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Resolution No. 04-04RESOLUTION No: 04-04 A RESOLUTION OF THE CITY OF ATLANTIC BEACH, FLORIDA ESTABLISHING A DEFERRED RETIREMENT OPTION PROGRAM (DROP) WHEREAS, the City of Atlantic Beach has employees rendering valuable services; and WHEREAS, the establishment of a DROP plan benefits employees by providing funds for retirement and funds for their beneficiaries in the event of death; and WHEREAS, the City of Atlantic Beach desires that it's DROP plan be administered by the ICMA Retirement Corporation and that the funds held by such plan be invested in the Vantage Trust Company, a trust established by public employers for the collective investment of funds held under their retirement and deferred compensation plans: NOW THEREFORE BE IT RESOLVED that the City of Atlantic Beach hereby establishes or has established a DROP plan (the "Plan") in the form of the Plan and Trust provided by the City of Atlantic Beach (executed copy attached hereto). The Plan shall be maintained for the exclusive benefit of eligible employees and their beneficiaries; and BE IT FURTHER RESOLVED that the City of Atlantic Beach hereby executes the Declaration of Trust of the Vantage Trust Company, and attached hereto, intending this execution to be operative with respect to any retirement or deferred compensation plan subsequently established by the City of Atlantic Beach, if the assets of the plan are to be invested in the Vantage Trust Company. BE IT FURTHER RESOLVED that the City of Atlantic Beach hereby agrees to serve as trustee under the Plan and to invest funds held under the Plan in the Vantage Trust Company; and BE IT FURTHER that the Human Resource Manager shall be the coordinator for the Plan; shall receive reports, notices, etc., from the ICMA Retirement Corporation or the Vantage Trust Company; shall cast, on behalf of the City of Atlantic Beach, any required votes under the Vantage Trust Company; may delegate any administrative duties relating to the Plan to appropriate departments; and Resolution No. 04-04 Page 2 BE IT FURTHER RESOLVED that the City of Atlantic Beach hereby authorizes the City Manager to execute all necessary agreements with the ICMA Retirement Corporation incidental to the administration of the Plan. ADOPTED by the City Commission of Atlantic Beach this a.3 ~` day of February 2004. I, /Vl ~kl/2C~~ ~/n1C ,Clerk of the City of Atlantic Beach, do hereby certify that the foregoing resolution proposed by the Human Resource Manager of the City of Atlantic Beach, was duly passed and adopted by the City Commission of the City of Atlantic Beach at a regular meeting thereof assembled this a3'~' day of February, 2004, by the following vote: AYES: 4 -PARSONS, SIMMONS, WATERS, MESERVE NAYS: 0 ABSENT: BEAVEK ~~ ~ Maureen King Clerk of the City of Atlan ' Beach Approved as to .form and correctness: e an C. J s ,Esquire City Att ey ADMINISTRATIVE SERVICES AGREEMENT Type: 401 Account Number: y494 Plan # 9494 ADMINISTRATIVE SERVICES AGREEMENT This Agreement, made as of the day of , 2004 (herein referred to as the "Inception Date"), between The International City ManagementAssociation Retirement Corporation ("RC"), a nonprofit corporation organized and existing under the laws of the State of Delaware; and the City of Atlantic Beach ("Employer") a City organized and existing under the laws of the State of Florida with an office at 800 Seminole Road, Atlantic Beach, Florida 32233. RECITALS Employer acts as a public plan sponsor for a retirement plan ("Plan")with responsibility to obtain investment alternatives and services for employees participating in that Plan; The VantageTrust (the "Trust") is a common law trust governed by an elected Board of Trustees for the commingled investment of retirement funds held by state and local governmental units for their employees; RC acts as investment adviser to the Trust; RC has designed, and the Trust offers, a series of separate funds (the "Funds") for the investment of plan assets as referenced in the Trust's principal disclosure document, "Making Sound Investment Decisions: A Retirement Investment Guide." The Funds are available only to public employers and only through ,~''" the Trust and RC. In addition to serving as investment adviser to the Trust, RC provides a complete. offering of services to public employers for the operation of employee retirement plans including, ;. but not limited to, communications concerning investment alternatives, account - maintenance, account record-keeping, investment and tax reporting, form processing, benefit disbursement and asset management. AGREEMENTS Appointment of RC Employer hereby designates RC as Administrator of the Plan to perform all non- discretionaryfunctions necessary for the administration of the Plan with respect to assets in the Plan deposited with the Trust. The functions to be performed by RC include: (a) allocation in accordance with participant direction of individual accounts to investment Funds offered by the Trust; (b) maintenance of individual accounts for participants reflecting amounts deferred, income, gain, or loss credited, and amounts disbursed as benefits; ~ (c) provision of periodic reports to the Employer and participants of the status of Plan investments and individual accounts; -2- Plan # 9494 (d) communication to participants of information regarding their rights and elections under the Plan; and (e) disbursement of benefits as agent for the Employer in accordance with terms of the Plan. 2. Adoption of Trust Employer has adopted the Declaration of Trust of VantageTrust and agrees to the commingled investment of assets of the Plan within the Trust. Employer agrees that operation of the Plan and investment, management and disbursement of amounts deposited in the Trust shall be subject to the Declaration of Trust, as it may be amended from time to time and shall also be subject to terms and conditions set forth in disclosure documents (such as the Retirement Investment Guide or Employer Bulletins) as those terms and conditions maybe adjusted from time to time. It is understood that the term "Employer Trust" as it is used in the Declaration of Trust shall mean this Administrative Services Agreement. 3. Employer Duty to Furnish Information ,., Employer agrees to furnish to RC on a timely basis such information as is necessary for RC to carry out its responsibilities as Administrator of the Plan, including information needed to allocate individual participant accounts to Funds in the Trust, and information as to the employment status of participants, and participant ,ages, addresses and other identifying information (including tax identification numbers). ~ RC shall be entitled to rely upon the accuracy of any information that is furnished to it by a responsible official of the Employer or any information relating to an individual participant or beneficiary that is furnished by such participant or beneficiary, and RC shall not be responsible for any error arising from its reliance on such information. RC will provide account information in reports, statements or accountings. 4. Certain Representations, Warranties, and Covenants RC represents and warrants to Employer that: (a) RC is anon-profit corporation with full power and authority to enter into this Agreement and to perform its obligations under this Agreement. The ability of RC to serve as investment adviser to the Trust is dependent upon the continued willingness of the Trust for RC to serve in that capacity. (b) RC is an investment adviser registered as such with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. ICMA-RC Services, Inc. (a wholly owned subsidiary of RC) is registered as abroker-dealer with the Securities and Exchange Commission (SEC) and is a member in good -3- Plan # 9494 standing of the National Association of Securities Dealers, Inc. RC covenants with employer that: (c) RC shall maintain and administer the Plan in compliance with the requirements for plans which satisfy the qualification requirements of Section 401 of the Internal Revenue Code; provided, however, RC shall not be responsible for the qualified status of the Plan in the event that the Employer directs RC to administer the Plan or disburse assets in a manner inconsistent with the requirements of Section 401 or otherwise causes the Plan not to be carried out in accordance with its terms; provided, further, that if the plan document used by the Employer contains terms that differ from the terms of RC's standardized plan document, RC shall not be responsible for the qualified status of the Plan to the extent affected by the differing terms in the Employer's plan document. Employer represents and warrants to RC that: (d) Employer is organized in the form and manner recited in the opening paragraph of this Agreement with full power and authority to enter into and perform its obligations under this Agreement and to act for the Plan and participants in the manner contemplated in this Agreement. Execution, delivery, and performance of this Agreement will not conflict with any law, rule, regulation or contract by which the Employer is bound or to which it is a party. 5. Participation in Certain Proceedings The Employer hereby authorizes RC to act as agent, to appear on its behalf, and to join the Employer as a necessary party in all legal proceedings involving the garnishment of benefits or the transfer of benefits pursuant to the divorce or separation of participants in the Employer Plan. Unless Employer notifies RC otherwise, Employer consents to the disbursement by RC of benefits that have been garnished or transferred to a former spouse, spouse or child pursuant to a domestic relations order. 6. Compensation and Payment (a) Plan Administration Fee. The amount to be paid for plan administration services under this Agreement shall be 0.55% per annum of the amount of Plan assets invested in the Trust. Such fee shall be computed based on average daily net Plan assets in the Trust. (b) Account Maintenance Fee. There shall be an annual account maintenance fee of $25.00. The account maintenance fee is payable in full on January 1st of each year on each account in existence on that date. For accounts established AFTER January 1st, the fee is payable on the first day of the calendar quarter following ,,~"~ establishment and is prorated by reference to the number of calendar quarters -4- Plan # 9494 remaining on the day of payment. See Appendix A for EZLink terms and conditions. (c) Compensation for Management Services to the Trust and Advisory and other Services to the Vantagepoint Funds. Employer acknowledges that in addition to amounts payable under this Agreement, RC receives fees from the Trust for investment management services furnished to the Trust. Employer further acknowledges that certain wholly-owned subsidiaries of RC receive compensation for advisory and other services furnished to the Vantagepoint Funds, which serve as the underlying portfolios of a number of Funds offered through the Trust. The fees referred to in this subsection are disclosed in the Retirement Investment Guide. These fees are not assessed against assets invested in the Trust's Mutual Fund Series. (d) Mutual Fund Services Fee. There is an annual charge of 0.15% assessed against average daily net Plan assets invested in the Trust's Mutual Fund Series. (e) Payment Procedures. All payments to RC pursuant to this Section 6 shall be paid out of the Plan assets held by the Trust and shall be paid by the Trust. The amount of Plan assets held in the Trust shall be adjusted by the Trust as required to reflect such payments. 7. Custody Employer understands that amounts invested in the Trust are to be remitted directly to the Trust in accordance with instructions :provided to Employer by RC and are not to be remitted to RC. In the event that any check or wire transfer is incorrectly labeled or transferred to RC, RC will return it to Employer with proper instructions. 8. Responsibility RC shall not be responsible for any acts or omissions of any person other than RC in connection with the administration or operation of the Plan. 9. Term This Agreement may be terminated without penalty by either party on sixty days advance notice in writing to the other. 10. Amendments and Adjustments (a) This Agreement may not be amended except by written instrument signed by the parties. (b) The parties agree that an adjustment to compensation or administrative and ~"" operational services under this Agreement may only be implemented by RC through -5- Plan # 9494 a proposal to the Employer via correspondence or the Employer Bulletin. The Employer will be given at least 60 days to review the proposal before the effective date of the adjustment. Such adjustment shall become effective unless, within the 60 day period before the effective date, the Employer notifies RC in writing that it does not accept such adjustment, in which event the parties will negotiate with respect to the adjustment. (c) No failure to exercise and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a waiver of such right, remedy, power or privilege. 11. Notices All notices required to be delivered under Section 10 of this Agreement shall be delivered personally or by registered or certified mail., postage prepaid, return receipt requested, to (i) Legal Department, ICMA Retirement Corporation, 777 North Capitol Street, N.E., Suite 600, Washington, D.C, 20002-4240; (ii) Employer at the office set forth in the first paragraph hereof, or to any other address designated by the party to receive the same by written notice similarly given. 