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RESOLUTION: 2002-24
SUBJECT: A resolution amending the City of Lakewood Police Money Purchase Pension Plan and Trust Agreement.
RECOMMENDATION: Action proposed: Adopt the resolution.
SUMMARY AND BACKGROUND OF SUBJECT MATTER: The City of Lakewood Police Money Purchase Pension Plan and Trust Agreement (the "Plan") must be amended to conform with recent changes in Federal law, by adding a definition of Eligible Retirement Plan, to increase the amount of the annual additions limitation, to revise the 5% of compensation limit on voluntary after-tax contributions, to revise the provisions relating to rollovers to include annuities, §§ 457 and 403(b) plans, to add an under $1,000 vested benefit involuntary distribution clause, to revise the Assignment of Benefits section to include Domestic Relations Orders provisions, and to add language permitting Internal Revenue Code or State statute-required amendments to be made without a vote of the sworn officers.
RESOLUTION ADOPTION DATE: April 8, 2002
ORIGINATED BY: City of Lakewood Police Pension Board, with the approval of more than 65% of the sworn officers voting on the Amendment.
STAFF PERSON RESPONSIBLE: Ken Milano,
Director of Employee Relations, 303-987-7701
Nancy Rhode, Benefits and Compensation
Administrator, 303-987-7710
DOCUMENTS ATTACHED: Resolution 2002-24
Exhibit A
SUBMITTED BY:
Ken Milano, Director of Employee Relations
REVIEWED BY:
Joni Inman, Director Mayor and City Manager's Office
Michael J. Rock, City Manager
SECOND AMENDMENT
to the
CITY OF LAKEWOOD POLICE
MONEY PURCHASE PENSION PLAN AND TRUST AGREEMENT
The following amendments to the Plan which was restated effective January 1, 1994, shall be effective January 1, 2002:
1. ARTICLE II. shall be amended by the addition of a new § 2.07, (definition of) "Eligible Retirement Plan," and the renumbering of subsequent ARTICLE II. sections.
2.07 "Eligible Retirement Plan" means for purposes of the direct rollover provisions of § 4.06(c) any defined contribution plan, defined benefit plan, annuity contract described in Code § 403(b), and an eligible plan under Code § 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 relations order, as defined in Code § 414(p) or CRS § 14-10-113.
2. ARTICLE IV. § 4.02, Limitation on Annual Addition, sentence four shall
be revised
to read:
The annual addition to the account of any Participant attributable to all defined contribution plans shall not exceed the lesser of thirty thousand dollars FORTY THOUSAND DOLLARS (as adjusted for cost of living increases by the Secretary of Treasury) or twenty five percent ONE HUNDRED PERCENT of such Participant's compensation.
3. ARTICLE IV. § 4.06(b), Voluntary Contributions, sentence one shall be revised to read:
In order to encourage savings and investments by Participants, each Participant voluntarily may contribute to the Pension Trust an amount equal to one percent, two percent, three percent, four percent, five percent, six percent or seven percent TO UP TO SEVENTY-FOUR PERCENT (74%) of compensation in addition to contributions under subparagraph (a) of this subsection SUBJECT TO THE FORTY THOUSAND DOLLAR ($40,000) LIMITATION SET FORTH IN § 4.02.
4. ARTICLE IV. § 4.06(c), Rollover Contributions, shall be revised to read:
Notwithstanding the limits imposed upon Participant contributions, a Participant may contribute any amount of funds to the Plan in any year if such contribution COMES FROM A PLAN WHICH satisfies the requirements under law for rollover contributions DEFINITION OF ELIGIBLE RETIREMENT PLAN DESCRIBED IN ARTICLE II § 2.07 and if the Plan Manager agrees in writing to accept such contribution on behalf of the Plan. Rollover contributions shall be added to a segregated Account attributable to such Participant's voluntary contributions, if any, and shall be nonforfeitable.
5. ARTICLE VII. § 7.01, When Benefits Become Distributable and Effect of Distribution, shall be revised to read:
When a Participant dies, suffers Total Disability, retires, terminates his employment for any other reason or transfers to employment elsewhere within the City, the portion of his vested Account attributable to City and Participant contributions shall be distributable under Section 7.02. NOTWITHSTANDING THE ABOVE, IF A PARTICIPANT TERMINATES EMPLOYMENT WITH A VESTED BENEFIT OF LESS THAN $5,000, THE PARTICIPANT SHALL HAVE 60 DAYS FROM THE DATE OF THE MAILING OF THE TAX NOTICE EXPLAINING THE PARTICIPANT'S OPTIONS IN WHICH TO DIRECT THE TRUSTEES AS TO THE DISPOSITION OF THE VESTED BENEFIT. IF AFTER 60 DAYS THE PARTICIPANT HAS FAILED TO DIRECT THE INVESTMENT OF THE VESTED BENEFIT AND SUCH VESTED BENEFIT IS LESS THAN $1,000 THEN THE TRUSTEE SHALL DISTRIBUTE THE PARTICIPANT'S VESTED BENEFIT TO THE PARTICIPANT. ALTERNATIVELY, IF THE PARTICIPANT'S VESTED BENEFIT IS MORE THAN $1,000 AND LESS THAN $5,000 THEN SUCH VESTED BENEFIT SHALL NOT BE DISTRIBUTED UNTIL THE PARTICIPANT PROVIDES DIRECTION TO THE TRUSTEES AS TO THE DISPOSITION OF THE VESTED BENEFIT. When benefits are distributed under this Plan, a Participant shall cease to have any further interest or participation in the Trust Fund or any subsequent accruals or contributions to the Trust Fund, except that a Participant shall retain the right to receive distribution of the value of his Account as determined at the last prior valuation date.
