HomeMy Public PortalAboutRES 98/11RESOLUTION 98 -11
A RESOLUTION OF THE TOWN COMMISSION OF THE TOWN OF GULF
STREAM, PALM BEACH COUNTY, FLORIDA, ESTABLISHING THE TOWN OF
GULF STREAM PREMIUM ONLY PLAN, A "CAFETERIA PLAN "; AUTHORIZING
THE TOWN MANAGER TO EXECUTE PLAN DOCUMENTS; AND ESTABLISHING
AND EFFECTIVE DATE.
WHEREAS, the Town of Gulf Stream has determined it is desirable to
establish a "cafeteria plan" within the meaning of Section 125 of the
Internal Revenue Code, as amended from time to time, to provide certain
benefits to the Employees of the Town of Gulf Stream:
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COMMISSION OF THE TOWN
OF GULF STREAM, FLORIDA THAT:
Section 1. The Town of Gulf Stream hereby establishes the
"cafeteria plan" TOWN OF GULF STREAM PREMIUM ONLY PLAN attached hereto
as Appendix "A" , said Appendix "A" being a part of this Resolution as
if fully set forth herein.
Section 2. The Town Commission of the Town of Gulf Stream hereby
authorizes the Town Manager to execute such plan documents.
Section 3. This Resolution shall become effective October 1,
1998.
PASSED AND ADOPTED this 22nd day of September. 1998.
YR&
(SEAL)
A EST :
TOWN CLERK
T OF GULF STREAM, FLORIDA
COMMISSIONER
p Al b,` -
CASE NUMBER: BA04708
THE
TOWN OF GULF STREAM PREMIUM ONLY PLAN
Effective October 1, 1996
As Amended and Restated Effective October 1, 1998
COPYRIGHT 1995 THE BARRINGTON GROUP, LTD.
USED WITH PERMISSION BY BENEFITAMERICA
TABLE OF CONTENTS
ARTICLE I. PURPOSE OF PLAN Page
Section 1.01. Purpose .......... ............................... 1
ARTICLE H. DEFINITIONS
Section 2.01. Defined Terms 1
Section 2.02. Construction ....... ............................... 2
ARTICLE M. ELIGIBILITY
Section 3.01. Eligibility to Participate 2
Section 3.02. Participation Requirements ............................ 2
ARTICLE IV. BENEFITS
Section 4.01. Benefit Options .......................... .
Section 4.02. Premium Payment Option ............................. 3
ARTICLE V. BENEFIT ELECTION PROCEDURES
Section 5.01. Benefit Elections ............................ 4
Section 5.02. Failure to Enroll 5
Section 5.03. Automatic Termination of Election 5
Section 5.04. Election Modifications Required by Administrator ............. 5
ARTICLE VI. PREMIUM PAYMENT
Section 6.01. Premium Payment Option Authorization .................... 6
Section 6.02. Automatic Termination of Authorization 6
Section 6.03. Payment During Leave ............................... 6
ARTICLE VII. NONDISCRIMINATION
Section 7.01. Nondiscrimination ... ............................... 7
ARTICLE VIII. GENERAL PROVISIONS
Section 8.01.
Administration
Section 8.02.
Amendment and Termination
7
Section 8.03.
Termination of Employment
7
Section 8.04.
....................
Exclusive Benefit
7
Section 8.05.
Spendthrift Clause
8
Section 8.06.
Company Liability .............................
8
Section 8.07.
Related Employers
8
Section 8.08.
...........................
Governing Law
8
..... ...............................
8
THE
TOWN OF GULF STREAM PREMIUM ONLY PLAN
ARTICLE I. PURPOSE OF PLAN.
Section 1.01. Purpose. The purpose of this Plan is to furnish eligible Employees of the Company with
a choice of receiving certain taxable or non - taxable benefits. It is intended that this Plan qualify as a
"cafeteria plan" within the meaning of Section 125(d) of the Code, and that certain benefits which an
eligible Employee elects to receive be eligible for exclusion from such Employee's income under Section
125 of the Code.
ARTICLE H. DEFINITIONS.
Section 2.01. Defined Terms.
(a) "Administrator" means the Company, or any other person or organization subsequently
designated as such by TOWN OF GULF STREAM with the authority and responsibility to
manage and administer the Plan.
(b) "Board" means the Board of Directors of TOWN OF GULF STREAM.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Company" means TOWN OF GULF STREAM and any other employer designated by
the Board.
(e) "Compensation" means W -2 wages and other taxable compensation from the Company
for any Plan Year.
(fl "Effective Date" means October 1, 1996.
(g) "Employee" means any common law Employee of the Company.
(h) "FMLA Leave" means a leave of absence provided to an Employee of the Company
under the Family and Medical Leave Act of 1993.
