Loading...
HomeMy Public PortalAboutResolution 02-89 Adoption of a "Cafeteria Plan" for city employees 1 • • • • 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. :; . • 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 . • • • 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. • 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. • • 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. • 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. • 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 • 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. Aeof, •�_ - '- ms - 4.yor 111 ATTEST: - - :441111">: //22;/rr' Cit ' Clerk