6. ARTICLE VII. § 7.02(g), Distribution for Rollover Transactions and Direct Transfers, shall be amended to read:
Notwithstanding any other provision of the Plan to the contrary that would otherwise limit a Participant's election under the Plan, a Participant may elect, at the time and in the manner prescribed by the Plan Manager, to have any portion of an eligible rollover distribution, as defined in Code Section 402(c)(4), paid directly to an ELIGIBLE RETIREMENT PLAN, AS DEFINED IN SECTION 2.07, specified by the Participant as a direct rollover. The Participant shall make such rollover request in writing and shall provide such information to the Plan Manager as the Plan Manager requests, including the name of the plan to which his interest is to be transferred and the name and address of the sponsor and the trustee of the new plan, when applicable.
For purposes of the direct rollover provisions of this § 7.02(g), 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 includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Code § 408(a) or (b), or to a qualified defined contribution plan described in Code § 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 includible in gross income and the portion of such distribution which is not so includible.
7. ARTICLE VII. § 7.04, Assignment of Benefits, shall be revised to memorialize the previous Resolution by the addition of the following paragraphs:
Notwithstanding the above the Trustees will comply with a Domestic Relations Order ("DRO").
A DRO is a judgment, decree or order (including approval of a property settlement agreement) made pursuant to a state domestic relations law (including community property law) that relates to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent ("Alternate Payee") of a Participant and which:
(a) creates or recognizes the existence of an Alternate Payee's right to, or
assigns to an Alternate Payee the right to, receive all or a portion of the
benefits payable to a Participant under this Plan;
(b) specifies:
(i) the name and last known mailing address of the Participant and each Alternate Payee covered by the order:
(ii) the amount or percentage of the Participant's Plan benefits to be paid to any Alternate Payee; or the manner in which such amount or percentage is to be determined; and
(iii) the number of payments or the period to which the order applies and each plan to which the order relates; and
(iv) payment(s) must commence no sooner than thirty (30) nor later than one hundred twenty (120) days, from the issuance of the qualified DRO
(c) does not require the Plan to:
(i) provide any type or form of benefit or any option not otherwise provided under the Plan;
(ii) provide increased benefit; or
(iii) pay benefits to an Alternate Payee that are required to be paid to another Alternate Payee under a prior DRO.
For purposes of this Plan, an Alternate Payee who had been married to the Participant for at least one year may be treated as an Eligible Spouse with respect to the portion of the Participant's benefit in which such Alternate Payee has an interest provided that the DRO provides for such treatment. In addition, if the DRO so provides, this Plan, shall have the right to make an immediate distribution of the Alternate Payee's benefit, notwithstanding the fact that the Participant may not be eligible for immediate payment.
However, under no circumstances, may the spouse of an Alternate Payee (who is not a Participant hereunder) be treated as an Eligible Spouse under the terms of the Plan.
Upon receipt of any judgment, decree or order relating to the provision of payment by the Plan to an Alternate Payee pursuant to a state domestic relations law, the Trustees shall promptly notify the affected Participant and any Alternate Payee of the receipt of such judgment, decree or order and shall notify the affected Participant and any Alternate Payee of the Trustee's procedure for determining whether or not the judgment, decree or order is a DRO. The Trustee's shall establish a procedure to determine the status of a judgment, decree or order as a DRO and to administer Plan distributions in accordance with such procedure. Such procedure shall be in writing, shall include a provision specifying the notification requirements enumerated in the proceeding paragraph, shall permit an Alternate Payee to designate a representative for receipt of communications from the Trustees and shall include such other provisions as the Trustee shall determine, including provisions required under regulations promulgated by the General Assembly of the State of Colorado.
8. ARTICLE X. § 10.04, Amendments to Plan and Trust, sentence four shall be revised to read:
Notwithstanding anything in the Plan at any time to the contrary, the Plan and Trust may be amended at any time WITHOUT A VOTE to conform to the provisions and requirements of federal and state law with respect to the Plan and Trust or any amendments to such laws or regulations or rulings issued pursuant to them.
CITY OF LAKEWOOD POLICE PENSION BOARD
By: Stephen A. Burkholder, Mayor
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