1994-066-Execute An Agreement With International City Management Association Retirement Corporation For Administration Of Town Deferred Compensation PlanRESOLUTION 1994 -66
RESOLUTION OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER TO EXECUTE
AN AGREEMENT WITH
INTERNATIONAL CITY MANAGEMENT ASSOCIATION
RETIREMENT CORPORATION
FOR ADMINISTRATION OF
TOWN DEFERRED COMPENSATION PLAN
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town of Los Gatos enter into an agreement with
International City Management Association Retirement Corporation for administration of
Town deferred compensation plan, and that the Town Manager is authorized, and is hereby
directed, to execute said agreement in the name and on behalf of the Town of Los Gatos.
PASSED AND ADOPTED at a regular meeting of the Town Council of the
Town of Los Gatos, California, held on the 16th day of May, 1994 by the following vote:
COUNCIL MEMBERS:
AYES: Steven Blanton, Linda Lubeck, Patrick O'Laughlin, Mayor Randy Attaway
NAYES: None
ABSENT: Joanne Benjamin
ABSTAIN: None
SIGNED:
MAYOR OF TOWN OF GATOS
LOS GATO , CALIFORNIA
ATTEST:
CLERK OF THE TOWN OkOS GATOS
LOS GATOS, CALIFORNIA
TOWN CL�
AGR---:i,
IC1tA
IMN: RFTIRENIEN'T
CORPORATION
DEFERRED COMPENSATION PLAN ADM'RiST�� MENT
This Deferred Compensation Plan Administration Agreement ( "Agreement ") is effective this
2 day Of,-'5-1994, by and between International City Management Association Retirement
Corporation, a non - profit corporation organized and existing under the laws of the state
of Delaware, its officers, employees and agents, hereinafter collectively referred to as RC,
and the TOWN OF LOS GATOS, its officers, employees and agents, hereinafter collectively
referred to as AGENCY.
WHEREAS, AGENCY, pursuant to and in compliance with Internal Revenue Code Section
457, has established a Deferred Compensation Plan, hereinafter referred to as PLAN; and
WHEREAS, AGENCY desires to use RC in connection with the administration of the PLAN;
and
WHEREAS, RC desires to provide such services subject to the terms and conditions set
forth herein;
Now therefore, AGENCY and RC agree as follows:
DESIGNATION:
A. AGENCY hereby designates RC as Administrator for AGENCY'S deferred
compensation plan. It is understood that plan assets will be invested in the ICMA
Retirement Trust (the "Trust "), a trust established for the commingled investment
of the deferred compensation and qualified retirement plan assets of state and local
governments and their agencies and instrumentalities. AGENCY has adopted the
Declaration of Trust of the ICMA Retirement Trust (attached as Exhibit A), and is
therefore eligible to participate in the Trust.
B. REPLACEMENT OF "EMPLOYER TRUST ": RC and AGENCY are currently parties
to a document entitled "Trust Agreement with the ICMA Retirement Corporation"
( "Employer Trust ") for the administration of the PLAN. AGENCY hereby terminates
the Employer Trust (not the Declaration of Trust of the ICMA Retirement Trust),
intending that this Agreement evidence the understanding between RC and
AGENCY with respect to the matters covered by it.
TERM: This Agreement shall remain in effect until it is terminated by one or both
parties in accordance with the provisions of this Agreement. This Agreement may
be terminated by either party, with or without "Cause" as that term may be defined
herein, and without obligation, upon the giving of one hundred twenty 020) days'
written notice by the party terminating the Agreement to the other party.
DEFAULT: In the event the Agreement is terminated for "Cause" (which shall mean
the failure of either party to perform any or all of its obligations as defined herein),
the non - defaulting party shall give the defaulting party written notice, specifying the
particulars of the default. If such default is not cured within sixty (60) days from
ICNIA
RETIREMENT
CORPORATVA
the date in which notice of default is given, the non - defaulting party may terminate
the Agreement effective thirty (30) days after the end of the sixty (60) day period.
4. INVESTMENT OPTIONS: The Trust will accept deferred compensation plan funds
for investment in the following:
A. Fixed Fund Option (PLUS Fund)
(i) A minimum rate of return will be established each January and July
for the ensuing six months.
