48-92 Resolution
RECORD OF RESOLUTIONS
Dayton Legel Blank Co" f-orm No. 30045
Resulution SO, 48-92 Passed 19
A RESOLUTION ADOPTING THE ICMA (INTERNATIONAL
CITY MANAGEMENT ASSOCIATION) RETIREMENT
CORPORATION DEFERRED COMPENSATION PLAN AND
AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
NECESSARY AGREEMENTS INCIDENTAL TO THE
ADMINISTRATION OF SAID PLAN.
WHEREAS, the City of Dublin wishes to offer the lCMA
Retirement Corporation Deferred Compensation Plan to its
employees as an alternative to the existing deferred
compensation plan offered through the Ohio Public Employees
Deferred compensation Program; and
WHEREAS, the city of Dublin recognizes that offering such
deferred compensation plans benefits the City by enabling
it to offer enhanced retirement security for its employees,
by providing increased flexibility in its personnel
management system, and by assisting in the attraction and
retention of competent personnel; and
WHEREAS, the City has determined that the establishment of
an alternative deferred compensation plan to be
administered by the lCMA Retirement Corporation serves the
aforementioned objectives; and,
WHEREAS, the City desires that the funds held under such
plan be invested in the lCMA Retirement Trust, a trust
established by public employers for collective investment
of funds held under this deferred compensation plan;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City
of DUblin, state of Ohio, (p of its elected members
concurring;
section 1. That the City of Dublin hereby adopts the lCMA
Retirement Corporation Deferred Compensation Plan referred
to as Appendix A.
Section 2. That the City of Dublin hereby executes the
Declaration of Trust of the lCMA Retirement Trust, attached
hereto as Appendix B, with the intent that this execution
be operative with respect to the assets of the plan to be
invested with the lCMA Retirement Trust.
Section 3. That the City Manager shall be the chief
management official of this program; shall receive
necessary reports, notices, etc. from the lCMA Retirement
Corporation or the lCMA Retirement Trust; shall cast, on
behalf of the city of Dublin, any required votes under the
lCMA Retirement Trust; shall assign administrative duties
to the appropriate departments to coordinate the plan; and
is hereby authorized to execute all necessary agreements
wi th the lCMA Retirement Corporation incidental to the
administration of the Plan.
section 4. That this Resolution shall take effect and be
- in force on the earliest date permitted by law.
Passed this Lf-rh" day of ~d ' 1993.
x: ~ . posted in the
or - Pres' ng Officer I,' .' . r,,:d\!t'on were. .
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ATTEST:
a- . '1 r\ublin Ohio
0/) ~.~ r1"r" or ((Juno. u .
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Clerk of Council
-
Deferred Compensation
PJan Document
(Appendix A)
r
ICMA
RETIREMENT
CORPORATION
08/89
DEFERRED COMPENSATION PLAN DOCUMENT
ARTICLE J. INTRODUCTION and who has been designated by the Employer as
The Employer hereby establishes the Employer's Deferred eligible to participate in the Plan.
Compensation Plan, hereinafter referred to as the "Plan," Section 2.06 Includible Compensation: The amount of
The Plan consists of the provisions set forth in this document. an Employee's compensation from the Employerfor
The primary purpose of this Plan is to provide retirement a taxable year that is attributable to services per-
formed for the Employer and that is includible in the
income and other deferred benefits to the Employees of the Employee's gross income for the taxable year for
Employer in accordance with the provisions of Section 457 of federal income tax purposes; such term does not
the Internal Revenue Code of 1986, as amended (the "Code"). include any amount excludable from gross income
This Plan shall be an agreement solely between the under this Plan or any other plan described in
Employer and participating Employees. Section 457(b) of the Code or any other amount
excludable from gross income forfederal income tax
purposes, Includible Compensation shall be deter-
ARTICLE II. DEFINITIONS mined without regard to any community property
Section 2.01 Account: The bookkeeping account laws.
maintained for each Participant reflecting the cu- Section 2.07 Joinder Agreement: An agreement en-
mulative amount of the Participant's Deferred Com- tered into between an Employee and the Employer,
pensation, including any income, gai{Js, losses, or including any amendments or modifications thereof.
increases or decreases in market value attributable Such agreement shall fix the amount of Deferred
to the Employer's investment of the Participant's Compensation, specify a preference among the
Deferred Compensation, and further reflecting any investment alternatives designated by the Employer,
distributions to the Participant or the Participant's designate the Employee's Beneficiary or Beneficia-
Beneficiary and any fees or expenses charged ries, and incorporate the terms, conditions, and
against such Participant's Deferred Compensation. provisions of the Plan by reference.
Section 2.02 Administrator: The person or persons Section 2.08 Normal Compensation: The amount of
named to carry out certain nondiscretionary ad- compensation which would be payable to a Partici-
ministrative functions under the Plan, as hereinafter pant by the Employer for a taxable year if no Joinder
described. The Employer may remove any person Agreement were in effect to defer compensation
as Administrator upon 60 days' advance notice in under this Plan.
writing to such person, in which case the Employer Section 2.09 Normal Retirement Age: Age 70-1/2, un-
shall name another person or persons to act as
Administrator. The Administrator may resign upon less the Participant has elected an alternate Normal
60 days' advance notice in writing to the Employer, Retirement Age by written instrument delivered to
in which case the Employer shall name another the Administrator prior to Separation from Service,
person or persons to act as Administrator. A Participant's Normal Retirement Age determines
the period during which a Participant may utilize the
Section 2.03 Beneficiary: The person or persons desig- catch-up limitation of Section 5.02 hereunder. Once
nated by the Participant in his Joinder Agreement a Participant has to any extent utilized the catch-up
who shall receive any benefits payable hereunder in limitation of Section 5,02, his/her Normal Retire-
the event of the Participant's death. In the event that ment age may not be changed.
the Participant names two or more Beneficiaries, A Participant's alternate Normal Retirement Age
each Beneficiary shall be entitled to equal shares of
the benefits payable at the Participant's death, un- may not be earlier than the earliest date that the
less otherwise provided in the Participant's Joinder Participant will become eligible to retire and receive
Agreement. If no beneficiary is designated in the unreduced retirement benefits under the Employer's
Joinder Agreement, if the Designated Beneficiary basic retirement plan covering the Participant and
predeceases the Participant, or if the designated may not be later than the date the Participant will
Beneficiary does not survive the Participant for a attain age 70-1/2. If a Participant continues employ-
period of fifteen (15) days, then the estate of the ment after attaining age 70-1/2, not having previ-
Participant shall be the Beneficiary. ously elected an alternate Normal Retirement Age,
the Participant's alternate Normal Retirement Age
Section 2.04 Deferred Compensation: The amount of shall not be later than the mandatory retirement age,
Normal Compensation otherwise payable to the if any, established by the Employer, or the age at
Participant which the Participant and the Employer which the Participant actually separates from ser-
mutually agree to defer hereunder, any amount vice if the Employer has no mandatory retirement
credited to a Participant's Account by reason of a age. If the Participant will not become eligible to
transfer under section 6,03, or any other amount receive benefits under a basic retirement plan
which the Employer agrees to credit to a Participant's maintained by the Employer, the Participant's alter-
Account. nate Normal Retirement Age may not be earlier than
Section 2.05 Employee: Any individual who provides age 55 and may not be later than age 70-1/2,
services for the Employer, whether as an employee Section 2.1 0 Participant: Any Employee who has joined
of the Employer or as an independent contractor, the Plan pursuant to the requirements of Article IV.
.
