HomeMy WebLinkAbout20012934.tiff RESOLUTION
RE: APPROVE AMENDMENTS TO 457 PLAN
WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS, the Board has been presented with proposed amendments#1 through #8
to the 457 Plan, known as the Deferred Compensation Plan of the County of Weld, State of
Colorado, and
WHEREAS, after review, the Board deems it advisable to approve only amendments #1
through #7, copies of which are attached hereto and incorporated herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of
Weld County, Colorado, that with amendments #1 through #7 proposed for the 457 Plan, be,
and hereby is, adopted, to be effective January 1, 2002, or such other effective date as
indicated on the attached.
BE IT FURTHER RESOLVED by the Board hereby authorizes only amendments #1
through #7 to be incorporated into the 457 Plan Document.
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 15th day of October, A.D., 2001.
BOARD OF OUNTY COMMISSIONERS
WELD CO TY, COLORADO
ATTEST:fie, M. J. eile, Chair Weld County Clerk to ` = •%r,,;;c ��
Glenn Vaad, Pro-Te
BY: -... e -- -
Deputy Clerk to the Board "1 / V //2A
Wil H. Jerke
APPROVE A ORM:
i E. Long
ou rney
R bert D. Ma en
/
Date of signature: %
2001-2934
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flBenefitsCorp
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Great-We st/BenefitsCorp EGTRRA Implementation Package
Issue #1: Elective Deferral and Catch-up Limits; Repeal of Coordination
Name of Plan Sponsor: County of Weld
Name of Plan; Deferred Compensation Plan of the County of Weld, State of Colorado
I Issue
EGTRRA permits the maximum regular deferral limit to be the lesser of 100% of
includible compensation or $11,000 in 2002, plus $1,000 per year up to $15,000
in 2006, then indexed in $500 increments. Catch-up contributions during the
three years prior to normal retirement age may be increased from $15,000 to
twice the regular elective deferral limit. Deferrals to other types of elective
deferral plans, such as 401(k) and 403(b), are no longer required to reduce the
amount that can be contributed to the 457p1an.
II. Discussion
Adopting these provisions requires the plan to delete "$7,500" each place it
appears and insert "the applicable dollar amount" in section 457(eX15).
Likewise, the catch-up limit would be amended by deleting the $15,000 cap and
inserting "twice the applicable limit set forth in section 457(ex15)." Delete all
references to the "33 1/3" of includible compensation limit and insert "100%"
Delete all language reducing deferrals to the 457 plan by amounts contributed to
other elective deferral plans.
III. Great-West/BenefitsCorp Comments
These are favorable changes for participants, and allow for greater account
growth.
IV. Staff Recommendation
Staff recommends these changes.
V. Board/Committee Decision
xx Adopt these provisions effective January 1, 2002
Do not adopt these provisions
6
BenefitsCorp
Beef it sCo
Great-West/BenefitsCorp EGTRRA Implementation Package
Issue #2: Additional Contributions for Participants Age 50 and Over
Name of Plan Sponsor County of Weld
Name of Plan: Deferred Compensation Plan of the County of Weld, State of Colorado
I. Issue
EGTRRA permits employees who turn age 50 or over during the calendar
year to contribute an additional amount into the plan for all plan years
except during the three years prior to normal retirement age while they are
utilizing the regular 457 catch-up provision. New Code section 414(v) sets
out the additional amount applicable to 457 plans. The additional amount
is $1,000 in 2002, increasing $1,000 each year up to $5,000 in 2006. This
additional amount is then indexed in $500 increments based upon cost-of-
living.
II. Discussion
Adopting this provision requires an amendment to the plan document
allowing employees age 50 and over to contribute additional amounts as
allowed under new Code section 414(v), subject to section 414(v)(6)(C)
which states that the age 50 catch-up is not available during the three
years the participant is utilizing regular 457 catch-up.
Ili. Great-WestlBenefitsCorp Comments
This is a favorable change for participants, and allows for greater account
growth.
IV. Staff Recommendation
Staff recommends this change.
V. Board/Committee Decision
xx This provision is adopted effective January 1, 2002.
This provision is not adopted.
7
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Great-West/BenefitsCorp EGTRRA Implementation Package
Issue #3: Flexible 457 Distributions; Required Minimum Distributions
Name of Plan Sponsor: County of Weld
Name of Plan: Deferred Compensation Plan of the County of Weld, State of Colorado
I. Issue
EGTRRA permits 457 plan assets to remain tax deferred until actually distributed
from the plan. Under amended section 457(a), the participants' account
balances are no longer taxable when "made available." The special distribution
rules under 457(d) are repealed such that payments are no longer required to be
paid in substantially non-increasing amounts paid at least annually. Non-spouse
beneficiaries may now take distributions over life expectancy, not just 15 years.
II. Discussion
Adopting these provisions requires deleting plan language taxing a participant's
457 account balance at separation from service prior to an amount being paid to
the participant or other beneficiary. The provisions requiring an irrevocable
election at separation from service and requiring annual payments in
substantially non-increasing amounts paid at least annually must be deleted- All
current irrevocable elections should be treated as null and void. Amend the plan
to comply with the new minimum distribution regulations.
III. Great-West/BenefitsCorp Comments
While making this change will provide participants with greater flexibility, it will
involve additional work by the plan sponsor and Great-West/SenefitsCorp when
participants request changes to existing irrevocable election dates and/or
payment amounts. Great-West will permit up to two changes in payout amounts
per calendar year from each participant, free of charge. Subsequent changes in
the same calendar year may involve an additional fee paid by the participant.
IV. Staff Recommendation
V. Board/Committee Decision
xxl These provisions are adopted effective January 1, 2002.
These provisions are not adopted.
8
BenefitsCorp
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Great-West/BenefitsCorp EGTRRA Implementation Package
Issue #4: In-Service Transfers for Purchase of DB Plan Service Credits
Name of Plan Sponsor Ccunty of Weld
Name of Plan: Deferred Compensation Plan of the County of Weld, State of Colorado
I. Issue
EGTRRA permits the plan to allow 457 plan participants to request a
trustee-to-trustee transfer of assets from their 457 account to a
governmental defined benefit plan for the purchase of permissible service
credit (as defined in section 415(nX3XA)) under such plan or a repayment
to which section 415 does not apply by reason of subsection (k)(3)
thereof.
II. Discussion
Adopting this provision requires the plan to be amended to include a
provision allowing trustee-to-trustee transfers pursuant to new Code
section 457(e)(17.
III. Great-West/BenefitsCorp Comments
This is a favorable change for participants, allowing them to transfer
assets from their 457 plan account to purchase permissible service credit
as allowed under new Code section 457(e)(17)with pre-tax dollars.
IV. Staff Recommendation
V. Board Decision
xx Adopt this provision effective January 1, 2002.
Do not adopt this provision.
9
+C tBenefitsCorp
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Great-West/BenefitsCorp EGTRRA Implementation Package
Issue #5: Rollovers From Employer-Sponsored Plans and IRAs
Name of Plan Sponsor: County of Weld
Name of Plan: Deferred Compengation Plan of the County of Weld, State of Colorado
I. Issue
EGTRRA permits the plan to accept rollover contributions from other types of
employer-sponsored plans, including 401(a), 401(k), and 403(b) plans, and IRAs
pursuant to new Code section 457(eX16) and revised section 402(cX8)(B)
defining eligible retirement plan.
II. Discussion
Adopting this provision requires the plan to be amended to separately account for
the dollars rolled into the plan and to determine when participants will be allowed
to take distributions from their rollover accounts. Rollovers into the 457 plan from
a 401(a), 401(k), 403(b) or an IRA are subject to the 10% premature distribution
penalty tax if distributed from the 457 plan prior to age 591/2
111. Great-West/BenefitsCorp Comments
This change allows participants to consolidate assets from plans of previous
employers and personal IRAs, and allows for greater account growth within the
457 plan. While this is generally regarded as a favorable provision, there may be
additional fees for recordkeeping services to accommodate rollovers from
multiple sources other than IRC Section 457 Plans.
IV. Staff Recommendation
V. Board/Committee Decision
xx Adopt this provision effective January 1, 2002 and allow
participants to request distributions from their rollover
account (1) xx at any time, or(2)
Do not adopt this provision
10
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EGTRRA Implementation Package
Issue #6: Qualified Domestic Relations Orders (QDROs)
Name of Plan Sponsor: County of Weld
Name of Plan; Deferred Compensation Plan of the County of Weld, State of Colorado
I. Issue
EGTRRA permits the plan to accept qualified domestic relations orders
pursuant to amended IRC section 414(pX11) to transfer all or a portion of
a participant's account to an alternate payee pursuant to divorce. The
plan may provide for immediate payments to alternate payees and tax
report such distributions to former spouse alternate payees.
II. Discussion
Adopting this provision will require a plan that is currently accepting
divorce orders pursuant to the Conforming Equitable Distribution Order
(CEDO) private letter rulings to delete the CEDO language and replace it
with a QDRO provision meeting the requirements of 414(p)(11). Plans
that have not previously accepted divorce orders must add the new
provision to the plan.
III. Great-West/BenefitsCorp Comments
This is a favorable change for participants and alternate payees, and
greatly simplifies plan administration and tax reporting. It should also
reduce the number of alternate payee accounts set up under the plan.
IV. Staff Recommendation
V. Board/Committee Decision
xx Adopt this provision effective January 1, 2002 for all previous
divorce decrees accepted by the Plan that meet (or are amended to
meet) the new requirements, as well as all future qualified orders.
Do not adopt this provision.
II
�t�� BenefitsCorp
Great-West/BenefitsCorp EGTRRA Implementation Package
Issue #1: Mandatory Cash-out of Small Account Balances
Name of Plan Sponsor: County of Weld
Name of Plan: Deferred Compensation Plan of the County of Weld, State of Colorado
1, Issue
Plans are allowed to cash out small account balances (typically $5,000 or less)
without the participant's consent upon separation from service. EGTRRA
requires Treasury to issue regulations within three years of the date of enactment
that will require all plans with a mandatory cash-out provision to designate an
IRA provider to receive unclaimed small accounts. If the participant does not
request the distribution in cash or direct it to another plan or IRA, the plan must
send all amounts of $1,000 or more to the designated IRA provider and
determine the default option for such amounts to be invested in.
11. Discussion
Each plan sponsor must determine whether the plan will allow small accounts to
remain in the 457 plan when a participant separates from service until age 70 ''A.
If the plan sponsor chooses to force immediate cash outs of small account
balances at separation from service, the plan must provide that, upon issuance of
Treasury regulations, such amounts will be sent to a designated IRA provider
and the default option to receive these amounts.
III. Great-West/BenefitsCorp Comments
It will be up to three years before the Treasury issues regulations requiring plans
to transfer mandated cash-out amounts to an IRA provider. The only accounts
that will be transferred are those of participants who refuse to take the cash or
tell the plan where to send the money_ Great-West/BenefitsCorp will make an
IRA product available to our plan sponsors when the regulations are issued, and
will advise of any fees applicable to the IRA product when it is available.
IV. Staff Recommendation
V. Board/Committee Decision
Adopt a mandatory cash-out provision for amounts of $5,000 or less, taking the
AA entire account balance,Including rollovers,into consideration.
1 1 Do not adopt this provision.
12
BenefitsCorp
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Great-West/BenefitsCorp EGTRRA Implementation Package
Issue #8: 457 Plan Loans
Name of Plan Sponsor; County of Weld
Name of Plan: Deferred Compensation Plan of the County of Weld, State of Colorado
Issue
EGTRRA does not contain any provision allowing loans to participants
from their 457 plan accounts. The Treasury is expected to issue
regulations in the near future that will either permit or prohibit such loans.
II. ' Discussion
Adopting a provision to allow participant loans from a 457 plan would have
to be contingent upon and consistent with Treasury regulations permitting
such loans. Loans should be account reduction loans with repayments
made via payroll deduction. The number of outstanding loans per
participant should be limited.
Ill. Great-WestiBenefitsCorp Comments
Our experience with loans under 401(k) plans is that participants may
damage their future retirement security if repayments are not made by
payroll deduction and they default on the payments. If your plan has a fee
structure that is sensitive to asset levels, the availability of loans may
impact your plan administrative fees by reducing plan assets by 5%-10%
in the first year if loan demand is high. The positive impact of 457 plans
may be a reduction in the number of unforeseeable emergency requests.
Each plan sponsor will have to carefully weigh the benefits and drawbacks
of offering a loan provision. If this provision is adopted, we suggest each
participant be permitted no more than two outstanding loans at any one
time. Great-West charges a fee to initiate the loan, and to service the loan
each year. These fees vary from plan to plan depending on the type and
number of investment options under your plan. A specific fee basis will be
quoted for your plan before this provision is effective.
IV. Staff Recommendation
13
V. Board/Committee Decision
r1 Adopt a plan loan provision to become effective the later of the date
specified in Treasury regulations or the date set forth In a plan loan policy
adopted by this Board.
XX
Do not adopt this provision.