(ii) The return credited monthly to participant accounts will be the greater
of the actual portfolio return or the announced minimum rate.
(iii) The Fixed investment option is not insured or guaranteed by any
government agency or by RC or the Trust.
B. Total Return Fund Options (Growth Stock Fund, Equity Index Fund, Equity
Income Fund, Asset Allocation Fund, Core Bond Fund, U.S. Treasury
Securities Fund, Cash Management Fund)
(i) Fund distributions, if any, will be automatically reinvested into the
fund.
(ii) The Total Return investment options are not insured or guaranteed by
any government agency or by RC or the Trust.
C. RC and the Trust shall be permitted to add or delete investment options
during the term of this Agreement by providing 90 days' written notice of
such change to Agency with written approval from Agency.
D. It is understood that the terms and conditions of investment in the Trust are
explained in the Trust's Declaration of Trust and in the Trust's disclosure
document, "Making Sound Investment Decisions: A Retirement Investment
Guide" (attached as Exhibit B). AGENCY agrees that investment in the Trust
will be governed by those documents, which may be adjusted from time to
time. Subject to any restrictions imposed by Employer, Plan participants
may in invest in any one or more of the Funds offered by the Trust.
5. ESTABLISHMENT OF ACCOUNTS:
A. ENROLLMENT SERVICES: RC agrees to process, or arrange to have
Processed, the enrollment of eligible employees who elect to participate in
the PLAN. RC agrees to provide informational and promotional material
pursuant to the PLAN for distribution to employees of AGENCY, subject to
approval of such material by AGENCY, such approval not to be unreasonably
withheld. AGENCY agrees to allow and facilitate the periodic distribution of
such material to employees.
ICNIA
RETIREMENT
CORPORATION"
RC agrees to conduct, or arrange to have conducted, group presentations
periodically for employees of AGENCY, to explain the PLAN. AGENCY agrees
to facilitate the scheduling of such presentations and to provide facilities at
which satisfactory attendance can be expected. RC agrees that qualified
personnel will be made available periodically to discuss the PLAN with
individual employees of AGENCY.
B. DEFERRALS: There shall be no minimum participant deferral.
C. AGENCY agrees to:
(i) Cause appropriate deductions to be made from such payroll(s) as may
be applicable and send the funds representing the total participant
deferrals to the Trust.
Oil Provide to RC, in such electronic or magnetic media designated by
RC, a deferral listing with respect to participant sub - accounts to
include not less than the following:
1. Name of Participant
2. Social Security Number of Participant
3. Amount to be credited to Participant's sub - account (s)
Will Funds may be sent by wire transfer, through an automated
clearinghouse or by check in accordance with written instructions
provided by RC. Failure to follow the written instructions provided by
RC may result in delay of posting to Participant accounts.
(iv) Funds will be posted no later than the business day following the day
on which the funds and the deferral listing are received by RC. RC will
not be liable for any delay in posting if AGENCY fails to send either
the funds representing deferral amounts or deferral information in
accordance with RC's instructions to the central processing site
designated by RC.
(v) Authorize RC to establish personal identification numbers ( "PINs ") for
each participant and shall require Participants to use such PINs to
obtain certain services as designated by RC.
D. RC agrees to:
(i) Establish a sub - account for each participant.
(ii) Post and credit the amounts sent by AGENCY to the sub - account(s)
of Participants in accordance with the latest written instructions on
file with RC.
IC.NtA
RETIREME\ °i
CORPORATION
6. PARTICIPANT SERVICES:
A. RC will provide a dedicated toll free telephone number which shall be
operative 24 hours a day, seven days a week. Using this number,
participants may obtain information about participant accounts. If such
service is requested by telephone, Participant shall use his /her PIN. RC will
provide telephonic asset reallocation and transfer of funds no later than May
1, 1995.
B. RC will provide Plan participants unlimited opportunities to increase (within
limitations of Sec. 457) or decrease deferral amounts. All requests to
increase or decrease deferral amounts will be processed by RC within five
(5) business days of receipt of the request and will be effective as soon as
administratively practical by AGENCY.
C RC will allow Plan participants to redirect future deferral amounts to any
other Investment Product offered by the Plan at any time. All requests will
be processed within five (5) business days of receipt and be effective with
the next following pay period deferral.