12. Complete Agreement ,~ This Agreement shall constitute the sole agreement between RC and Employer relating to the object ofthis Agreement and correctly sets forth the complete rights, duties and obligations of .each party to the other_as of its date. -Any prior agreements, promises, negotiations or representations, verbal or otherwise, not expressly set forth in this Agreement are of no force and effect. 13. Governing Law This agreement shall be governed by and construed in accordance with the laws of the State of Florida, applicable to contracts made in that jurisdiction without reference to its conflicts of laws provisions. ''~`' -6- Plan # 9494 In Witness Whereof, the parties hereto have executed this Agreement as of the Inception Date first above written. CITY OF ATLANTIC BEACH by: <~ ~. Jim },~'`anson, City Manager Name and Title (Please Print) INTERNATIONAL CITY MANAGEMENT ASSOCIATION RETIREMENT CORPORATION by: Paul Gallagher "" Corporate Secretary -7- I C M A RETIREMENT C O R P O R AT I O N PLAN & TRUST DOCUMENT ICMA RETIREMENT CORPORATION The Publio Sector Expert EGTgRA AMENDMEr1T _~., , nl~.SI00 ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST EGTRRA AMENDMENT PREAMBLE A. Adoption and effective date of amendment. This Amendment of the ICMA Retirement Corporation Governmental Money Purchase Plan & Trust (the "Plan") and its Adoption Agreement is adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). This Amendment is intended as good faith compliance with the requirements of EGTRRA and is to be construed in accordance with EGTRRA and guidance issued thereunder. Except as otherwise provided, this Amendment shall be effective as of the first day of the first Plan Year beginning after December 31, 2001 and shall end December 31, 2010, unless otherwise extended by law or other- wise. B. Supersession of inconsistent provisions. This Amendment shall supersede the provisions of the Plan and Adoption Agreement to the extent those provisions are inconsistent with the provisions of this Amend- ment. Section 1. Limitations on Contributions A. Effective date. This Section shall be effective for Limitation Years beginning after December 31, 2001. """' B. Maximum annual addition. The maximum Annual Addition that may be contributed or allocated to a Participant's Account under the Plan for any Limitation Year shall not exceed the lesser of (i) $40,000, as adjusted for increases in the cost-of-living under section 415(d) of the Code, or (ii) One hundred percent (100%) of the Participant's Compensation for the Limitation Year. The compensation limit referred to in (ii) shall not apply to any contribution for medical benefits after separation from service (within the meaning of section 401(h) or section 419A(f) (2) of the Code) which is otherwise treated as an Annual Addition. Section 2. Increase in Earnings Limit A. In general. For Plan Years beginning on or after January 1, 2002, the annual Earnings of each Participant taken into account in determining all benefits provided under the Plan for any Plan Year shall not exceed $200,000, as adjusted for increases in the cost-of-living in accordance with section 401(a)(17)(B) of the Code. Annual Earnings means Earnings during the Plan Year or such other consecutive 12-month period over which Earnings is otherwise determined under the Plan (the determination period). The cost-of- living adjustment in effect for a calendar year applies to annual Earnings for the determination period that begins with or within such calendar year. B. Prior years. If Earnings for any prior determination period are taken into account in determining a Participant's allocations or benefits for the current Plan Year, the Earnings for such prior year are subject to the applicable annual Earnings limit in effect for that prior year. MPP 10/25/00 Section 3. Direct Rollovers of Plan Distributions A. Effective date. This Section shall apply to distributions made after December 31, 2001. B. Modification of definition of eligible retirement plan. For purposes of the direct rollover provisions in Section 9.03 of the Plan, an eligible retirement plan shall also mean an annuity contract described in section 403(b) of the Code and an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in section 414(p) of the Code. C. Modification of definition of eligible rollover distribution to include after-tax employee contributions. For purposes of the direct rollover provisions in Section 9.03 of the Plan, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible. Section 4. Rollovers From Other Plans Effective January 1, 2002, unless otherwise elected by the Employer in the Adoption Agreement, the Plan will accept Participant rollover contributions and/or direct rollovers of distributions (including after-tax contributions) made after December 31, 2001 that are eligible for rollover in accordance with Section 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), or 457(e)(16) of the Code, from all of the following types of plans: (1) a qualified plan described in Section 401(a) or 403(a) of the Code; (2) an annuity contract described in Section 403(b) of the Code; (3) an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state; and (4) an individual retirement account or annuity described in Section 408(a) or 408(b) of the Code (including SEPs, and SIMPLE IRAs after 2 years of participating in the SIMPLE IRA). The amount distributed from such plan must be rolled over to this Plan no later than the sixtieth (60th) day after distribution was made from the plan, unless otherwise waived by the IRS pursuant to Section 402(c)(3) of the Code. Section 5. Voluntary Participant Contributions The ten percent (10%) limit on Voluntary Participant Contributions under Section 4.05 of the Plan shall be increased to twenty-five percent (25%). MPP 10/25/00 BASIC DOCUMENT in(~ ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST I. PURPOSE The Employer hereby adopts this Plan and Trust to provide funds for its Employees' retirement, and to provide funds for their Beneficiaries in the event of death. The benefits provided in this Plan shall be paid from the Trust. The Plan and the Trust forming a part hereof are adopted and shall be maintained for the exclusive benefit of eligible Employees and their Beneficiaries. Except as provided in Sections 4.10 and 14.03, no part of the corpus or income of the Trust shall revert to the Employer or be used for or diverted to purposes other than the exclusive benefit of Participants and their Beneficiaries. II. DEFINITIONS 2.01 Account. A separate record which shall be established and maintained under the Trust for each Participant, and which shall include all Participant subaccounts created pursuant to Article IV, plus any Participant Loan Account created pursuant to Section 13.03. Each subaccount created pursuant to Article IV shall include any earnings of the Trust and adjustments for withdrawals, and realized and unrealized gains and losses allocable thereto. The term "Account" may also refer to any of such separate subaccounts. 2.02 Accounting Date. Each day that the New York Stock Exchange is open for trading, and such other dates as may be determined by the Plan Administrator, as provided in Section 6.06 for valuing the Trust's assets. 2.03 Adoption Agreement. The separate agreement executed by the Employer through which the Employer adopts the Plan and elects among the various alternatives provided thereunder, and which upon execution, becomes an integral part of the Plan. 2.04 Beneficiary. The person or persons designated by the Participant who, subject to the requirements of Article XII, shall receive any benefits payable hereunder in the event of the Participant's death. The designation of such Beneficiary shall be in writing to the Plan Administrator. A Participant may designate primary and contingent Benefi- ciaries. Where no designated Beneficiary survives the Participant, the Participant's Beneficiary shall be his/her surviv- ing spouse or, if none, his/her estate. 2.05 Break in Service. A Period of Severance of at least twelve (12) consecutive months. In the case of an individual who is absent from work for maternity or paternity reasons, the twelve (12) consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a Break in Serv- ice. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of the birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. 2.06 Code. The Internal Revenue Code of 1986, as amended from time to time. 2.07 Covered Employment Classification. The group or groups of Employees eligible to make and/or have contri- butions to this Plan made on their behalf, as specified by the Employer in the Adoption Agreement. 2.08 Disability. A physical or mental impairment which is of such permanence and degree that, as determined by the Employer, a Participant is unable because of such impairment to perform any substantial gainful activity for which he/she is suited by virtue of his/her experience, training, or education and that has lasted, or can be expected to last, for a continuous period of not less than twelve (12) months, or can be expected to result in death. The permanence MPP 10/25/00 and degree of such impairment shall be supported by medical evidence. If the Employer maintains along-term disability plan, the definition of Disability shall be the same as the definition of disability in the long term disability plan. 2.09 Earnings. (a) General Rule. Earnings, which form the basis for computing Employer Contributions, are all of each Participant's W-2 earnings which are actually paid to the Participant during the Plan Year, plus any contributions made pursuant to a salary reduction agreement which are not includible in the gross income of the Employee under section 125, 132(f)(4), 402(e)(3), 402(h)(1)(B), 403(b), 414(h)(2), or 457(b) of the Code. Unless the Employer elects otherwise in the Adoption Agreement, Earnings shall exclude overtime compensation and bonuses. (b) Limitation on Earnings. Notwithstanding the foregoing, effective as of the first Plan Year beginning on or after January 1, 1989, and before January 1, 1994, the annual Earnings of each Participant taken into account for determining all benefits provided under the Plan for any Plan Year shall not exceed $200,000. This limitation shall be adjusted by the Secretary of the Treasury at the same time and in the same man- ner as under section 415(d) of the Code, except that the dollar increase in effect on January 1 of any calendar year is effective for years beginning in such calendar year and the first adjustment to the $200,000 limitation is effective on January 1, 1990. For Plan Years beginning on or after January 1, 1994, the annual Earnings of each Participant taken into ~ account for determining all benefits provided under the Plan for any Plan Year shall not exceed $150,000, as adjusted for increases in the cost-of-living in accordance with section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any determination period beginning in such calendar year. If a determination period consists of fewer than twelve (12) months, the annual Earnings limit is an amount equal to the otherwise applicable annual Earnings limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve (12). If Earnings for any prior determination period are taken into account in determining a Participant's allocations for the current Plan Year, the Earnings for such prior determination period are subject to the applicable annual Earnings limit in effect for that prior year. For this purpose, for years beginning on or after January 1, 1989, the applicable annual Earnings limit is $200,000. In addition, in determining allocations in Plan Years beginning on or after January 1, 1994, the annual Earnings limit in effect for determination periods beginning before that date is $150,000. (c) Limitations for Governmental Plans. In the case of an eligible participant in a governmental plan (within the meaning of section 414(d) of the Code), the dollar limitation shall not apply to the extent the Earn- ings which are allowed to be taken into account under the Plan would be reduced below the amount which was allowed to be taken into account under the Plan as in effect on July 1, 1993. For purposes of this Section, an eligible participant is an individual who first became a Participant in the Plan during a Plan Year beginning before the first Plan Year beginning after December 31, 1993. 2.10 Effective Date. The first day of the Plan Year during which the Employer adopts the Plan, unless the Employer elects in the Adoption Agreement an alternate date as the Effective Date of the Plan. 2.11 Employee. Any individual who has applied for and been hired in an employment position and who is em- ployed by the Employer as a common law employee; provided, however, that Employee shall not include any indi- vidual who is not so recorded on the payroll records of the Employer, including any such person who is subsequently MPP 10/25/00 ~ reclassified by a court of law or regulatory body as a common law employee of the Employer. For purposes of clarifica- tion only and not to imply that the preceding sentence would otherwise cover such person, the term Employee does not include any individual who performs services for the Employer as an independent contractor, or under any other nonemployee classification. 2.12 Employer. The unit of state or local government or an agency or instrumentality of one (1) or more states or local governments that executes the Adoption Agreement. 2.13 Hour of Service. Each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer. 2.14 Nonforfeitable Interest. The interest of the Participant or his/her Beneficiary (whichever is applicable) in that percentage of his/her Employer Contribution Account balance which has vested pursuant to Article VII. A Participant shall, at all times, have a one hundred percent (100%) Nonforfeitable Interest in his/her Participant Contribution, Portable Benefits, and Voluntary Contribution Accounts. 