14
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457 Tool Kit(10/01) A Great-West Company
Please follow these
Introduction steps to complete this
How To Implement & Leverage EGTRRA process:
The landmark changes created by the Economic Growth and Tax Relief Step 1 —
Reconciliation Act (EGTRRA) of 2001 will have a dramatic impact on retirement Make sure you have completed
plans for plan sponsors, participants and providers. This pension reform presents and mailed the Plan Sponsor
exciting new challenges and opportunities for Great-West/BenefitsCorp and our Checklist as this is the"trigger"
clients.We are excited to partner with you to address the needs of your plan and for Great-West/BenefitsCorp to
effectively implement your desired changes. begin implementing your desired
changes(this was mailed to you in
We are currently rolling out an implementation strategy and process(EGTRRA early September)
Implementation Package) that will help your plan take advantage of the many
positives from EGTRRA and overcome the challenges.A reminder of all that is Step 2 —
included in the EGTRRA Implementation Package (Phases 1 — 3) is located on Review the Implementation Tool
the next page. Kit which includes an overall
implementation strategy plus the
Phase 3 of the Implementation Package is an Implementation Tool Kit This Tool amended and updated documents
Kit which is enclosed in this binder,will provide you and or your committee/
board the documents necessary to complete the EGTRRA implementation Step 3 —
process. Sign the appropriate legal
documents accepting the changes
to your plan
Step 4 —
Mail in the signed documents to
Marilyn Collister at Great-West/
BenefitsCorp in Greenwood
Village, Colorado
Securities,when offered,are offered by BenefitsCorp Equities,Inc.,a wholly owned subsidiary of Great-West Life
&Annuity Insurance Company.
EGTRRA Implementation Package
Plan Sponsor Communication
Our Implementation
Phase 1 - Education on EGTRRA Package consists of the
Since EGTRRA became law on June 7th,Great West/BenefitsCorp has following steps:
been preparing for implementation and communicating with our clients.
Through webinars (presentations over the Internet) and regional seminars, Plan Sponsor Communication
we have been able to educate plan sponsors on the many optional and Phase 1 —Education on EGTRRA
mandatory changes resulting from EGTRRA.You may review this Phase 2 — Plan Sponsor Checklist
information at www.benefitscorp.com. Phase 3 — Implementation Tool Kit
Participant Communication
Phase 2 — Plan Sponsor Checklist Marketing&Communication Program
In September a Plan Sponsor Checklist was mailed out that included all of
the necessary resolutions 457 plan sponsors can use to adopt the
changes. Here are the items included in this checklist:
• Resolution Adoptions with signature page for Board/Committee
• Issue #1 — Elective Deferral and Catch-up Limits; Repeal of Coordination
• Issue #2 —Additional Contributions for Participants Age 50 and Over
• Issue #3 —Flexible 457 distributions; Required Minimum Distributions
• Issue #4—In-Service Transfers for Purchase of DB Plan Service Credits
• Issue #5 —Rollovers From Employer-Sponsored Plans and IRAs
• Issue #6—Qualified Domestic Relations Orders (QDROs)
• Issue #7—Mandatory Cash-out of Small Account Balances
• Issue #8 — 457 Plan Loans
Completing and signing this checklist is a first step towards making EGTRRA enhancements become reality for the plan.
Plan sponsors can make decisions to adopt the resolutions today in order to take advantage of EGTRRA next year and
then make changes to the plan document over the course of 2002. For those plan sponsors who are using the Great-
West/BenefitsCorp model plan documents,we will use this checklist to prepare the revised and updated documents in
early October. If you are using plan documents from another source,we still need to receive this information as soon as
possible.
These decisions must be communicated to Great-West/BenefitsCorp as soon as possible,if we are to implement
the changes in a timely manner as noted in the package.Receiving the checklist,will serve as the "trigger"for
Great-West/BenefitsCorp to begin implementing your desired changes.
As noted in the package,please send a copy of the signed Resolution and each marked
Issue Sheet to:
Marilyn R.Collister
Director, Plan Design and Compliance
8515 E.Orchard Road, 10T2
Greenwood Village,Colorado 80111
2
Phase 3 — Implementation Tool Kit
The overall impact of EGTRRA is far reaching. Making the decisions about which changes to make is only the beginning of
the process. In order to fully leverage EGTRRA for the plan and participants many aspects of how the plan operates must
change.Everything from basic marketing and communications to the plan setup on the recordkeeping system to how
participants are counseled upon separation from service, have to change with EGTRRA.
Because EGTRRA impacts so many areas of your plan and how we provide products and/or services to your plan,we have
developed an Implementation Tool Kit,which will contain the following.
• An explanation of our implementation strategy and recommendations on why it is important to make these
changes
• The documentation required to make the necessary plan changes (i.e., plan document adoption agreements,
amended services agreements,etc.) The decisions from your completed Plan Sponsor Checklist will be
incorporated into the appropriate documents.
There will be a BenefitsCorp representative available to help plan sponsors complete this process.
Participant Communication
We will be rolling out a very proactive marketing and communications program that will reinforce the great enhancements
to retirement plans in general and specifically 457 plans.
Marketing & Communication Program
Our program will educate participants on how to take advantage of.
A) Overall enhancements to their retirement plan
B) Increased contribution limits including new catch-up limits
C) Available tax credits and more
Our plan is to make these messages available through a number of potential channels: newsletters,group presentations,
posters,flyers,e-mail and Web site education.
Additionally,we will be modifying the marketing and communication material,presentations and
Web sites that we provide based on the decisions you have made.This will take some time.As we
rollout our EGTRRA Implementation strategy,we ask for your patience and cooperation.Plan
sponsors have a number of decisions and changes to make. It is critical that these decisions be
made as soon as possible,in order to provide us with the time needed to implement the changes
you desire.
3
EGTRRA Implementation Strategy
Leveraging Pension Reform
The positives of EGTRRA are well known,as participants will be able to contribute more for retirement,have greater
flexibility with withdrawals after separation from service and the convenience of combining retirement accounts.The
potential challenges are not as well known.Our goal is to help plan sponsors leverage all of the many positives from
EGTRRA and partner to overcome any challenges.
Challenges
1. 457 Portability may result in a scenario of more participants rolling distributions out of the plan
which will cause:
■ Fewer participants and assets remaining in the plan
• More distribution requests and administrative expense for the plan and Great-West/BenefitsCorp
• More potential retirement planning mistakes made by participants (i.e.spending retirement savings,moving
money to accounts without the same investment oversight)
Result- Possible higher prices for participants, less money for future retirees and possible higher investment risk.
2. Retirement Account Consolidation&Distribution Flexibility will likely cause:
• More distribution requests
• More changes to distribution amounts and frequency
• Increased administrative burden to recordkeep rollovers from other defined contribution plans
• More communication to educate participants on the many changes
■ Increased expenses for Great West/BenefitsCorp and the plan
Result— Possible higher prices for participants. Higher prices may be somwhat off-set by rollovers into the plan.
3. 402(f) Notice requirement will cause:
• Payor, (Great West/BenefitsCorp), responsible for providing special tax notification to each participant requesting
a distribution
■ Increased communication expenses in order to truly educate participant on all of their options,which is noted in
our recommendations below
Result— Possible higher prices for participants.
4
Our Recommendations
1. Create the most competitive retirement plan(s) possible
• Take advantage of every opportunity to allow increased contributions
• Allow for flexible distributions
• Allow participants to roll in accounts from previous retirement plans
• Add Traditional &Roth Deemed IRAs (information regarding Deemed IRAs will follow Treasury guidance on this
new retirement opportunity)
Result—A more attractive plan with increased retirement planning opportunities.
2. Emphasize all of the advantages of staying in the plan
• Tax advantages of 457 Plan
• Potential buying power of plan
• Investment oversight by plan
• Strong retirement plan service provider in Great West/BenefitsCorp
Result— Participants aware of their plan's advantages in comparison with other retirement accounts.
3. Broaden retirement plan education
• Great-West/BenefitsCorp will always encourage participants to stay in the plan
• Educate participants on all of their many options throughout their participation in the plan, not just at separation
• Allow Great West/BenefitsCorp to offer participants a competitive IRA product as we educate them on all of their
options
• Clearly explain the impact of a participant's decisions when taking a distribution
Result— Participant will be educated during their career on all of their retirement planning options and decisions not
just at retirement or separation from service.Great-West/BenefitsCorp will have an opportunity to develop and
expand relationship with participants,thus making up for some of the increased expenses.
Summary
In order for Great-West/BenefitsCorp and the plan sponsor to make the most of EGTRRA we must partner to:
1) Enhance the benefits of the plan
2) Engage employees to enroll and rollover existing retirement accounts into the plan
3) Encourage participants to save enough for retirement and
4) Empower participants to make the right decisions for their circumstances upon separation from service.
This will allow Great West/BenefitsCorp and the plan to offer competitive retirement plan benefits, retain participants,
keep expenses down and provide participants with the opportunity to achieve their retirement goals.
5
BENEFITSCORP, INC.
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
FOR GOVERNMENTAL EMPLOYERS
11/15/01 Model 457 Plan Document for Governmental Employers
INTRODUCTION TO BENEFITSCORP, INC.
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
FOR GOVERNMENTAL EMPLOYERS
The attached Plan maybe used by eligible governmental employers as a model in preparing
deferred compensation plans intended to satisfy § 457 of the Internal Revenue Code of 1986, as
amended. In general, under a § 457 plan, which is also referred to as an"eligible deferred
compensation plan," a participant may defer amounts of compensation(and income earned on those
deferrals) and avoid federal income taxation until those amounts are paid to the participant.
The following types of governmental entities may establish eligible § 457 plans:
1. The 50 states of the United States and the District of Columbia;
2. A political subdivision of a state(for example a county or municipality); and
3. Any agency or instrumentality of a state or a political subdivision of a state.
This Plan contains provisions that may be included in an eligible deferred compensation plan.
It was prepared for your convenience. You should review and, where appropriate, modify the
provisions to meet your particular needs. You should also refer to any applicable state or local laws,
including tax laws and rules for governmental employee benefit plans (if applicable), in the design of
your plan.
In designing your plan, you should take into account the investment options to be used and the
terms of any Trust or custodial agreements entered into with respect to the Plan. You should also
ascertain the federal income tax reporting and withholding obligations,FICA and FUTA obligations
(to the extent applicable), and any comparable state obligations with respect to your plan. Generally,
deferred amounts under a § 457 plan are not reported as income, and federal income tax is not
withheld, until the amounts are paid to the participant. Deferred amounts generally are included in
the FICA and FUTA wage base when deferred.
This Plan is not intended to provide you with legal advice, nor should it be implemented
without regard to your particular needs or any applicable laws of your state. No state or federal
government has passed on the legal sufficiency(including the conformity with § 457) of this Plan.
Neither BenefitsCorp, Inc., nor any of its affiliated companies assumes any liability to any person or
entity with respect to the adequacy of this document for any purpose, or with respect to any tax or
legal ramifications arising from its use. BenefitsCorp, Inc., is not a party to any plan which you may
adopt and BenefitsCorp, Inc., has no responsibility, accountability, or liability to you, any employer,
any participant or any beneficiary with regard to the operation or adequacy of this Plan, any § 457
plan prepared from this Plan, or any future amendments made to this Plan. You should consult with
your legal counsel prior to adopting any plan.
11/15/01 Model 457 Plan Document for Governmental Employers
TABLE OF CONTENTS
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
Pace
Introduction
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
I.INTRODUCTION 1
II.DEFINITIONS 1
2.01 "Administrator"or"Plan Administrator" 1
2.02 "Age 50 or Older Catch-up" 1
2.03 "Beneficiary" 1
2.04 "Code" 1
2.05 "Compensation" 1
2.06 "Custodial Account" 1
2.07 "Custodian" 1
2.08 "Deferred Compensation" 1
2.09 "Employee" 2
2.10 "Employer" 2
2.11 "Includible Compensation" 2
2.12 "Limited Catch-up" 2
2.13 "Normal Retirement Age" 2
2.14 "Participant" 2
2.15 "Participation Agreement" 2
2.16 "Plan Year" 2
2.17 "Qualified Domestic Relations Order" or"QDRO" 2
2.18 "Severance from Employment" 2
2.19 "Total Amount Deferred" 3
2.20 "Trust" 3
2.21 "Trustee" 3
2.22 "Unforeseeable Emergency" 3
III.ADMINISTRATION 3
3.01 Administrator 3
3.02 Appointment and Termination of Administrator 3
3.03 Duties of Plan Administrator 4
3.04 Administrative Fees and Expenses 4
3.05 Actions of Administrator 5
3.06 Delegation 5
3.07 Investment and Service Providers 5
IV.PARTICIPATION IN THE PLAN 5
4.01 Enrollment in the Plan 5
4.02 Deferral Limitations 6
4.03 Limited Catch-up 6
4.04 Age 50 or Older Catch-up 7
4.05 Employer Modification of Deferral 7
4.06 Participant Modification of Deferral 8
4.07 Revocation 8
4.08 Re-Enrollment 8
4.09 Transfers and Rollovers Into the Plan 8
4.10 Multiple Plans 9
11/15/01 Model 457 Plan Document
for Governmental Employers
TABLE OF CONTENTS (Continued)
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
Page
4.11 Qualified Military Service 9
V.CREATION OF TRUST AND TRUST FUND 9
5.01 Custody of Plan Assets 9
5.02 Establishment of Trust 10
5.03 Appointment and Termination of Trustee 11
5.04 Acceptance 11
5.05 Control of Plan Assets 11
5.06 General Duties of the Trustee 11
5.07 Investment Powers of the Trustee 12
5.08 Trustee Fees and Expenses 13
5.09 Exclusive Benefit Rules 13
5.10 Trustee Actions 13
5.11 Delegation 14
5.12 Division of Duties and Indemnification. 14
VI.INVESTMENTS 15
6.01 Investment Options 15
6.02 Participant Investment Direction 15
6.03 Employer Investment Direction 15
6.04 Participant Accounts 16
6.05 Distributions from the Trust 16
VII.DISTRIBUTIONS 16
7.01 Conditions for Distributions 16
7.02 Severance from Employment 17
7.03 In-Service Distributions and Transfers 17
7.04 Unforeseeable Emergencies 18
7.05 Death Benefits 19
7.06 Payment Options 20
7.07 Default Distribution Option 20
7.08 Limitations on Distribution Options 20
7.09 Transfers from the Plan 21
7.10 Taxation of Distributions 21
7.11 Eligible Rollover Distributions 21
7.12 Elections 22
7.13 Practices and Procedures 22
VIII. LEAVE OF ABSENCE 22
8.01 Paid Leave of Absence 22
8.02 Unpaid Leave of Absence 23
IX.PARTICIPANT LOANS 23
9.01 Authorization of Loans 23
9.02 Maximum Loan Amount 23
9.03 Repayment of Loan 23
9.04 Loan Terms and Conditions 23
X.AMENDMENT OR TERMINATION OF PLAN 25
10.01 Termination 25
10.02 Amendment 25
10.03 Copies of Amendments 25
XL TAX TREATMENT OF AMOUNTS CONTRIBUTED 25
XII.NON-ASSIGNABILITY 25
12.01 Non-Assignability 25
12.02 Qualified Domestic Relations Orders 26
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TABLE OF CONTENTS (Continued)
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
Page
XIII.DISCLAIMER 27
XIV.EMPLOYER PARTICIPATION 27
XV.INTERPRETATION 27
15.01 Governing Law 27
15.02 §457 27
15.03 Word Usage 27
15.04 Headings 27
15.05 Entire Agreement 28
11/15/01 Model 457 Plan Document iii
for Governmental Employers
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
I. INTRODUCTION
In accordance with the provisions of§ 457 of the Internal Revenue Code of 1986, as amended, the
Employer named in the BenefitsCorp, Inc. Adoption Agreement for Section 457 Eligible Deferred
Compensation Plan for Governmental Employers hereby establishes this Deferred Compensation
Plan, hereinafter referred to as the "Plan." Nothing contained in this Plan shall be deemed to
constitute an employment agreement between any Participant and Employer and nothing contained
herein shall be deemed to give a Participant any right to be retained in the employ of Employer.