D. RC will allow participants to transfer existing account balances from one
investment option offered by the Plan to another as frequently as every 90
days. Transfer requests received no later than the last working day of a
month will be processed effective at the end of that month. It is understood
that there are certain restrictions on transfers among the PLUS Fund, the
Guaranteed Fund (no longer open for investment), and the Cash Management
Fund. These restrictions are explained in the Trust's disclosure document,
attached as Exhibit B.
E. RC will provide annually to participants an updated disclosure document and
an Annual Report for the Funds of the Trust offered by the Plan.
F. RC will provide participants consolidated quarterly statements detailing
participant's year -to -date deferral amounts, account balance information that
includes changes in account value since the previous report date.
Participants shall be informed that they must notify RC within thirty (30)
days of receipt of their statements or confirmation of their investments, to
report any errors to RC. RC will not be liable for any errors not reported
within this time frame.
G. RC agrees to mail 90% of these statements to participants within fifteen
0 5) business days after the end of each calendar quarter, and 100% of the
statements to participants within eighteen 0 8) business days after the end
of each calendar quarter. RC will have no responsibility to report, or account
for the accuracy of information applicable to periods prior to the effective
date such Plan was administered by RC.
ICMA
RETIREMPNT
CORPORATION
H. RC will provide certain standard reports quarterly to AGENCY to enable
AGENCY to effectively monitor all accounting and record - keeping processes.
These reports will include combined data for an entire Plan. In addition, all
services will be provided in accordance with the attached Exhibit B.
RC agrees to maintain, for a reasonable time, the records necessary to
Produce the above mentioned reports, and agrees that all records shall be
the property of AGENCY. AGENCY agrees that all related computer tapes,
disks and programs shall remain the property of RC.
7. DISTRIBUTIONS:
A. RC will assist the participant in preparing necessary forms to select his /her
distribution option. Requests for distributions must be received by RC on or
before the last working day of the month preceding the month in which the
distribution is desired. Distributions are effected as of the last working day
of the month following the month the request is received.
B. Participants electing a payment of a lump sum amount will receive
distribution of their account in accordance with the terms of the PLAN and
as indicated in section 7.A. However, RC shall initiate the processing of all
approved emergency withdrawal requests upon receipt.
C. RC will provide necessary forms and process payments from the
participant's account, to the company selected by the Plan to provide
annuity options to participants. Participant will be required to submit properly
completed forms to RC in a time frame necessary to effectuate the "payment
begin date" requested by participant.
D. RC shall offer to participants for distribution of their account a designated
amount payment option. Payments shall be made on a monthly, quarterly,
semi - annual or annual basis as specified by the participant, in equal
installments until the amount applied, adjusted each business day for
investment results, is exhausted. The final installment will be the sum
remaining at the time such payment is due.
E. RC shall also offer to Plan participants a designated periodic payment option
with a variable payment, subject to the requirements of Section 457 of the
Internal Revenue Code. Payments shall be made monthly, quarterly or
annually for any specified number of years as permitted by the Plan, at the
discretion of the Plan participant. The amount of each variable payment shall
be determined by dividing the Participant's current portfolio balance by the
number of remaining payments.
F. All payment options are available for all investment options. Participants
selecting the options in D or E above shall be subject to the same fees and
charges, and permitted the same exchange opportunities, as an active or
inactive participant as defined by the Plan. Processing of these options will
ICNIA
RETIRE LENT
CORPORATIOA
be completed by RC upon receipt of properly completed forms. Unless
otherwise designated, all distributions will be made pro -rata from each of the
Participant's investment options.
G. RC will be responsible for preparing and filing all reports required by federal
and state taxing authorities through the effective date of the termination of
the contract. AGENCY shall be responsible for all reporting requirements for
periods prior to the effective date of this contract, or after the termination
date of this contract. RC will be responsible for the annual filing of individual
1099 or W -2 forms, unless by contract between AGENCY and an Investment
Provider, the forms are prepared by the Investment Provider that provides
annuity payments to participants. RC shall withhold income taxes from
distributions as required, and remit said taxes to appropriate regulatory
authorities. RC shall also prepare and file periodic and annual tax returns for
said amounts withheld.