2.15 Normal Retirement Age. The age which the Employer specifies in the Adoption Agreement. If the Employer enforces a mandatory retirement age, the Normal Retirement Age is the lesser of that mandatory age or the age speci- fied in the Adoption Agreement. 2.16 Participant. An Employee or former Employee for whom contributions have been made under the Plan and who has not yet received all of the payments of benefits to which he/she is entitled under the Plan. A Participant is treated as benefiting under the Plan for any Play Year during which the Participant received or is deemed to receive an allocation in accordance with Treas. Reg. section 1.410(b)-(3)(a). 2.17 Period of Service. For purposes of determining an Employee's initial or continued eligibility to participate in the Plan or the Nonforfeitable Interest in the Participant's Account balance derived from Employer Contributions, an Employee will receive credit for the aggregate of all time period(s) commencing with the Employee's first day of employment or reemployment and ending on the date a Break in Service begins. The first day of employment or reemployment is the first day the Employee performs an Hour of Service. An Employee will also receive credit for any Period of Severance of less than twelve (12) consecutive months. Fractional periods of a year will be expressed in terms of days. Notwithstanding anything to the contrary herein, if the Plan is an amendment and restatement of a plan that previ- ously calculated service under the hours of service method, service shall be credited in a manner that is at least as generous as that provided under Treas. Regs. section 1.410(a)-7(g). 2.18 Period of Severance. A continuous period of time during which the Employee is not employed by the Em- ployer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was otherwise first absent from service. 2.19 Plan. This Plan, as established by the Employer, including any elected provisions pursuant to the Adoption Agreement. 2.20 Plan Administrator. The ICMA Retirement Corporation or any successor Plan Administrator. 2.21 Plan Year. The twelve (12) consecutive month period designated by the Employer in the Adoption Agreement. 2.22 Trust. The Trust created under Article VI of the Plan which shall consist of all of the assets of the Plan derived from Employer and Participant contributions under the Plan, plus any income and gains thereon, less any losses, expenses and distributions to Participants and Beneficiaries. MPP 10/25/00 ~ III. ELIGIBILITY 3.01 Service. Except as provided in Sections 3.02 and 3.03 of the Plan, an Employee within the Covered Employ- ment Classification who has completed a twelve (12) month Period of Service shall be eligible to participate in the Plan at the beginning of the payroll period next commencing thereafter. The Employer may elect in the Adoption Agreement to waive or reduce the twelve (12) month Period of Service. If the Employer maintains the plan of a predecessor employer, service with such employer shall be treated a Service for the Employer. 3.02 Age. The Employer may designate a minimum age requirement, not to exceed age twenty-one (21), for partici- pation. Such age, if any, shall be declared in the Adoption Agreement. 3.03 Return to Covered Employment Classification. In the event a Participant is no longer a member of Covered Employment Classification and becomes ineligible to make contributions and/or have contributions made on his/her behalf, such Employee will become eligible for contributions immediately upon returning to a Covered Employment Classification. If such Participant incurs a Break in Service, eligibility will be determined under the Break in Service rules of the Plan. In the event an Employee who is not a member of a Covered Employment Classification becomes a member, such Employee will be eligible to participate immediately if such Employee has satisfied the minimum age and service requirements and would have otherwise previously become a Participant. 3.04 Service Before a Break in Service. All Periods of Service with the Employer are counted toward eligibility, including Periods of Service before a Break in Service. N CONTRIBUTIONS 4.01 Employer Contributions. For each Plan Year, the Employer will contribute to the Trust an amount as specified in the Adoption Agreement. The Employer's full contribution for any Plan Year shall be due and paid not later than thirty (30) working days after the close of the Plan Year. Each Participant will share in Employer Contributions for the period beginning on the date the Participant commences participation under the Plan and ending on the date on which such Employee severs employment with the Employer or is no longer a member of a Covered Employment Classification, and such contributions shall be accounted for separately in his/her Employer Contribution Account. Notwithstanding anything to the contrary herein, if so elected by the Employer in the Adoption Agreement, an Employee shall be required to make contributions as provided pursuant to Section 4.03 or 4.04 in order to be eligible for Employer Contributions to be made on his/her behalf to the Plan. 4.02 Forfeitures. All amounts forfeited by terminated Participants, pursuant to Section 7.06, shall be allocated to a suspense account and used to reduce dollar for dollar Employer Contributions otherwise required under the Plan for the current Plan Year and succeeding Plan Years, if necessary. Forfeitures may first be used to pay the reasonable administrative expenses of the Plan, with any remainder being applied to reduce Employer Contributions. 4.03 Mandatory Participant Contributions. If the Employer so elects in the Adoption Agreement, each eligible Employee shall make contributions at a prescribed rate as a requirement for his/her participation in the Plan. Once such an eligible Employee becomes a Participant hereunder, he/she shall not thereafter have the right to discontinue or vary the rate of such Mandatory Participant Contributions. Such contributions shall be accounted for separately in the Participant Contribution Account. Such Account shall be at all times nonforfeitable by the Participant. If the Employer so elects in the Adoption Agreement, the Mandatory Participant Contributions shall be "picked- up" by the Employer in accordance with Code section 414(h)(2). Any contribution picked-up under this Section shall be MPP 10/25/00 treated as an employer contribution in determining the tax treatment under the Code, and shall not be included as gross income of the Participant until it is distributed. 4.04 Matched Participant Contributions. If the Employer so elects in the Adoption Agreement, Employer Contri- butions shall be made on behalf of an eligible Employee for a Plan Year only if the Employee agrees to make Matched Participant Contributions for that Plan Year. The rate of Employer Contributions shall, to the .extent specified in the Adoption Agreement, be based upon the rate at which Matched Participant Contributions are made for that Plan Year. Matched Participant Contributions shall be accounted for separately in the Participant Contribution Account. Such Account shall be at all times nonforfeitable by the Participant. 4.05 Voluntary Participant Contributions. If the Employer so elects in the Adoption Agreement, an eligible Employee may make voluntary (unmatched) contributions under the Plan for any Plan Year in any amount up to ten percent (10%) of his/her Earnings for such Plan Year. Such contributions shall be accounted for separately in the Participant's Voluntary Contribution Account. Such Account shall be at all times nonforfeitable by the Participant. 4.06 Deductible Employee Contributions. The Plan will not accept deductible employee contributions which are made for a taxable year beginning after December 31, 1986. Contributions made prior to that date will be main- tained in a Deductible Employee Contribution Account. The Account will share in the gains and losses under the Plan in the same manner as described in Section 6.06 of the Plan. Such Account shall be at all times nonforfeitable by the Participant. 4.07 Military Service Contributions. Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with section 414(u) of the Code. If the Employer has elected in the Adoption Agreement to make loans available to Participants, loan repayments will be suspended under the Plan as permitted under section 414(u)(4) of the Code. 4.08 Changes in Participant Election. A Participant may elect to change his/her rate of Matched Participant Contributions or Voluntary Participant Contributions at anytime or during an election period as designated by the Employer. A Participant may discontinue such contributions at any time or during an election period as designated by the Employer. 4.09 Portability of Benefits. (a) An Employee within the Covered Employment Classification, whether or not he/she has satisfied the minimum age and service requirements of Article III, may transfer or roll over his/her interest in a plan qualified under section 401(a) or 403(a) of the Code to this Plan, provided: (1) The distribution is on account of termination or discontinuance of the plan or the distribution becomes payable on account of the Employee's separation from service, death, disability or after the Employee attains age fifty-nine and one-half (59-1/2); and the form and nature of the distri- bution from the other plan satisfies the applicable requirements under the Code to make the transfer or rollover a nontaxable transaction to the Employee; (2) The amount distributed from the plan is transferred to this Plan no later than the sixtieth (60th) day after distribution was made from the plan; and (3) In the case of a rollover, the amount transferred to this Plan does not exceed the amount of the distribution reduced by the Employee contributions (if any) to the plan (other than accumulated deductible voluntary contributions). MPP 10/25/00 Such transfer or rollover may also be through an Individual Retirement Plan qualified under section 408 of the Code where the Individual Retirement Plan was used as a conduit from the prior plan and the transfer is made in accordance with the rules provided at (1) through (3) of this paragraph and the transfer does not include any personal contribu- tions or earnings thereon the Participant may have made to the Individual Retirement Plan. The amount transferred shall be deposited in the Trust and shall be credited to a Portable Benefits Account. Such Account shall be one hundred percent (100%) vested in the Employee. The Plan will accept accumulated Deductible Employee Contributions as defined in section 72(0)(5) of the Code that were distributed from a qualified retirement plan and transferred (rolled over) pursuant to section 402(a)(5), 402(a)(7)> 403(a)(4), or 408(d)(3) of the Code. Notwithstanding the above, this transferred (rolled over) amount shall be deposited to the Trust and shall be credited to a Deductible Employee Contribution Account. Such Account shall be one hundred percent (100%) vested in the Employee. (b) An Employee within the Covered Employment Classification, whether or not he/she has satisfied the minimum age and service requirement of Article III, may, upon approval by the Employer and the Plan Administrator, transfer his/her interest in another plan maintained by the Employer that is qualified under section 401(a) of the Code to this Plan, provided the transfer is effected through cone-time irrevocable written election made by the Participant. The amount transferred shall be deposited in the Trust and shall be credited to sources that maintain the same attributes as the plan from which they are transferred. Such transfer shall not reduce the accrued years or service credited to the Participant for purposes of vesting or eligibility for any Plan benefits or features. 4.10 Return of Employer Contributions. Any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the date of contribution. V LIMITATION ON ALLOCATIONS 5.01 Participants Only in This Plan. (a) If the Participant does not participate in, and has never participated in another qualified plan or a welfare benefit fund, as defined in section 419(e) of the Code, maintained by the Employer, or an individual medical account, as defined by section 415(1)(2) of the Code, maintained by the Employer, which pro- vides an Annual Addition, the amount of Annual Additions which may be credited to the Participant's Account for any Limitation Year will not exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. If the Employer Contribution that would otherwise be contrib- uted or allocated to the Participant's Account would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the amount contributed or allocated will be reduced so that the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. (b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant on the basis of a reasonable estimation of the Participant's Compensation for the Limitation Year, uniformly determined for all Participants simi- larly situated. (c) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on thebasis of the Participant's actual Compensation for the Limitation Year. (d) If, pursuant to Subsection (c) or as a result of the allocation of forfeitures, there is an Excess Amount, the excess will be disposed of as follows: MPP 10/25/00 10 (1) Any Voluntary Participant Contributions, to the extent they would reduce the Excess Amount, will be returned to the Participant; (2) If after the application of paragraph (1) an Excess Amount still exists, and the Participant is covered by the Plan at the end of the Limitation Year, the Excess Amount in the Participant's Account will be used to reduce Employer Contributions (including any allocation of forfeitures) for such Participant in the next Limitation Year, and each succeeding Limitation Year if necessary; (3) If after the application of paragraph (1) an Excess Amount still exists, and the Participant is not covered by the Plan at the end of the Limitation Year, the Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer Contri- butions (including allocation of any forfeitures) for all remaining Participants in the next Limita- tion Year, and each succeeding Limitation Year if necessary; (4) If a suspense account is in existence at any time during a particular Limitation Year, all amounts in the suspense account must be allocated and reallocated to Participants' accounts before any Employer or any Employee contributions may be made to the Plan for that Limitation Year. Excess Amounts in a suspense account may not be distributed to Participants or former Partici- pants. 