II. DEFINITIONS
•
2.01 "Administrator"or"Plan Administrator"shall mean the person,persons or entity
appointed by the Employer to administer the Plan pursuant to section 3.02, if any, but shall not
include any company which issues policies, contracts, or investment media to the Plan in respect of a
Participant.
2.02 "Age 50 or Older Catch-up"shall mean the deferred amount described in section 4.04.
2.03 "Beneficiary"shall mean the persons or entities designated by a Participant pursuant to
section 4.01(c).
2.04 "Code"shall mean the Internal Revenue Code of 1986, as amended, or any future
United States internal revenue law. References herein to specific section numbers of the Code shall
be deemed to include Treasury regulations and Internal Revenue Service guidance thereunder and to
corresponding provisions of any future United States internal revenue law.
2.05 "Compensation"shall mean all payments made to an Employee by the Employer as
remuneration for services rendered, including salaries, fees and, to the extent permitted by Treasury
Regulations or other similar guidance, accrued vacation and sick leave pay.
2.06 "Custodial Account"shall mean the account established with a Custodian meeting the
provisions of Code § 401(f), if the Employer has elected to satisfy the trust requirement of Code §
457(g)by setting aside Plan assets in a custodial account.
2.07 "Custodian"shall mean the bank, trust company or other person authorized to hold the
assets of such a custodial account in accordance with regulations issued by the Secretary of the
Treasury pursuant to Code § 401(f)that is selected by the Employer to hold Plan assets if the
Employer has elected to use a custodial account pursuant to Code § 457(g) and § 401(f).
2.08 "Deferred Compensation"shall mean the amount of Compensation not yet earned
which the Participant and the Employer mutually agree shall be deferred.
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2.09 "Employee"shall mean those individuals specified in the Adoption Agreement.
2.10 "Employer"shall mean the sponsor of the Plan as named in the Adoption Agreement.
2.11 "Includible Compensation"shall mean, for purposes of the limitation set forth in
section 4.02, Compensation for services performed for the Employer as defined in Code § 457(e)(5).
2.12 "Limited Catch-up"shall mean the deferred amount described in section 4.03.
2.13 "Normal Retirement Age"shall mean age 70%2, unless the Participant has elected an
alternate Normal Retirement Age by written instrument delivered to the Administrator prior to
Severance From Employment. A Participant's Normal Retirement Age determines the period during
which a Participant may utilize the Limited Catch-up of section 4.03 of the Plan. Once a Participant
has to any extent utilized the Limited Catch-up of section 4.03 of the Plan, his Normal Retirement
Age may not be changed.
A Participant's alternate Normal Retirement Age may not be earlier than the earliest date the
Participant will become eligible to retire under the Employer's basic retirement plan without the
Employer's consent and to receive immediate retirement benefits without actuarial or similar
reduction because of early retirement, and may not be later than age 70% . If the Participant will not
become eligible to receive benefits under a basic retirement plan maintained by the Employer, the
Participant's alternate Normal Retirement Age may not be earlier than age 50 and may not be later
than age 70%. If a Participant continues to be employed by Employer after attaining age 70%2, not
having previously elected an alternate Normal Retirement Age, 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 severs employment with the Employer if the
Employer has no mandatory retirement age.
2.14 "Participant"shall mean any Employee who becomes a Participant pursuant to section
4.01. Except for purposes of Articles IV, VIII, and IX, "Participant" shall include former
Participants. The Administrator, if he or she is otherwise eligible, may participate in the Plan.
2.15 "Participation Agreement"shall mean the agreement entered into and filed by an
Employee with the Employer pursuant to section 4.01, in which the Employee elects to become a
Plan Participant.
2.16 "Plan Year"shall mean the calendar year.
2.17 "Qualified Domestic Relations Order" or"ODRO"shall have the meaning specified in
section 12.02.
2.18 "Severance from Employment"shall mean severance of the Participant's employment
with the Employer. A Participant shall be deemed to have severed his employment with the
Employer for purposes of this Plan when both parties consider the employment relationship to have
terminated and neither party anticipates any future employment of the Participant by the Employer.
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In the case of a Participant who is an independent contractor, Severance from Employment shall be
deemed to have occurred when the Participant's contract for services has completely expired and
terminated, there is no foreseeable possibility that the Employer shall renew the contract or enter into
a new contract for services to be performed by the Participant, and it is not anticipated that the
Participant shall become an Employee of the Employer.
2.19 "Total Amount Deferred"shall mean,with respect to each Participant, the sum of all
Compensation deferred under the Plan, plus income and minus loss thereon(including amounts
determined with reference to life insurance policies) and less the amount of any expenses or
distributions authorized by this Plan, calculated in accordance with section 6.04.
2.20 "Trust"shall mean the trust created under Article V of the Plan if the Employer or
certain employees are named as Trustee(s) in the Adoption Agreement. "Trust" shall mean a trust
created by a separate written agreement between the Employer and the Trustee if a bank or trust
company is named as Trustee in the Adoption Agreement. The Trust shall consist of all Plan assets
held by the Trustee named in the Adoption Agreement.
2.21 "Trustee"shall mean the Employer or such other person, persons or entity selected by
the Employer who agrees to act as Trustee hereunder if elected in the Adoption Agreement. This
term (except as used in Article V) also refers to the person holding the assets of any custodial account
or holding any annuity contract described in section 5.01.
2.22 "Unforeseeable Emergency"shall mean severe financial hardship to a Participant
resulting from a sudden and unexpected illness or accident of the Participant or of a dependent(as
defined in Code § 152(a)) of the Participant, loss of the Participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control
of the Participant as defined in Code § 457. Whether a hardship constitutes an Unforeseeable
Emergency under section 7.04 shall be determined in the sole discretion of the Administrator.
III. ADMINISTRATION
3.01 Administrator.The Employer shall be the Administrator unless another person or
persons is appointed by the Employer in the Adoption Agreement as set forth in section 3.02.
3.02 Appointment and Termination of Administrator.An Administrator may be named in
the Adoption Agreement by the Employer and may be a Participant. The Administrator shall remain
in office at the will of the Employer and may be removed from office at any time by the Employer,
with or without cause. Such removal shall be effective upon delivery of written notice to the
Administrator or at such later time as may be designated in such notice; provided that any such notice
of removal shall take effect no later than 60 days after the delivery thereof, unless such 60 day period
shall be waived. The Administrator may resign at any time upon giving written notice to the
Employer or at such later time as may be designated in the notice of resignation; provided that(a) any
such notice of resignation shall take effect no later than 60 days after the delivery thereof, unless such
60 day period shall be waived and (b) upon such resignation or removal the Employer shall have the
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power and the duty to designate and appoint a successor Administrator, and the actual appointment of
a successor Administrator is a condition that must be fulfilled before the resignation or removal of the
Administrator shall become effective. Upon appointment,the successor Administrator shall have all
the rights, powers,privileges, liabilities and duties of the predecessor Administrator. The
Administrator so resigned or removed shall take any and all action necessary to vest the rights,
powers,privileges, liabilities and duties of the Administrator in the successor.
3.03 Duties of Plan Administrator.Subject to any applicable laws and any approvals
required by the Employer, the Plan Administrator shall have full power and authority to adopt rules,
regulations and procedures for the administration of the Plan, and to interpret, alter, amend, or revoke
any rules, regulations or procedures so adopted. The Plan Administrator's duties shall include:
(a) appointing the Plan's attorney, accountant, actuary, custodian or any other party
needed to administer the Plan or the Plan assets;
(b) directing the Trustee with respect to payments from the Plan assets held in Trust;
(c) communicating with Employees regarding their participation and benefits under the
Plan, including the administration of all claims procedures;
(d) filing any returns and reports with the Internal Revenue Service or any other
governmental agency;
(e) reviewing and approving any financial reports, investment reviews, or other reports
prepared by any party appointed under paragraph(a);
(f) establishing a funding policy and investment objectives consistent with the purposes of
the Plan; and
(g) construing and resolving any question of Plan interpretation. The Plan
Administrator's interpretation of Plan provisions including eligibility and benefits
under the Plan is final.
3.04 Administrative Fees and Expenses.All reasonable costs, charges and expenses incurred
by the Plan Administrator in connection with the administration of the Plan(including fees for legal
services rendered to the Plan Administrator)may be paid by the Employer, but if not paid by the
Employer when due, shall be paid from Plan assets. Such reasonable compensation to the
Administrator as may be agreed upon from time to time between the Employer and Plan
Administrator may be paid by the Employer,but if not paid by the Employer when due shall be paid
from Plan assets. Notwithstanding the foregoing, no compensation other than reimbursement for
expenses shall be paid to a Plan Administrator who is the Employer or a full-time Employee of the
Employer. In the event any part of the assets in the Plan become subject to tax, all taxes incurred
shall be paid from the Plan assets unless the Plan Administrator advises the Trustee not to pay such
tax.
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for Governmental Employers
3.05 Actions of Administrator.Every action taken by the Plan Administrator shall be
presumed to be a fair and reasonable exercise of the authority vested in or the duties imposed upon
him,her, or it. The Plan Administrator shall be deemed to have exercised reasonable care, diligence
and prudence and to have acted impartially as to all persons interested, unless the contrary be proven
by affirmative evidence. The Plan Administrator shall not be liable for amounts of Compensation
deferred by Participants or for other amounts payable under the Plan.
3.06 Delegation.Subject to any applicable laws and any approvals required by the
Employer, the Plan Administrator may delegate any or all of his,her or its powers and duties
hereunder to another person,persons, or entity, and may pay reasonable compensation for such
services as an administrative expense of the Plan, to the extent such compensation is not otherwise
paid.
3.07 Investment and Service Providers.Any company which issues policies, contracts, or
investment media to the Employer or in respect of a Participant is not a party to this Plan and such
company shall have no responsibility, accountability, or liability to the Employer, the Administrator,
any Participant, or any Beneficiary with regard to the operation or adequacy of this Plan, including
any future amendments made thereto.
IV. PARTICIPATION IN THE PLAN
4.01 Enrollment in the Plan.
(a) An Employee may become a Participant by entering into a Participation Agreement.
Compensation will be deferred for any payroll period if a Participation Agreement
providing for such deferral is entered into by the Participant and approved by the
Administrator before the beginning of such payroll period. With respect to a new
Employee, Compensation shall be deferred for the payroll period during which a
Participant first becomes an Employee if a Participation Agreement providing for such
deferral is entered into by the Participant and approved by the Administrator before the
first day on which the Participant becomes an Employee. Any prior employee who
was a Participant in the Plan and is rehired by Employer may resume participation in
the Plan by entering into a Participation Agreement. Unless distributions from the
Plan have begun due to that prior Severance from Employment, however, any deferred
commencement date elected by such employee with respect to those prior Plan assets
shall be null and void.
In entering into the Participation Agreement, the Participant elects to participate in this
Plan and consents to the deferral by the Employer of the amount specified in the
Participation Agreement from the Participant's gross compensation for each payroll
period. Such deferral shall continue in effect until modified, disallowed or revoked in
accordance with the terms of this Plan, or until the Participant ceases employment with
the Employer. The Employer retains the right to establish minimum deferral amounts
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per payroll period and to limit the number and/or timing of enrollments into the Plan
in the Participation Agreement.
(b) Notwithstanding section 4.01(a), to the extent permitted by applicable law, the
Administrator may establish procedures whereby each Employee becomes a
Participant in the Plan and, as a term or condition of employment, elects to participate
in the Plan and consents to the deferral by the Employer of a specified amount for any
payroll period for which a Participation Agreement is not in effect. In the event such
procedures are in place, a Participant may elect to defer a different amount of
compensation per payroll period, including zero,by entering into a Participation
Agreement.
(c) Beneficiary. Each Participant may designate in the Participation Agreement or in any
other manner authorized by the Administrator a Beneficiary or Beneficiaries to receive
any amounts which may be distributed in the event of the death of the Participant prior
to the complete distribution of benefits. A Participant may change the designation of
Beneficiaries at any time by filing with the Administrator a written notice on a form
approved by the Administrator. If no such designation is in effect on the Participant's
death, or if the designated Beneficiary does not survive the Participant by 30 days, his
Beneficiary shall be his surviving spouse, if any, and then his estate.