Section 2.11 Plan Year: The calendar year. Section 5.02 Catch-Up Limitation: For each of the last
Section 2.12 Retirement: The first date upon which both three (3) taxable years of a Participant ending be-
of the following shall have occurred with respect to fore his attainment of Normal Retirement Age, the
a participant: Separation from Service and attain- maximum amount of Deferred Compensation shall
ment of age 65. be the lesser of: (1) $15,000 or (2) the sum of (i) the
Normal Limitation for the taxable year, and (ii) the
Section 2.13 Separation from Service: Severance of Normal Limitation for each prior taxable year of the
the Participant's employment with the Employer Participant commencing after 1978 less the amount
which constitutes a "separation from service" within of the Participant's Deferred Compensation for such
the meaning of Section 402(e)(4)(A)(iii) of the Code. prior taxable years. A prior taxable year shall be
In general, a Participant shall be deemed to have taken into account under the preceding sentence
severed his employment with the Employer for pur- only if (i) the Participant was eligible to participate in
poses of this Plan when, in accordance with the the Plan for such year (or in any other eligible
established practices of the Employer, the employ- deferred compensation plan established under
ment relationship is considered to have actually Section 457 of the Code which is properly taken into
terminated. In the case of a Participant who is an account pursuant to regulations under section 457),
independent contractor of the Employer, Separation and (ii) compensation (if any) deferred under the
from Service shall be deemed to have occurred Plan (or such other plan) was subject to the deferral
when the Participant's contract under which ser- limitations set forth in Section 5,01.
vices are performed has completely expired and Section 5.03 Other Plans: The amount excludable from
terminated, there is no foreseeable possibility that
the Employer will renew the contract or enter into a a Participant's gross income under this Plan or any
new contract for the Participant's services, and it is other eligible deferred compensation plan under
not anticipated that the Participant will become an section 457 of the Code shall not exceed $7,500.00
Employee of the Employer, (or such greater amount allowed under Section 5,02
of the Plan), less any amount excluded from gross
income under section 403(b), 402(a)(8), or 402
ARTICLE III. ADMINISTRATION (h)(1 )(B) of the Code, or any amount with respect to
Section 3.01 Duties of Employer: The Employer shall which a deduction is allowa:bfe by reason of a
contribution to an organization described in section
have the authority to make all discretionary decisions 501 (c)(18) of the Code.
affecting the rights or benefits of Participants which
may be required in the administration of this Plan,
! Section 3.02 Duties of Administrator: The Adminis- ARTICLE VI. INVESTMENTS AND ACCOUNT VALUES
, trator, as agent for the Employer, shall perform Section 6.01 Investment of Deferred Compensation:
l nondiscretionary administrative functions in con- All investments of Participant's Deferred Compen-
j nection with the Plan, including the maintenance of sation made by the Employer, including all property
I Participants' Accounts, the provision of periodic and rights purchased with such amounts and all
I reports of the status of each Account, and the income attributable thereto, shall be the sole prop-
1 disbursement of benefits on behalf of the Employer erty of the Employer and shall not be held in trust for
I in accordance with the provisions of this Plan. Participants or as collateral security forthe fulfillment
j of the Employer's obligations under the Plan. Such
! ARTICLE IV, PARTICIPATION IN THE PLAN property shall be subject to the claims of general
j Section 4.01 Initial Participation: An Employee may creditors of the Employer, and no Participant or
become a Participant by entering into a Joinder Beneficiary shall have any vested interest or secured
Agreement prior to the beginning of the calendar or preferred position with respect to such property or
month in which the Joinder Agreement is to become have any claim against the Employer except as a
effective to defer compensation not yet earned. general creditor,
Section 4.02 Amendment of Joinder Agreement: A Section 6.02 Crediting of Accounts: The Participant's
Participant may amend an executed Joinder Account shall reflect the amount and value of the
Agreement to change the amount of compensation investments or other property obtained by the Em-
not yet earned which is to be deferred (including the ployer through the investment of the Participant's
1 reduction of such future deferrals to zero) or to Deferred Compensation. It is anticipated that the
I change his investment preference (subject to such Employer's investments with respect to a Partici-
restrictions as may result from the nature orterms of pant will conform to the investment preference
any investment made by the Employer). Such specified in the Participant's Joinder Agreement,
! amendment shall become effective as of the begin- but nothing herein shall be construed to require the
1 ning of the calendar month commencing after the Employer to make any particular investment of a
date the amendment is executed. A Participant may Participant's Deferred Compensation. Each Partici-
at any time amend his Joinder Agreement to change pant shall receive periodic reports, not less frequently
the designated Beneficiary, and such amendment than annually, showing the then-current value of his
shall become effective immediately. Account.
ARTICLE V. LIMITATIONS ON DEFERRALS Section 6.03 Transfers: (a) Incoming Transfers: A
transfer may be accepted from an eligible deferred
Section 5.01 Normal Limitation: Except as provided in compensation plan maintained by another employer
section 5.02, the maximum amount of Deferred and credited to a Participant's Account under the
Compensation for any Participant for any taxable Plan if (i) the Participant has separated from service
year shall not exceed the lesser of $7,500.00 or 33- with that employer and become an Employee of the
1/3 percent of the Participant's Includible Com pen- Employer, and (ii) the other employer's plan pro-
sation for the taxable year. This limitation will ordi- vides that such transfer will be made. The Employer
narily be equivalent to the lesser of $7,500,00 or 25 may require such documentation from the prede-
percent of the Participant's Normal Compensation. cessor plan as it deems necessary to effectuate the
transfer, to confirm that such plan is an eligible following payment options, provided that such op-
deferred compensation plan within the meaning of tion is consistent with the limitations set forth in
Section 457 of the Code, and to assure that transfers Section 7.03:
are provided for under such plan. The Employer (a) Equal monthly, quarterly, semi-annual or annual
may refuse to accept a transfer in the form of assets
other than cash, unless the Employer and the payments in an amount chosen by the Participant,
Administrator agree to hold such other assets under continuing until his Account is exhausted;
the Plan. Any such transferred amount shall not be (b) One lump-sum payment;
treated as a deferral subject to the limitations of
Article V, except that, for purposes of applying the (c) Approximately equal monthly, quarterly, semi-
limitations of Sections 5.01 and 5.02, an amount annual or annual payments, calculated to
deferred during any taxable year under the plan continue for a period certain chosen by the
from which the transfer is accepted shall be treated Participant.
as if it has been deferred under this Plan during such (d) Annual Payments equal to the minimum
taxable year and compensation paid by the transferor distributions required under Section 401 (a)(9) of
employer shall be treated as if it had been paid by the the Code over the life expectancy of the
Employer. Participant or over the life expectancies of the
(b) Outgoing Transfers: An amount may be trans- Participant and his/her Beneficiary.
ferred to an eligible deferred compensation plan (e) Payments equal to payments made by the issuer
maintained by another employer, and charged to a of a retirement annuity policy acquired by the
Participant's Account under this Plan, if (i) the Par- Employer,
ticipant has separated from service with the Em-
ployer and become an employee of the other em- (f) Any other payment option elected by the
ployer, (ii) the other employer's plan provides that Participant and agreed to by the Employer and
sucn transfer will be accepted, and (iii) the Partici- Administrator, provided that such option must
pant and the employers have signed such agree- provide for substantially nonincreasing payments
ments as are necessary to assure that the Employer's for any period after the latest benefit
liability to pay benefits to the Partictpant has been commencement date under Section 7.01.
discharged and assumed by the other employer. A Participant's or Beneficiary's election of a
The Employer may require such documentation
from the other plan as it deems necessary to effec- payment option must be made at least 30 days
tuate the transfer, to confirm that such plan is an before the payment of benefits is to commence.
eligible deferred compensation plan within the If a Participant or Beneficiary fails to make a
meaning of section 457 of the Code, and to assure timely election of a payment option, benefits
that transfers are provided for under such plan. shall be paid monthly under option (c) above for
Such transfers shall be made only under such a period of five years.
