; or (ii) the sum of the Normal Limitation amount for the taxable year, plus so much of the normal limitation amount not utilized in prior taxable years. A prior taxable year shall be taken into account under the preceding sentence only if the Participant was eligible to participate in the Plan all or part of such year (or in any other Eligible Deferred Compensation Plan which is properly taken into account pursuant to regulations under Section 457), and, compensation (if any) deferred under the Plan (or such other plan) was subject to the maximum deferral limitations described in Internal Revenue Code Section 457(b)(3) as in effect prior to and after January 1, 2002.
The catch up limitation is available to a Participant only during one three-year period. If a Participant uses the catch up limitation and then postpones Normal Retirement Age or returns to work after retiring, the limitation shall not be available again before a subsequent retirement.
6.03Additional Elective Deferral: All Participants who have attained the age of fifty (50) years before the end of the calendar year shall be eligible to defer additional amounts of Deferred Compensation in accordance with, and subject to the limitations of, Sections 414(v) of the Internal Revenue Code. In the case of Participants who have attained the age of fifty (50) years and are eligible to use the catch up limitation provided under Section 6.02 above, such Participants shall be eligible to defer an amount equal to the greater of (i) the amount permitted under this Section 6.03; or (ii) the amount permitted under Section 6.02 above. Such additional elective deferrals shall not be taken into account for purposes of the "applicable dollar amount" specified in Section 6.01 in effect for the calendar year.
6.04Other Plans: The Total Deferral Amounts of a Participant under this Plan or any other Eligible Deferred Compensation Plan shall not exceed the maximum limitations specified in this Article VI. If a Participant is eligible to defer additional amounts under the catch up limitation prescribed in Section 6.02 above, under more than one Eligible Deferred Compensation Plan, and the applicable catch up limitation amount is not the same for each Eligible Deferred Compensation Plan for a calendar year, said Participant shall be permitted to defer the catch up limitation amount under the Eligible Plan which permits the largest catch up limitation amount for the Participant.
6.05Military Service Exemption: Notwithstanding any provision of this Plan to the contrary, the normal limitation amount under Section 6.01 for a Plan year does not apply to participants returning from qualified military service pursuant to the Uniform Services Employment Re-employment Rights Act of 1994 and contributions and benefits with respect to qualified military service will be provided in accordance with Section 414(u) of the Code.
6.06Rollovers Disregarded in Determining Maximum Deferral Amount: Any rollover contribution (and any earnings applicable thereto) received from an Eligible Plan on behalf of a Participant during a calendar year shall not be included for purposes of determining the Participant's maximum deferral amount under Article VI for the calendar year.
6.07Excess Deferrals: If a Participant's deferrals for a calendar year would be more than permitted under this Article VI, including additional deferrals pursuant to Sections 6.02 and 6.03, such amounts shall be considered "excess deferrals" and the Employer shall not withhold any additional Deferred Compensation on behalf of such Participant. In the event the Plan Administrator determines that a Participant' Deferred Compensation contributed to the Plan for a calendar year exceeds the annual deferral limitation under Section 457(e), the Plan Administrator shall distribute to the Participant such excess deferrals, as adjusted for allocable income, as soon as administratively practicable. Distributions shall be made without regard to any requirements which might otherwise preclude distribution only to the extent allowed under the Internal Revenue Code, Treasury Regulations, and other interpretative announcements.
ARTICLE VII. NON-RESPONSIBILITY CLAUSE
Subject to the provisions of Article VIII thereof, the Employer may, but is not required to, invest funds held pursuant to agreements between Participants and the Employer in accordance with the preference or preferences indicated by each Participant at the time of enrollment or change in enrollment, prospectively only. Any action by the Employer in investing funds shall not be considered to be either an endorsement or guarantee of any investment, nor shall it be considered to attest to the financial soundness or the suitability of any investment.
In no event shall the Employer's or Trustee's obligation to pay benefits to a Participant exceed the value of the amounts credited to the Participant's account. Neither the Employer, the Trustee, the Plan Administrator, the Deferred Compensation Oversight Committee, nor any agent or other person shall be liable for losses arising from depreciation or shrinkage in the value of any investments acquired under this Plan.
ARTICLE VIII. TRUST AND INVESTMENT OF ACCOUNTS
8.01Investment Funds: In accordance with uniform and nondiscriminatory rules established by the Employer and the Deferred Compensation Oversight Committee, the Participant may direct his Accounts to be invested in one (1) or more investment funds available under the Plan, provided, however, that the Participant's investment directions shall not violate any investment restrictions established by the Employer, the Trustee, the Plan Administrator, or a Provider. Neither the Employer, the Trustee, the Deferred Compensation Oversight Committee, the Plan Administrator, nor any other person or agent shall be liable for any losses incurred by virtue of following such directions or because of any reasonable administrative delay in implementing such directions. If the Trustee receives any contribution under the Plan that is not accompanied by instructions directing its investment. The Trustee shall hold such funds pending direction from the Participant until the end of the Plan Year. If no direction has been received, the Trustee shall invest said contribution in such investment fund as shall be designated by the Deferred Compensation Oversight Committee.
8.02Trust: Attached hereto as Exhibit A, and incorporated herein by reference, is the City of Pasadena's Section 457 Deferred Compensation Plan Trust. Notwithstanding any contrary provision of the Plan, in accordance with Section 457(g) of the Internal Revenue Code, all amounts of compensation deferred pursuant to the Plan, all property and rights purchased with such amounts, and all income attributable to such amounts, property, or rights shall be transferred to and held in the Trust for the exclusive benefit of Participants and their Beneficiaries under the Plan.