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CCR1982174RESOLUTION 1174-82 RESOLUTION CONFIRMING THE CITY OF MUSKEG0 EMPLOYEE DEFERRED COMPENSATION PLAN WHEREAS, Section 457 of the Internal Revenue Code authorizes municipalities to establish deferred compensation plans for employees who choose to defer income, and WHEREAS, certain tax benefits can accrue to employees participating in a deferred compensation plan, and WHEREAS, the City of Muskego desires to establish a deferred compensation plan for the benefit of its employees who choose to participate in such plans, and WHEREAS, the City of Muskego has established a master agreement for a deferred compensation plan, THEREFORE, BE IT RESOLVED that the Cormon Council upon the recommendation of the Finance Committee, does hereby establish and adopt a deferred compen- sation plan for employees who choose to defer income. BE IT FURTHER RESOLVED that the Mayor and Clerk are authorized to execute the attached agreement for the City of Muskego Employee Deferrfidsompensation Plan. DATED THIS { 4 DAY OF , 1982. FINANCE COMMITTEE Ald. Edwin P. Dumke Ald. Mitchel Penovich ATTEST : City Clerk THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CITY OF MUSKEGO EMPLOYEE DEFERRED COMPENSATION PLAN ARTICLE I - DEFINITIONS @ 1.01 1.02 1.03 1.Oh 1.05 1.07 ality of the State, or a tax-exempt rural electric cooperative and its tax- "Ehployer" means the State or a political subdivision, agency or instrument- exempt affiliates who adopt this plan. I, Employer who performs personal service for the Ehployer, including service as an independent contractor. contracts and certificates issued under the Plan. "Ovner" means the Employer. The Employer is the owner of the individual EDIployee" means any officer, full-time employee or elected official of the I, Equitable. Individual Participants under the Plan must designate to the Employer a person to receive pension, annuity, death or other benefits under provisions of the Plan from the Employer. Beneficiary" means the Employer and benefits are paid to the Employer by 11 Administrator" means Ehployer or its duly authorized designee for that purpose who shall exercise the discretion or other mctions given to the Employer under the terms of the Plan. 11 services rendered, without deduction for any portion thereof deferred under the provisions of this Plan or for any amounts contributed to a tax-deferred annuity plan pursuant to Section 403 (b) of the Internal Revenue Code. "Deferred Compensation" means that portion of an !hployee's Compensation which the Ehployee has elected to defer in accordance with the provisions of the Plan, subject to the folloving limitations: (a) The maximum amount that may be deferred under the Plan for the taxable Compensation" means all wages or salaries to be paid to an Employee for year of a Participant shall not exceed the lesser of (1) $7,500 or (2) 33-1/35 of the Participant's includible Compensation. (b) For one or more of a Participant's last three taxable years ending prior to a Participant's retirement, the maxim amount that may be deferred under the Plan shall be the lesser of (1) $15,000 or (2) the sum of the which has not been utilized by the Participant in his previous taxable limitation in (a) above and the amount of the limitation in (a) above years. (c) For any individuals who are participants in more than one plan established under Section b57 of the Internal Revenue Code, the maximum amount of com- pensation deferred I'or all such plans during any taxable year shall not exceed $7,500 (as modified by adjustments provided under (b) above). ! CITY OF MUSKEG0 EMPLOYEE DEFERRED COMPENSATION PLAN Page 2 (dl For any Participants who exclude income pursuant to Section 403 (b) of the Internal Revenue Code, the amounts excluded in taxable years under Section 403 (b) shall be treated as amounts deferred for purposes of above for any taxable year shall be deemed to be included in computing (a), (b) and (c) above; and any amounts deferred under (a), (b) and (c) the amounts referred to in Section 403 (b) (2) (A) (11) of the Internal Revenue Code. 1.08 "Includible Compensation" means the Compensation of an Bnployee which is currently includible in gross income, determined by taking into account exclusions permitted under Sections 403 (b) and b57 of the Internal Revenue Code. I 1.09 "Participant" means any Dnployee who voluntarily elects to participate in this Plan by filing a duly executed Participation Agreement with the Employer. 1.10 "Participation Agreement" means the contract by which the Dnployee and the Employer agree that an amount of the Employee's Compensation will be deferred in accordance with the provisions of the Plan. I 1.11 "Equitable" means the Equitable Life Assurance Society of the United States. 