circumstances as are permitted under section 457
of the Code and the regulations thereunder. Section 7.03 Limitation on Options: No payment option
Section 6.04 Employer Liability: In no event shall the may be selected by a Participant or Beneficiary
Employer's liability to pay benefits to a Participant under Sections 7,02, 7,04, or 7.05 unless it satisfies
under Article VI exceed the value of the amounts the requirements of Sections 401 (a)(9) and 457( d)(2)
credited to the Participant's Account; the Employer of the Code, including that payments commencing
shall not be liable for losses arising from deprecia- before the death of the Participant shall satisfy the
tion or shrinkage in the value of any investments incidental death benefits requirement under Section
acquired under this Plan, 457(d)(2)(B)(i)(l). Unless otherwise elected by the
Participant, ail determinations under Section
401 (a)(9) shall be made without recalculation of life
ARTICLE VII. BENEFITS expectancies,
Section 7.01 Retirement Benefits and Election on Section 7.04 Post-retirement Death Benefits: (a) Should
Separation from Service: Except as otherwise the Participant die after he/she has begun to receive
provided in this Article VII, the distribution of a benefits under a payment option, the remaining
Participant's Account shall commence as of April 1 payments, if any, under the payment option shall be
of the calendar year after the Plan Year of the payable to the Participant's Beneficiary commenc-
Participant's Retirement, and the distribution of such ing within the 30-day period commencing with the
Retirement benefits shall be made in accordance 61 st day after the Participant's death, unless the
with one of the payment options described in Sec- Beneficiary elects payment under a different pay-
tion 7.02. Notwithstanding the foregoing, the Partici- ment option that is available under Section 7.02
pant may irrevocably elect within 60 days following within 60 days of the Participant's death. Any different
Separation from Service to have the distribution of payment option elected by a Beneficiary under this
benefits commence on a fixed or determinable date section must provide for payments at a rate that is at
other than that described in the preceding sentence least as rapid as under the payment option that was
which is at least 60 days after the date such election applicable to the Participant. In no event shall the
is delivered in writing to the Employer and forwarded Employer or Administrator be liable to the Beneficiary
to the Administrator, but not later than April 1 of the for the amount of any payment made in the name of
year following the year of the Participant's Retire- the Participant before the Administrator receives
ment or attainment of age 70-1/2, whichever is later. proof of death of the Participant.
Section 7.02 Payment Options: As provided in Sections (b) If the designated Beneficiary does not continue
7.01, 7.04, and 7.05, a Participant or Beneficiary to live for the remaining period of payments under
may elect to have the value of the Participant's the payment option, then the commuted value of any
Account distributed in accordance with one of the remaining payments under the payment option shall
be paid in a lump sum to the estate of the Benefi- mination as to whether such an unforeseeable
ciary. In the event that the Participant's estate is the emergency exists shall be based on the merits of
Beneficiary, the commuted value of any remaining each individual case.
payments under the payment option shall be paid to Section 7.07 Transitional Rule for Pre-1989 Benefit
the estate in a lump sum. Elections: In the event that, priorto January 11989,
Section 7.05 Pre-retirement Death Benefits: (a) Should a Participant or Beneficiary has commenced re-
the Participant die before he/she has begun to ceiving benefits under a payment option or has
receive the benefits provided by Section 7,01, the irrevocably elected a payment option or benefit
value of the Participant's Account shall be payable commencement date, then that payment option or
to the Beneficiary commencing within the 30-day election shall remain in effect notwithstanding any
period commencing on the 91 st day after the other provision of this Plan,
Participant's death, unless the Beneficiary irrevocably
elects a different fixed or determinable benefit com- ARTICLE VIII. NON-ASSIGNABILITY
mencement date within 90 days of the Participant's
death. Such benefit commencement date shall be Section 8.01 In General: Except as provided in Section
not later than the later of (i) December 31 of the year 8.02, no Participant or Beneficiary shall have any
following the year of the Participant's death, or (ii) if right to commute, sell, assign, pledge, transfer or
the Beneficiary is the Participant's spouse, December otherwise conveyor encumber the right to receive
31 of the year in which the Participant would have any payments hereunder, which payments and rights
attained age 70-1/2. are expressly declared to be non-assignable and
; (b) Unless a Beneficiary elects a different payment non-transferable,
option prior to the benefit commencement date, Section 8.02 Domestic Relations Orders: (a) Allow-
death benefits under this Section shall be paid in ance of Transfers: To the extent required under a
approximately equal annual installments over five final judgment, decree, or order (including approval
years, or over such shorter period as may be neces- of a property settlement agreement) made pursuant
sary to assure that the amount of any annual install- to a state domestic relations law, any portion of a
ment is..r:!ot less than $3.500. A Beneficiary shall be Participant's Account may berpaid or set aside for
treated as if he/she were a Participant for purposes payment to a spouse, former spouse, or child of the
of determining the payment options available under Participant. Where necessary to carry out the terms
, Section 7.02, provided, however, that the payment of such an order, a separate Account shall be
, option chosen by the Beneficiary must provide for
established with respect to the spouse, former
payments to the Beneficiary over a period no longer spouse, or child who shall be entitled to make
j than the life expectancy of the Beneficiary, and investment selections with respect thereto in the
provided that such period may not exceed fifteen same manner as the Participant; any amount so set
(15) years if the Beneficiary is not the Participant's aside for a spouse, former spouse, or child shall be
i spouse. paid out in a lump sum at the earliest date that
, (c) In the event that the Beneficiary dies before the benefits may be paid to the Participant, unless the
payment of death benefits has commenced or been order directs a different time or form of payment.
completed, the remaining value of the Participant's Nothing in this Section shall be construed to autho-
Account shall be paid to the estate of {he Beneficiary rize any amount to be distributed under the Plan at
in a lump sum. In the event that the Participant's a time or in a form that is not f1ermitted under Section
estate is the Beneficiary, payment shall be made to 457 of the Code, Any payment made to a person
the estate in a lump sum, other than the Participant pursuant to this Section
, shall be reduced by required income tax withhold-
, Section 7.06 Unforeseeable Emergencies: (a) In the ing; the fact that payment is made to a person other
i event an unforeseeable emergency occurs, a Par- than the Participant may not prevent such payment
ticipant may apply to the Employer to receive that from being includible in the gross income of the
part of the value of his Account that is reasonably Participant for withholding and income tax reporting
needed to satisfy the emergency need. If such an purposes.
application is approved by the Employer, the Partici- (b) Release from Liability to Participant: The
pant shall be paid only such amount as the Employer
I deems necessary to meet the emergency need, but Employer's liability to pay benefits to a Participant
I payment shall not be made to the extent that the shall be reduced to the extent that amounts have
i financial hardship may be relieved through cessa- been paid or set aside for payment to a spouse,
, former spouse, or child pursuant to paragraph (a) of
I tion of deferral under the Plan, insurance or other
j reimbursement, or liquidation of other assets to the this Section. No such transfer shall be effectuated
i unless the Employer or Administrator has been
I extent such liquidation would not itself cause severe
, provided with satisfactory evidence that the Em-
I financial hardship.
1 ployer and the Administrator are released from any
I (b) An unforeseeable emergency shall be deemed further claim by the Participant with respect to such
to involve only circumstances of severe financial amounts. The Participant shall be deemed to have
1 hardship to the Participant resulting from a sudden released the Employer and the Administrator from
i unexpected illness, accident, or disability of the any claim with respect to such amounts, in any case
I Participant or of a dependent (as defined in Section in which (I) the Employer or Administrator has been
I 152(a) of the Code) of the Participant, loss of the served with legal process or otherwise joined in a
1 Participant's property due to casualty, or other simi- proceeding relating to such transfer, (ii) the Partic;-
lar and extraordinary unforeseeable circumstances pant has been notified of the pendency of such
, arising as a result of events beyond the control of the proceeding in the manner prescribed by the law of
I Participant. The need to send a Participant's child to the jurisdiction in which the proceeding is pending
\. , college or to purchase a new home shall not be for service of process in such action or by mail from
considered unforeseeable emergencies. The deter- the Employer or Administrator to the Participant's
I
I
I
last known mailing address, and (iii) the Partici- ARTICLE X. AMENDMENT OR TERMINATION OF PLAN
pant fails to obtain an order of the court in the The Employer may at any time amend this Plan provided
proceeding relieving the Employer or Administra-
tor from the obligation to comply with the judg- that it transmits such amendment in writing to the Administra-
ment, decree, or order. tor at least 30 days prior to the effective date of the amend-
ment. The consent of the Administrator shall not be required
(c) Participation in Legal Proceedings: The Em- in order for such amendment to become effective, but the
ployer and Administrator shall not be obligated to Administrator shall be under no obligation to continue acting
defend against or set aside any judgment, decree, as Administrator hereunder if it disapproves of such amend-
or order described in paragraph (a) or any legal ment. The Employer may at any time terminate this Plan.
order relating to the garnishment of a Participant's The Administrator may at any time propose an amend-
benefits, unless the full expense of such legal action ment to the Plan by an instrument in writing transmitted to the
is borne by the Participant. In the event that the Employer at least 30 days before the effective date of the
Participant's action (or inaction) nonetheless causes amendment. Such amendment shall become effective un-
the Employeror Administratorto incur such expense, less, within such 30-day period, the Employer notifies the
the amount of the expense may be charged against Administrator in writing that it disapproves such amendment,
the Participant's Account and thereby reduce the in which case such amendment shall not become effective.
