HomeMy Public PortalAboutResolution 02-89 Adoption of a "Cafeteria Plan" for city employees 1
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RESOLUTION NO. d. T1
' WHEREAS, the city has under consideration adoption of a .
"Cafeteria .Plan for its employees under Section 125 (d) of
• the Internal" Revenue Code.
NOW,., THEREFORE, Beit resolved that the• City of McCall,
Idaho, does hereby adopt that certain Section 125 Plan
dated and. signed concurrently herewith and on file with the
City Clerk. :; .
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Be it further resolved, that pursuant . to Article 14 of
the plan, administra,tin of such plan shall be the responsi-
' bility of the Employee Benefits Committee consisting of the
• members hereinafter named ,who are hereby appointed to such
• committee to-wit:
Councilman Richard Moltke
Councilman Gary -Van Komen . •
City Treasurer, James Henderson
Dated this q-}, day of March, 1989 . •
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• K ) • Marl */
Attest: / •
City glerk 0
RESOLUTION NO. ;it'll
WHEREAS, the city has under consideration adoption of a
"Cafeteria Plan" for its employees under Section 125 (d) of
the Internal Revenue Code.
NOW, THEREFORE, Be it resolved that the City of McCall,
Idaho, does hereby adopt that certain Section 125 Plan
dated and signed concurrently herewith and on file with the
City Clerk.
Be it further resolved, that pursuant to Article 14 of
the plan, administratin of such plan shall be the responsi-
bility of the Employee Benefits Committee consisting of the
members hereinafter named who are hereby appointed to such
committee, to-wit:
Councilman Richard Moltke
Councilman Gary Van Komen
City Treasurer, James Henderson
Dated this 9th day of March, 1989 .
Mayer
Attest:
City C i•rk
CITY OF McCALL
SECTION 125 PLAN
ARTICLE 1
Preamble
The purpose of the Plan is to permit Members to choose fringe benefits
available to be purchased on their behalf by the Employer. This plan
is intended to be a "cafeteria plan" as defined in section 125(d) of
the Code.
The provisions of this Plan shall be effective as of March 9, 1989.
ARTICLE 2
Definitions
Each word and phrase defined in this Article 2 shall have the
following meaning whenever such work or phrase is capitalized and used
herein unless a different meaning is clearly required by the context
of the plan.
Section 2.01 Account: The individual account established on the books
of the Employers under Section 11.01 in the name of each Member for
the purpose of accounting for contributions allocated to and benefits
paid for a Member.
Section 2.02 Board: The board of directors of the Company.
Section 2.03 Code: The Internal Revenue Code of 1954, as amended from
time to time.
Section 2.04 City: City of McCall.
Section 2.05 Compensation: A Member's basic pay, including bonuses,
overtime and commissions, as determined by the Committee, for personal
services rendered in the course of employment and contributions under
Sections 4.01 and 4.02 on a Member's behalf.
Section 2.06 Employee: Any person employed by the Company who is
eligible for benefits under a Medical Plan but excluding any person
covered by a collective bargaining agreement between the Company and a
bargaining unit of employees, unless coverage under this Plan is
provided for under the collective bargaining agreement.
Section 2.07 Employer: City of McCall.
Section 2.08 ERISA: The Employee Retirement Income Security Act of
1974, as amended form time to time.
Section 2.09 Highly Compensated Member: A Member who is:
a. an officer;
b. a shareholder owning more than 5 percent of the voting power
or other value of all classes of stock;
c. otherwise treated as highly compensated under section 125 of
the Code; or
d. a spouse or dependent (within the meaning of Code section
152) of one of the above.
Section 2. 10 Medical Plan Any contract or plan of the Company
other than this Plan which provides medical care benefits (in-
cluding dental and vision care benefits) for employees generally.
Section 2. 11 Member Any employee who has become eligible to
participate in the Plan in accordance with Section 3. 01 and who
has not ceased to be an Employee.
Section 2. 12 Nonelective Contributions The contributions made
pursuant to Section 4.03.
Section 2. 13 Normal Retirement Age The Normal Retirement Age
under any qualified retirement plan of the Company in which a
Member participates.
Section 2. 14 Period of Coverage The Plan Year, except that it
may be a fraction of a Plan Year as provided in Section 5.04.
Section 2. 15 Plan The Employer's cafeteria plan, set forth
herein.
Section 2. 16 Plan Year Each successive 12 month period beginning
with the effective date of the Plan as noted in the Preamble.
ARTICLE 3
Eligibility Requirements
Section 3.01 Eligibility: Any employee employed by the Employer shall
become a Member as of the later date of March 9, 1989 or the date of
the Employee's coverage under the Plan.
Section 3.02 Enrollment and Membership: The Company shall notify in
writing each Employee who becomes a Member of the Plan and shall
explain the rights, privileges and duties of a Member of the Plan.