1.12 "Plan" means the Deferred Compensation Plan of the Bnployer, as set forth herein and as it may from time to time be amended, which plan is intended to meet the applicable requirements of Section 457 of the Internal Revenue Code. ARTICLE 11 - OPERATION OF PLAN 2.01 Participation - An hployee may elect to become a Participant in the Plan and to defer payment of part of his Compensation by executing a written Participation Agreement and filing it with the hployer. 2.02 Deferred Compensation - Employer and Participant mutually acknowledge that the Compensation of each Employee is as set forth in the annual salary amount of funds deferred under the terms of this Plan or set aside under ordinances of the hployer and that said Compensation includes the dollar any Code Section 403 (b) tax-deferred annuity plan. Employee Compensation shall be paid as provided except that during each employment year in which the Employee is a Participant in the Plan, that portion of his Compensation which is specified by the Employee in the Participation Agreement shall be deferred, invested and distributed in accordance with the provisions of the Plan. 2.03 Investment of the Deferred Amount - The amounts deferred in accordance with Section 2.02 shall be invested in either an annuity contract or life annuity contract or life insurance contract or combination of the two, offered by Equitable. The Employee shall state his investment preference at time of enrollment in the Plan and with the bployer's agreement may change the investment mix from time to time subject to Equitable's underwriting rules then in effect. CITY OF MUSICEGO EMPLOYEE DEFERRED COMPENSATION PLAN Page 3 2.04 Ownership of Deferred Amounts - The Employer shall own and maintain the method of setting aside sufficient of its assets to meet its future obliga- amounts deferred in accordance with Section 2.02 to provide a convenient tions under this Plan. The Rnployer shall at all times be the legal and beneficial owner of all such deferred amounts, ixluding the income thereof any investment fund attributable to amounts deferred under the Plan or the and any increments thereon, and neither the existence of the Plan nor of maintenance of any Accounts intended to measure Participants interests in the investment fund shall be deemed to create a trust or limit use by the Employer of the funds therein for general Faployer purposes. The obligation of the Employer to make payments pursuant to this Plan is contractual only and no Participant or Beneficiary shall have a preferred claim or lien on or to the assets of any investment fund or Account therein, but shall have only Assets of the Plan will be subJect to creditors of the Employer. Interests the right to receive the benefits payable under the Plan from the Employer. of a Participant in the Investment fllnd who changes employment may, under certain prescribed conditions, be transferred to an eligible plan of a new Employer. ARTICLE I11 - ADMINISTRATION AND ACCOUNTING 3.01 e 3.02 3.03 3.04 e- Administration by Rnployer - This Plan shall be administered by the Bnployer, which shall prescribe such forms and adopt such rules and regulations as are necessary to carry out the purposes of the Plan. Election to Participate - An Bnployee's election to participate in this Plan shall be made by filing a duly executed Participation Agreement with the Employer, and not otherwise. Enrollment Periods (a) When the Plan is made available, existing Employees may elect to partici- pate in the Plan. Such election shall be effective at the next payroll date. (b) Any person who becomes an Employee after this Plan is first made available shall have the option to elect to participate in the Plan. Such election shall be effective at the next payroll date. Contents of Participation Agreement - The Participation Agreement shall be filed with the &@oyer and Equitable and shall contain, among other provisions. - the following: (a) A provision whereby the Participant specifies that portion of his Compensation which is to be deferred. (b) A provision whereby the Participant shall indicate his investment preference. (c) A provision vhereby the Participant shall designate a aeneficiary or Beneficiaries, including one or more contingent Beneficiaries, to receive any benefits which nay be 2ayaSle umier this ?Len on death of the Pa.tici9ar.t. 3.05 Termination of Participation - A Participant may revoke his election to participate in the Plan by signing and filing with the Employer and Equitable a written revocation of participation. 