Employer's obligation to pay benefits to the Partici- In the event of such disapproval, the Administrator shall be
pant. In the course of any proceeding relating to under no obligation to continue acting as Administrator
divorce, separation, or child support, the Employer hereunder, If this Plan document constitutes an amendment
and Administrator shall be authorized to disclose and restatement of the Plan as previously adopted by the
information relating to the Participant's Account to Employer, the amendments contained herein shall become
the Participant's spouse, former spouse, or child effective on January 1, 1989, and the terms of the preceding
(including the legal representatives of the spouse, Plan document shall remain in effect through December 31,
former spouse, or child), or to a court. 1988.
ARTICLE IX. RELATIONSHIP TO OTHER PLANS AND Except as may be required to maintain the status of the
Plan as an eligible deferred compensation plan under Section
EMPLOYMENT AGREEMENTS 457 of the Code or to comply with other applicable laws, no
--yc
This plan serves in addition to any other retirement, amendment or termination of the Plan shall divest any
pension, or benefit plan or system presently in existence or Participant of any rights with respect to compensation de-
hereinafter established for the benefit of the Employer's ferred before the date of the amendment or termination.
employees, and participation hereunder shall not affect ARTICLE XI. APPLICABLE LAW
benefits receivable under any such plan or system. Nothing
contained in this Plan shall be deemed to constitute an This Plan shall be construed under the laws of the state
employment contract or agreement between any Partici- where the Employer is located and is established with the
pant and the Employer or to give any Participant the right intent that it meet the requirements of an "eligible deferred
to be retained in the employ of the Employer. Nor shall compensation plan" under Section 457 of the Code, as
anything herein be construed to modify the terms of any amended. The provisions of this Plan shall be interpreted
employment contract or agreement between a Participant wherever possible in conformity with the requirements of that
and the Employer. section.
ARTICLE XII.
Any notice to a party of this plan document shall be given
at the last address provided in writing from one party to
another party. Any notice such mailed shall be determined to
have been received by such party.
Declaration of Trust of the
lCiV1A Retirement Trust
(Appendix B)
ICMA
RETIREMENT
CORPORATION
.
DECLARATION OF TRUST
OF ICMA RETIREMENT TRUST
ARTICLE I. NAME DEFINITIONS (0) Retirement Trust. The Trust created by the
Section 1.1 Name: The Name of the Trust, as amended and Declaration of Trust.
restated hereby, is the ICMA Retirement Trust. (p) Trust Property. The amounts held in the
Section 1.2 Definitions: Wherever they are used herein, Retirement Trust on behalf of the Public
the following terms shall have the following respective Employers in connection with Deferred
meanings: Compensation Plans and on behalf of the Public
Employer Trustees for the exclusive benefit of
(a) Bylaws. The bylaws referred to in Section 4.1 Employees pursuant to Qualified Plans, The
hereof, as amended from time to time. Trust Property shall include any income resulting
(b) Deferred Compensation Plan. A deferred from the investment to the amounts so held.
compensation plan established and maintained by (q) Trustees. The Public Employee Trustees and
a Public Employer for the purpose of providing ICMA/RC Trustees elected by the Public Employers
retirement income and other deferred benefits to its to serve as members of the Board of Trustees of the
employees in accordance with the provision of Retirement Trust.
section 457 of the Internal Revenue Code of 1954,
as amended. ARTICLE II. CREATION AND PURPOSE OF THE TRUST;
(c) Employees. Those employees who participate in OWNERSHIP OF TRUST PROPERTY
Qualified Plans. Section 2.1 Creation: The Retirement Trust is created and
(d) Employer Trust. A trust created pursuant to established by the execution of this Declaration of Trust
an agreement between RC and a Public Employer by the Trustees and the Public Employers,
for the purpose of investing and administering the Section 2.2 Purpose: The purpose oiJhe Retirement Trust
funtis set aside by such Employer in connection is to provide for the commingled investment of funds
with its Deferred Compensation agreements with held by the Public Employers in connection with their
its employees or in connection with its Qualified Deferred Compensation and Qualified Plans. The
Plan. Trust Property shall be invested in the Portfolios, in
(e) Guaranteed Investment Contract. A contract Guaranteed Investment Contracts, and in other invest-
entered into by the Retirement Trust with insurance ments recommended by the Investment Adviser under
companies that provides for a guaranteed rate of the supervision of the Board of Trustees. No part of the
return on investments made pursuant to such Trust Property will be invested in securities issued by
contract. Public Employers.
(f) ICMA. The International City Management Section 2.3 Ownership of Trust Property: The Trustees
Association, shall have legal title to the Trust Property, The Public
(g) ICMA/RC Trustees. Those Trustees elected by Employers shall be the beneficial owners of the portion
the Public Employers who, in accordance with the of the Trust Property allocable to the Deferred Com-
provisions of Section 3.1 (a) hereof, are also pensation Plans. The portion of the Trust Property
members, or former members, of the Board of allocable to the Qualified Plans shall be held for the
Directors of ICMA or RC. Public Employer Trustees for the exclusive benefit of
(h) Investment Adviser.. The Investment Adviserthat the Employees.
enters into a contract with the Retirement Trust to ARTICLE III. TRUSTEES
provide advice with respect to investment of the Section 3.1 Number and Qualification of Trustees: (a)The
Trust Property, Board of Trustees shall consist of nine Trustees. Five
(i) Portfolios. The Portfolios of investment established of the Trustees shall be full-time employees of a Public
by the Investment Adviser to the Retirement Trust, Employer (the Public Employee Trustees) who are
under the supervision of the Trustees, for the authorized by such Public Employerto serve as Trustee.
purpose of providing investments for the Trust The remaining four Trustees shall consist of two per-
Property. sons who, at the time of election to the Board of
(j) Public Employee Trustees. Those Trustees Trustees, are members of the Board of Directors of
elected by the Public Employers who, in accordance ICMA and two persons who, at the time of election, are
with the provision of Section 3.1 (a) hereof, are full- members of the Board of Directors of RC (the ICMA/RC
time employees of Public Employers. Trustees. One of the Trustees who is a director of
(k) Public EmployerTrustees. Public Employers who ICMA, and one of the Trustees who is a director of RC,
shall, at the time of election, be full-time employees of
serve as trustees of the Qualified Plans. a Public Employer.
(I) Public Employer. A unit of state or local (b) No person may serve as a Trustee for more than
government, or any agency or instrumentality one term in any ten-year period.
thereof, that has adopted a Deferred Compensation Section 3.2 Election and Term: (a) Except forthe Trustees
Plan or a Qualified Plan and has executed this
Declaration of Trust. appointed to fill vacancies pursuant to Section 3.5
hereof, the Trustees shall be elected by a vote of a
(m) Qualified Plan. A plan sponsored by a Public majority of the Public Employers in accordance with the
Employer for the purpose of providing retirement procedures set forth in the By-Laws. (b) At the first
income to its employees which satisfies the election of Trustees, three Trustees shall be elected for
qualification requirements of Section 401 of the a term of three years, three Trustees shall be elected for
Internal Revenue Code, as amended. a term of two years and three Trustees shall be elected
(n) RC. The International City ManagementAssociation for a term of one year. At each subsequent election,
Retirement Corporation. three Trustees shall be elected for a term of three years
and until his or her successor is elected and qualified.