5.02 Participants in Another Defined Contribution Plan. (a) Unless the Employer provides other limitations in the Adoption Agreement, this Section applies if, in addition to this Plan, the Participant is covered under another qualified defined contribution plan main- tained by the Employer, or a welfare benefit fund, as defined in section 419(e) of the Code, maintained by the Employer, or an individual medical account, as defined by section 415(1)(2) of the Code, maintained by the Employer, which provides an Annual Addition, during any Limitation Year. The Annual Additions which may be credited to a Participant's Account under this Plan for any such Limita- tion Year will not exceed the Maximum Permissible Amount reduced by the Annual Additions credited to a Participant's Account under the other plans and welfare benefit funds for the same Limitation Year. If the Annual Additions with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's Account under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the amount contributed or allocated will be reduced so that the Annual Additions under all such plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount will be contrib- uted or allocated to the Participant's Account under this Plan for the Limitation Year. (b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant in the manner described in Section 5.01(b). (c) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensation for the Limitation Year. (d) If, pursuant to Subsection (c) or as a result of the allocation of forfeitures, a Participant's Annual Addi- tions under this Plan and such other plans would result in an Excess Amount for a Limitation Year, the Excess Amount will be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a welfare benefit fund or individual medical account will be deemed to have MPP 10/25/00 11 "'` been allocated first regardless of the actual allocation date. (e) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of, (1) The total Excess Amount allocated as of such date, multiplied by (2) The ratio of (i) the Annual Additions allocated to the Participant for the Limitation Year as of such date under this Plan to (ii) the total Annual Additions allocated to the Participant for the Limitation Year as of such date under this and all the other qualified defined contribution plans. (f) Any Excess Amount attributed to this Plan will be disposed in the manner described in Section 5.01(d). 5.03 Definitions. For the purposes of this Article, the following definitions shall apply: (a) AnnualAdditions: The sum of the following amounts credited to a Participant's account for the Limita- tion Year: (1) Employer Contributions; (2) Forfeitures; (3) Employee contributions; and (4) Allocations under a simplified employee pension. Amounts allocated, after March 31, 1984, to an individual medical account, as defined in section 415(1)(2) of the Code, which is part of a pension or annuity plan maintained by the Employer, are treated as Annual Additions to a defined contribution plan. For this purpose, any Excess Amount applied under Sections 5.01(d) or 5.02(f) in the Limitation Year to reduce Employer Contributions will be considered Annual Additions for such Limitation Year. (b) Compensation: A Participant's wages, salaries, and fees for professional services and other amounts re- ceived (without regard to whether an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan (as described in Treas. Reg. section 1.62-2(c))), excluding the following: (1) Employer Contributions to a plan of deferred compensation which are not includible in the Employee's gross income for the taxable year in which contributed, or Employer Contributions under a simplified employee pension plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation; and (2) Other amounts which received special tax benefits, or contributions made by the Employer ,..., (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in section 403(b) of the Code (whether or not the amounts are actually excludable from the gross income of the Employee). (3) Notwithstanding the above, for Limitation Years beginning after December 31, 1997, Compen- sation shall include: MPP 10/25/00 12 (a) any elective deferrals (as defined in section 402(8)(3) of the Code), and (b) any amount which is contributed or deferred by the Employer at the election of the Employee and which is not includible in the gross income of the Employee by reason of sections 125 or 457 of the Code. (4) Notwithstanding the above, for Limitation Years beginning on and after January 1, 2001, for purposes of applying the limitations described in this Article V of the Plan, Compensation paid or made available during such Limitation Years shall include elective amounts that are not includible in the gross income of the Employee by reason of section 132(f)(4) of the Code. For purposes of applying the limitations of this Article, Compensation for a Limitation Year is the Compensa- tion actually paid or made available during such year. (c) Defined Contribution Dollar Limitation: $30,000. (d) Employer. The Employer that adopts this Plan. (e) Excess Amount The excess of the Participant's Annual Additions for the Limitation Year over the Maxi- mum Permissible Amount. An Excess Amount shall include allocable income. The income allocable to an Excess Amount is equal to the sum of the allocable gain or loss for the Plan Year and the allocable gain or loss for the period between the end of the Plan Year and the date of distributions (the gap period). The Plan may use any reasonable method for computing the income allocable to an Excess Amount, provided that the method is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants' Accounts. (f) Highest Average Compensation: The average Compensation for the three (3) consecutive years of service with the Employer that produce the highest average. A year of service with the Employer is the twelve (12) consecutive month period defined as the Limitation Year in the Adoption Agreement. (g) Limitation Year. A calendar year, or the twelve (12) consecutive month period elected by the Employer in _ the Adoption Agreement. All qualified plans maintained by the Employer must use the same Limitation Year. If the Limitation Year is amended to a different twelve (12) consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made. (h) Maximum Permissible Amount. The maximum Annual Addition that may be contributed or allocated to a Participant's Account under the Plan for any Limitation Year shall not exceed the lesser of: (1) The Defined Contribution Dollar Limitation, or (2) Twenty-five percent (25%) of the Participant's Compensation for the Limitation Year. If a short Limitation Year is created because of an amendment changing the Limitation Year to a different twelve (12) consecutive month period, the Maximum Permissible Amount will not exceed the Defined Contribution Dollar Limitation multiplied by the following fraction: Number of months in the short Limitation Year 12 (i) Projected Annual Benefit: The annual retirement benefit (adjusted to an actuarially equivalent straight MPP 10/25/00 13 life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) to which the Participant would be entitled under the terms of the plan assuming: (1) The Participant will continue employment until Normal Retirement Age under the plan (or current age, if later), and (2) The Participant's Compensation for the current Limitation Year and all other relevant factors used to determine benefits under the plan will remain constant for all future Limitation Years. VI. TRUST AND INVESTMENT OF ACCOUNTS 6.01 Trust. A Trust is hereby created to hold all of the assets of the Plan for the exclusive benefit of Participants and Beneficiaries, except that expenses and taxes may be paid from the Trust as provided in Section 6.03. The trustee shall be the Employer or such other person which agrees to act in that capacity hereunder. 6.02 Investment Powers. The trustee or the Plan Administrator, acting as agent for the trustee, shall have the powers listed in this Section with respect to investment of Trust assets, except to the extent that the investment of Trust assets is controlled by Participants, pursuant to Section 13.03. (a) To invest and reinvest the Trust without distinction between principal and income in common or preferred stocks, shares of regulated investment companies and other mutual funds, bonds, loans, notes, debentures, certificates of deposit, contracts with insurance companies including but not limited to insurance, individual or group annuity, deposit administration, guaranteed interest contracts, and deposits at reasonable rates of interest at banking institutions including but not limited to savings ac- counts and certificates of deposit. Assets of the Trust may be invested in securities that involve a higher degree of risk than investments that have demonstrated their investment performance over an extended period of time. (b) To invest and reinvest all or any part of the assets of the Trust in any common, collective or commingled trust fund that is maintained by a bank or other institution and that is available to Employee plans qualified under section 401 of the Code, or any successor provisions thereto, and during the period of time that an investment through any such medium shall exist, to the extent of participation of the Plan, the declaration of trust of such common, collective, or commingled trust fund shall constitute a part of this Plan. (c) To invest and reinvest all or any part of the assets of the Trust in any group annuity, deposit administra- tion or guaranteed interest contract issued by an insurance company or other financial institution on a commingled or collective basis with the assets of any other plan or trust qualified under section 401(a) of the Code or any other plan described in section 401(a) (24) of the Code, and such contract may be held or issued in the name of the Plan Administrator, or such custodian as the Plan Administrator may appoint, as agent and nominee for the Employer. During the period that an investment through any such contract shall exist, to the extent of participation of the Plan, the terms and conditions of such contract shall constitute a part of the Plan. (d) To hold cash awaiting investment and to keep such portion of the Trust in cash or cash balances, without liability for interest, in such amounts as may from time to time be deemed to be reasonable and necessary to meet obligations under the Plan or otherwise to be in the best interests of the Plan. (e) To hold, to authorize the holding of, and to register any investment to the Trust in the name of the Plan, the Employer, or any nominee or agent of any of the foregoing, including the Plan Administrator, or in bearer form, to deposit or arrange for the deposit of securities in a qualified central depository even MPP 10/25/00 14 though, when so deposited, such securities may be merged and held in bulk in the name of the nominee '` of such depository with other securities deposited therein by any other person, and to organize corpora- tions or trusts under the laws of any jurisdiction for the purpose of acquiring or holding title to any property for the Trust, all with or without the addition of words or other action to indicate that property is held in a fiduciary or representative capacity but the books and records of the Plan shall at all times show that all such investments are part of the Trust. (f) Upon such terms as may be deemed advisable by the Employer or the Plan Administrator, as the case may be, for the protection of the interests of the Plan or for the preservation of the value of an investment, to exercise and enforce by suit for legal or equitable remedies or by other action, or to waive any right or claim on behalf of the Plan or any default in any obligation owing to the Plan, to renew, extend the time for payment of, agree to a reduction in the rate of interest on, or agree to any other modification or change in the terms of any obligation owing to the Plan, to settle, compromise, adjust, or submit to arbitration any claim or right in favor of or against the Plan, to exercise and enforce any and all rights of foreclosure, bid for property in foreclosure, and take a deed in lieu of foreclosure with or without paying consideration therefor, to commence or defend suits or other legal proceedings whenever any interest of the Plan requires it, and to represent the Plan in all suits or legal proceedings in any court of law or equity or before any body or tribunal. (g) To employ suitable consultants, depositories, agents, and legal counsel on behalf of the Plan. (h) To open and maintain any bank account or accounts in the name of the Plan, the Employer, or any nominee or agent of the foregoing, including the Plan Administrator, in any bank or banks. (i) To do any and all other acts that may be deemed necessary to carry out any of the powers set forth herein. 