3.06 Amendment of Particiuation Apreement - A Participant may change the amount of Compensation be deferred under the Plan or may amend his statement of invest- ment preference by filing with the Employer and Equitable a signed amendment on a form approved by the Fqloyer and Equitable. Such amendment will, unless specifically stated othervise, apply only to future amounts deferred under the e Plan. If a Participant requests that amounts then held in a Participant's Account also be invested in accordance with an amended investment preference, the Enployer may, if it deems it in the best interest of the Participant to do e so, approve such change. If the change involves an increase in the amount of will be subject to Equitable's undervriting rules then in effect. life insurance on a Participant's life, acceptance by Equitable of the increase 3.07 Particiuant Accounts - A separate certificate or contract shall be maintained for each Participant. For convenience, and to facilitate an orderly adminis- will be maintained by the Employer showing the Participant's name. me Partici- tration of the Plan, individual certificates or contracts for all Participants pant's deferred Account shall be credited each pay period with the amount de- ferred from the preceding pay period on the day received by Equitable. A written report of the status of the Participant's Account shall be furnished to Partici- pants at least annually by Equitable through the Rnployer. All interest, divi- Participant's Account shall be credited or debited to the Account as they occur. dents, charges for premiums, capital, or market changes applicable to each Credits to the Participant's Account shall be subject to the investment prefer- ence then in effect. e ARTICLE N - BENEFITS 4.01 The Participant is entitled to have paid to him the benefits created by his participation in this Plan in accordance vith the provisions of this Article. Bene- fits paid to a Participant shall be reported to a Participant as wages subject to vithholding for federal income taxes and reportable on Form W-2. (a) Normal Retirement - Upon the Participant's attaining the normal retire- ment age, he may retire and receive the benefits provided under this Plan. Such benefits shall be paid in accordance with the payment options described below. (b) Termination of bplopnent - If the Participant terminates his employment with the Employer, benefits may be taken in a lump sum or deferred until the normal retirement date. (c) Death - If the Participant dies vhile employed with the Employer and before retirement or the comencenent of termination of service benefits under this Plan, the benefits otherwise payable under this Plan shall be paid in a lump sum to his designated Beneficiary. If the Participant dies vhile benefits are being paid to him under this Plan, and before such benefits have been exhausted, then benefit payments vi11 continue only in accordance vith any slu-vivorship option selected by the Participant ir! as~'r?.%~.~t? vith subsect13r. (d) below. ' CITY OF MUSKEG0 EMPLOYEE DEFERRED COMPENSATION PLAN Designation of Beneficiary The Participant has the right to name and file with the Employer a person or persons who shall receive the benefits payable under this written Beneficiary or change of Beneficiary form, designating the purpose shall be provided by the kployer. It is not binding on the Plan in the event of the Participant's death. The form for this &ployer until it is signed, filed with the Employer by the Partici- pant, and accepted by the kployer. If the Participant dies without Beneficiary predeceased him, any death benefits shall be paid to the having a Beneficiary form on file, or if a Participant's designated vive, then to the Participant's executors or administrators. The Participant's surviving children in equal shares or, should none sur- Participant accepts and acknowledges that he has the burden for exe- cuting and filing with the Rnployer a proper Beneficiary designation form. (d) Benefit Options - The following options are available for selection by Participant. If, at the normal retirement date the Participant fails to benefits payable (I) if the Participant then has a living spouse, under select a payment option, he shall be deemed to have elected to have the the Joint and Surviwr Life Annuity form with the Participant's spouse as the contingent annuitant (100% continuation), or (11) if the Partici- pant then does not have a living spouse, under the Life Annuity form. The participant may select the following benefit options: Joint and Survivor Life Annuity - The term "Joint and Survivor Life Annuity" means an annuity providing monthly payments while either of the two persons upon whose lives such payments depend is living. The monthly amount to be continued when only one of the persons is living will be were living. This percentage may be 50% or any higher percentage up to equal to a percentage of the monthly amount that was paid while both and including 100% as elected by the Participant. The payments commence ment due before the death of the survivor. as of the Participant's retirement date and terminate with the last pay- Joint and Survivor Ten Years Certain Annuity - The term "Joint and Sur- vivor Ten Years Certain Annuity" means an annuity urovidiw monthly Pay- ments while either of