,
Section 3.3 Nominations: The Trustees who are full-time (d) invest and reinvest the Trust Property in the
employees of Public Employers shall serve as the Portfolios, the Guaranteed Interest Contracts and
Nominating Committee for the Public Employee Trust- in any other investment recommended by the
ees, The Nominating Committee shall choose candi- Investment Adviser, but not including securities
dates for Public Employee Trustees in accordance with issued by Public Employers, provided that if a
the procedures set forth in the By-Laws. Public Employer has directed that its monies be
Section 3.4 Resignation and Removal: (a) Any Trustee invested in specified Portfolios or in a Guaranteed
may resign as Trustee (without need for prior or subse- I nvestment Contract, the Trustees of the
quent accounting) by an instrument in writing signed by Retirement Trust shall invest such monies in
the Trustee and delivered to the other Trustees and accordance with such directions;
such resignation shall be effective upon such delivery, (e) keep such portion of the Trust Property in cash or
or at a later date according to the terms of the instru- cash balances as the Trustees, from time to time,
ment. Any of the Trustees may be removed for cause, may deem to be in the best interest of the
by a vote of a majority of the Public Employers, (b) Retirement Trust created hereby without liability
Each Public Employee Trustee shall resign his or her for interest thereon;
position as Trustee within sixty days of the date on (f) accept and retain for such time as they may deem
which he or she ceases to be a full-time employee of a advisable any securities or other property received
Public Employer. or acquired by them as Trustees hereunder,
Section 3.5 Vacancies: The term of office of a Trustee shall whether or not such securities or other property
terminate and a vacancy shall occur in the event of the would normally be purchased as investment
death, resignation, removal, adjudicated incompetence hereunder;
or other incapacity to perform the duties of the office of (g) cause any securities or other property held as part
a Trustee, In the case of a vacancy, the remaining of the Trust Property to be registered in the name
Trustees shall appoint such person as they in their ofthe RetirementTrust or in the name of a nominee,
discretion shall see fit (subject to the limitations set forth and to hold any investments in bearer from, but the
in this Section), to serve forthe unexpired portion of the books and records of the Trustees shall at all times
term of the Trustee who has resigned or otherwise show that all such investments are a part of the
ceased to be a Trustee. The appointment shall be Trust Property;
made by a written instrument signed by a majority of the (h) make, execute, acknowledge, and deliver any and
Trustees. The person appointed must be the same
type ofTrustee (i.e., Public Employee Trustee or ICMA! all documents of transfer and conveyance and any
RC Trustee) as the person who has ceased to be a and all other instruments that may be necessary or
Trustee. An appointment of a Trustee may be made in appropriate to carry out the powers herein granted;
anticipation of a vacancy to occur at a later date by (i) vote upon any stock, bonds, or other securities;
reason of retirement or resignation, provided that such give general or special proxies or powers of attorney
appointment shall not become effective prior to such with or without power of substitution;exercise any
retirement or resignation, Whenever a vacancy in the conversion privileges, subscription rights, or other
number of Trustees shall occur, until such vacancy is options, and make any payments incidental thereto;
filled as provided in this Section 3.5, the Trustees in oppose, or consent to, or otherwise participate in,
office, regardless of their number, shall have all the corporate reorganizations or to other changes
powers granted to the Trustees and shall discharge all affecting corporate securities, and delegate
the duties imposed upon the Trustees by this Declara- discretionary powers and pay any assessments or
tion. A written instrument certifying the existence of charges in connection therewith; and generally
such vacancy signed by a majority of the Trustees shall exercise any of the powers of an owner with
be conclusive evidence of the existence of such va- respect to stocks, bonds, securities or other
cancy, property held as part of the Trust Property;
Section 3.6 Trustees Serve in Representative Capacity: (j) enter into contracts or arrangements for goods or
By executing this Declaration, each Public Employer services required in connection with the operation
agrees that the Public Employee Trustees elected by of the Retirement Trust, including, but not limited
the Public Employers are authorized to act as agents to, contracts with custodians and contracts for the
and representatives of the Public Employers collec- provision of administrative services;
tively. (k) borrow or raise money for the purposes of the
ARTICLE IV. POWERS OF TRUSTEES Retirement Trust in such amount, and upon such
terms and conditions, as the Trustees shall deem
Section 4.1 General Powers: The Trustees shall have the advisable, provided that the aggregate amount of
power to conduct the business of the Trust and to carry such borrowings shall not exceed 30% of the
on its operations. Such power shall include, but shall value of the Trust Property. No person lending
not be limited to, the power to: money to the Trustees shall be bound to see the
(a) receive the Trust Property from the Public application of the money lent or to inquire into its
Employers, Public Employer Trustees or other validity, expediency or propriety or any such
Trustee of any Employer Trust; borrowing;
(b) enter into a contract with an Investment Adviser (I) incur reasonable expenses as required for the
providing, among other things, forthe establishment operation of the Retirement Trust and deduct such
and operation of the Portfolios, selection of the expenses from of the Trust Property;
Guaranteed Investment Contracts in which the (m) pay expenses properly allocable to the Trust
Trust Property may be invested, selection of the Property incurred in connection with the Deferred
other investments for the Trust Property and the Compensation Plans, Qualified Plans, or the
payment of reasonable fees to the Investment Employer Trusts and deduct such expenses from
Adviser and to any sub-investment adviser retained the portion of the Trust Property to whom such
by the Investment Adviser; expenses are properly allocable;
(c) review annually the performance of the Investment (n) payout of the Trust Property all real and personal
Adviser and approve annually the contract with property taxes, income taxes and other taxes of
such Investment Adviser; any and all kinds which, in the opinion of the
Trustees, are properly levied, or assessed under
existing or future laws upon, or in respect of, the
Trust Property and allocate any such taxes to the Section 5.2 Liability: The Trustees shall not be liable for any
appropriate accounts; mistake of judgment or other action taken in good faith,
(0) adopt, amend and repeal the bylaws, provided that and for any action taken or omitted in reliance in good
such bylaws are at all times consistent with the faith upon the books of account or other records of the
terms of this Declaration of Trust; Retirement Trust, upon the opinion of counsel, or upon
(p) employ persons to make available interests in the reports made to the Retirement Trust by any of its
officers, employees or agents or by the Investment
Retirement Trust to employers eligible to maintain Adviser or any sub-investment adviser, accountants,
a Deferred Compensation Plan under Section 457 appraisers or other experts or consultant selected with
or a Qualified Plan under Section 401 of the Internal reasonable care by the Trustees, officers or employees
Revenue Code, as amended; of the Retirement Trust. The Trustees shall also not be
(q) issue the Annual Report of the Retirement Trust, liable for any loss sustained by the Trust Property by
and the disclosure documents and other literature reason of any investment made in good faith and in
used by the Retirement Trust; accordance with the standard of care set forth in
(r) make loans, including the purchase of debt Section 5.1,
obligations, provided that all such loans shall bear Section 5.3 Bond: No Trustee shall be obligated to give any
interest at the current market rate; bond or other security for the performance of any of his
(s) contract for, and delegate any powers granted or her duties hereunder.
hereunder to, such officers, agents, employees, ARTICLE VI. ANNUAL REPORT TO SHAREHOLDERS
auditors and attorneys as the Trustees may select,
provided that the Trustees may not delegate the The Trustees shall annually submit to the Public Employers
powers set forth in paragraphs (b), (c) and (0) of this and Public Employer Trustees a written report of the transac-
Section 4.1 and may not delegate any powers if tions of the Retirement Trust, including financial statements
such delegation would violate their fiduciary duties; which shall be certified by independent public accountants
(t) provide for the indemnification of the Officers and chosen by the Trustees.