6.03 Taxes and Expenses. All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect to the Trust, or the income thereof, and all commissions or acquisitions or dispositions of securities and similar expenses of investment and reinvestment of the Trust, shall be paid from the Trust. Such reasonable compensation of the Plan Administrator, as may be agreed upon from time to time by the Employer and the Plan Administrator, and reimbursement for reasonable expenses incurred by the Plan Administrator in perform- ance of its duties hereunder (including but not limited to fees for legal, accounting, investment and custodial services) shall also be paid from the Trust. However, no person who is a fiduciary within the meaning of section 3(21)(A) of ERISA and regulations promulgated thereunder, and who receives full-time pay from the Employer may receive compensation from the Trust, except for expenses properly and actually incurred. 6.04 Payment of Benefits. The payment of benefits from the Trust in accordance with the terms of the Plan may be made by the Plan Administrator, or by any custodian or other person so authorized by the Employer to make such disbursement. Benefits under this Plan shall be paid only if the Plan Administrator, custodian or other person decides in his/her discretion that the applicant is entitled to them. The Plan Administrator, custodian or other person shall not be liable with respect to any distribution of Trust assets made at the direction of the Employer. G.OS Investment Funds. In accordance with uniform and nondiscriminatory rules established by the Employer and the Plan Administrator, the Participant may direct his/her Accounts to be invested in one (1) or more investment funds available under the Plan; provided, however, that the Participant's investment directions shall not violate any investment restrictions established by the Employer and shall not include any investment in collectibles, as defined in section 408(m) of the Code. 6.06 Valuation of Accounts. As of each Accounting Date, the Plan assets held in each investment fund offered shall be valued at fair market value and the investment income and gains or losses for each fund shall be determined. Such investment income and gains or losses shall be allocated proportionately among all Account balances on a fund- by-fund basis. The allocation shall be in the proportion that each such Account balance as of the immediately preced- ing Accounting Date bears to the total of all such Account balances as of that Accounting Date. For purposes of this MPP 10/25/00 15 Article, all Account balances include the Account balances of all Participants and Beneficiaries. 6.07 Participant Loan Accounts. Participant Loan Accounts shall be invested in accordance with Section 13.03 of the Plan. Such Accounts shall not share in any investment income and gains or losses of the investment funds described in Section 6.05. VII. VESTING 7.01 Vesting Schedule. The portion of a Participant's Account attributable to Mandatory Participant Contribu- tions, Matched Participant Contributions, or voluntary Participant Contributions, and the earnings thereon, shall be at all times nonforfeitable by the Participant. A Participant shall have a Nonforfeitable Interest in the percentage of his/her Employer Contribution Account established under Section 4.01 determined pursuant to the schedule elected by the Employer in the Adoption Agreement. 7.02 Crediting Periods of Service. Except as provided in Section 7.03, all of an Emlloyee's Periods of Service with the Employer are counted to determine the nonforfeitable percentage in the Employee's Account balance derived from Employer Contributions. If the Employer maintains the plan of a predecessor employer, service with such employer will be treated as service for the Employer. For purposes of determining years of service and Breaks in Service for purposes of computing a Participant's nonforfeitable right to the Account balance derived from Employer Contributions, the twelve (12) consecutive month period will commence on the date the Employee first performs an hour of service and each subsequent twelve (12) consecutive month period will commence on the anniversary of such date. 7.03 Service After Break in Service. In the case of a Participant who has a Break in Service of at least five (5) years, all Periods of Service after such Breaks in Service will be disregarded for the purpose of determining the nonforfeitable percentage of the Employer-derived Account balance that accrued before such Break, but both pre-Break and post- Break service will count for the purposes of vesting the Employer-derived Account balance that accrues after such Break. Both Accounts will share in the earnings and losses of the fund. In the case of a Participant who does not have a Break in Service of at least five (5) years, both the pre-Break and post- Break service will count in vesting both the pre-Break and post-Break Employer-derived Account balance. In the case of a Participant who does not have any nonforfeitable right to the Account balance derived from Employer Contributions, years of service before a period of consecutive one (1) year Breaks in Service will not be taken into account in computing eligibility service if the number of consecutive one (1) year Breaks in Service in such period equals or exceeds the greater of five (5) or the aggregate number of years of service. Such aggregate number of years of service will not include any years of service disregarded under the preceding sentence by reason of prior Breaks in Service. If a Participant's years of service are disregarded pursuant to the preceding paragraph, such Participant will be treated as a new Employee for eligibility purposes. If a Participant's years of service may not be disregarded pursuant to the preceding paragraph, such Participant shall continue to participate in the Plan, or, if terminated, shall participate immediately upon reemployment. 7.04 Vesting Upon Normal Retirement Age. Notwithstanding Section 7.01 of the Plan, a Participant shall have a Nonforfeitable Interest in his/her entire Employer Contribution Account, to the extent that the balance of such Account has not previously been forfeited pursuant to Section 7.06 of the Plan, if he/she is employed on or after his/ her Normal Retirement Age. MPP 10/25/00 16 7.05 Vesting Upon Death or Disability. Notwithstanding Section 7.01 of the Plan, in the event of Disability or death, a Participant or his/her Beneficiary shall have a Nonforfeitable Interest in his/her entire Employer Contribution Account, to the extent that the balance of such Account has not previously been forfeited pursuant to Section 7.06 of the Plan. 7.06 Forfeitures. Except as provided in Sections 7.04 and 7.05 of the Plan or as otherwise provided in this Section 7.06, a Participant who separates from service prior to obtaining full vesting shall forfeit that percentage of his/her Employer Contribution Account balance which has not vested as of the date such Participant incurs a Break in Service of five (5) consecutive years or, if earlier, the date such Participant receives, or is deemed under the provisions of Section 9.04 to have received, distribution of the entire Nonforfeitable Interest in his/her Employer Contribution Account. If a Participant receives a voluntary distribution of less than the entire vested portion of his/her Employer Contribution Account, the part of the nonvested portion that will be treated as a forfeiture is the total nonvested portion multiplied by a fraction, the numerator of which is the amount of the distribution attributable to Employer Contributions and the denominator of which is the total value of the vested Employer Contribution Account. No forfeiture will occur solely as a result of a Participant's withdrawal of Employee Contributions. Forfeitures shall be allocated in the manner described in Section 4.02. 7.07 Reinstatement of Forfeitures. If the Participant returns to the employment of the Employer before incurring a Break in Service of five (5) consecutive years, any amounts forfeited pursuant to Section 7.06 shall be reinstated to the Participant's Employer Contribution Account on the date of repayment by the Participant of the amount distributed to such Participant from his/her Employer Contribution Account; provided, however, that if such Participant forfeited his/her Account balance by reason of a deemed distribution, pursuant to Section 9.04, such amounts shall be auto- matically restored upon the reemployment of such Participant. Such repayment must be made before the earlier of five (5) years after the first date on which the Participant is subsequently reemployed by the Employer, or the date the Participant incurs a Break in Service of five (5) consecutive years. VIII. BENEFITS CLAIM 8.01 Claim of Benefits. A Participant, Employee or Beneficiary shall notify the Plan Administrator in writing of a claim of benefits under the Plan. The Plan Administrator shall take such steps as may be necessary to facilitate the payment of such benefits to the Participant, Employee or Beneficiary. 8.02 Appeal Procedure. If any claim for benefits is denied by the Plan Administrator, the Plan Administrator shall notify the claimant in writing of such denial, setting forth the specific reasons and citing reference to specific provi- sions of the Plan upon which the denial is based. An appeal period of sixty (60) days after receipt of the notification of denial shall be granted, and said notification shall advise the claimant of the appeal procedure. The claimant shall file the appeal with the Plan Administrator, whose decision shall be final, to the extent provided by Section 15.07. IX. COMMENCEMENT OF BENEFITS 9.01 Normal and Elective Commencement of Benefits. A Participant who retires, becomes Disabled or separates from service for any other reason may elect by written notice to the Plan Administrator to have the. distribution of benefits commence on any date, provided that such distribution complies with Sections 9.02 and 9.07. Such election must be made in writing during the ninety (90) day period ending on the date as of which benefit payments are to commence. A Participant's election shall be revocable and may be amended by the Participant. MPP 10/25/00 1~ The failure of a Participant and the Participant's Spouse to consent to a distribution while a benefit is immediately distributable, within the meaning of section 9.02 of the Plan, shall be deemed to be an election to defer commence- ment of payment of any benefit. 9.02 Restrictions on Immediate Distributions. Notwithstanding anything to the contrary in Section 9.01 of the Plan, if the value of a Participant's vested Account balance exceeds the dollar limit under section 411(a)(11)(A) of the Code, and the Account balance is immediately distributable, the Participant and the Participant's Spouse (or where either has died, the survivor) must consent to any distribution of such Account balance. The consent of the Partici- pant and the Participant's spouse shall be obtained in writing during the ninety (90) day period ending on the date as of which benefit payments are to commence. The Plan Administrator shall notify the Participant and the Participant's Spouse of the right to defer any distribution until the Participant's Account balance is no longer immediately distributable. Such notification shall include a general description of the material features, and an explanation of the relative values of, the optional forms of benefit available under the Plan in a manner that would satisfy section 417(a)(3) of the Code, and shall be provided no less than thirty (30) and no more than ninety (90) days before the date as of which benefit payments are to commence. However, distribution may commence less than thirty (30) days after the notice described in the preceding sentence is given, provided (i) the distribution is one to which sections 401(a)(11) and 417 of the Code do not apply or, if sec- tions 401(a) (11) and 417 of the Code do apply, the waiver requirements of Section 12.04(a) are met; (ii) the Plan Administrator clearly informs the Participant that the Participant has a right to a period of at least thirty (30) days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particu- lar distribution option); and (iii) the Participant, after receiving the notice, affirmatively elects a distribution. Notwithstanding the foregoing, only the Participant need consent to the commencement of a distribution in the form of the Qualified Joint and Survivor Annuity while the Account balance is immediately distributable. (Furthermore, if payment in the form of a Qualified Joint and Survivor Annuity is not required with respect to the Participant pursuant to section 12.02 of the Plan, only the Participant need consent to the distribution of an Account balance that is immediately distributable.) Neither the consent of the Participant nor the Participant's Spouse shall be required for any form of distribution to the extent that a distribution is required to satisfy section 401(a)(9) or 415 of the Code. In addition, upon termination of this Plan if the Plan does not offer an annuity option (purchased from a commercial provider) and if the Employer does not maintain another defined contribution plan, the Participant's Account balance will, without the Participant's consent, be distributed to the Participant. An Account