Each Member may elect to participate as of the date on which he or she
becomes eligible in accordance with Section 3.01 by completing and
delivering to the Company a salary reduction agreement and an election
of benefits form on the forms provided therefore by the Company.
ARTICLE 4
Contributions
Section 4. 01 Medical Contributions For any Plan year, each
Member may elect to have contributed to his or her Account a
specified amount of his or her compensation for such Plan Year to
pay for benefits under a Medical Plan. The amount of such con-
tributions shall be determined in accordance with the Medical
Plan.
Section 4. 02 Pay reduction and Payroll Withholding A Member's
compensation for a Plan Year shall be reduced by the amount of
the contributions which he or she elects for such Plan Year under
Section 4.01 . Contributions shall be made only by way of payroll
withholding which shall be made during a Member's applicable
Period of Coverage.
Section 4. 03 Nonelective Contributions For any Plan Year, the
Employers may make further contributions to the Plan on behalf of
Members. In the case of a Member who becomes eligible to Parti-
cipate during a Period of Coverage, as provided for in Section
5.04, the Employer's non-elective contribution will be a pro-rata
amount based on the number of months left in the applicable
Period of Coverage. Any such contributions shall be made only on
a nondiscriminatory basis.
ARTICLE 5
Elections
Section 5. 01 In General Elections of contributions and benefits
shall be made at the time, in the manner and subject to the con-
ditions specified by the Committee which shall prescribe uniform
and nondiscriminatory rules for such elections.
Section 5. 02 Contributions and Benefits Members must elect both
the amount of contributions and how much of the contributions as
well as Nonelective Contributions allocated to their Accounts
shall be allocated to each benefit for an elected period of
coverage. Contributions allocated to a particular benefit may
never be used for any other benefit.
Section 5. 03 Period of Coverage Except as provided in Sections
5. 04 and 5. 06, any Member electing contributions and benefits
must make an irrevocable election for an entire Period of Cover-
age.
Section 5. 04 Fractional Periods Members who become eligible to
participate during a Period of Coverage may elect to participate
for a period lasting until the end of the current Period of
Coverage. In such cases, the interval commencing the day after
their elections are made and ending at the end of the current
Period of Coverage shall be deemed to be their Period of Cover-
age. Such Members must elect to participate no later than 30
days after becoming eligible to do so or within such other time
limit as the Committee may prescribe.
Section 5. 05 Timinc of Elections Elections of contributions and
benefits for a Period of Coverage shall be made prior to such
Period of Coverage, provided that where a Member commences or
recommences participation during a Period of Coverage, he or she
shall make elections prior to commencement of participation.
Section 5.06 Changes of Elections Elections of contributions
and/or benefits may be changed during a Period of Coverage only
on account of and consistent with a change in family status be-
cause of marriage, divorce, death of a spouse or dependent or
change in the number of a Member's dependents, or change in the
employment status of a spouse. Changes in elections shall only
be effective as to contributions and benefits following the ef-
fective date of such changes.
Section 5.07 Medical Plans Elections of contributions under
Section 4. 01 shall be subject to the rules governing elections of
benefits under the Medical Plan.
• ARTICLE 6
Benefits
Section 6. 01 Benefits Available Subject to Article 10, Members
may elect one or more of the following benefits:
a. Medical Plan Benefits
b. Cash
Section 6.02 Medical Plan Benefits Contributions under Section
4.01 may be used to purchase benefits under the Medical Plan
which shall be governed by the terms of the Medical Plan.
Section 6.03 Cash Benefits Cash benefits are represented by the
maximum permissible contributions and the amount of such con-
tributions elected by a Member.
ARTICLE 7
Limitations on Benefits
Section 7.01 Coverage Amounts for coverage under the Medical
Plan may only be paid for coverage during the Period of Coverage
elected for such benefit and only from contributions made for
such Benefit during such Period of Coverage.
Section 7. 02 Forfeitures Amounts remaining in the Member' s
Medical Plan subaccount shall be forfeited after payment of all
costs for such plan incurred during the applicable Period of
Coverage.
Section 7.03 Medical Plan Coverage and limitations for a
Member' s Medical Plan benefits shall be as set forth in the
Member's Medical Plan.
ARTICLE 8
Claims for Benefits
Section 8. 01 Medical Plans Claims under a Member' s Medical Plan
shall be governed by the terms of such Medical Plan.
ARTICLE 9
Post-Termination Participation
Section 9. 01 Medical Plans Post-termination participation in a
Medical Plan. shall be governed by the terms of such Medical Plan.