Trustees of the Retirement Trust and purchase ARTICLE VII. DURATION OR AMENDMENT OF
fiduciary insurance;
(u) maintain books and records, i~ding separate RETIREMENT TRUST
accounts for each Public Employer, Public Employer Section 7.1 Withdrawal: A Public Employer or Public Em-
Trustee or Employer Trust and such additional ployer Trustee may, at any time, withdraw from this
separate accounts as are required under, and Retirement Trust by delivering to the Board of Trustees
consistent with, the Deferred Compensation or a written statement of withdrawal. In such statement,
Qualified plan of each Public Employer; and the Public Employer or Public Employer Trustee shall
(v) do all such acts, take all such proceedings, and acknowledge that the Trust Property allocable to the
exercise all such rights and privileges, although not Public Employer is derived from compensation de-
specifically mention herein, as the Trustees may ferred by employees of such Public Employer pursuant
deem necessary or appropriate to administer the to its Deferred Compensation Plan or from contribu-
Trust Property and to carry out the purposes of the tions to the accounts of Employees pursuant to a
Retirement Trust. Qualified Plan, and shall designate the financial institu-
Section 4.2 Distribution of Trust Property: Distributions of tion to which such property shall be transferred by the
the Trust property shall be made to, or on behalf of, the Trustees of the Retirement Trust or by the Trustee of
Public Employer or Public Employer Trustee, in accor- the Employer Trust.
dance with the terms of the Deferred Compensation Section 7.2 Duration: The Retirement Trust shall continue
Plans, Qualified Plans or Employer Trusts. The Trust- until terminated by the vote of a majority of the Public
ees of the Retirement Trust shall be fully protected in Employers, each casting one vote. Upon termination,
making payments in accordance with the directions of all of the Trust Property shall be paid out to the Public
the Public Employers, Public Employer Trustees or Employers, Public Employer Trustees or the Trustees
other Trustee of the EmployerTrusts without ascertain- of the Employer Trusts, as appropriate.
ing whether such payments are in compliance with the Section 7.3 Amendment: The Retirement Trust may be
provision of the Deferred Compensation or Qualified amended by the vote of a majority of the public Employ-
Plans, orthe agreements creating the EmployerTrusts. ers, each casting one vote.
Section 4.3 Execution of Instruments: The Trustees may Section 7.4 Procedure: A resolution to terminate or amend
unanimously designate anyone or more of the Trust- the Retirement Trust or to remove a Trustee shall be
ees to execute any instrument or document on behalf submitted to a vote of the Public Employers if: (i) a
of all. including but not limited to the signing or endorse- majority of the Trustees so direct, or; (ii) a petition
men! of any check and the signing of any applications, requesting a vote signed by not less that 25 percent of
insurance and other contracts, and the action of such the Public Employers, is submitted to the Trustees.
designated Trustee or Trustees shall have the same
force and effect as if taken by all the Trustees, ARTICLE VIII. MISCELLANEOUS
ARTICLE V. DUTY OF CARE AND LIABILITY OF Section 8.1 Governing Law: Except as otherwise required
TRUSTEES by state or local law, this Declaration of Trust and the
Section 5.1 Duty of Care: In exercising the powers Retirement Trust hereby created shall be construed
hereinbefore granted to the Trustees, the Trustees and regulated by the laws of the District of Columbia.
shall perform all acts within their authority for the Section 8.2 Counterparts: This Declaration may be ex-
exclusive purpose of providing benefits for the Public ecuted by the Public Employers and Trustees in two or
Employers in connection with Deferred Compensation more counterparts, each of which shall be deemed an
Plans and Public Employer Trustees pursuant to Quali- original but all of which together shall constitute one
fied Plans, and shall perform such acts with the care, and the same instrument.
skill, prudence and diligence in the circumstances then
prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct
of an enterprise of a like character and with like aims,
Page
Introduction to Deferred Compensation 2:1
Section 457
The ICMA Retirement Corporation-administered deferred compensation plan is an employer-
adopted program which provides individual employees with the opportunity to participate in a
voluntary, payroll-deducted supplementary retirement program. The plan is one of the most
flexible vehicles available for retirement savings. The employee is given a major role in deciding
the amount of funds to be deferred, fund options selection, and the form and timing of benefit
payments.
For the employer, administration of RC's deferred compensation plan is much less complicated than
most public sector retirement programs. The plan has no requirements for actuarial soundness, tests
for nondiscrimination and other substantial burdens placed on employers by traditional retirement
plans.
Although designed as a supplemental plan, RC's deferred compensation may be offered as the
primary retirement plan, particularly by special districts and employers with small numbers of
employees.
,.-
The tax advantage of deferred compensation in the public sector is based on the ownership of
deferred funds by the public employer which is a tax-exempt organization. The employer-held
funds are not taxable until such time as the employee actually receives funds, which may be at
separation from service, retirement, death or unforeseeable emergency. Only at the time when the
participant receives these funds is a tax liability incurred by the participant. The funds are subject
to the general creditors of the public entity.
The transfer of tax liability is derived from the IRS doctrine of constructive receipt. An individual
is in constructive receipt of income, and responsible for taxes, if that individual can exercise control
over receipt of the funds. As long as that control is restricted-for example, if the employee has no
access to the funds except in certain situations-the employee can enjoy the deferral of tax liability.
For more information on the provisions of Section 457, please see Chapter 5 (Key Plan Provisions).
January
1992
Page Intemal Revenue Code
2:2 Section 457:
The Code and Regulations
The ICMA Retirement Corporation was a pioneer in the development of deferred compensation
plans for public employees. The program provides portable retirement plans with tax-deferral
advantages for mobile public sector employees, which were unavailable at the time of the founding
of RC.
The Internal Revenue Service approval of the RC plan was a legal precedent which provided the
foundation for all current federal legislation for similar plans. From inception, in 1972, of.the RC
program until 1979, the program operated on the basis of a private letter ruling covering all local
governments who adopted the RC plan.
Section 457 of the Internal Revenue Code, which became effective on January 1, 1979, was formally
I enacted with the passage of the Revenue Act of 1978 and now provides the legal basis under which
I sta te and local governments operate deferred compensation plans. Section 457 was amended by the
I Tax Reform Act of 1986 (TRA) and the Technical and Miscellaneous Revenue Act of 1988 (T AMRA)
and retains substantially the same benefits as previously existed.
-,.,-
A copy of Section 457 (as amended) has been included for your information as Exhibit2A. The current
regulations for Section 457 are included as Exhibit 2B. Final regulations, which incorporate all TRA
and T AMRA changes, have yet to be issued.
ICMA Retirement Corporation Plan Document
Virtually all employers elect to adopt RC's model Deferred Compensation Plan (See Exhibit 20.
Adopting the RC model eliminates the need for the employer to develop a plan document, a lengthy
process which requires tha t employers continually monitor tlie plan for compliance wi th the I ntemal
Revenue Code. RC has obtained a private letter ruling for an employer who has adopted this
document attesting to its eligibility asa Section 457 Deferred Compensation Plan. RCupdates its plan
document periodically to keep up with changing Federal tax regulations and to provide enhancement
of plan features. RC's plan document has been designed to provide the greatest flexibility allowed
under the Internal Revenue Code.
If the employer wishes to develop its own plan document or if the employer has a plan in place that
it wants RC to administer, RC will accept the plan for administration, provided the provisions are not
inconsistent with RC's administrative capabilities. In this case, RC will not assume responsibility for
determining plan eligibility.
January
1992
,
ICMA
RETIREMENT
CORPORATION
Appendix 3: Fund Descriptions
PLUS Fund
For participants who prefer to invest in a minimum-rate fund
T he PLUS Fund consisting of investment contracts issued by high quality insurance
companies, the ICMA Retirement Trust provides a conservative, six-
month minimum-rate option in the PLUS Fund. This fund offers
participants a minimum rate of return adjusted every six months,
offers a minimum PLUS the ability to earn more than the minimum rate, under
favorable market conditions. The PLUS Fund uses an active
rate PLUS the portfolio management approach for all contracts in the Fund.
ability to earn Approval of Investment Contract Issuers
more than the --rnvestments are presently spread among four of the ten issuers that
minimum rate. meet the Trust's eligibility criteria at this time. To be eligible for
inclusion on the PLUS Fund approved list, an issuer must be rated at
least Aa2 by Moody's Investors Service, and in addition must
satisfy an in-depth Retirement Corporation review which includes
annual on-site visits and an interview of senior management of the
firm.