H. RC agrees to provide plan participants anticipating retirement or other
separation from service with illustrations indicating monthly benefit
payments at an assumed interest rate for the Fixed Option or an assumed
rate of earnings for the Total Return Fund investments. Such assumed
interest rate or rate of earnings shall be for illustration purposes only. The
actual interest rate /yield paid on the Fixed Option during distribution shall
change quarterly and shall always be as described in Section 4 above. For
the Total Return funds, earnings will be those actually earned.
8. TERMINATION OF AGREEMENT:
Upon the effective date of termination of this Agreement, the following shall
occur:
a. RC will no longer accept deferrals.
b. RC will provide AGENCY a copy of all records relating to participant
sub - accounts, in hard copy or such other form as mutually agreed
upon between RC and AGENCY, within ninety (90) days after the
effective date of termination.
C. If termination is due to either party exercising the right of termination
described in Section 2 above, within 90 days of the effective date of
termination, RC shall transfer all Total Return fund balances to
AGENCY, or to such other entity as AGENCY may designate in
writing. It is understood that the Trust reserves the right to take up
to 12 months to disburse assets from the PLUS Fund upon
termination of this Agreement, as set forth in the disclosure document
contained in Exhibit B.
d. Notwithstanding any provision to the contrary, if termination is for
Cause (as that term is herein defined), the disbursement of Total
ICNIA
RETIRE.NIEST
CORPORATION
Return funds shall occur within sixty (60) days of the effective date
of termination. It is understood that the Trust reserves the right to
take up to 12 months to disburse assets from the PLUS Fund upon
termination.
e. Accounts in distribution will be transferred to AGENCY or its designee
in accordance with the time frame described above.
9. FEES AND EXPENSES: In consideration of its services under the Plan fees and
expenses will be as follows:
A. Plan Administration Fee. The amount to be paid for plan administration
services under this agreement shall be 0.9% per annum of the amount of
Plan assets invested in the Trust. Such fee shall be computed and paid at the
end of each month on Plan assets in the Trust at that time.
B. Account Maintenance Fee. The annual account maintenance fee has been
waived.
C. Compensation for Advisory Servicesto the Trust. Agency acknowledges that
in addition to the amounts payable under this Agreement, RC receives fees
from the Trust for investment advisory services furnished to the Trust in the
amount of 0.15% annually (for the PLUS Fund) and 0.10% (for all other
funds) of the value of Retirement Trust property as determined on the close
of business on the last day of each month.
D. Payment Procedures. All payments to RC pursuant to this section 9 shall be
paid by the Trust. The amount of Plan assets held in the Trust shall be
adjusted by the Trust as required to reflect such payments.
10. CONFIDENTIALITY: RC agrees that all information supplied to and all work
Processed or completed by RC related to AGENCY shall be kept confidential and will
not be disclosed except as required by law.
11. PRIVITY OF CONTRACT: RC and Plan Participants shall have no privity of contract
with each other.
12. TITLE AND OWNERSHIP: In accordance with the provisions of Internal Revenue
Code Section 457, all AGENCY account(s) established under this Agreement shall
be held in the name of AGENCY.
13. CIRCUMSTANCES EXCUSING PERFORMANCE: Neither party to the Contract shall
be in default by reason of failure to perform in accordance with its terms if such
failure arises out of causes beyond reasonable control and without fault or
negligence on their part. Such causes may include, but are not limited to, acts of
God or public enemy, acts of the government in either its sovereign or contractual
capacity, fires, floods, epidemics, quarantine or restrictions, freight embargoes, and
unusually severe weather.
IC }IA
RETIRENIEVT
CORPORATION
14. INDEMNIFICATION: RC agrees to be solely responsible to AGENCY for any and all
services performed by RC, its agents or its employees under this Agreement. RC
shall be responsible for any error or negligence committed by RC its agents, or its
employees under this Agreement. AGENCY shall be responsible for any error or
negligence committed by AGENCY, its agents or its employees.
15. INSURANCE:
A. RC shall insure for a minimum of Five Million Dollars ($5,000,000) for errors
and omissions during the term of this contract and any renewal periods.
B. RC agrees to notify AGENCY in writing at least 30 days in advance of the
discontinuation or substantial change in its program of insurance, and
immediately to provide evidence of comparable errors and omissions
insurance with a commercial insurer acceptable to AGENCY.