4.02 Deferral Limitations.
(a) Except as provided in sections 4.03 and 4.04, the maximum that may be deferred
under the Plan for any taxable year of a Participant shall not exceed the lesser of
(1)the applicable dollar amount in effect for the year, as adjusted for the calendar year
in accordance with Code § 457(e)(15), or(2) 100% of the Participant's Includible
Compensation, each reduced by any amount specified in section 4.02(b) for that
taxable year.
(b) The deferral limitation shall be reduced by any amount excludable from the
Participant's gross income attributable to elective deferrals to another eligible deferred
compensation plan described in Code § 457(b).
4.03 Limited Catch-up.For one or more of the Participant's last three taxable years ending
before the taxable year in which Normal Retirement Age under the Plan is attained, the maximum
deferral shall be the lesser of:
(a) twice the applicable dollar limit in effect under Code § 457(e)(15), reduced by any
applicable amount specified in section 4.02(b) for that taxable year; or
(b) the sum of:
(1) the limitations established for purposes of section 4.02 of the Plan, for such
taxable year(determined without regard to this section 4.03), plus
(2) so much of the limitation established under section 4.02 of the Plan or
established in accordance with Code § 457(b)(2) and the regulations thereunder
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for Governmental Employers
under an eligible deferred compensation plan sponsored by an entity other than
the Employer and located in the same state for prior taxable years (beginning
after December 31, 1978 and during all or any portion of which the Participant
was eligible to participate in this Plan) as has not theretofore been used under
sections 4.02 or 4.03 hereof or under such other plan (taking into account the
limitations under and participation in other eligible deferred compensation
plans in accordance with the Code);provided, however, that this section 4.03
shall not apply with respect to any Participant who has previously utilized in
whole or in part the limited catch-up under this Plan or under any other eligible
deferred compensation plan(within the meaning of Code § 457).
4.04 Age 50 or Older Catch-up.A Participant who attains age 50 or older by the end of a
Plan Year and who does not utilize the Limited Catch-up for such Plan Year may make a deferral in
excess of the limitation specified in section 4.02, up to the amount specified in and subject to any
other requirements under Code § 414(v).
4.05 Employer Modification of Deferral.The Employer or Administrator shall have the right
to modify or disallow the periodic deferral of Compensation elected by the Participant:
(a) in excess of the limitations stated in sections 4.02, 4.03 and 4.04;
(b) in excess of the Participant's net Compensation for any payroll period;
(c) upon any change in the length of payroll period utilized by Employer. In such case the
periodic deferral shall be adjusted so that approximately the same percentage of pay
shall be deferred on an annual basis;
(d) in order to round periodic deferrals to the nearest whole dollar amount;
(e) to reduce the future deferrals in the event that the amount actually deferred for any
payroll period exceeds, for any reason whatsoever, the amount elected by the
Participant. In the alternative, such amount of excess deferral may be refunded to the
Participant. No adjustment in future deferrals shall be made if a periodic deferral is
missed or is less than the amount elected, for any reason whatsoever; or
(0 if the deferral elected for any payroll period is less than the minimum amount specified
in section 4.01(a);
And to the extent permitted by and in accordance with the Code, the Employer or Administrator may
distribute the amount of a Participant's deferral in excess of the distribution limitations stated in
sections 4.02, 4.03 and 4.04 notwithstanding the limitations of Article VII; provided, however, that
the Employer and the Administrator shall have no liability to any Participant or Beneficiary with
respect to the exercise of, or the failure to exercise, the authority provided in this section 4.05.
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for Governmental Employers
4.06 Participant Modification of Deferral.A Participant may modify the Participation
Agreement at the times and in the manner authorized by the Administrator with respect to
Compensation payable no earlier than the payroll period after such modification is entered into by the
Participant and accepted by the Administrator. Notwithstanding the above, if a negative election
procedure has been implemented pursuant to section 4.01(b), a Participant may enter into or modify a
Participation Agreement at any time to provide for no deferral.
4.07 Revocation.A Participant may at any time revoke the agreement to defer
Compensation by filing a request for revocation to the Administrator in a manner approved by the
Administrator. Such revocation will be effective for the payroll period following the Administrator's
receipt of the revocation or as soon as administratively feasible thereafter. However, the Total
Amount Deferred shall be distributed only as provided in Articles VI and VII and shall be subject to
the terms and provisions of the affected investment option. A Participant's request for a distribution
in the event of an Unforeseeable Emergency shall in addition be treated as a request for revocation of
deferrals as of a date determined by the Administrator for the period of time determined under section
7.04.
4.08 Re-Enrollment.A Participant who revokes the Participation Agreement as set forth in
section 4.07 above may again become a Participant at the times and in the manner authorized by the
Administrator, by entering into a new Participation Agreement to defer Compensation payable no
earlier than the payroll period after such new Participation Agreement is entered into entered into by
the Participant and accepted by the Administrator.
4.09 Transfers and Rollovers Into the Plan.
(a) Transfers to the Plan. If the Participant was formerly a Participant in an eligible
deferred compensation plan maintained by another employer, and if such plan permits
the direct transfer of the Participant's interest therein to the Plan,then the Plan shall
accept assets representing the value of such interest; provided, however, that the
Participant has separated from service with that prior employer and become an
Employee of Employer. Such amounts shall be held, accounted for, administered and
otherwise treated in the same manner as Compensation deferred by the Participant
under this Plan except that such amounts shall not be considered Compensation
deferred under the Plan in the taxable year of such transfer in determining the
maximum deferral under section 4.02. The Employer may require such documentation
from the predecessor plan as it deems necessary to confirm that such plan is an eligible
deferred compensation plan within the meaning of Code § 457, and to assure that
transfers are provided under such plan. The Employer may refuse to accept a transfer
in the form of assets other than cash, unless Employer and the Committee agree to hold
such other assets under the Plan.
(b) Rollovers to Plan. If so specified in the Adoption Agreement, the Plan shall accept a
rollover contribution on behalf of a Participant or Employee who may become a
Participant. A rollover contribution for purposes of this subsection is an eligible
rollover contribution(as defined in Code § 402(0(2)) from any (i)plan qualified under
Code §§ 401(a) or 403(a); (ii)tax-sheltered annuity or custodial account described in
11/15/01 Model 457 Plan Document 8
for Governmental Employers
Code § 403(b); (iii) individual retirement account or annuity described in Code § 408;
or(iv) eligible deferred compensation plan described in Code § 457(b)maintained by
an eligible employer described in Code § 457(e)(1)(A). Prior to accepting any rollover
contribution, the Administrator may require that the Participant or Employee establish
that the amount to be rolled over to the Plan is a valid rollover within the meaning of
the Code. A Participant's rollover contribution shall be held in a separate rollover
account or accounts, as the Administrator shall determine from time to time.
4.10 Multiple Plans.In the case of a Participant who participates in more than one deferred
compensation plan governed by Code § 457, the limitations set forth in sections 4.02, 4.03 and 4.04
shall, to the extent required under the Code, apply to all such plans considered together. For purposes
of sections 4.02, 4.03 and 4.04, Compensation deferred shall be taken into account at its value in the
Plan Year in which deferred.
4.11 Qualified Military Service.Notwithstanding any provision of this Plan to the contrary,
contributions and benefits with respect to qualified military service shall be provided in accordance
with Code § 414(u).
V. CREATION OF TRUST AND TRUST FUND
5.01 Custody of Plan Assets.All contributions under the Plan, all property and rights
purchased with such amounts, and all income attributable to such amounts,property or rights shall be
held for the exclusive benefit of Participants and their Beneficiaries. The trust requirement of Code §
457(g) shall be satisfied in the manner specified in the Adoption Agreement. Depending upon the
choices made in the Adoption Agreement, Plan assets shall be set aside as follows:
(a) If elected in Box C. 1 of the Adoption Agreement, Plan assets shall be set aside in trust
pursuant to this Article V with the Employer or certain employees of(or holders of
certain positions with) the Employer named as Trustee. The Trustee shall be named in
the Adoption Agreement and shall accept such appointment by executing same. All
contributions to the Plan shall be transferred to the Trust established under the Plan
within a period that is not longer than is reasonable for the proper administration of the
Accounts of Participants.
(b) If elected in Box C. 2 of the Adoption Agreement, Plan assets will be set aside in trust
pursuant to a separate written trust agreement entered into between the Employer and
the bank or trust company named as Trustee. The bank or trust company named in the
Adoption Agreement shall be the Trustee and shall accept such appointment by
executing the same. Any Trust under the Plan shall be established pursuant to a written
agreement that constitutes a valid trust under the law of the state where the Employer is
located. All contributions to the Plan shall be transferred to a Trust established under
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the Plan within a period that is not longer than is reasonable for the proper
administration of the Accounts of Participants.
(c) If elected in Box C. 3 of the Adoption Agreement, Plan assets shall be set aside in one
or more annuity contracts described in Code § 401(0. Notwithstanding any contrary
provision of the Plan, including any annuity contract issued under the Plan, in
accordance with Code § 457(g), all contributions to the Plan, all property and rights
purchased with such amounts, and all income attributable to such amounts, property, or
rights shall be held under one or more annuity contracts, as defined in Code § 401(g),
issued by an insurance company qualified to do business in the state where the contract
was issued, for the exclusive benefit of Participants and Beneficiaries under the Plan.
For this purpose, the term"annuity contract"does not include a life, health or accident,
property, casualty, or liability insurance contract. The owner of the annuity contract is
the "deemed trustee" of the assets invested under the contract for purposes of Code §
401(a). All contributions to the Plan shall be transferred to such annuity contract
within a period that is not longer than is reasonable for the proper administration of the
Accounts of Participants.
(d) If elected in Box C. 4 of the Adoption Agreement, Plan assets shall be set aside in one
or more custodial accounts described in Code § 401(0. The bank, trust company or
other person named in the Adoption Agreement shall be the Custodian and"deemed
trustee" for purposes of Code § 457(g) and shall accept such appointment by executing
the same. The Employer and Custodian shall enter into a separate written custody
agreement. For purposes of this paragraph, the Custodian of any custodial account
created pursuant to the Plan must be a bank, as described in Code § 408(n), or a person
who meets the non-bank Trustee requirements of paragraphs (2)-(6)of section 1.408-
2(e) of the Income Tax Regulations relating to the use of non-bank Trustees. All
contributions to the Plan shall be transferred to a custodial account described in Code §
401(0 within a period that is not longer than is reasonable for the proper administration
of the Accounts of Participants.
5.02 Establishment of Trust.If elected in Box C. 1 of the Adoption Agreement, the
Employer or named Employees of Employer(or certain holders of positions with the Employer) shall
serve as Trustee as evidenced by the Trustee's execution of the applicable page of the Adoption
Agreement. In that event, a Trust is hereby created to hold all of the assets of the Plan for the
exclusive benefit of Participants and Beneficiaries. The Trust shall consist of all contributions made
under the Plan and the investment earnings thereon. All contributions and the earnings thereon less
payments made under the terms of the Plan, including fees and expenses, shall constitute the Trust.
Except to the extent that the Employer enters into a separate written trust agreement with a bank or
trust company Trustee, the assets in Trust shall be administered as provided in this document.
If elected in Box C. 2 of the Adoption Agreement, the bank or trust company named in the Adoption
Agreement shall serve as Trustee as evidenced by the Trustee's execution of the applicable page of
the Adoption Agreement. In that event, a Trust shall be created to hold all of the assets of the Plan
for the exclusive benefit of Participants and Beneficiaries pursuant to a separate written trust
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for Governmental Employers
instrument between the Employer and the Trustee setting out the Trustee's duties, rights,
responsibilities, fees and expenses, the division of duties and indenmification; the provisions of this
Article V shall not apply. The Trust shall consist of all contributions made under the Plan which are
held by the Trustee.
5.03 Appointment and Termination of Trustee.A Trustee may be named by the Employer
and may be a Participant. The Trustee shall remain in office at the will of the Employer and may be
removed from office at any time by the Employer, with or without cause. Such removal shall be
effective upon delivery of written notice to the Trustee or at such later time as may be designated in
such notice; provided that any such notice of removal shall take effect no sooner than 30 days and no
later than 60 days after the delivery thereof, unless such 30 or 60 day period shall be waived. The
Trustee may resign at any time upon giving written notice to the Employer or at such later time as
may be designated in the notice of resignation; provided that(a) any such notice of resignation shall
take effect no sooner than 30 days and no later than 60 days after the delivery thereof, unless such 30
day or 60 day period shall be waived and(b)upon such resignation or removal the Employer shall
have the power and the duty to designate and appoint a successor Trustee, and the actual appointment
of a successor Trustee is a condition that must be fulfilled before the resignation or removal of the
Trustee shall become effective.
Upon appointment, the successor Trustee shall have all the rights, powers,privileges, liabilities and
duties of the predecessor Trustee. The Trustee so resigned or removed shall take any and all action
necessary to vest the rights, powers,privileges, liabilities and duties of the Administrator in his, her or
its successor.
5.04 Accevtance.By signing the Adoption Agreement the Trustee accepts the Trust created
under the Plan and agrees to perform the obligations imposed.
5.05 Control of Plan Assets.The assets of the Trust or evidence of ownership shall be held
by the Trustee, under the terms of the Plan and under either this Article V or under the separate
written trust agreement with a bank or trust company. If the assets represent amounts transferred
from a former plan, the Trustee shall not be responsible for the propriety of any investment under the
former plan.