balance is immediately distributable if any part of the Account balance could be distributed to the Partici- pant (or Surviving Spouse) before the Participant attains or would have attained (if not deceased) the later of Normal Retirement Age or age sixty-two (62). For purposes of determining the applicability of the foregoing consent requirements to distributions made before the first day of the first plan year beginning after December 31, 1988, the Participant's vested Account balance shall not include amounts attributable to accumulated deductible employee contributions within the meaning of section 72(0)(5)(B) of the Code. 9.03 Transfer to Another Plan. (a) If a Participant becomes eligible to participate in another plan maintained by the Employer that is quali- •.. feed under section 401(a) of the Code, the Plan Administrator shall, at the written election of such Participant, transfer all or part of such Participant's Account to such plan, provided the plan administra- tor for such plan certifies to the Plan Administrator that its plan provides for the acceptance of such a transfer. For purposes of this Plan, any such transfer shall not be considered a distribution to the Partici- pant subject to spousal consent as described in Section 9.02 and Article XII. MPP 10/25/00 18 (b) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee's election under this Section, a Distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. For purposes of this Plan, any such Eligible Rollover Distribution shall be considered a distribution to the Participant subject to spousal consent as described in Section 9.02 and Article XII. (c) Definitions. For the purposes of Subsection (b), the following definitions shall apply: (1) Eligible Rollover Distribution. Any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life or life expectancy of the Distributee or the joint lives or joint life expectancies of the Distributee and the Distributee's designated beneficiary, or for a specified period often years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Code; the portion of any distribution that is not includible in gross income; and any other distribution(s) that is reasonably expected to total less than $200 during a year. (2) Eligible Retirement Plan. An individual retirement account described in section 408 (a) of the Code, an individual retirement annuity described in section 408(b) of the Code (collectively, an "IRA"), an annuity plan described in section 403(a) of the Code, or a qualified trust described in section 401(a) of the Code, that accepts the Distributee's Eligible Rollover Distribution. How- ever, in the case of an Eligible Rollover Distribution to the Surviving Spouse, an Eligible Retire- ment Plan is an IRA. (3) Distributee. Participant; in addition, the Participant's surviving spouse and the Participant's spouse who is the alternate payee under a qualified domestic relations order, as defined in section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse. (4) Direct Rollover. A payment by the Plan to the Eligible Retirement Plan specified by the Distributee. 9.04 De Minimis Accounts. Notwithstanding the foregoing provisions of this Article, if a Participant terminates service, and the value of his/her Nonforfeitable Interest in his/her Account is not greater than the dollar limit under section 411(a)(11)(A) of the Code, the Participant's benefit shall be paid (to the extent it constitutes an Eligible Rollover Distribution) in the form of a direct rollover to the Plan Administrator's designated IRA, unless he/she affirmatively elects to receive a cash payment or a Direct Rollover in accordance with procedures established by the Plan Administrator. For purposes of this Section, if a Participant's Nonforfeitable Interest in his/her Account is zero, the Participant shall be deemed to have received a distribution of such Nonforfeitable Interest in his/her Account. A Participant's Nonforfeitable Interest in his/her Account shall not include accumulated Deductible Employee Contri- butions within the meaning of Section 72(0)(5)(B) of the Code for Plan Years beginning prior to January 1, 1989. 9.05 Withdrawal of Voluntary Contributions. A Participant may make a written election, or if married, a Quali- fied Election, to withdraw a part of or the full amount of hislher Voluntary Contribution Account. Such withdrawals may be made at any time, provided that no more than two (2) such withdrawals may be made during any calendar year. No forfeiture will occur solely as the result of any such withdrawal. /.06 Withdrawal of Deductible Employee Contributions. A Participant may make a written election, or if married, a Qualified Election, to withdraw a part of or the full amount of his/her Deductible Employee Contribution Account. Such withdrawals may be made at any time, provided that no more than two (2) such withdrawals may be made during any calendar year. No forfeiture will occur solely as the result of any such withdrawal. MPP 10/25/00 19 9.07 Latest Commencement of Benefits. Notwithstanding anything to the contrary in this Article, benefits shall begin no later than the Participant's Required Beginning Date, as defined under Section 10.06, or as otherwise pro- vided in Section 10.05. X. DISTRIBUTION REQUIREMENTS 10.01 General Rules. (a) Subject to the provisions of Article XII, the requirements of this Article shall apply to any distribution of a Participant's interest and will take precedence over any inconsistent provisions of this Plan. (b) All distributions required under this Article shall be determined and made in accordance with the pro- posed regulations under section 401(a)(9) of the Code, including the minimum distribution incidental benefit requirement of section 1.401(a) (9)-2 of the proposed regulations. 10.02 Required Beginning Date. The entire Nonforfeitable Interest of a Participant must be distributed or begin to be distributed no later than the Participant's Required Beginning Date. 10.03 Limits on Distribution Periods. As of the first Distribution Calendar Year, distributions, if not made in a single-sum, may only be made over one of the following periods (or a combination thereof): (a) The life of the Participant, (b) The life of the Participant and a Designated Beneficiary, (c) A period certain not extending beyond the Life Expectancy of the Participant, or (d) A period certain not extending beyond the Joint and Last Survivor Expectancy of the Participant and a Designated Beneficiary. 10.04 Determination of Amount to Be Distributed Each Yeaz. If the Participant's Nonforfeitable Interest is to be distributed in other than a single sum, the following minimum distribution rules shall apply on or after the Required Beginning Date: (a) Individual Account. (1) If a Participant's Benefit is to be distributed over (i) a period not extending beyond the Life Expectancy of the Participant or the Joint Life and Last Survivor Expectanry of the Participant and the Participant's Designated Beneficiary, or (ii) a period not extending beyond the Life Expectancy of the Designated Beneficiary, the amount required to be distributed for each calen- dar year, beginning with distributions for the first Distribution Calendar Year, must at least equal the quotient obtained by dividing the Participant's Benefit by the Applicable Life Expectanry. (2) For calendar years beginning before January 1, 1989, if the Participant's spouse is not the Desig- nated Beneficiary, the method of distribution selected must assure that at least fifty percent (50%) of the present value of the amount available for distribution is paid within the Life Ex- pectancy of the Participant. (3) For calendar years beginning after December 31, 1988, the amount to be distributed each year, beginning with distributions for the first Distribution Calendar Year shall not be less than the quotient obtained by dividing the Participant's Benefit by the lesser of (i) the Applicable Life MPP 10/25/00 20 ,- ~~~.: >`, ~:'` ~"'"~ Expectancy, or (ii) if the Participant's spouse is not the Designated Beneficiary, the applicable divisor determined from the table set forth in Q&A-4 of section 1.401(a)(9)-2 of the proposed regulations. Distributions after the death of the Participant shall be distributed using the Appli- cable Life Expectancy in Subsection (1) as the relevant divisor without regard to Proposed Regu- lations section 1.401(a)(9)-2. (4) The minimum distribution required for the Participant's first Distribution Calendar Year must be made on or before the Participant's Required Beginning Date. The minimum distribution for other calendar years, including the minimum distribution for the Distribution Calendar Year in which the Employee's required beginning date occurs, must be made on or before December 31 of that Distribution Calendar Year. (b) Other forms. If the Participant's Benefit is distributed in the form of an annuity purchased from an insurance company, distributions thereunder shall be made in accordance with the requirements of section 401(a)(9) of the Code and the proposed regulations thereunder. 10.05 Death Distribution Provisions. Upon the death of the Participant, the following distribution provisions shall take effect: (a) If the Participant dies after distribution of his/her interest has commenced, the remaining portion of such interest will continue to be distributed at least as rapidly as under the method of distribution being used prior to the Participant's death. ~'' (b) If the Participant dies before distribution of his/her interest commences, the Participant's entire interest ,__ will be distributed no later than December 31 ~of the calendar year containing the filch (5th) anniversary of the Participant's death except to the extent that an election is made to receive distributions in accord- ance with (1) or (2) below: (1) If any portion of the Participant's interest is payable to a Designated Beneficiary, distributions may be made over the life or over a period certain not greater than the Life Expectanry of the Designated Beneficiary commencing on or before December 31 of the calendar year immediately following the calendar year in which the Participant died; (2) If the Designated Beneficiary is the Participant's surviving spouse, the date distributions are required to begin in accordance with Subsection (1) shall not be earlier than the later of (i) December 31 of the calendar year immediately following the calendar year in which the Partici- pant died, and (ii) December 31 of the calendar year in which the Participant would have at- tained age seventy and one-half (70-1/2). If the Participant has not made an election pursuant to this Subsection by the time of his/her death, the Participant's Designated Beneficiary must elect the method of distribution no later than the earlier of (i) December 31 of the calendar year in which distributions would be required to begin under this Section, or (ii) December 31 of the calendar year which contains the fifth (5th) anniversary of the date of death of the Participant. If the Participant has no Designated Beneficiary, or if the Designated Beneficiary does not elect a method of distribution, distribution of the Participant's entire interest must be completed by December 31 of the calendar year containing the fifth (5th) anniversary of the Participant's death. " (c) For purposes of Subsection (b), if the surviving spouse dies after the Participant, but before payments to such spouse begin, the provisions of Subsection (b), with the exception of paragraph (2) therein, shall be applied as if the surviving spouse were the Participant. MPP 10/25/00 21 (d) For purposes of this Section, any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. (e) For the purposes of this Section, distribution of a Participant's interest is considered to begin on the Participant's Required Beginning Date (or, if Subsection (c) is applicable, the date distribution is required to begin to the surviving spouse pursuant to Subsection (b)). If distribution in the form of an annuity ir- revocably commences to the participant before the Required Beginning Date, the date distribution is considered to begin is the date distribution actually commences. 