(i) "Highly Compensated Individual" means a highly compensated individual as defined in
Code Section 125 (e)(2).
0) "Highly Compensated Participant" means a highly compensated participant as defined in
Code Section 125 (e)(1).
(k) "Insurance Plan" means the plan(s) maintained by the Company to provide accident and
health benefits to the Company's Employees, which is partially or fully insured by an
independent third party.
(1) "Key Employee" means a key Employee as defined in Code Section 416 (i)(1).
(in) "Participant" means any Employee of the Company who is a participant in the employer
sponsored group insurance plan and meets the requirements of Section 3.01.
(n) "Premium Payment Option" means the option to pay Insurance Plan premiums through
the Plan.
(o) "Plan" means the cafeteria plan herein contained, as amended from time to time, which
shall be known as "THE TOWN OF GULF STREAM PREMIUM ONLY PLAN."
(p) "Plan Year" means the twelve (12) month period beginning October 1 and ending
September 30.
Section 2.02. Construction. Wherever appropriate, words used in the singular may include the plural,
or the plural may be read as the singular; and the masculine may include the feminine.
ARTICLE M. ELIGIBILITY.
Section 3.01. Eligibility to Participate.
(a) An Employee who regularly works 35 hour(s) per week and has completed a period of
30 day(s) of consecutive employment with the Company may become a Participant in the Plan,
counting periods that an Employee is on leave required under FMLA or during as absence from
work for duty in the uniformed service of the United States of America.
(b) Any former Employee within a collective bargaining unit shall become eligible to
participate in this Plan only upon agreement between the Company and the Employee's
bargaining representative or written direction by the Company after satisfaction of any collective
bargaining obligation under the National Labor Relations Act. Any such Employee's date of
participation shall be that determined through collective bargaining, or as may otherwise be
lawfully determined by the Company.
Section 3.02. Participation Requirements
(a) An Employee of the Company who makes an election to allocate contributions to the
Plan shall become a Participant on the later of.
(1) the Effective Date; or
(2) the first day of the month coincidental with or next following the date the
Employee completes the standards of Section 3.01.
Enrollment in the plan in this matter constitutes an election to participate in the Plan.
(b) Any Participant whose employment with the Company terminates and who is rehired,
shall be reinstated as a Participant, with the same benefit elections previously made for the
current plan Year, on the first day of the month coincidental with or next following the date the
Employee completes 30 day(s) of consecutive employment, provided such date shall not be
earlier than the first day of the first Plan Year beginning after such Participant's termination.
(c) Notwithstanding anything in this Section 3.01 to the contrary, the Administrator may, at
any time, exclude one or more Highly Compensated Individuals or Key Employees from
participation in the Plan if such exclusion is necessary to maintain the statutory non - taxable
status of benefits received under this Plan by other Key Employees. Such exclusion shall be
accomplished in a nondiscriminatory manner and shall be based on such facts and circumstances
as the Administrator deems to be appropriate.
ARTICLE IV. BENEFITS.
Section 4.01. Benefit Options. A Participant may, pursuant to the procedures described in Article V:
(a) Elect to receive his full Compensation in cash (the "Cash Option "), or to have a portion
of it applied by the Company toward the cost of the Premium Payment Option described below
(b) Elect to have any Company Credits allocated under this Plan applied by the Company
toward the cost of the Premium Payment Option described below:
(1) "Company Credits" are dollar contributions to the Plan with respect to a
Participant made independently by the Company which may be used for purposes of
purchasing benefits through the Plan. The amount of Company Credits shall be
determined annually by the Company and communicated to Participants and Eligible
Employees during the enrollment period in a timely fashion. Company Credits will be
available for application under the Plan ratably with respect to each payroll period
during a Plan Year.
(2) Company Credits may be applied with respect to the Premium Payment Option
toward the cost of premiums for the Insurance Plan(s) for the coverage elected by the
Participant. Company Credits may be applied with respect to any of the Insurance Plans
providing accident or health benefits and /or group term life benefits.
Section 4.02. Premium Payment Option. Benefits shall be provided through, and in accordance with
the provisions of, the Insurance Plan(s). The maximum amount of Company Credits and Compensation
a Participant may elect to have applied on a pre -tax basis toward the cost of the Premium Payment
Option for any Plan Year or a portion thereof is the cost of premiums under the Insurance Plan(s) for the
coverage elected by the Participant, which shall not exceed ten thousand dollars ($10,000).
ARTICLE V. BENEFIT ELECTION PROCEDURES.
Section 5.01. Benefit Elections.
(a) The Administrator shall prescribe suitable forms to be utilized by Participants in electing
benefit options under the Plan.