5.06 General Duties of the Trustee.The Employer or named individuals in the employ of the
Employer named as Trustee(s) in the Adoption Agreement shall be responsible for the administration
of investments held in the Plan. The Trustee's duties shall include:
(a) receiving contributions under the terms of the Plan;
(b) making distributions from Plan assets held in Trust in accordance with written
instructions received from an authorized representative of the Employer;
(c) keeping accurate records reflecting its administration of the Trust assets and making
such records available to the Employer for review and audit. Within 90 days after
each Plan Year, and within 90 days after its removal or resignation, the Trustee shall
file with the Employer an accounting of its administration of the Trust assets during
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such year or from the end of the preceding Plan Year to the date of removal or
resignation. Such accounting shall include a statement of cash receipts and
disbursements since the date of its last accounting and shall contain an asset list
showing the fair market value of investments held in the Trust as of the end of the Plan
Year;
The value of marketable investments shall be determined using the most recent price
quoted on a national securities exchange or over the counter market. The value of
non-marketable investments shall be determined in the sole judgment of the Trustee
which determination shall be binding and conclusive. The value of investments in
securities or obligations of the Employer in which there is no market shall be
determined in the sole judgment of the Employer and the Trustee shall have no
responsibility with respect to the valuation of such assets. The Employer shall review
the Trustee's accounting and notify the Trustee in the event of its disapproval of the
report within 90 days, providing the Trustee with a written description of the items in
question. The Trustee shall have 60 days to provide the Employer with a written
explanation of the items in question; and
(d) employing such agents, attorneys or other professionals as the Trustee may deem
necessary or advisable in the performance of its duties.
The Trustee's duties shall be limited to those described above. The Employer shall be responsible for
any other administrative duties required under the Plan or by applicable law.
5.07 Investment Powers of the Trustee.The Trustee shall implement an investment program
based on the Employer's investment objectives. If either the Employer or the Employee fails to issue
investment directions as provided in sections 6.01 and 6.02, the Trustee shall have authority to invest
the Trust assets in its sole discretion. In addition to powers given by law, the Trustee may:
(a) invest the Trust assets in any form of property, including common and preferred
stocks, exchange and trade put and call options,bonds, money market instruments,
mutual funds (including Trust assets for which the Trustee or its affiliates serve as
investment advisor), Treasury bills, deposits at reasonable rates of interest at banking
institutions including but not limited to savings accounts and certificates of deposit,
and other forms of securities or investment of any kind, class, or character whatsoever,
or in any other property, real or personal, having a ready market;
(b) invest and reinvest all or any part of the Trust assets in any insurance policies or other
contracts with insurance companies including but not limited to individual or group
annuity, deposit administration, and guaranteed interest contracts. Such contracts shall
be held in the name of the Trustee;
(c) transfer any assets of the Trust to any group or common, collective or commingled
fund that is maintained by a bank or other institution that is established to permit the
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pooling of Trust assets of separate Trusts so long as such Trust assets are available to
§ 457 plans;
(d) hold cash uninvested and deposit same with any banking or savings institution at
reasonable interest;
(e) join in or oppose the reorganization, recapitalization, consolidation, sale or merger of
corporations or properties, including those in which it is interested as a Trustee, upon
such terms as it deems wise;
(f) hold investments in nominee or bearer form;
(g) to vote or refrain from voting any stocks, bonds, or other securities held in the Trust, to
exercise any other right appurtenant to any securities or other property held in the
Trust, to vote or refrain from voting proxies;
(h) exercise all ownership rights with respect to assets held in the Trust; and
(i) do any and all other acts that may be deemed necessary in the performance of the
Trustee's duties hereunder.
5.08 Trustee Fees and Expenses.A11 reasonable costs, charges and expenses incurred by the
Trustee in connection with the administration of the Trust assets (including fees for legal services
rendered to the Trustee) may be paid by the Employer,but if not paid by the Employer when due,
shall be paid from the Trust. Such reasonable compensation to a bank or trust company Trustee as
may be agreed upon from time to time between the Employer and the Trustee may be paid by the
Employer, but if not paid by the Employer when due shall be paid by the Trust. The Trustee shall
have the right to liquidate Trust assets to cover its fees. Notwithstanding the foregoing, no
compensation other than reimbursement for expenses shall be paid to a Trustee who is the Employer
or a full-time Employee of the Employer. In the event any part of the Trust assets become subject to
tax, all taxes incurred shall be paid from the Trust unless the Plan Administrator advises the Trustee
not to pay such tax.
5.09 Exclusive Benefit Rules.No part of the Trust assets shall be used for, or diverted to,
purposes other than for the exclusive benefit of Participants, former Participants with a interest in the
Plan, and the Beneficiary or Beneficiaries of a deceased Participant having an interest in the Trust
assets at the death of the Participant.
5.10 Trustee Actions.Every action taken by the Trustee shall be presumed to be a fair and
reasonable exercise of the authority vested in or the duties imposed upon him,her, or it. The Trustee
shall be deemed to have exercised reasonable care, diligence and prudence and to have acted
impartially as to all persons interested, unless the contrary be proven by affirmative evidence. The
Trustee shall not be liable for amounts of Compensation deferred by Participants or for other amounts
payable under the Plan.
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5.11 Delegation.Subject to any applicable laws and any approvals required by the
Employer, the Trustee may delegate any or all powers and duties hereunder to another person,
persons, or entity, and may pay reasonable compensation for such services as an administrative
expense of the Plan, to the extent such compensation is not otherwise paid.
5.12 Division of Duties and Indemnification.
(a) The Trustee shall have the authority and discretion to manage and govern the Trust
assets to the extent provided in this instrument,but does not guarantee the Trust in any
manner against investment loss or depreciation in asset value, or guarantee the
adequacy of the Trust assets to meet and discharge all or any liabilities of the Plan.
(b) The Trustee shall not be liable for the making, retention or sale of any investment or
reinvestment made by it, as herein provided, or for any loss to, or diminution of the
Trust assets or for any other loss or damage which may result from the discharge of its
duties hereunder except to the extent it is judicially determined that the Trustee has
failed to exercise the care, skill,prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character with like aims.
(c) The Employer warrants that all directions issued to the Trustee by it or the Plan
Administrator shall be in accordance with the terms of the Plan and not contrary to the
provisions of the Code.
(d) The Trustee shall not be answerable for any action taken pursuant to any direction,
consent, certificate, or other paper or document on the belief that the same is genuine
and signed by the proper person. All directions by the Employer or the Plan
Administrator shall be in writing from the authorized individual or individuals named
in the Adoption Agreement.
(e) The duties and obligations of the Trustee shall be limited to those expressly imposed
upon it by this instrument or subsequently agreed upon by the parties. Responsibility
for administrative duties required under the Plan or applicable law not expressly
imposed upon or agreed to by the Trustee shall rest solely with the Employer.
(f) The Trustee shall be indemnified and held harmless by the Employer from and against
any and all liability to which the Trustee may be subjected, including all expenses
reasonably incurred in its defense, for any action or failure to act resulting from
compliance with the instructions of the Employer, the employees or agents of the
Employer, the Plan Administrator, or any other fiduciary to the Plan, and for any
liability arising from the actions or inactions of any predecessor Trustee, custodian or
other fiduciaries of the Plan.
(g) The Trustee shall not be responsible in any way for the application of any payments it
is directed to make or for the adequacy of the Trust assets to meet and discharge any
and all liabilities under the Plan.
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for Governmental Employers
VI. INVESTMENTS
6.01 Investment Options.The Employer have the sole discretion to select one or more
investment options from which Participants may instruct the Trustee as to the investment of their
Account balances. These investment options may include specified life insurance policies, annuity
contracts, or investment media issued by an insurance company. It shall be the sole responsibility of
the Employer to ensure that all investment options offered under the Plan are appropriate and in
compliance with any and all state laws pertaining to such investments.
6.02 Participant Investment Direction.If the Employer chooses to designate one or more
investment options in which Participants may direct investment of their Account, Participants shall
have the option to direct the investment of their Account from among the investment options
designated by the Employer. Such investment options shall be under the full control of the Trustee.
A Participant's right to direct the investment of Account balances shall apply only to making
selections among the options made available under the Plan and only to the extent specified by the
Employer pursuant to uniform rules.
(a) Each Participant shall designate on the form prescribed by the Administrator the one
or more investment options in which he or she wishes to have his Account invested
and may change such investment directions in accordance with and at the time or times
specified under uniform rules established by the Administrator. The Participant's
Account shall be debited or credited as appropriate to reflect all gains or losses on such
investments.
(b) Neither the Employer,the Administrator, the Trustee nor any other person shall be
liable for any loss incurred by virtue of following the Participant's directions or by
reason of any reasonable administrative delay in implementing such directions.
(c) The Employer may from time to time change the investment options made available
under the Plan pursuant to uniform rules established by the Administrator. If the
Employer eliminates an investment option, all Participants who had chosen that
investment option shall select another option. If no new option is selected by the
Participant, money remaining in the eliminated investment option shall be reinvested
at the direction of the Employer. The Participants shall have no right to require the
Employer to select or retain any investment option. Any change with respect to
investment options made by the Employer or a Participant, however, shall be subject
to the terms and conditions (including any rules or procedural requirements) of the
affected investment options.
6.03 Employer Investment Direction.
(a) To the extent the Employer chooses not to allow Participant direction of the investment
of his or her Account, the Employer shall have the right to direct the Trustee with
respect to investments of the Trust assets, may appoint an investment manager to direct
investments or may give the Trustee sole investment management responsibility. Any
investment directive shall be made in writing by the Employer or investment manager.
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Such instructions regarding the delegation of investment responsibility shall remain in
force until revoked or amended in writing. The Trustee shall not be responsible for the
propriety of any investment made at the direction of the Employer or an investment
manager and shall not be required to consult with or advise the Employer regarding the
investment quality of any directed investment held hereunder. In the absence of such
written directive, the Trustee shall automatically invest the available cash in its
discretion in an appropriate interim investment until specific investment directions are
received.
(b) If the Employer fails to direct the investment of Trust assets or name an investment
manager, the Trustee shall have full investment authority.
6.04 Participant Accounts.The Administrator shall maintain or cause to be maintained one
or more individual accounts for each Participant. Such accounts shall include separate accounts, as
necessary, for Code § 457 Deferred Compensation, Code § 457 rollovers, IRA rollovers, other
qualified plan and Code § 403(b)plan rollovers, and such other accounts as may be appropriate from
time-to-time for plan administration. At regular intervals established by the Administrator, each
Participant's account(s) shall be credited with the amount of any Deferred Compensation paid into the
Trust; debited with any applicable administrative or investment expense, including,but not limited to,
fees charged to Participants, allocated on a reasonable and consistent basis; credited or debited with
investment gain or loss, as appropriate; and debited with the amount of any distribution. At least
once a year each Participant shall be notified in writing of his Total Amount Deferred.
•
6.05 Distributions from the Trust.The payment of benefits from the Trust in accordance
with the terms of the Plan may be made by the Trustee, or by any custodian or other person so
authorized by the Employer to make such distribution. Neither the Plan Administrator, the Trustee
nor any other person shall be liable with respect to any distribution from the Trust made at the
direction of the Employer or a person authorized by the Employer to give disbursement direction.
VII. DISTRIBUTIONS
7.01 Conditions for Distributions.(a) § 457 Deferred Compensation. Payments from a
Participant's § 457 Deferred Compensation account to the Participant or Beneficiary
shall not be made earlier than:
(1) the Participant's Severance from Employment or death;
(2) the Participant's account meets all of the requirements for an in-service de
minimis distribution pursuant to section 7.03;
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(3) the Participant incurs an approved Unforeseeable Emergency pursuant to
section 7.04;
(4) the Participant transfers an amount to a defined benefit governmental plan
pursuant to section 7.03(c); or
(5) The calendar year in which the Participant attains age 70 1/2.
(b) Rollovers. Payments from a Participant's rollover account(s)may be made at any
time.
7.02 Severance from Employment. (a) Subject to section 7.02(b), distributions to a
Participant shall commence following his or her Severance from Employment, on the
regular distribution commencement date (as the Employer or Administrator may
establish from time-to-time) elected by the Participant, in a form and manner
determined pursuant to sections 7.06, 7.07 and 7.08.
(b) Upon notice to Participants, and subject to sections 7.08(b), 7.10(b) and 7.11, the
Administrator may establish procedures under which a Participant whose total § 457
Deferred Compensation account balance is less than an amount specified by the
Administrator(not in excess of$5,000 or other applicable limit under the Code)will
receive a lump sum distribution on the first regular distribution commencement date
(as the Employer or Administrator may establish from time-to-time) following the
Participant's Severance from Employment, notwithstanding any election made by the
Participant pursuant to section 7.02(a).
7.03 In-Service Distributions and Transfers.
(a) Voluntary In-Service Distribution of De Minimis Accounts. A Participant who is an
active Employee shall receive a distribution of the total amount payable to the
Participant under the Plan if the following requirements are met:
(1) the portion of the total amount payable to the Participant under the Plan does
not exceed an amount specified from time to time by the Administrator(not in
excess of$5,000 or other applicable limit under the Code);
(2) the Participant has not previously received an in-service distribution of the total
amount payable to the Participant under the Plan;
(3) no amount has been deferred under the Plan with respect to the Participant
during the two-year period ending on the date of the in-service distribution; and
(4) the Participant elects to receive the distribution.
(b) Involuntary In-Service Distribution of De Minimis Accounts.
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Upon notice to Participants, and subject to section 7.11, the Administrator may
establish procedures under which the Plan shall distribute the total amount payable
under the Plan to a Participant who is an active Employee if the following
requirements are met:
(1) the portion of the total amount payable to the Participant under the Plan does
not exceed an amount specified from time to time by the Administrator(not in
excess of$5,000 or other applicable limit under the Code);
(2) the Participant has not previously received an in-service distribution of the total
amount payable to the Participant under the Plan; and
(3) no amount has been deferred under the Plan with respect to the Participant
during the two-year period ending on the date of the in-service distribution.