C. Pursuant to this Agreement, except as limited below, RC shall indemnify,
defend and hold harmless AGENCY, its officers, employees and agents from
loss, liability, claim, suit or judgement resulting from work or acts done or
omitted by RC's officers, employees and agents in carrying out RC's
responsibilities as set forth in this Agreement and any amendments thereto.
D. Notwithstanding the foregoing, RC shall not be liable for any injury or
damage which results solely from its reliance on information transmitted by
AGENCY, its officers, employees or agents.
E. RC shall, on an annual basis, provide evidence of RC's capacity to respond
to claims falling within this insurance program.
F. RC agrees to notify AGENCY of any claim, judgment, settlement, award,
verdict or change on its financial condition which would have a significant
negative effect on the protection of this insurance.
16. ASSIGNABILITY: No party to his Agreement shall assign the same without the
express written consent of the other party, which consent not to be unreasonably
withheld. This provision shall not restrict RC's right to delegate certain
recordkeeping or other services to an agent. Unless agreed to by the parties, no
such assignment shall relieve any party to this Agreement of any duties or
responsibilities herein.
17. PARTIES BOUND: This Agreement and the provisions thereof shall be binding upon
and shall inure to the benefit of the successors and assigns of the respective
parties.
18. APPLICABLE LAW: This Agreement shall be construed in accordance with the laws
operating within the State of California.
1CMA
RETI RE.MEIN'r
CORPORA] TOA
19. ARBITRATION: Any dispute which arises between the parties with respect to any
of the terms of this Agreement, whether such dispute arises during the term of the
Contract and any extension period, or after the termination, shall be resolved
through binding arbitration. Arbitration shall be conducted in accordance with
commercial rules of either the American Arbitration Association ( "AAA ") or the
Judicial Arbitration and Mediation Service ( "JAMS "). Each party agrees to waive
its right, if any, to a jury trial and punitive damages. Each party shall bear its own
costs, including attorney fees, related to the arbitration proceedings.
20. UNLAWFUL PROVISIONS: In the event any provisions of this Agreement shall be
held illegal or invalid for any reason, said illegality or invalidity shall not affect the
remaining parts of the Agreement, but the same shall be construed and enforced
as if said illegal or invalid provision had never been inserted herein. Notwithstanding
anything contained herein to the contrary, no party to this Agreement will be
required to perform or render any services hereunder, the performance or rendition
of which would be in violation of any laws relating thereto.
21. MODIFICATION: This writing is intended both as the final expression of the
Agreement between the parties and as a complete statement of the terms of the
Agreement, pursuant to California Code of Civil Procedure Section 1856 or its
successor(s). No modification of this Agreement shall be effective unless and until
such modification is evidenced by a writing signed by both parties.
22. NO WAIVER: The failure of either party to enforce any provision of this Agreement
shall not be construed as a waiver of that provision or of any other provision in the
Agreement and either party may, at any time, enforce the provision previously
waived, unless a modification to this Agreement has been executed.
23. SEVERABILITY: The provisions of this Contract are severable, and, if for any
reason a clause, sentence, paragraph, or other part of this Contract shall be
determined to be invalid by a court or federal or state agency, board, or commission
having jurisdiction over the subject matter thereof, such invalidity shall not affect
other provisions of this Contract which can be given effect without the invalid
provision.
24. NOTICES: All notices and demand to be given under this Agreement by one party
to another shall be given by certified or United States mail, addressed to the party
to be notified or upon whom a demand is being made, at the respective addresses
set forth in this Agreement or such other place as either party may, from time to
time, designate in writing to the other party. Notice shall be deemed received on the
earlier of, three days from the date of mailing, or the day the notice is actually
received by the party to whom the notice was sent.
If to
If to AGENCY
ICMA
RETIRENIFN'T
CORPORATION
Deferred Compensation Department
ATTN:
TOWN OF LOS GATOS
110 E. Main Street
Los Gatos, California 95032
ATTN: Mark Linder
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on the
date first written.
AGE'C
VID KNAPP, Town ager Vice Pre ident
DATE SIGNED: a DATE SIGNED: 5 9 9
APPROVED AS TO FORM
—'CARRY ANDERSON,
Town Attorney
Date:
ATTEST:
MARIAN COSGROVE
Clerk To The Town of