(b) The benefit period under the Plan shall be the Plan Year. Benefit elections for any Plan
Year shall be made, in accordance with procedures prescribed by the Administrator, prior to
October 1 or, in the case of a new Participant, prior to his effective date of participation in the
Plan.
(c) There will be an enrollment period during which the Employees can enroll in and select
benefits available under the Plan prior to;
(1) The first day of a Plan Year during which an Employee is eligible to participate
in the Plan; or
(2) The first day, during a Plan Year, of the month after the date that a new
Employee becomes eligible to participate in the Plan, in accordance with the standards of
Section 3.01
(d) An enrollment form must be completed and returned to the Administrator prior to the
end of the enrollment period for an election to be effective.
(e) Prior to the beginning of each subsequent Plan Year with respect to which this Plan
continues in effect, there will be an enrollment period during which a Participant will have the
opportunity to elect a different or new coverage under the Plan effective for the subsequent Plan
Year.
(fl A benefit election for any Plan Year shall be irrevocable; provided, a Participant may
revoke or modify a benefit election during a current Plan Year if the revocation or modification
is on account of a change in the Participant's family status. A change in family status shall be
determined in accordance with regulations promulgated by the Internal Revenue Service under
IRC Section 125. Any revocation or modification must be consistent with the reason such
revocation or modification was permitted. Any such revocation or modification shall be on a
form prescribed by the Administrator and shall be effective as of the first pay period after such
form is completed and returned to the Administrator.
(g) A Participant who returns from unpaid FMLA Leave after having changed his or her
benefit elections on account of taking FMLA Leave may have his or her benefit elections
reinstated on the same terms as prior to taking FMLA Leave, to the extent that reinstatement is
required under the FMLA Leave. A reinstated Participant shall not have a greater right to
benefits for the remainder of the Plan Year than a Participant who is continuously working
during the Plan Year.
Section 5.02. Failure to Enroll.
(a) If an Employee fails to return an initial election form prior to the end of the enrollment
period, the Employee will not become a Participant. However, an eligible Employee will be
allowed to make an initial election to participate during a succeeding enrollment period if he or
she wishes.
(b) If a participant does not return an election form for a subsequent Plan Year, then that
Participant shall be considered to have made the same elections as in the prior Plan Year, subject
to the current terms, conditions, and limitations of each benefit option available at that time.
Section 5.03. Automatic Termination of Participation. Participation under this Plan shall
automatically terminate on the date on which the Participant's employment with the Company terminates.
Section 5.04. Election Modifications Required by Administrator.
(a) Notwithstanding anything in this Plan to the contrary, the Administrator may, at any
time, require all or any class of Employees to amend the amount of any Premium Payment
Option authorization by them for a Plan Year or the Administrator may take such other actions
as it deems appropriate in the event the Administrator determines that such amendments or other
actions are necessary or advisable in order to
(1) satisfy the nondiscrimination requirements imposed on this Plan by any
provision of the Code and any rules or regulations issued pursuant thereto;
(2) prevent any Participant or class of Participants from having to recognize more
income for Federal income tax purposes from the receipt of optional benefits hereunder
than would otherwise be recognized due to the application of any provision of the Code,
or rules or regulations issued pursuant thereto; or
(3) maintain the statutory nontaxable status of benefits received under this Plan
pursuant to the requirements of the applicable provisions of the Code, including, without
limitation, a modification of elections by Highly Compensated Participants or Key
Employees, with or without the consent of such Employees.
(b) The Administrator may divide Employees into two or more classes for purposes of this
Section 5.04 provided that such classification shall be nondiscriminatory, based on such facts and
circumstances as the Administrator determines to be appropriate including, but not limited to,
scheduled hours or other relevant considerations. Any required amendment of elections as
permitted by this Section 5.04 shall be made pursuant to and in accordance with such rules,
regulations and procedures as the Administrator may from time to time adopt in the exclusive
exercise of its discretion.
ARTICLE VI. PREMIUM PAYMENT.
Section 6.01. Premium Payment Option Authorization.
(a) Each Participant who timely elects the Premium Payment Option under Article IV must
authorize the Company to reduce his Compensation for the Plan Year or allocate Company
Credits under this plan in an amount equal to the Participant's cost of premiums under the
Insurance Plan(s) for coverage elected by the Participant, subject to automatic adjustment in the
event of a change in the cost of the Insurance Plan(s).