(c) Transfer for Purchase of Defined Benefit Plan Service Credit.
If a Participant is also a Participant in a defined benefit governmental plan(as defined
in Code § 414(d)), such Participant may request the Plan Administrator to transfer
amounts from his or her account for(i) the purchase of permissive service credit(as
defined in Code § 415(n)(3)(A))under such plan, or(ii) a repayment to which Code
§ 415 does not apply by reason of Code § 415(k)(3). Such transfer requests shall be
granted in the sole discretion of the Plan Administrator, and if granted, shall be made
directly to the defined benefit governmental plan.
7.04 Unforeseeable Emergencies.If the Plan Administrator has determined that a Participant
has incurred a genuine Unforeseeable Emergency and that no other resources of financial relief are
available, the Plan Administrator may grant, in its sole discretion, a Participant's request for a
payment from the Participant's § 457 Deferred Compensation account. Any payment made under this
provision shall be in a lump sum.
(a) The Plan Administrator shall have the right to request and review all pertinent
information necessary to assure that hardship withdrawal requests are consistent with
the provisions of Code § 457.
(b) In no event, however, shall an Unforeseeable Emergency distribution be made if such
hardship may be relieved:
(1) through reimbursement or compensation by insurance or otherwise;
(2) by liquidation of the Participant's assets, to the extent the liquidation of the
Participant's assets would not itself cause a severe financial hardship; or
(3) by cessation of deferrals under this Plan; or
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(4) if allowed,by taking out a loan under this Plan, provided that the repayment of
such loan does not itself cause financial hardship
(c) The amount of any financial hardship benefit shall not exceed the lesser of:
(1) the amount reasonably necessary, as determined by the Plan Administrator, to
satisfy the hardship; or
(2) the amount of the Participant's account.
(d) The Employer or Administrator may suspend the Participant's salary deferral election
during the pendency of the Participant's request for a financial hardship distribution.
Payment of a financial hardship distribution shall result in mandatory suspension of
deferrals for a minimum of six (6)months from the date of payment(or such other
period as mandated in Treasury Regulations).
(e) Except to the extent authorized in Treasury Regulations the following events are not
considered unforeseeable emergencies under the Plan:
(1) enrollment of a child in college;
(2) purchase of a house;
(3) purchase or repair of an automobile;
(4) repayment of loans;
(5) payment of income taxes,back taxes, or fines associated with back taxes;
(6) unpaid expenses including rent, utility bills, mortgage payments, or medical
bills;
(7) marital separation or divorce; or
(8) bankruptcy except when resulting directly and solely from illness or casualty
loss.
7.05 Death Benefits.
(a) Upon the Participant's death, the Participant's remaining account balance(s) will be
distributed to the Beneficiary commencing after the Administrator receives satisfactory
proof of the Participant's death(or on the first regular distribution commencement
date thereafter as the Employer or Administrator may establish from time-to-time),
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unless prior to such date the Beneficiary elects a deferred commencement date, in a
form and manner determined pursuant to sections 7.06, 7.07 and 7.08.
(b) If there are two or more Beneficiaries, the provisions of this section and section 7.08
shall be applied to each Beneficiary separately with respect to each Beneficiary's share
in the Participant's account.
(c) If the Beneficiary dies after beginning to receive benefits but before the entire account
balance has been distributed, the remaining account balance shall be paid to the estate
of the Beneficiary in a lump sum.
(d) Under no circumstances shall the Employer or the Plan be liable to the Beneficiary for
the amount of any payment made in the name of the Participant before the
Administrator receives satisfactory proof of the Participant's death.
7.06 Payment Options.A payee's election of a payment option must be made at least thirty
(30) days prior to the date that the payment of benefits is to commence. If a timely election of a
payment option is not made, benefits shall be paid in accordance with section 7.07. Subject to
applicable law and the other provisions of this Plan, distributions may be made in accordance with
one of the following payment options.
(a) A single lump-sum payment;
(b) Installment payments for a period of years (payable on a monthly, quarterly, semi-
annual, or annual basis)which extends no longer than the life expectancy of the
Participant or Beneficiary as permitted under Code § 401(a)(9);
(c) Partial lump-sum payment of a designated amount, with the balance payable in
installment payments for a period of years, as described in subsection(b);
(d) Annuity payments (payable on a monthly, quarterly, or annual basis) for the lifetime of
the Participant or for the lifetimes of the Participant and Beneficiary in compliance
with Code § 401(a)(9); or
(e) Such other forms of installment payments as may be approved by the Employer
consistent with the requirements of Code § 401(a)(9).
7.07 Default Distribution Option.In the absence of an effective election by the Participant,
Beneficiary or other payee, as applicable, as to the commencement and/or form of benefits,
distributions shall be made in accordance with the applicable requirements of Code §§ 401(a)(9) and
457(d), and proposed or final Treasury Regulations thereunder.
7.08 Limitations on Distribution Options.Notwithstanding any other provision of this
Article VII, Plan distributions shall satisfy the requirements of this section 7.08.
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for Governmental Employers
(a) No distribution option may be selected by a payee under this Article VII unless it
satisfies the applicable requirements of Code §§ 401(a)(9) and 457(d), and proposed or
final Treasury Regulations thereunder.
(b) For mandatory distributions, if any,made on or after the effective date of and subject
to final Treasury Regulations under Code § 401(a)(31), payment of an account balance
that exceeds $1,000 but is less than $5,000 (or other applicable limit under the Code)
and for which the Participant has not made an election to receive in cash or to rollover
to a qualified retirement plan shall, to the extent required by and in accordance with
such regulations,be rolled over to an account set up for the benefit of the Participant
with the IRA provider designated from time-to-time by the Employer or
Administrator.
(c) The terms of this Article shall be construed in accordance with all applicable Code
sections.
7.09 Transfers from the Plan.
If a Participant separates from service prior to his or her required beginning date, and becomes
a Participant in an eligible deferred compensation plan of another governmental employer, and
provided that payments under this Plan have not begun, such Participant may request a transfer of his
or her account to the eligible deferred compensation plan of the other governmental employer.
Requests for transfers must be made to the Plan Administrator and shall be granted in the sole
discretion of the Plan Administrator. If an amount is to be transferred pursuant to this provision, the
Plan Administrator shall transfer such amount directly to the eligible deferred compensation plan of
the other employer. Amounts transferred to another eligible deferred compensation plan shall be
treated as distributed from this Plan and this Plan shall have no further responsibility to the
Participant or any Beneficiary with respect to the amount transferred.
7.10 Taxation of Distributions.To the extent required by law, income and other taxes shall
be withheld from each benefit payment and payments shall be reported to the appropriate
governmental agency or agencies.
7.11 Eligible Rollover Distributions. (a) General. 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
Employer, to have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
(b) Definitions. For purposes of this section, the following definitions shall apply.
(1) 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: any distribution
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for Governmental Employers
that is one of a series of substantially equal periodic 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 period of ten years or
more; any distribution to the extent such distribution is required under Code §
401(a)(9); any distribution that is a deemed distribution under the provisions of
Code § 72(p); the portion of any distribution that is not includable in gross
income; and any hardship distribution or distribution on account of
unforeseeable emergency.
(2) Eligible Retirement Plan. An eligible retirement plan is an individual
retirement account described in Code § 408(a), an individual retirement
annuity described in Code § 408(b), an annuity plan described in Code § 403(a)
that accepts the distributee's eligible rollover distribution, a qualified trust
described in Code § 401(a) (including § 401(k))that accepts the distributee's
eligible rollover distribution, a tax-sheltered annuity described in Code §
403(b) that accepts the distributee's eligible rollover distribution, or another
eligible deferred compensation plan described in Code § 457(b) that accepts
the distributee's eligible rollover distribution.
(3) Distributee. A distributee includes an Employee or former Employee, 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 § 414(p), are
distributees with regard to the interest of the spouse or former spouse.
(4) Direct Rollover. A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
7.12 Elections.Elections under this Article shall be made in such form and manner as the
Plan Administrator may specify from time to time. To the extent permitted by and in accordance with
the Code, any irrevocable elections as to the form or timing of distributions executed prior to
January 1, 2002, are hereby revoked.
7.13 Practices and Procedures.The Employer may adopt practices and procedures applicable
to existing and new distribution elections.
VIII. LEAVE OF ABSENCE
8.01 Paid Leave of Absence.If a Participant is on an approved leave of absence from the
Employer with Compensation, or on approved leave of absence without Compensation that does not
constitute a Severance from Employment, which under the Employer's current practices is generally a
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for Governmental Employers
leave of absence without Compensation for a period of one year or less, said Participant's
participation in the Plan may continue.
8.02 Unpaid Leave of Absence.If a Participant is on an approved leave of absence without
Compensation and such leave of absence continues to such an extent that it becomes a Severance
from Employment, said Participant shall have separated from service with the Employer for purposes
of this Plan. Upon termination of leave without pay and return to active status, the Participant may
enter into a new Participation Agreement to be effective when permitted by section 4.01.
IX. PARTICIPANT LOANS
9.01 Authorization of Loans.If so specified in the Adoption Agreement, the Administrator
may direct the Trustee to make loans to Participants on or after the effective date of Treasury
Regulations or other guidance under Code § 457 and to the extent allowable under and in accordance
with Code § 457. Such loans shall be made on the application of the Participant in a form approved
by the Administrator and on such terms and conditions as are set forth in this Article, provided,
however, that the Administrator may adopt regulations, rules or procedures specifying different loan
terms and conditions if necessary or desirable to comply with or conform to such Treasury
Regulations or other guidance and other applicable law.
9.02 Maximum Loan Amount.In no event shall any loan made to a Participant be in an
amount which shall cause the outstanding aggregate balance of all loans made to such Participant
under this Plan exceed the lesser of:
(a) $50,000, reduced by the excess (if any) of: (i)the highest outstanding balance of loans
from the Plan to the Participant during the one-year period ending on the day before
the date on which the loan is made; over(ii)the outstanding balance of loans from the
Plan to the Participant or the Beneficiary on the date on which the loan is made; or
(b) One-half of the Participant's Total Amount Deferred.
9.03 Repayment of Loan.Each loan shall mature and be payable, in full and with interest,
within five(5)years from the date such loan is made, unless
(a) The loan is used to acquire any dwelling unit that within a reasonable time (determined
at the time the loan is made)will be used as the principal residence of the Participant;
or
(b) Loan repayments are, at the Employer's election, suspended as permitted by Code §
414(u)(4) (with respect to qualified military service).
9.04 Loan Terms and Conditions.In addition to such rules and regulations as the
Administrator may adopt, which rules are hereby incorporated into this Plan by reference, all loans to
Participants shall comply with the following terms and conditions:
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(a) Loans shall be available to all Participants on a reasonably equivalent basis.
(b) Loans shall bear interest at a reasonable rate to be fixed by the Administrator based on
interest rates currently being charged by commercial lenders for similar loans. The
Administrator shall not discriminate among Participants in the matter of interest rates,
but loans granted at different times may bear different interest rates based on
prevailing rates at the time.
(c) Each loan shall be made against collateral, including the assignment of no more than
one-half of the present value of the Participant's Total Amount Deferred as security for
the aggregate amount of all loans made to such Participant, supported by the
Participant's collateral promissory note for the amount of the loan, including interest.
(d) Loan repayments must be made by payroll deduction. In all events,payments of
principal and interest must be made at least quarterly and such payments shall be
sufficient to amortize the principal and interest payable pursuant to the loan on a
substantially level basis.
(e) A loan to a Participant or Beneficiary shall be considered a directed investment option
for such Participant's account balance.
(f) No distribution shall be made to any Participant, or to a Beneficiary of any such
Participant, unless and until all unpaid loans, including accrued interest thereon, have
been satisfied. If a Participant terminates employment with the Employer for any
reason, the outstanding balance of all loans made to him shall become fully payable
and, if not paid within thirty days, any unpaid balance shall be deducted from any
benefit payable to the Participant or his Beneficiary. In the event of default in
repayment of a loan or the bankruptcy of a Participant who has received a loan, the
note will become immediately due and payable, foreclosure on the note and attachment
of security will occur, the amount of the outstanding balance of the loan will be treated
as a distribution to the Participant, and the defaulting Participant's Accumulated
Deferrals shall be reduced by the amount of the outstanding balance of the loan(or so
much thereof as may be treated as a distribution without violating Code requirements).
(g) The loan program under the Plan shall be administered by the Administrator in a
uniform and nondiscriminatory manner. The Administrator shall establish procedures
for loans, including procedures for applying for loans, guidelines governing the basis
on which loans shall be approved, procedures for determining the appropriate interest
rate, the types of collateral which shall be accepted as security, any limitations on the
types and amount of loans offered, loan fees and the events which shall constitute
default and actions to be taken to collect loans in default.
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for Governmental Employers
X. AMENDMENT OR TERMINATION OF PLAN
10.01 Termination.The Employer may at any time terminate this Plan; provided, however,
that no termination shall affect the amount of benefits,which at the time of such termination shall
have accrued for Participants or Beneficiaries. Such accrued benefit shall include any Compensation
deferred before the time of the termination and income thereon accrued to the date of the termination.
Such amount shall be calculated in accordance with section 6.02(b) and the terms and conditions of
the affected investment option. Upon such termination, each Participant in the Plan shall be deemed
to have revoked his agreement to defer future Compensation as provided in section 4.06 as of the date
of such termination and section 4.01(b) shall no longer be in effect. Each Participant's full
Compensation on a nondeferred basis shall be restored.