Interest Crediting
Interest crediting for the PLUS Fund follows procedures similar to
those used for the six total return funds of the ICMA Retirement
Trust. The fund reports a single rate of return for each month,
quarter or year. Each participant owns an undivided interest in the
entire portfolio and the return represents interest on the entire
portfolio of contracts.
Minimum Rate
The minimum rate is set twice a year, generally with a new
minimum rate announced effective January 1 and July 1.
Contributions to the PLUS Fund earn either the minimum rate or
the actual portfolio rate, whichever is higher, from the date of
receipt.
Investment Adviser
The PLUS Fund is managed by:
. The ICMA Retirement Corporation, Washington, D.C.
.
. page 23
I] .
ICMA
. RETIREMENT
CORPORATION
. Appendix 3: Fund Descriptions
Q Growth Stock Fund
I I Investment Philosophy and Objectives
The Growth Stock Fund seeks long-term growth of capital by
. investments in common stock of companies with above-average
potential for growth in corporate earnings. Dividend income is
secondary to the overall objective of long-term capital growth. The
0 investment objective of the Growth Stock Fund is to achieve a long-
term rate of return in excess of the rate of inflation.
. Investment Strategy and Portfolio Management
~
The Growth Stock Fund invests in a variety of common stocks
. selected for prospects of above-average growth in corporate earnings
per share, The portfolio is diversified by industry and market
capitalization and has a higher-than-average portfolio turnover.
I] Investments may include larger, seasoned firms but tend to be
oriented toward smaller to medium-sized companies.
The Growth Stock Fund is actively managed by its investment
. advisers utilizing various philosophies and approaches to meet the
Fund's overall objective.
-- Suitability for Investors
The Growth Stock Fund is designed for participants seeking greater-
Q than-average capital appreciation and is intended as a long-term
investment vehicle due to its volatility of returns over short time
periods.
. Investment Advisers
. The Growth Stock Fund is managed by:
. Fidelity Management Trust Co., Boston, Massachusetts
II . Lehman Ark Management Co., New York, New York
. Hutson Management, New York, New York
III . Janus Capital Management, Denver, Colorado
--
I page 24
[j .
ICMA
I RETIREMENT
CORPORA nON
I Appendix 3: Fund Descriptions
q Index Fund
I I Investment Philosophy and Objectives
The Index Fund seeks to provide investment results, before fees,
- which parallel the performance of the Standard and Poor's 500
Index (S&P 500). Dividend income is secondary to the overall
objective of long-term capital growth. In addition, the Fund does
0 not invest in the stock of any company doing business in South
Africa.
II Investment Strategy and Portfolio Management
~c
The Fund is passively managed, using a stratified sampling
II approach. Under this method, the portfolio includes between 275
and 375 stocks selected to result in market capitalization and
industry representation ratios comparable to those of the S&P 500.
I] The Fund remains fully invested in common stocks at all times and
the investment adviser does not buy or sell stocks based on
prospective changes in the economy, the stock market, or the
II fundamental financial outlook for any particular stock. The Index
Fund follows a disciplined quantitative approach to common stock
investing. The Fund may also invest in S&P 500 Index futures
I contracts.
Suitability for Investors
I) The Index Fund is designed for participants who want an
investment designed to parallel the return of the S&P 500 and is
. intended as a long-term investment vehicle due to the volatility of
returns on common stocks over short time periods.
. Investment Adviser
The Index Fund is managed by:
Il . Wilshire Asset Management, Santa Monica, California
II
.
. page 25
.
I lCMA
I RETIREMENT
CORPORATION
I Appendix 3: Fund Descriptions
I Asset Allocation Fund
I
I
]
I ~-
I
l]
I
I
IJ
.
I
.
I
.
11 page 26
[l .
ICMA
II RETIREMENT
CORPORA nON
-- Investment Philosophy and Objectives
The Asset Allocation Fund seeks growth of capital and risk
II reduction by investing in a portfolio diversified among common
stocks, bonds, and cash equivalents. The investment objective is to
maximize total return (i.e., capital appreciation plus income) with
. less investment risk than a portfolio consisting entirely of common
stocks. In addition, the Fund does not invest in stocks, bonds, or
commercial paper of any company doing business in South Africa.
. Investment Strategy and Portfolio Management
0 The Asset Allocation Fund invests in the following investment
vehicles: a portfolio of stocks passively managed and selected to
parallel the investment performance of the S&P 500 Index; U.S.
. Treasury bonds with maturities generally in excess of 20 years; and
cash reserves. The Fund may invest in S&P 500 Index and U.S.
~-
Treasury bond futures contracts to achieve changes in the percentage
mix.
. The stock and bond investment vehicles are designed and intended
Il to produce "market returns" for the asset classes they represent.
Active management of the Fund by its subadvisers relates to re-
balancing the percentage mix among asset classes based upon
analysis of changes in financial market conditions. The frequency
. and magnitude of changes in the proportional mix among asset
classes will vary with each manager's assessment of market
conditions.
. Suitability for Investors
I) The Asset Allocation Fund is designed for participants who seek an
investment which provides an actively managed mix of stocks,
bonds, and cash reserves. To realize the benefits of maximum total
. return with less risk than a pure stock fund, this Fund should be
considered a long-term investment vehicle with a potential for
short-term volatility.
. Investment Advisers
~ The Asset Allocation Fund is managed by:
. Mellon Capital Management, San Francisco, California
. AVATAR Associates, New York, New York
page 27
Ll ICMA
RETIREMENT
- CORPORATION
- Appendix 3: Fund Descriptions
Ll Bond Fund
_. Investment Philosophy and Objectives
The Bond Fund seeks to provide value over time by investing in
II medium- to long-term investment-grade debt securities yielding the
highest available current income consistent with the conservation
of principal. The investment objective is to preserve principal and
II obtain a long-term rate of return in excess of the rate of inflation.
Investment Strategy and Portfolio Management
I -the Bond Fund invests primarily in investment-grade securities
with intermediate to long maturities. The portfolio is diversified
II across a broad range of corporate, U.S. Government, and Agency
securi ties. Modification of the average maturity of the portfolio is
made to improve or preserve the portfolio's income stream and
principal amounts in response to the outlook for interest rates.
I] Investment advisers actively manage the Bond Fund using various
philosophies and approaches to meet the Fund's overall objectives.
. Suitability for Investors
The Bond Fund is designed for participants who seek growth
. primarily through the reinvestment of periodic income.
Appreciation of capital from changes in principal value should be
of secondary importance.
I] Investment Advisers
. The Bond Fund is managed by:
. Lowe, Brockenbrough, Tierney & Tattersall, Richmond,
. Virginia
. STW Fixed Income Management, Carpinteria, California
13
.
.
. page 28
IJ ICMA
I RETIREMENT
CORPORA nON
I Appendix 3: Fund Descriptions
I] U.S. Treasury Securities Fund
I Investment Philosophy and Objectives
The U.s. Treasury Securities Fund seeks to earn a high level of
. current income consistent with conservation of principal by investing
in intermediate-term U.s, Treasury ("Treasury") securities. Returns
will reflect both interest income and market price changes in
IJ portfolio securities.
Investment Strategy and Portfolio Management
. JJ1e U.S. Treasury Securities Fund invests primarily in
intermediate-term Treasury notes. The Fund may also invest in
. coupon-bearing Treasury bonds and bills and, to a limited extent, in
zero-coupon Treasury bonds. Treasury notes have maturities from
two to ten years; Treasury bonds have maturities greater than ten
IJ years; and Treasury bills have maturities of less than one year. The
weighted average maturity of the portfolio will be between five
and ten years.
. The Fund may invest in Treasury note and bond futures to maintain
fixed income exposure comparable to that of a fully invested
portfolio position. Futures contracts are not used to obtain market
. leverage.
The Fund's investment subadviser seeks to add value above that of
~ a passively managed in termedia te-term Treasury index by
attempting to anticipate changes in interest rates and to identify
inefficiently priced securities.
. Suitability for Investors
. The U.s. Treasury Securities Fund is intended for participants who
seek total protection against credit risk as well as growth of
principal through reinvestment of current income from an actively
- managed portfolio of intermediate-term Treasury securities.