ARTICLE 10
Nondiscrimination
Section 10. 01 Reduction of Contributions and Benefits The Com-
pany may reject any election and reduce the amount of contri-
butions or nontaxable benefits to the extent the Company deems
necessary to assure that the Plan does not discriminate in favor
of Highly Compensated Members in violation of Code section 125 or
any other applicable provision of law or to prevent taxation of
key employees under the provisions of section 125(b) (2) of the
Code. Any rejection of elections or any reduction of contribu-
tions or benefits shall be made by the Company on a reasonable
and nondiscriminatory basis. Contributions which may not be paid
out because of benefit reductions imposed by this Section 10.01
shall be forfeited.
Section 10. 02 Prohibition of Discrimination Any discretionary
acts to be taken under the terms and provisions of this Plan by
the Company shall be uniform in their nature and application to
all those similarly situated, and no discretionary acts shall be
taken that would be discriminatory under the provisions of the
Code relating to cafeteria plans as such provisions now exist or
may from time to time be amended.
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ARTICLE 11
Accounts
Section 11 . 01 Accounts A separate Account shall be maintained
for each Member to reflect the amount of contributions on his or
her behalf under Article 4.
Section 11 . 02 Assignment of Benefits Any interest in a Member's
Account may not be assigned, transferred or alienated in any
manner whatsoever.
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• ARTICLE 12
Amendment and Termination
Section 12. 01 Amendment of Plan The Company may amend any or all
provisions of the Plan at any time by written instrument iden-
tified as an amendment' of the Plan effective as of a specified
date.
Section 12. 02 Termination of Plan This Plan may be terminated in
whole or in part at any time by the Company.
Section 12.03 Preservation of Rights Termination or amendment of
the Plan shall not affect the rights of any Member in his or her
account or the right to claim reimbursement for expenses incurred
prior to such termination or amendment as the case may be to the
extent such amount is payable under the terms of the Plan prior
to the effective date of such termination or amendment.
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ARTICLE 13
Miscellaneous
Section 13. 01 Facility of Payment If the Company deems any
person entitled to receive any amount under the provisions of
this Plan incapable of receiving or disbursing the same by reason
of minority, illness or infirmity, mental incompetency, or in-
capacity of any kind, the Company may, in its discretion, take
any one or more of the following actions:
a. Apply such amount directly for the comfort, support and
maintenance of such person;
b. Reimburse any person for such support theretofore sup-
plied to the person entitled to receive any such pay-
ment;
c. Pay such amount to a legal representative or guardian
or any other person selected by the Company to dis-
burse it for such comfort, support and maintenance,
including without limitation, any relative who had
undertaken, wholly or partially, the expense of such
person's comfort, care and maintenance, or any institu-
tion in whose care or custody the person entitled to
the amount may be. The Company may, in its discre-
tion, deposit any amount due to a minor to his or her
credit in any savings or commercial bank of the Com-
pany' s choice.
Section 13. 02 Lost Payee Any amount due and payable to a Member
or such Members spouse or dependents shall be forfeited if the
Company, after reasonable effort, is unable to locate the Member,
spouse or dependent to whom payment is due. Such forfeited
amounts shall be applied towards contributions to the Plan.
However, any such forfeited amount will be reinstated through a
special contribution to the Plan by the Employers and become
payable if a claim is made by the Member or the Member's spouse
or dependents. The Company shall prescribe uniform and nondis-
criminatory rules for carrying out this provision.
Section 13.03 Indemnification To the extent permitted by law,
the Company shall indemnify and hold harmless the Members, any
Employee, and any other person or persons to whom the Company
have delegated fiduciary or other administration duties under the
Plan, against any and all claims, losses, damages, expenses, and
liabilities arising from any act or a failure to act that con-
stitutes or is alleged to constitute a breach of such persons's
responsibilities in connection with the Plan under ERISA or any
other law, unless the same is determined to be due to gross
negligence, willful misconduct, or willful failure to act.
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Section 13. 04 Titles and Headings The titles and headings of the
Articles and Sections of this instrument are placed herein for
• convenience of reference only, and in the case of any conflicts,
the text of this instrument, rather than the titles or headings,
shall control.
Section 13. 05 Number Wherever used herein, the singular shall
include the plural and the plural shall include the singular,
except where the context requires otherwise.
Section 13. 06 Applicable Law The provisions of this Plan shall
be construed according to the laws of the State of Idaho, except
as superseded by federal law, and in accordance with the Code and
ERISA. The Plan is intended to be a cafeteria plan under section
125 (d) of the Code, and shall be construed accordingly.
• ARTICLE 14
Administration of the Plan
Section 14.01 Appointment of the Committee The administration of
the Plan, as provided herein, including the payment of all
benefits to Members or their beneficiaries, shall be the
responsibility of the Employee. Benefits Committee, which shall be
the administrator of the Plan. In addition, the Committee and
each member thereof shall be named fiduciaries of the Plan. The
Committee shall consist of a Chairperson and at least two other
persons appointed from time to time by the Company who shall
serve at the pleasure of the Board, without compensation, unless
otherwise determined by the Board.