10.02 Amendment.The Employer may also amend the provisions of this Plan at any time;
provided,however, that no amendment shall affect the amount of benefits which at the time of such
amendment shall have accrued for Participants or Beneficiaries, to the extent of and Compensation
deferred before the time of the amendment and income thereon accrued to the date of the amendment,
calculated in accordance with section 6.03 and the terms and conditions of the investment options
hereunder; and provided further, that no amendment shall affect the duties and responsibilities of the
Trustee unless executed by the Trustee.
To the extent permitted by applicable law, the Employer delegates to the Administrator the authority
to adopt rules, regulations or procedures from time to time as may be necessary or desirable to
conform Plan provisions to, or to elaborate Plan provisions in light of, technical amendments to the
Code, Treasury regulations or other guidance issued under the Code, and such rules, regulations or
procedures are hereby ratified by the Employer as having the force and effect of Plan amendments.
10.03 Copies of Amendments.The Administrator shall provide a copy of any Plan
amendment to any Trustee or custodian and to the issuers of any investment options selected pursuant
to section 6.01.
XI. TAX TREATMENT OF AMOUNTS CONTRIBUTED
It is intended that pursuant to Code § 457, the amount of Deferred Compensation shall not be
considered current compensation for purposes of federal income taxation. This rule shall also apply
to state income taxation unless applicable state laws provide otherwise. Such amounts shall,
however, be included as compensation to the extent required under the Federal Insurance
Contributions Act (FICA). Payments under this Plan shall supplement retirement and death benefits
payable under the Employer's group insurance and retirement plans, if any.
XII. NON-ASSIGNABILITY
12.01 Non-Assignability.It is agreed that neither the Participant, nor any Beneficiary,nor any
other designee shall have any right to commute, sell, assign, transfer, or otherwise convey the right to
11/15/01 Model 457 Plan Document 25
for Governmental Employers
receive any payments hereunder, which payments and right thereto are expressly declared to be
non-assignable and non-transferable; and in the event of attempt to assign or transfer, the Employer
shall have no further liability hereunder, nor shall any unpaid amounts be subject to attachment,
garnishment or execution, or be transferable by operation of law in event of bankruptcy, insolvency,
except to the extent otherwise required by law.
12.02 Qualified Domestic Relations Orders.If so specified in the Adoption Agreement,
domestic relations orders approved by the Plan Administrator shall be administered as follows.
(a) To the extent required under a final judgment, decree, or order meeting the
requirements of Code § 414(p), herein referred to as a Qualified Domestic Relations
Order("QDRO"), which is duly filed upon the Employer, any portion of a
Participant's account may be paid or set aside for payment to a spouse, former spouse,
or a child of the Participant. Where necessary to carry out the terms of such a QDRO,
a separate account shall be established with respect to the spouse, former spouse, or
child, and such person shall be entitled to make investment selections with respect
thereto in the same manner as the Participant. All costs and charges incurred in
carrying out the investment selection shall be deducted from the account created for
the spouse, former spouse, or child making the investment selection.
Any amounts so set aside for a spouse, former spouse or a child shall be paid out in a
lump sum at the earliest date that benefits may be paid to the Participant, unless the
QDRO directs a different form of payment or different payment date. Withholding
and income tax reporting shall be done with respect to the alternate payee under the
terms of the Code as amended from time to time.
(b) The Employer's liability to pay benefits to a Participant shall be reduced to the extent
that amounts have been paid or set aside for payment to a spouse, former spouse or
child pursuant to this section. No amount shall be paid or set aside unless the
Employer, or its agents or assigns, has been provided with satisfactory evidence
releasing them from any further claim by the Participant with respect to these amounts.
The Participant shall be deemed to have released the Employer from any claim with
respect to such amounts in any case in which the Employer has been notified of or
otherwise joined in a proceeding relating to a QDRO which sets aside a portion of the
Participant's account for a spouse, former spouse or child, and the Participant fails to
obtain an order of the court in the proceeding relieving the Employer from the
obligation to comply with the QDRO.
(c) The Employer shall not be obligated to comply with any judgment, decree or order
which attempts to require the Plan to violate any Plan provision or any provision of
Code § 457. Neither the Employer nor its agents or assigns shall be obligated to
defend against or set aside any judgment, decree, or order described herein or any legal
order relating to the division of a Participant's benefits under the Plan unless the full
expense of such legal action is borne by the Participant. In the event that the
Participant's action (or inaction)nonetheless causes the Employer, its agents or assigns
11/15/01 Model 457 Plan Document 26
for Governmental Employers
to incur such expense, the amount of the expense may be charged against the
Participant's account and thereby reduce Employer's obligation to pay benefits to the
Participant. In the course of any proceeding relating to divorce, separation, or child
support, the Employer, its agents and assigns shall be authorized to disclose
information relating to Participant's individual account to the Participant's spouse,
former spouse or child(including the legal representatives of the spouse, former
spouse or child), or to a court.
XIII. DISCLAIMER
The Employer and the Administrator make no endorsement, guarantee or any other representation and
shall not be liable to the Plan or to any Participant, Beneficiary, or any other person with respect to
(a)the financial soundness, investment performance, fitness, or suitability(for meeting a Participant's
objectives, future obligations under the Plan, or any other purpose) of any investment option offered
pursuant to section 6.01 or any investment vehicle in which amounts deferred under the Plan are
actually invested, or(b) the tax consequences of the Plan to any Participant, Beneficiary or any other
person.
XIV. EMPLOYER PARTICIPATION
Notwithstanding any other provisions of this Plan, the Employer may add to the amounts payable to
any Participant under the Plan additional Deferred Compensation for services to be rendered by the
Participant to the Employer during a payroll period, provided such additional Compensation deferred,
when added to all other Compensation deferred under the Plan, does not exceed the maximum
deferral permitted by Article IV.
XV. INTERPRETATION
15.01 Governing Law.This Plan shall be construed under the laws of the state in which the
Employer's headquarters is located.
15.02 § 457.This Plan is intended to be an eligible deferred compensation plan within the
meaning of Code § 457, and shall be interpreted so as to be consistent with such section and all
regulations promulgated thereunder.
15.03 Word Usage.Words used herein in the singular shall include the plural and the plural
the singular where applicable, and one gender shall include the other genders where appropriate.
15.04 Headings.The headings of articles, sections or other subdivisions hereof are included
solely for convenience of reference, and if there is any conflict between such headings and the text of
the Plan, the text shall control.
11/15/01 Model 457 Plan Document 27
for Governmental Employers
15.05 Entire Agreement.This Plan, the executed Adoption Agreement and any properly
adopted amendment thereof, shall constitute the total agreement or contract between the Employer
and the Participant regarding the Plan. No oral statement regarding the Plan may be relied upon by
the Participant. This Plan and any properly adopted amendment, shall be binding on the parties hereto
and their respective heirs, administrators, Trustees, successors, and assigns and on all designated
Beneficiaries of the Participant.
11/15/01 Model 457 Plan Document 28
for Governmental Employers
INSTRUCTIONS FOR COMPLETION OF 11-01 ADOPTION AGREEMENT
FOR
BENEFITSCORP, INC. MODEL SECTION 457 DEFERRED COMPENSATION
FOR GOVERNMENTAL EMPLOYERS
Your plan document consists of both the Plan Document and the Adoption Agreement. You
cannot have one without the other. The following EGTRRA provisions have been incorporated
into the plan document and therefore are not addressed on the Adoption Agreement:
1. Increased Elective Deferrals—section 4.02.
2. Increased 457 Catch-up—section 4.03.
3. Elimination of coordination with 401(k)and 403(b)contributions—section 4.02.
4. Age 50 Catch-up—section 4.04.
5. Flexible Distributions and the elimination of irrevocable elections—Article VII.
6. New required minimum distribution rules—Article VII.
7. Rollovers out of the plan to other eligible retirement plans, including IRAs — section
7.11.
8. In-service transfers to purchase service credits in a governmental DB plan — section
7.03(c).
9. The employer's ability to mandate in-service deminimis and cash-outs of small account
balances has been granted in the document, rather than being a choice in the Adoption
Agreement. See sections 7.02(b)and 7.03(b).
10. Other changes as required to satisfy EGTRRA have also been incorporated into the plan
document.
The Adoption Agreement is the vehicle for activating certain sections of the Plan Document.
Those certain provisions will or will not apply based upon the manner in which the Adoption
Agreement is completed.
Step 1. A. Employer Information. Complete the Employer Information section by
inserting the name, address, telephone number and tax identification number of the employer.
Also provide the official name of the plan and the name of the Plan Administrator. The
Employer will be the Plan Administrator unless specific employees or other individuals are
named. [Note: Neither BenefitsCorp, nor our parent company nor any of our affiliated
companies may be named as Plan Administrator.]
Step 2. B. Effective Date. If you have never offered a §457 plan to employees, and this
is the first §457 plan ever established for your employees, fill in the effective date of this new
plan in B. 1. If you are amending your current plan, insert the effective date of the original plan
and the effective date of this amended and restated plan in B. 2.
11-01 Adoption Agreement Instructions
Step 3. C. Custody of Assets. This section will identify how the governmental
employer has chosen to satisfy the trust requirement of Internal Revenue Code §457(g). Each of
the four choices listed meets the trust requirements and the employer should check all that will
apply to the plan. In certain instances it is possible that more than one of the boxes will be
checked. For example, if the employer will be utilizing a qualifying group annuity contract in
lieu of a trust for all assets invested under the contract, and self-trustee the outside mutual funds
both Box 1 and Box 3 would be checked. If they are using an annuity contract and an bank or
trust company custodian for the unwrapped funds,both Box 3 and Box 4 would be checked.
Box 1. Check Box 1 if plan assets are to be held in a trust pursuant to the provisions of Article
V of the Plan with the Employer or named employees of the Employer serving as trustee. The
Trustee information page of this Adoption Agreement must also be completed. If all plan assets
are to be held by the Trustee, the named Trustee must hold title to any group annuity contracts or
unwrapped mutual funds or other options used to invest plan assets.
Box 2. Check Box 2 if plan assets are to be held in a trust pursuant to a separate written trust
agreement entered into between the Employer and the bank or trust company named on page 5 of
this Adoption Agreement. Complete all applicable information on page 6. The Custodian is the
deemed trustee for purposes of Code §457(g) and must hold title to any investment options
offered by the Plan that are intended to be owned by the"trustee."
Box 3. Check Box 3 if plan assets are to be held in one or more annuity contracts meeting the
requirements of Code §401(f).
Box 4. Check Box 4 if plan assets are to be held in a custodial account meeting the requirements
of Code §401(f) pursuant to a separate written agreement between the Employer and the bank,
trust company or other person who are been authorized by the Secretary of the Treasury pursuant
to Code § 401(f) named on page 5 of this Adoption Agreement. The separate trust agreement,
not Article V of the Plan document,will control.
Step 4. D. Eligible Employees. Determine who is eligible to participate in the plan and
check all that apply. Fill in the blanks to identify how many hours must be worked to qualify as
a full-time employee as well as the hours that qualify as a part-time employee or a seasonal,
temporary or similar part-time employee. If elected and appointed officials and/or independent
contractors will be allowed to participate in the plan, check the appropriate boxes. To the extent
that any one of these classifications of employees need further definition, or if additional
requirement or limitation apply, please provide that information on the lines provided on the
bottom of page 2.
Step 5. E. FICA Replacement Plan (3121(b)(2)(F)). If this plan is being used to
qualify as a retirement system providing FICA replacement retirement benefits pursuant to
regulations under Code section 3121(b)(7)(F), please complete this section. If there are
employer contributions, check Box 1 and fill in the blank with the percentage of compensation
being contributed by the Employer. If there are employee contributions, check Box 2 and fill in
the blank with the percentage of compensation being contributed by the Employees. The total
amount contributed on behalf of each employee must equal at least 7.5%.
Note: If this is a FICA replacement plan, the unforeseeable emergency provisions contained in
the plan document are null and void.
11-01 Adoption Agreement Instructions ii
Step 6. F. Rollovers. If the plan will accept rollovers from other eligible retirement
plans and/or IRAs, complete this section. Check each box that applies.
Step 7. G. Participant Loans. Determine whether the plan will allow participant loans
and check the appropriate box.
Step 8. H. Qualified Domestic Relations Orders. Determine whether the plan will
accept qualified domestic relations orders and check the appropriate box.
Step 9. The Employer must adopt the Plan by executing the completed Adoption
Agreement on Page 4.
Step 10. If a custodian account is to be used to satisfy the trust requirement, complete the
Custodian Information on page 5 and indicate the names of individuals who will be authorized to
issue instructions to the custodian on behalf of the Plan. Both the Employer and Custodian
should execute page 5.
Step 11. If a trust arrangement is to be used (rather than a custodial account or annuity
contract), complete the Trustee Information on page 6. Fill in the effective date and check
whether the Employer, named individuals, or a bank or trust company is to act as trustee and
provide the appropriate name(s)of the trustee. Also indicate the names of individuals who will
be authorized to issue instructions to the trustee on behalf of the Plan. Both the employer and the
trustee(s)must execute page 6.
Step 12. Attach the executed Adoption Agreement to the Plan Document for your files.
11-01 Adoption Agreement Instructions iii
ADOPTION AGREEMENT
BENEFITSCORP, INC.
SECTION 457
ELIGIBLE DEFERRED COMPENSATION PLAN
FOR GOVERNMENTAL EMPLOYERS
11-01 457 Adoption Agreement for Governmental Employers
BENEFITSCORP, INC.
SECTION 457 ELIGIBLE DEFERRED COMPENSATION PLAN
FOR GOVERNMENTAL EMPLOYERS
The Employer named below hereby establishes (or, as applicable, amends and restates) a
Deferred Compensation Plan for eligible Employees as provided in this Adoption Agreement and
the accompanying BenefitsCorp Section 457 Eligible Deferred Compensation Plan document.