Investment Advisers
The U.s. Treasury Securities Fund is managed by:
. Bridgewater Asset Management, Wilton, Connecticut
page 29
.
] .
ICMA
- RETIREMENT
CORPORATION
- Appendix 3: Fund Descriptions
a Cash Management Fund
- Investment Philosophy and Objectives
The Cash Management Fund seeks to generate a high level of
- current income by investing in a combination of money market
instruments and short maturity bonds. The Cash Management Fund
is designed to preserve capital, provide liquidity, and provide,
[] over time, a higher total rate of return than a money market fund.
The investment objective of the Cash Management Fund is to obtain
a rate of return on investments at least equal to the rate of
- infla tion.
-...-
Investment Strategy and Portfolio Management
- The Cash Management Fund invests in a diversified portfolio of
short-term, high quality securities that may include U.S.
I] Government and Agency securities, commercial paper, bank
obligations, repurchase agreements, Eurodollar instruments,
investment contracts, and corporate debt securities. The Investment
adviser actively manages the portfolio of the Cash Management
. Fund, and the average maturity of the portfolio is subject to
adjustment within a narrow range in small increments.
. Suitability for Investors
The Cash Management Fund is intended for participants seeking
I] reasonable safety of principal and the opportunity to invest in a
short-term fixed income portfolio.
. Investment Adviser
The Cash Management Fund is managed by:
. . Payden & Rygel, Investment Counsel, Los Angeles, California
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l]. . ,
ICMA
RETIREMENT
II CORPORA nON
I Appendix 1: About the lCMA Retirement Corporation
II The Retirement Corporation is one of three associated, but legally
separate, entities:
II . The ICMA Retirement Corporation
. The ICMA Retirement Trust
. ICMA-RC Services, Inc.
II The ICMA The ICMA Retirement Corporation serves as investment adviser to
Retirement Corporation the ICMA Retirement Trust. It is a private, non-profit corporation
n founded in 1972 by public employers, exclusively to administer tax-
deferred retirement plans for public employers.
. Since 1972, the Retirement Corporation program has grown from
285 participants to over 160,000, with total assets in excess of
$2.5 billion. Over 4,200 public employer plans are included in our
tax-deferred retirement programs.
II The Retirement Corporation is not a subsidiary of any corporation.
The Retirement Corporation is associated with a number of
Q sponsoring organizations, including the International City
Management Association (lCMA), the National League of Cities
(NLC), and the Government Finance Officers Association (GFOA).
. The Retirement Corporation serves participating public employers
from its headquarters in Washington, D.C., and through its
. Representatives in thirty cities throughout the country.
The ICMA The ICMA Retirement Trust was established in 1983 to permit
Retirement Trust public employers to manage services that must otherwise be
Q obtained through commercial financial institutions. The Trust
allows accounts with similar investment objectives to be managed
more efficiently, helping to control the cost of Retirement
. Corporation services.
All interests in the Trust are actually owned by participating
. public employers. Further, employers nominate and vote for a
Board of Trustees, composed primarily of individuals involved in
local government. Employers thus have representative control
I] over the management of retirement plan assets.
The Board of Trustees further safeguards the integrity of the Trust
by (1) directing annual independent audits of the Trust, and (2)
. reviewing performance of the ICMA Retirement Corporation as the
Retirement Trust fund manager.
.
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0 . .
ICMA
. RETIREMENT
CORPORA nON
. ICMA-RC Services, Inc. ICMA-RC Services, a member firm of the NASD and SIPC, is the
wholly-owned broker-dealer subsidiary of the ICMA Retirement
q Corporation. The Representatives serving your plan are NASD
Registered Representatives. Shares of the funds which make up
the ICMA Retirement Trust are available exclusively through
. Registered Representatives of ICMA-RC Services, Inc.
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fI page 21
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ADMINISTRATIVE REPORT
TO: Members of Dublin City Council
FROM: Timothy C. Hansley, City Manager I
SUBJECT: ICMA Retirement Corporation
Deferred Compensation Plan
DATE: December 2, 1992
INITIATED BY: David L. Harding, Director of Personnel & Purchasing ~
Summary & Action Recommended
Attached for your consideration is Resolution No. 48-92 adopting
the ICMA (International City Management Association) Retirement
Corporation Deferred Compensation Plan and authorizing the City
Manager to execute the necessary agreements governing the
administration of the Plan.
Offering a deferred compensation plan to City of Dublin employees
is not a new idea. As authorized by Resolution No. 31-85, the City
has for the past six years offered a deferred compensation plan to
its employees through the Ohio Public Employees Deferred
Compensation Program. Although said plan has been a valuable
enhancement to our employee's individual retirement security, it is
the opinion of Staff that said plan offers a limited array of
investment options and, in some cases, contains more restrictive
conditions when compared to the plan offered through the ICMA
Retirement Corporation. The ICMA Retirement Corporation Plan seems
to offer a much greater diversity of investment options and, in
some cases, more flexible terms and conditions for the individual
employee. Staff wishes to offer the ICMA Retirement Corporation
plan as an alternative to the existing plan; however, in order to
do so, the attached Resolution must first be adopted by Council.
Given that the ICMA Plan can offer some valuable options to
interested employees, can assist the city in recruitment efforts,
and can be offered as a benefit to employees with no financial
contribution on the part of the City, Staff recommends that
Resolution No. 48-92 be adopted by Council.
ICMA Retirement cor~oration Deferred Company Plan
As stated in Section 1. of Resolution No. 48-92, attached as
appendix A. is the Plan Document describing the provisions of the
plan. As stated in Article 1 of said Plan Document, the primary
purpose of the Plan is to provide retirement income and other
deferred benefits to employees in accordance with the provisions of
section 457 of the Internal Revenue Code of 1986, as amended.
The leMA Retirement Corporation-administered deferred compensation
plan is an employer-adopted program which provides individual
employees with the opportunity to participate in a voluntary, pay-
roll-deducted supplementary retirement program. The employee is
given a major role in deciding the amount of funds to be deferred,
. .
fund options selection, and the form and timing of benefit pay-
ments. An employee participating in such a 457 deferred compensa-
tion program may, in general, defer from taxation a maximum of 25
percent of the normal compensation or $7,500, whichever is less.
Under the ICMA Retirement Corporation Deferred Compensation Plan,
participants may choose among the following seven investment
options covering a diversity of asset classes:
* PLUS Fund
* Growth Stock Fund
* Index Fund
* Asset Allocation Fund
* Bond Fund
* U. S. Treasury Securities Fund
* Cash Management Fund
(A brief introduction to Deferred Compensation Section 457 and a
description of each of the aforementioned investment options is
attached for your reference.)
Declaration of Trust
As stated in Section 2. of Resolution No. 48-92, attached as
appendix B. is the Declaration of Trust to be executed by the City
via adoption of Resolution No. 48-92. The Adoption Resolution must
execute the Declaration of Trust as a condition for offering the
ICMA Retirement Corporation Deferred Compensation Plan. This
Declaration provides the framework for the Trust to take the
necessary investment actions on behalf of all employers who have
adopted the Trust. The Trust allows accounts with similar
investment objectives to be managed more efficiently, thus helping
to control the cost of Retirement Corporation services.
(A brief description of the ICMA Retirement Corporation, the ICMA
Retirement Trust, and ICMA RC Services, Inc. is attached for your
reference. )
Conclusion
Staff believes that the ICMA Retirement Corporation Deferred
Compensation Plan can truly offer some valuable investment options
to interested employees of the City of Dublin and can also assist
the City in the recruitment and/or retention of competent, well
qualified personnel. Once again it should be emphasized that, like
the existing deferred compensation plan already offered by the
City, the ICMA Retirement Corporation Deferred Compensation Plan
can be offered as a benefit to employees with no financial
contribution on the part of the City. Given the positives
associated with offering said Plan, as just noted, and the fact
that offering said plan requires no financial contribution on the
part of the City, staff recommends that Resolution No. 48-92
adopting said plan be passed by Council.
DLH/mc
Attachments