two persbns upon whose lives-such payments depend ten years. The monthly amount to be continued when only one of the per- is living, with a guarantee that installments will be paid for at least sons is living will be equal to a percentage of the monthly amount that was paid while both were living. This percentage may be 50% or any higher percentage up to and including,lOO%, as elected by the Participant. If the joint annuitants do not live for the ten year certain period, the remaining payments will be made to their beneficiaries. The payments comence as of the Participant's retirement and terminate with the last payment due before the death of the survivor. - "_ CITY OF MUSICEGO EMPLOYEE DEFERRED COMPENSATION PLAN Page 6 Life Annuity - The term "Life Annuity" means an annuity providing monthly payments only during the lifetime of the person upon whose life such payments depend. The payments commence as of the Participant's retirement date and terminate with the last payment due before the death of such person. by Equitable at the time an event occurs causing payment of benefits to Equitable will also make available any other settlement options offered begin. 4.02 Financial 3ardshig - Notwithstanding any other provisions herein, for "fin- ancial hardship" a Participant may apply to the Employer to withdraw, in whole or in part, benefits from the Plan prior to retirement or any other termination of his employment with the bployer. Benefits to be paid upon any withdrawal shall be limited strictly to that mount necessary to meet benefits shall be paid upon retirement, termination of employment, or death the emergency situation constituting financial hardship. Any remaining in accordance with Section 4.01 above. Withdrawal for "financial hardship" which would cause him great hardship if early withdrawal were not permitted. shall be ligited to real emergencies beyond the control of the Participant "Financial hardship" shall include the folloving: Impending personal bank- accident of the Participant or any dependent thereof; major property loss or ruptcy; unexpected and unreimbursed major expenses resulting from illness or any other type of unexpected and unreimbursed personal expense expenditures of a major nature that would be normally budgetable, such as a down payment for a home, the purchase of an automobile, college or other schooling expenses, etc., will not constitute a "financial hardship". The decision of the Ehployer concerning "financial hardship" shall be final as to all Participants. Not- cumstances as may be prescribed by the Secretaly of the Treasury by regdation pursuant to the authority contained in Section 457(b)(5) of the Internal Reve- nue Code. withstanding the foregoing, "financial hardship" shall be limited to such cir- ARTICLE V - MISC-US ' 5.01 Retirement System Integration - Benefits payable by, and deductions for bployee contributions to, any retirement system of the Fmployer shall be computed without reference to amounts deferred pursuant to this Plan and shall instead be based upon gross Compensation the Participant would receive if such Participants had not elected to participate in this Plan and to defer Compensation. 5.02 Amendment and Termination - This Plan may be amended or terminated by the Employer at any time. No amendment or termination of the Plan shall reduce or impair the rights of any Participant or his Beneficiary which have already accrued. Upon the termination of the Plan, the Fhployer shall distribute all amounts credited to each Participant's Account in accordance with the Pertici- pant's payment option selected. All Participants shall be treated in the same manner. 5.03 @ 5.04 5.05 5.06 Creditors - A Participant mey not assign, transfer, Sell, hypothecate, or otherwise dispose of any or all of his interest or right vhich he may have under the Plan, and any attempt to do so shall be void. bloyment - Participetfon in the Plan shall not be construed as giving any right to continue his employment with the Ehployer. Successors and AssiKns - The Plan shall be binding upon and shall inure to the benefit of the Employer, its successors and assigns, all Participants and Beneficiaries and their heirs and legal representatives. Written Notice - Any notice or other communication required or permitted under the Plan shall be in writing, and if directed to the Employer shall be sent to the designated offlce of the Employer and, if directed to a Partici- pant or to a Beneficiary, shall be sent to such Participant or Beneficiary at his last hoVn address as it appears on the Employer's records. 5.07 Total Anreement - This Plan and the Participation Agreement, and an)' sub- sequently adopted amendment thereof, shall constitute the total agreement or contract between the hployer and the Participant regarding the Plan. No oral statement regarding the Plan may be relied upon by the Participant. \