A. EMPLOYER INFORMATION.
1. EMPLOYER'S NAME AND ADDRESS:
Co IAhtJ y ?$ \I)oa cl,
GIs les SI-. - P.Q . Bo( iss
&mi . Op &o31
2. TELEPHONE NUMBER: Q p- 351, - 4000 E x+. 4 748
3. TAX IDNUMBER: $4 -(00O0813
4. NAME OF PLAN: fl e-cwnd ( snY,1io-n Than rct Gum*a1 10o IA,
.fad, sc Cdoc%da
5. NAME OF PLAN ADMINISTRATOR(the Employer unless another person(s) is
appointed as set forth in section 3.02 of the Plan):
P crer,tor cF Qdrr(r,is4rn*an
1A)P(d l .A(Ant
B. EFFECTIVE DATE. (Check box 1 OR box 2 and fill in the blank(s).)
1. [ ] This is a new Plan having an effective date of
2. VC This is an amended and restated Plan.
The effective date of the original Plan was Jan , a3 , (9 g 5
The effective date of the amended and restated Plan is De{, tS 7.0(
11-01 457 Adoption Agreement for Governmental Employers
C. CUSTODY OF ASSETS. (Check each box that applies.)
Internal Revenue Code ("Code") § 457(g) shall be satisfied by setting aside plan assets
for the exclusive benefit of participants and beneficiaries, as follows:
1. [ ] in a trust pursuant to the provisions of Article V of the Plan. The Employer, or
certain employees (or holders of certain positions with Employer) as named on page 6 of
this Adoption Agreement shall be the Trustee.
2. [ ] in a trust pursuant to a separate written trust agreement entered into between the
Employer and the bank or trust company named on page 5 of this Adoption Agreement.
3. 1(j in one or more annuity contracts meeting the requirements of Code § 401(0.
4. [ ] in a custodial account meeting the requirements of Code § 401(0, pursuant to a
separate written agreement with the Custodian named on page 4 of this Adoption
Agreement.
D. ELIGIBLE EMPLOYEES. (Check each box that applies)
"Employee" shall mean:
1. [ v] any full-time employee working 140 or more hours per week
2. [.-4 any permanent part-time employee working fewer than 4o hours per week
3. [ ] any seasonal, temporary or similar part-time employee
4. [ of any elected or appointed official
5. [ ] any independent contractor
who performs services for and receives any type of compensation from the Employer(or any
agency, department, subdivision or instrumentality of the Employer) for whom services are
rendered. If Box D.4 is not checked, elected or appointed officials will not be treated as
Employees and will not be eligible to participate in the Plan, without regard to whether they are
treated as common-law employees or independent contractors for other purposes. The following
are the additional requirements or limitations, if any, for one or more of the specified class(es) of
employees to be eligible to participate in the Plan:
11-01 457 Adoption Agreement 2
for Governmental Employers
E. FICA REPLACEMENT ("3121") PLAN.
Check the applicable box(es) if this Plan is a retirement system providing FICA replacement
retirement benefits pursuant to regulations under Code § 3121(b)(7)(F) for [ ] full time
employees and/or [ ] part-time employees, and complete the following. (Check each box that
applies.)
1. [ ] The Employer shall make an annual contribution to each Participant's account
equal to percent of such Participant's Compensation.
2. [ ] Each Participant is required to make an annual contribution of percent of
Compensation.
(Note: The total percentage of 1 and 2 must equal at least 7.5%)
In the event that this Plan is a retirement system providing FICA replacement retirement benefits
as described above, all references to Unforeseeable Emergency distributions in the plan
document shall be null and void.
F. ROLLOVERS. (Check each box that applies)
1. Rollovers from eligible Code §§ 457(b)plans SHALL BE allowed.
2. [>Q Rollovers from plans qualified under Code §§ 401(a), 403(a) and 403(b) SHALL
BE allowed.
r§3. Rollovers from Individual Retirement Accounts and Annuities described in Code
408(a) and (b) SHALL BE allowed.
G. PARTICIPANT LOANS. (Check Box 1 OR Box 2)
1. [ ] The Administrator MAY direct the Trustee to make Participant loans in
accordance with Article 9 of the Plan.
2. The Administrator MAY NOT direct the Trustee to make Participant loans in
accordance with Article 9 of the Plan.
H. QUALIFIED DOMESTIC RELATIONS ORDERS. (Check Box 1 OR Box 2.)
1. VI The Plan SHALL accept qualified domestic relations orders as provided in section
12.02 of the Plan.
2. [ ] The Plan SHALL NOT accept qualified domestic relations orders as provided in
section 12.02 of the Plan.
11-01 457 Adoption Agreement 3
for Governmental Employers
This Plan and Adoption Agreement are duly executed on behalf of the Employer.
EMPLOYER'S AUTHO ED SIGNORS:
By: 2igdapti By:
Title: OhR i g t u w I'uiVin• Title:
Date: I D = i s`—u I Date:
11-01 457 Adoption Agreement 4
for Governmental Employers )to
CUSTODIAN
[Complete this section only if box C.4. on page 2 was checked.]
Employer has elected to meet the trust requirement of Code § 457(g) by setting plan
assets aside for the exclusive benefit of participants and beneficiaries in a custodial account
meeting the requirements of Code § 401(f). The bank or trust company custodian named below
shall be the"deemed trustee" of plan assets held pursuant to the custodial agreement.
A. Effective , the following named bank or trust company is
hereby appointed as custodian of all or a portion of the assets of the Employer's § 457 Deferred
Compensation Plan:
B. INDIVIDUAL(S)AUTHORIZED TO ISSUE INSTRUCTIONS TO CUSTODIAN/TRUSTEE:
This appointment is duly signed on behalf of the Employer and the Custodian.
EMPLOYER
[Signature]
[Title]
[Date]
CUSTODIAN
[Signature]
[Title]
[Date]
11-01 457 Adoption Agreement 5
for Governmental Employers (� G'
TRUSTEE
A. Effective , the following is hereby appointed as trustee for and
accepts the trust created by the Employer's § 457 Deferred Compensation Plan:
1. Complete this section A. 1. only if box C. 1. on page 2 was checked.
[ ] The Employer or [ ] The following named employees:
2. Complete this section A. 2. only if box C. 2. on page 2 was checked.
[ ] The following named bank or trust company:
B. NAME(S) OF EMPLOYEE(S)AUTHORIZED TO ISSUE INSTRUCTIONS TO TRUSTEE:
This Trustee appointment is duly signed on behalf of the Employer and the Trustee.
EMPLOYER TRUSTEE
[Signature] [Signature]
[Title] [Title]
[Date] [Date]
TRUSTEE TRUSTEE
[Signature] [Signature]
[Title] [Title]
[Date] [Date]
11-01 457 Adoption Agreement 6
for Governmental Employers N
NOTICE OF AMENDMENT TO GREAT-WEST& ANNUITY INSURANCE
COMPANY GROUP ANNUITY CONTRACT
Pursuant to the Contract Modifications, your group annuity contract issued by Great-
West Life &Annuity Insurance Company has been amended to conform to the retirement
plan provisions of the Economic Growth and Tax Relief and Reconciliation Act of 2001
("EGTRRA") and the required minimum distribution regulations issued by the federal
Treasury in 2001.
The new tax law changes contained in the amendment are effective January 1, 2002. The
amendment will be sent to you as soon as we receive approval by your State's
Department of Insurance.
AGREEMENT/CONTRACT AMENDMENT
TO COMPLY WITH THE
ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT
OF 2001 (EGTRRA)
THIS AMENDMENT is entered into this _ day of , 20_, by and between BenefitsCorp,
Inc. (hereinafter referred to as "BenefitsCorp") and
(hereinafter referred to as "Plan Sponsor") with respect to the services provided
to the Plan Sponsor's Plan(s) (hereinafter referred to as the "Plan(s)") under the Agreement/Contract.
WHEREAS, the Plan Sponsor entered into an Agreement/Contract (hereinafter referred to as
"Agreement") with Great-West Life & Annuity Insurance Company or one or more of its wholly-owned
subsidiaries with respect to the services provided to the Plan(s); and
WHEREAS, the parties agree that the Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA) will impact the Agreement and Plan(s); and
WHEREAS, the parties agree that it would be mutually beneficial to amend the Agreement, for the
remainder of the term.
IOW THEREFORE, in consideration of the covenants and conditions herein contained, and other
good and valuable consideration, as herein provided, the parties agree to amend the Agreement.
This Amendment supersedes the provisions of the Agreement to the extent those provisions are
inconsistent with the provisions of this Amendment.
1. Benefits Communication Corporation has changed its name to BenefitsCorp, Inc.
(BenefitsCorp). All references to Benefits Communication Corporation, if any, shall be
changed to BenefitsCorp.
2. By signing this Amendment, Great-West Life & Annuity Insurance Company (hereinafter
referred to as "GWL&A") hereby assumes the performance of all duties, if any, of Financial
Administrative Services Corporation (hereinafter referred to as "FASCorp"), its wholly-owned
subsidiary.
3. All distributions from the Plan(s) will be processed and tax reported pursuant to the terms of
the Plan(s) and the Internal Revenue Code (hereinafter referred to as "Code"), as amended
from time to time.
4. If the Plan mandatorily distributes account balances less than $5,000 and more than $1,000
and Treasury Regulations require the Plan to designate an IRA provider to receive all such
small accounts not otherwise directed by the participant, a separate IRA product will be made
available to the Plan.
EGTRRA Agreement Amendment.Doc 1
5. A notice shall be provided to Participants pursuant to Code section 402(f). Ongoing retirement
planning education, distribution counseling and an IRA may also be made available to
Participants. The objective is to encourage Participants to roll other retirement plans into the
Plan(s) if allowed by the Plan(s) and to retain all assets in the Plan(s) at separation from
service. However, where a Participant chooses to establish a separate IRA or roll over eligible
retirement plan assets to an IRA, an IRA product will be made available.
6. This provision is being added to the Agreement in connection with Title V of the Gramm-
Leach-Bliley Act (P.L. 106-102) which was signed into law on November 12, 1999.
BenefitsCorp is committed to protecting your privacy and that of your employees.
BenefitsCorp shall treat as confidential all Plan, Participant and customer information or data
received from the Plan Sponsor and/or Participants which shall not be disclosed to a third
party or be used except for the purpose of providing services to the Plan and Plan
Participants unless agreed to in writing by the parties. Any third party that is retained to
provide services under this Agreement by either party and who has access to confidential
information relating to a customer, the Plan Sponsor or Plan Participant, shall agree in writing
to be bound by this section of the Agreement and to use such confidential information only for
the purpose of carrying out the performance of specific terms of the Agreement.
7. None of the parties hereto shall be liable to the other for any and all losses, damages, costs,
charges, counsel fees, payments, expenses or liability due to any failure, delay or interruption
in performing its obligations hereunder, and without the fault or negligence of such party, due
to causes or conditions beyond its control including, without limitation, labor disputes, riots,
war and war-like operations including acts of terrorism, epidemics, explosions, sabotage, acts
of God, failure of power, fire or other casualty, natural disasters or disruptions in orderly
trading on any relevant exchange or market, including disruptions due to extraordinary market
volume that result in substantial delay in receipt of correct data.
8. The Plan specific Attachment(s) shall be attached to this Amendment and become part of the
Agreement.
EGTRRA Agreement Amendment.Doc 2
IN WITNESS WHEREOF, the parties have caused this Amendment to the Agreement to be executed
effective January 1, 2002 by their respective officers and agents thereunto duly authorized as of the
'ay and year first above written.
For Plan Sponsor
By: �.e, Date /6
I.I/i A I i/a, a /"/ni,,v,s 5 i on-E9's
For Great-West Life & Annuity Insurance Company
A 6—A
Al Cunningham,
Assistant Vice President
For BenefitsCorp, Inc. (formerly Benefits Communication Corporation)
cSLøL
Charles P. Nelson,
President
EGTRRA Agreement Amendment.Doc 3
Code Section 457 Deferred Compensation Plans
ATTACHMENT
1. If the Plan Sponsor's Code section 457 Deferred Compensation Plan accepts Qualified
Domestic Relations Orders (hereinafter referred to as "QDROs"), QDROs will be processed
and distributed pursuant to the terms of the Plan(s) and Code requirements in effect on the
date of the distribution. All references to Conforming Equitable Distribution Orders (hereinafter
referred to as "CEDOs") in the Agreement, if any, shall be replaced with the term "Qualified
Domestic Relations Orders (QDROs)".
2. If loans are available under the Plan Sponsor's Code section 457 Deferred Compensation
Plan beginning January 1, 2002 or thereafter, Plan Sponsor agrees that all loans shall be
account reduction loans repaid by payroll deduction and administered pursuant to the loan
policy and procedures established by the recordkeeper from time to time. Participants will be
subject to the fees in the loan documents.
3. Effective January 1, 2002, references to Internal Revenue Service Form W2, if any, are
hereby changed to Form 1099R.
4. If the Plan(s) accepts pre-tax rollovers from other eligible retirement plans, including Individual
Retirement Accounts or Annuities (hereinafter referred to as "IRAs"), beginning January 1,
2002 or thereafter, separate accounts will be maintained for rollovers from eligible Code
Section 457 plans, Code Section 401(a), 401(k) and 403(b) plans and IRAs. Other accounts
may be established from time to time as required for plan administration.
Plan Sponsor agrees that rollovers will be administered according to the rollover policy and
procedures established by the recordkeeper from time to time. Participants will be subject to
the fees, if any, set forth in the rollover policy and procedures.
Amounts distributed from rollover accounts will be tax reported pursuant to the internal
revenue laws in effect on the date of the distribution.
EGTRRA Agreement Amendment.Doc
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