(b) A Premium Payment Option authorization for any Plan Year shall be irrevocable as
provided in Section 5.01(f). A Participant may, however, revoke or modify a Premium Payment
Option authorization during a current Plan Year if the revocation or modification is on account
of a change in the Participant's family status. Additionally, if the premium amount of an
Insurance Plan significantly increases or the coverage of an Insurance Plan is significantly
curtailed or modified, a Participant may revoke a Premium Payment Option authorization during
a current Plan Year and, in lieu thereof, receive on a prospective basis coverage under another
Insurance Plan with similar coverage, if similar coverage is available, in accordance with
regulations promulgated by the Internal Revenue Service under IRC Section 125. Any such
revocation or modification must be consistent with the reason such revocation or modification
was permitted. Any such revocation or modification shall be on a form prescribed by the
Administrator and shall be effective as of the first pay period after such form is completed and
returned to the Administrator.
Section 6.02. Automatic Termination of Authorization. Premium Payment Option authorizations
made under this Article shall automatically terminate on the date on which the Participant's employment
with the Company terminates.
Section 6.03. Payment During Leave. With respect to Participants who go on leave which is
Company- approved or FMLA Leave, contributions required or permitted to be made by them under the
Plan may be made by one of the following methods, which must be nondiscriminatory, as agreed
between the Employee on leave and the Company before the commencement of the leave of absence or
the applicable coverage period:
(a) Contributions may be made by the Employee on leave on a regular basis (generally on
an after -tax basis);
(b) Contributions may be made by the Employee on leave by pre - payment (generally on a
Pre-tax basis with respect to the same Plan Year during which the leave occurs); or
(c) Contributions advanced by the Company on behalf of the Employee on leave may be re-
paid by the Participant when he returns from leave on either a pre -tax basis with respect to the
same Plan Year during which the leave occurs or on after -tax basis.
ARTICLE VII. NONDISCRIMINATION.
Section 7.01. Nondiscrimination.
(a) Notwithstanding anything in this Plan to the contrary, this Plan shall not discriminate in
favor of Highly Compensated Individuals as to eligibility to participate.
(b) Notwithstanding anything in this Plan to the contrary, this Plan shall not discriminate in
favor of Highly Compensated Participants as to contributions or benefits.
(c) The statutory non - taxable benefits provided to Key Employees under the Plan shall not
exceed 25% of the aggregate of such statutory non - taxable benefits provided for all Employees
under the Plan.
(d) All Employees who are treated as employed by a single employer under subsections (b),
(c) or (m) of Section 414 of the Code shall be treated as employed by a single employer for
purposes of this Article VII.
ARTICLE VIII. GENERAL PROVISIONS.
Section 8.01. Administration.
(a) The Administrator shall serve at the pleasure of the Board or designated officer of the
Company. The Administrator shall construe and interpret this Plan, and shall decide all
questions of eligibility and benefits. Any such determination and decision of the Administrator
shall be final, conclusive, and binding upon all parties affected thereby, unless arbitrary and
capricious. This Plan is intended to be interpreted in accordance with and qualify as a "cafeteria
plan" under Section 125 of the Code. To the extent any provisions contained herein are
inconsistent with this Code section, such provisions are hereby modified to conform therewith.
(b) The Administrator shall establish uniform rules, procedures and interpretations as
appropriate for the administration of the Plan, to be consistently applied to all Participants in like
circumstances.
(c) Any administrative discretion under the Plan shall be based solely on clearly defined and
ascertainable criteria set forth in the Plan.
Section 8.02. Amendment and Termination. This Plan may be amended or terminated at any time by
the Board. Upon termination of the Plan, Participant's benefits shall become payable as the Board may
direct. The Board shall inform the Participants of any changes, amendments or termination of this Plan.
Section 8.03. Termination of Employment. If a Participant has authorized the Premium Payment
Option and that Participant's employment terminates for any reason, the Participant shall continue to
receive such benefits to the extent provided for by the terms of the Insurance Plan(s).
Section 8.04. Exclusive Benefit. Amounts available for elective use under this Plan shall be used for
the exclusive benefits of Employees and their dependents. The Plan, however, does not grant any
Employee the right to be retained in the service of the Company.
Section 8.05. Spendthrift Clause. Benefits payable under this Plan may not be assigned, alienated,
transferred, pledged or encumbered, nor shall any such benefit be subject to claims of or seizure by legal
process by creditors.
Section 8.06. Company Liability.
(a) Benefits payable under this Plan will be paid solely from the general assets of the
Company, without interest or earned credit of any kind.
(b) No Employee, Participant, dependent or beneficiary shall have any right or interest in
any assets of the Company upon termination of this Plan, their employment or otherwise, except
as specifically provided under this Plan, and then only to the extent of the benefits payable under
this Plan.
Section 8.07. Related Employers. If the Company is a member of a controlled group of corporations,
the Company may, by resolution, authorize other members of the controlled group to adopt this Plan.
Section 8.08. Governing Law. To the extent the laws of any State shall apply, this Plan shall be
construed, administered and enforced in accordance with the laws of the State of Florida.
Date. IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of the Effective
Attest:
TOWN OF GULF STREAM