Section 14. 02 Conduct of Committee Business The Committee
shall elect its Chairperson who shall be a member of the
Committee and a Secretary who may or may not bea member of the
Committee. It shall appoint such subcommittees as it shall deem
necessary and appropriate. The Committee shall conduct its
business according to the provisions of this Article 14 and shall
hold regular meetings in any convenient location. A majority of
all of the members of the Committee shall have power to act, and
the concurrence of dissent of any member may be by telephone,
wire cablegram or letter.
Section 14.03 Records and Reports of the Committee The
Committee shall keep such written records as it shall deem
necessary or proper, which records shall be open to inspection by
the Company. The Committee shall prepare and submit to the
Company an annual report which shall include such information as
the Committee deems necessary or advisable.
Section 14. 04 Administrative Powers and Duties The Committee
shall have the power to take all actions required to carry out
the provisions of the Plan and shall further have the following
powers and duties, which shall be exercised in a manner
consistent with the provisions of the Plan:
a. To construe and interpret the provisions of the Plan,
and make rules and regulations under the Plan to the
extent deemed advisable by the Committee;
b. To decide all questions as to eligibility to become a
Member in the Plan and as to the rights of Members
under the Plan;
c. To file or cause to be filed all suchannual reports,
returns, schedules, descriptions, financial statements
and other statements as may be required by any federal
or state statute, agency, or authority;
d. To obtain from the Affiliated Companies and employees
such information as shall be necessary to the proper
• administration of the Plan;
e. To determine the amount, manner and time of payment of
benefits hereunder;
f. To contract with such insurance carriers or other
suppliers as may be necessary to provide for benefits;
g. To communicate to any insurer or other contract
supplier of .benefits under this Plan in writing all
information required to carry out the provisions of the
Plan;
h. To notify the Members of the Plan in writing of any
amendment or termination of the Plan, or of a change in
any benefits available under the Plan;
i. To prescribe such forms as may be required for
Employees to make elections under this Plan; and
j . To do such other acts as it deems reasonably required
to administer the Plan in accordance with its
provisions, or as may be provided for or required by
law.
Section 14. 05 Fiduciary Duties The Committee and any other
fiduciary within the meaning of ERISA shall discharge their
duties solely in the interest of Members and their beneficiaries
and:
1 . For the exclusive purpose of providing benefits to
Members and their beneficiaries and defraying
reasonable expenses of administering the Plan;
2. With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matter would
use in the conduct of an enterprise of a like character
and with like aims;
3. To the extent a fiduciary possesses and exercises
investment responsibilities, by diversifying
investments so as to minimize the risk of large losses,
unless under the circumstances it is clearly prudent
not to do so; and
4. In accordance with the documents and instrument
governing the Plan insofar as such documents and
instruments are consistent with the provisions of
ERISA.
Section 14. 06 Allocation or Delegation of Duties and
Responsibilities In furtherance of their duties and
responsibilities under this Plan, the Committee and the Board
may, subject always to the requirements of Section 14.05,
a. Employ agents to carry out nonfiduciary
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responsibilities;
b. Employ agents to carry out fiduciary responsibilities
(.other than trustee responsibilities as defined in
section „405(c) (3) of ERISA) ;
c. Consult with counsel, who may be of counsel to the
Company; and
d. Provide for the allocation of fiduciary
responsibilities (other than trustees' responsibilities
as defined in section 405 (c) (3) of ERISA) among
Committee members, in the case of the Committee, and
among members of the Board in the case of the Board.
Section 14. 07 Procedure for the- Allocation or Delegation of
Fiduciary Duties Any action described in subsections (b) or (d)
of Section 14.06 may be taken by the Committee or the Board only
in accordance with the following procedure:
a. Such action shall be taken by a majority of the
Committee or the Board, as the case may be, in a
resolution approved by a majority of such Committee or
Board;
b. The vote cast by each member of the Committee or the
Board for or against the adoption of such resolution
shall be recorded and made a part of the written record
of the Committee's or Board 's proceedings; and
c. Any delegation of fiduciary responsibilities or any
allocation of fiduciary responsibilities among members
of the Committee or the Board may be modified or
rescinded by the Committee or Board according to the
procedure set forth in subsections (a) and (b) of this
Section 14.07.
Section 14. 08 Claims Procedure The Committee shall establish
a reasonable claims procedure.
Section 14. 09 Medical Plans Medical Plans shall be administered
by the administrators of such Plans and all claims for benefits
under such Plans shall be governed by the terms of such Plans.
Dated this 9th day of March 1989.
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4.yor 111
ATTEST: - -
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Cit ' Clerk