10.06 Definitions. For the purposes of this Section, the following definitions shall apply: (a) Applicable Life Expectancy. The Life Expectancy (or Joint and Last Survivor Expectanry) calculated using the attained age of the Participant (or Designated Beneficiary) as of the Participant's (or Designated Beneficiary's) birthday in the applicable calendar year reduced by one (1) for each calendar year which has elapsed since the date Life Expectanry was first calculated. If Life Expectannry is being recalculated, the Applicable Life Expectancy shall be the Life Expectancy as so recalculated. The applicable calendar year shall be the first Distribution Calendar Year, and if Life Expectancy is being recalculated such succeeding calendar year. (b) Designated Beneficiary. The individual who is designated as the Beneficiary under the Plan in accordance with section 401(a) (9) of the Code and the proposed regulations thereunder. (c) Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distribu- tions beginning before the Participant's death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant's Required Beginning Date. For distributions beginning after the Participant's death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin pursuant to Section 10.05 above. (d) Life Expectancy. The Life Expectancy and joint and last survivor expectanry, respectively, as computed by use of the expected return multiples in Tables V and VI of section 1.72-9 of the income tax regulations. Unless otherwise elected by the Participant (or spouse, in the case of distributions described in Section 10.05(b)(2) above) by the time distributions are required to begin, Life Expectancies shall be recalculated annually. Such election shall be irrevocable as to the Participant (or spouse) and shall apply to all subsequent years. The Life Expectancy of a nonspouse Beneficiary may not be recalculated. (e) Participants Benefit. (1) The Account balance as of the last Accounting Date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year) increased by the amount of any contri- butions or forfeitures allocated to the Account balance as of dates in the valuation calendar year after such Accounting Date and decreased by distributions made in the valuation calendar year after such Accounting Date. (2) For purposes of paragraph (1) above, if any portion of the minimum distribution for the first Distribution Calendar Year is made in the second Distribution Calendar Year on or before the Required Beginning Date, the amount of the minimum distribution made in the second Distri- bution Calendar Year shall be treated as if it had been made in the immediately preceding Distribution Calendar Year. MPP 10/25/00 ~~ (f) Required Beginning Date. The Required Beginning Date of a Participant is the first day of April of the calendar year following the calendar year in which the Participant attains age seventy and one-half (70-1/ 2), or such later date as permitted under this Section or section 401(a)(9) of the Code. XI. MODES OF DISTRIBUTION OF BENEFITS 11.01 Normal Mode of Distribution. Unless an elective mode of distribution is elected in accordance with Article XII, benefits shall be paid to the Participant in the form provided for in Article XII. 11.02 Elective Mode of Distribution. Subject to the requirements of Articles X and XII, a Participant may revocably elect to have his/her Account distributed in any one (1) of the following modes in lieu of the mode described in Section 11.01: (a) Equal Payments. Equal monthly, quarterly, semi-annual, or annual payments in an amount chosen by the Participant continuing until the Account is exhausted. (b Lump Sum. A lump sum payment. (c) Period Certain. Approximately equal monthly, quarterly, semi-annual, or annual payments, calculated to continue for a period certain chosen by the Participant. (d) Other. Any other sequence of payments requested by the Participant. '.1.03 Election of Mode. Except as otherwise provided in Section 12.04(a), a Participant's election of a payment option must be made in writing between thirty (30) and ninety (90) days before the payment of benefits is to com- mence. 11.04 Death Benefits. Subject to Articles X and XII, (a) In the case of a Participant who dies before he/she has begun receiving benefit payments, the Participant's entire Nonforfeitable Interest shall then be payable to his/her Beneficiary within ninety (90) days of the Participant's death. A Beneficiary who is entitled to receive benefits under this Section may elect to have benefits commence at a later date, subject to the provisions of Section 10.05. The Beneficiary may elect to receive the death benefit in any of the forms available to the Participant under Section 11.02. If the Beneficiary is the Participant's Surviving Spouse, and such Surviving Spouse dies before payment com- mences, then this Section shall apply to the beneficiary of the Surviving Spouse as though such Surviving Spouse were the Participant. (b) Should the Participant die after he/she has begun receiving benefit payments, the Beneficiary shall receive the remaining benefits, if any, that are payable, under the payment schedule elected by the Participant. Notwithstanding the foregoing, the Beneficiary may elect to accelerate payments of the remaining bal- ances, including but not limited to, a lump sum distribution. XII. SPOUSAL BENEFIT REQUIREMENTS 2.01 Application. The provisions of this Article shall take precedence over any conflicting provision in this Plan. 'he provisions of this Article shall apply to any Participant who is credited with any Period of Service with the Em- ployer on qr aker August 23> 1984, and such other Participants as provided in Section 12.05. MPP 10/25/00 23 #'` 12.02 Qualified Joint and Survivor Annuity. Unless an optional form of benefit is selected pursuant to a Qualified Election within the ninety (90) day period ending on the Annuity Starting Date, a married Participant's Vested Account Balance will be paid in the form of a Qualified Joint and Survivor Annuity and an unmarried Participant's Vested Account Balance will be paid in the form of a Straight Life Annuity. The Participant may elect to have such annuity distributed upon the attainment of the Earliest Retirement Age under the Plan. 12.03 Qualified Preretirement Survivor Annuity. If a Participant dies before the Annuity Starting Date, then fifty percent (50%) of the Participant's Vested Account Balance shall be applied toward the purchase of an annuity for the life of the Surviving Spouse; the remaining portion shall be paid to such Beneficiaries (which may include such Spouse) designated by the Participant. Notwithstanding the foregoing, the Participant may waive the spousal annuity by designating a different Beneficiary within the Election Period pursuant to a Qualified Election. To the extent that less than one hundred percent (100%) of the vested Account balance is paid to the Surviving Spouse, the amount of the Participant's Account derived from Employee contributions will be allocated to the Surviving Spouse in the same proportion as the amount of the Participant's Account derived from Employee contributions is to the Participant's total vested Account Balance. The Surviving Spouse may elect to have such annuity distributed within a reasonable period after the Participant's death. Further, such Spouse may elect to receive any death benefit payable to him/her hereunder in any of the forms available to the Participant under Section 11.02. 12.04 Notice Requirements. (a) In the case of a Qualified Joint and Survivor Annuity as described in Section 12.02, the Plan Admin- istrator shall, no less than thirty (30) days and no more than ninety (90) days prior to the Annuity Starting Date, provide each Participant a written explanation of: (i) the terms and conditions of a Qualified Joint and Survivor Annuity; (ii) the Participant's right to make and the effect of an election to waive the Qualified Joint and Survivor Annuity form of benefit; (iii) the rights of a Participant's Spouse; and (iv) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity. However, if the Participant, after having received the written explanation, affirmatively elects a form of distribution and the Spouse consents to that form of distribution (if neces- sary), benefit payments may commence less than 30 days after the written explanation was provided to the Participant, provided that the following requirements are met: (1) The Plan Administrator provides information to the Participant clearly indicating that the Participant has a right to at least 30 days to consider whether to waive the Qualified Joint and Survivor Annuity and consent to a form of distribution other than a Qualified Joint and Survivor Annuity; (2) The Participant is permitted to revoke an affirmative distribution election at least until the Annuity Starting Date, or if later, at any time prior to the expiration of the 7-day period that begins the day after the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; (3) The Annuity Starting Date is after the date that the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; and (4) Distribution in accordance with the affirmative election does not commence before the expira- tion of the 7-day period that begins after the day after the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant. (b) In the case of a qualified preretirement survivor annuity as described in Section 12.03, the Plan Adminis- trator shall provide each Participant within the applicable period for such Participant a written explana- tion of the qualified pre-retirement survivor annuity in such terms and in such manner as would be MPP 10/25/00 24 comparable to the explanation provided for meeting the requirements of Subsection (a) applicable to a Qualified Joint and Survivor Annuity. The applicable period for a Participant is whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Participant attains age thirty-two (32) and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age thirry- five (35); (ii) a reasonable period ending after the individual becomes a Participant; (iii) a reasonable period ending after Subsection (c) ceases to apply to the Participant; (iv) a reasonable period ending after this Article first applies to the Participant. Notwithstanding the foregoing, notice must be provided within a reasonable period ending after separation from service in the case of a Participant who separates from service before attaining age thirty-five (35)• For purposes of applying the preceding paragraph, a reasonable period ending after the enumerated events described in (ii), (iii) and (iv) is the end of the two (2) year period beginning one (1) year prior to the date the applicable event occurs, and ending one (I) year after that date. In the case of a Participant who separates from service before the Plan Year in which age thirty-five. (35) is attained, notice shall be provided within the two (2) year period beginning one (1) year prior to separation and ending one (1) year after separation. If such a Participant thereafter returns to employment with the Employer, the ap- plicable period for such Participant shall be redetermined. (c) Notwithstanding the other requirements of this Section, the respective notices prescribed by this Section need not be given to a Participant if (I) the Plan "fully subsidizes" the costs of a Qualified Joint and Survivor Annuity or qualified preretirement survivor annuity, and (2) the Plan does not allow the Partici- pant to waive the Qualified Joint and Survivor Annuity or qualified preretirement survivor annuity and does not allow a married Participant to designate anon-Spouse Beneficiary. For purposes of this Subsec- tion (c}, a plan fully subsidizes the costs of a benefit if no increase in cost or decrease in benefits to the Participant may result from the Participant's failure to elect another benefit. 12.05 Definitions. For the purposes of this Section, the following definitions shall apply: (a) Annuity Starting Date: The first day of the first period for which an amount is paid as an annuity or any other form. (b) Election Period: The period which begins on the first day of the Plan Year in which the Participant attains age thirty-five (35) and ends on the date of the Participant's death. If a Participant separates from service prior to the first day of the Plan Year in which age thirty-five (35) is attained, with respect to the Account balance as of the date of separation, the Election Period shall begin on the date of separation. Pre-age thirty-five (35) waiver. A Participant who will not yet attain age thirty-five (35) as of the end of any current Plan Year may make a special Qualified Election to waive the qualified preretirement survivor annuity for the period beginning on the date of such election and ending on the first day of the Plan Year in which the Participant will attain age thirty-five (35). Such election shall not be valid unless the Partici- pant receives a written explanation of the qualified preretirement survivor annuity in such terms as are comparable to the explanation required under Section 13.04(a). Qualified preretirement survivor an- nuity coverage will be automatically reinstated as of the first day of the Plan Year in which the Participant attains age thirty-five (35). Any new waiver on or after such date shall be subject to the full requirements of this Article. (c) Earliest Retirement Age: The earliest date on which, under the Plan, the Participant could elect to receive retirement benefits. MPP 10/25/00 25 (d) Qualified Election: A waiver of a Qualified Joint and Survivor Annuity or a qualified preretirement survivor annuity. Any waiver of a Qualified Joint and Survivor Annuity or a qualified preretirement survivor annuity shall not be effective unless: (a) the Participant's Spouse consents in writing to the election; (b) the election designates a specific Beneficiary, including any class of Beneficiaries or any contingent Beneficiaries, which may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further spousal consent); (c) the Spouse's consent acknowledges the effect of the election; and (d) the Spouse's consent is witnessed by a Plan representative or notary public. Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity shall not be effective unless the election designates a form of benefit payment which may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further Spousal consent). If it is established to the satisfaction of a Plan representative that there is no Spouse or that the Spouse cannot be located, a waiver will be deemed a Qualified Election. Any consent by a Spouse obtained under this provision (or establishment that the consent of a Spouse may not be obtained) shall be effective only with respect to such Spouse. A consent that permits designa- tions by the Participant without any requirement of further consent by such Spouse must acknowledge that the Spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the Spouse voluntarily elects to relinquish either or both of such rights. A revocation of a prior waiver may be made by a Participant without the consent of the Spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the Participant has received notice as provided in Sec- tion 12.04. (e) Qualified joint and Survivor Annuity: An immediate annuity for the life of the Participant with a survivor annuity for the life of the Spouse which is not less than fifty percent (50%) and not more than one hundred percent (100%) of the amount of the annuity which is payable during the joint lives of the Participant and the Spouse and which is the amount of benefit which can be purchased with the Partici- pant's Vested Account Balance. The percentage of the survivor annuity shall be fifty percent (50%). (f) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the Participant, provided that a former Spouse will be treated as the Spouse or Surviving Spouse and a current Spouse will not be treated as the Spouse or Surviving Spouse to the extent provided under a qualified domestic relations order as described in section 414(p) of the Code. (g) Straight Life Annuity: An annuity payable in equal installments for the life of the Participant that termi- nates upon the Participant's death. (h) vested Account Balance: The aggregate value of the Participant's vested Account balances derived from Employer and Employee contributions (including rollovers), whether vested before or upon death, including the proceeds of insurance contracts, if any, on the Participant's life. The provisions of this Article shall apply to a Participant who is vested in amounts attributable to Employer Contributions, Employee contributions (or both) at the time of death or distribution. 12.06 Annuity Contracts. Where benefits are to be paid in the form of a life annuity pursuant to the terms of this Article, a nontransferable annuity contract shall be purchased from a life insurance company and distributed to the Participant or Surviving Spouse, as applicable. The terms of any annuity contract purchased and distributed by the ~ Plan shall comply with the requirements of this Plan and section 417 of the Code. XIII. LOANS TO PARTICIPANTS 13.01 Availability of Loans to Participants. MPP 10/25/00 26 . (a) If the Employer has elected in the Adoption Agreement to make loans available to Participants, a Partici- pant may apply for a loan from the Plan subject to the limitations and other provisions of this Article. (b) The Employer shall establish written guidelines governing the granting of loans, provided that such guidelines are approved by the Plan Administrator and are not inconsistent with the provisions of this Article, and that loans are made available to all Participants on a reasonably equivalent basis. 13.02 Terms and Conditions of Loans to Participants. Any loan by the Plan to a Participant under Section 13.01 of the Plan shall satisfy the following requirements: (a) Availability. Loans shall be made available to all Participants on a reasonably equivalent basis. (b) Nondiscrimination. Loans shall not be made to highly compensated Employees in an amount greater than the amount made available to other Employees. (c) Interest Rate. Loans must be adequately secured and bear a reasonable interest rate. (d) Loan Limit. No Participant loan shall exceed the present value of the Participant's Nonforfeitable Interest in his/her Account. (e) Spousal Consent. A Participant must obtain the consent of his/her Spouse, as defined under Section 12.05 if any, within the ninety (90) day period before the time the Account balance is used as security for the loan. Spousal consent shall be obtained no earlier than the beginning of the ninety (90) day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting Spouse or any subsequent Spouse with respect to that loan. Anew consent shall be required if the Account balance is used for renegotiation, extension, renewal, or other revision of the loan. (f) Foreclosure. In the event of default, foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan. (g) Reduction of Account. If a valid spousal consent has been obtained in accordance with Subsection (e), then, notwithstanding any other provision of this Plan, the portion of the Participant's vested Account balance used as a security interest held by the Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the Account balance payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. If less than one hundred percent (100%) of the Participant's nonforfeitable Account balance (determined without regard to the preceding sentence) is payable to the surviving spouse, then the Account balance shall be adjusted by first reducing the nonforfeitable Account balance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse. (h) Amount of Loan. At the time the loan is made, the principal amount of the loan plus the outstanding balance (principal plus accrued interest) due on any other outstanding loans to the Participant or Benefi- ciary from the Plan and from all other plans of the Employer that are qualified employer plans under section 72(p)(4) of the Code shall not exceed the least of: (1) $50,000, reduced by the excess (if any) of (a) The highest outstanding balance of loans from the Plan during the one (1) year period ending on the day before the date on which the loan is made, over MPP 10/25/00 27 (b) The outstanding balance of loans from the Plan on the date on which such loan is made; or (2) The greater of (a) $10,000, or (b) One-half (1/2) of the value of the Participant's Nonforfeitable Interest in all of his/her Accounts under this Plan. For the purpose of the above limitation, all loans from all qualified employer plans under section 72(p)(4) of the Code are aggregated. (i) Application for Loan. The Participant must give the Employer adequate written notice, as determined by the Employer, of the amount and desired time for receiving a loan. No more than one (1) loan may be made by the Plan to a Participant in any calendar year. No loan shall be approved if an existing loan from the Plan to the Participant is in default to any extent. (j) Length of Loan. The terms of any loan issued or renegotiated after December 31, 1993, shall require the Participant to repay the loan in substantially equal installments of principal and interest, at least monthly, over a period that does not exceed five (5) years from the date of the loan; provided, however, that if the proceeds of the loan are applied by the Participant to acquire any dwelling unit that is to be used within a reasonable time (determined at the time the loan is made) after the loan is made as the principal residence of the Participant, the five (5) year limit shall not apply. In this event, the period of repayment shall not exceed a reasonable period determined by the Employer. Principal installments and interest payments otherwise due may be suspended during an authorized leave of absence, if the promissory note so provides, but not beyond the original term permitted under this Subsection (j), with a revised payment schedule (within such term) instituted at the end of such period of suspension. (k) Prepayment. The Participant shall be permitted to repay the loan in whole or in part at any time prior to maturity, without penalty. (1) Note. The loan shall be evidenced by a promissory note executed by the Participant and delivered to the Employer, and shall bear interest at a reasonable rate determined by the Employer. (m) Security. The loan shall be secured by an assignment of that portion the Participant's right, title and interest in and to his/her Employer Contribution Account (to the extent vested), Participant Contribu- tionAccount, and Portable Benefits Account that is equal to fifty percent (50%) of the Participant's Account (to the extent vested). (n) Assignment or Pledge. For the purposes of paragraphs (h) and (i), assignment or pledge of any portion of the Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance contract purchased under the Plan, will be treated as a loan. (o) Other Terms and Conditions. The Employer shall fix such other terms and conditions of the loan as it deems necessary to comply with legal requirements, to maintain the qualification of the Plan and Trust under section 401(a) of the Code, or to prevent the treatment of the loan for tax purposes as a distri- bution to the Participant. The Employer, in its discretion for any reason, may fix other terms and condi- tions of the loan, not inconsistent with the provisions of this Article. MPP 10/25/00 28 13.03 Pazticipant Loan Accounts. (a) Upon approval of a loan to a Participant by the Employer, an amount not in excess of the loan shall be transferred from the Participant's other investment fund(s), described in Section 6.05 of the Plan, to the Participant's Loan Account as of the Accounting Date immediately preceding the agreed upon date on which the loan is to be made. (b) The assets of a Participant's Loan Account may be invested and reinvested only in promissory notes received by the Plan from the Participant as consideration for a loan permitted by Section 13.01 of the Plan or in cash. Uninvested cash balances in a Participant's Loan Account shall not bear interest. No person who is otherwise a fiduciary of the Plan shall be liable for any loss, or by reason of any breach, that results from the Participant's exercise of such control. (c) Repayment of principal and payment of interest shall be made by payroll deduction or, where repayment cannot be made by payroll deduction, by check, and shall be invested in one (1) or more other invest- ment funds, in accordance with Section 6.05 of the Plan, as of the next Accounting Date after payment thereof to the Trust. The amount so invested shall be deducted from the Participant's Loan Account. (d) The Employer shall have the authority to establish other reasonable rules, not inconsistent with the provisions of the Plan, governing the establishment and maintenance of Participant Loan Accounts. XIV. PLAN AMENDMENT, TERMINATION AND OPTIONAL PROVISIONS 14.01 Amendment by Employer. The Employer reserves the right, subject to Section 14.02 of the Plan, to amend the Plan from time to time by either: (a) Filing an amended Adoption Agreement to change, delete, or add any optional provision, or (b) Continuing the Plan in the form of an amended and restated Plan and Trust. No amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant's ac- crued benefit. Notwithstanding the preceding sentence, a Participant's Account balance may be reduced to the extent permitted under section 412(c)(8) of the Code. For purposes of this paragraph, a Plan amendment which has the effect of decreasing a Participant's Account balance or eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is amended, in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee's right to his/her Employer-derived accrued benefit will not be less than his percentage computed under the plan without regard to such amend- ment. The Employer may (1) change the choice of options in the Adoption Agreement, (2) add overriding language in the Adoption Agreement when such language is necessary to satisfy sections 415 or 416 of the Code because of the required aggregation of multiple plans, and (3) add certain model amendments published by the Internal Revenue Service. 14.02 Amendment of Vesting Schedule. If the Plan's vesting schedule is amended, or the Plan is amended in any vay that directly or indirectly affects the computation of the Participant's nonforfeitable percentage, each Participant may elect, within a reasonable period after the adoption of the amendment or change, to have the nonforfeitable percentage computed under the Plan without regard to such amendment or change. MPP 10/25/00 29 The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: (a) Sixty (60) days after the amendment is adopted; (b) Sixty (60) days after the amendment becomes effective; or (c) Sixty (60) days after the Participant is issued written notice of the amendment by the Employer or Plan Administrator. 14.03 Termination by Employer. The Employer reserves the right to terminate this Plan. However, in the event of such termination no part of the Trust shall be used or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries, except as provided in this Section. Upon Plan termination or partial termination, all Account balances shall be valued at their fair market value and the Participant's right to his/her Employer Contribution Account shall be one hundred percent (100%) vested and nonforfeitable. Such amount and any other amounts held in the Participant's other Accounts shall be maintained for the Participant until paid pursuant to the terms of the Plan. Any amounts held in a suspense account, after all liabilities of the Plan to Participants and Beneficiaries have been satisfied or provided for, shall be paid to the Employer in accordance with the Code and regulations thereunder. In the event that the Commissioner of Internal Revenue determines that the Plan is not initially qualified under the Internal Revenue Code, any contribution made by the Employer incident to that initial qualification must be returned to the Employer within one year after the date the initial qualification is denied, but only if the application for the qualification is made by the time prescribed by law for filing the Employer's return for the year in which the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe. 14.04 Discontinuance of Contributions. A permanent discontinuance of contributions to the Plan by the Em- ployer, unless an amended and restated Plan is established, shall constitute a Plan termination. 14.05 Amendment by Plan Administrator. The Plan Administrator may amend this Plan upon thirty (30) days writ-ten notification to the Employer; provided, however, that any such amendment must be for the express purpose of maintaining compliance with applicable federal laws and regulations of the Internal Revenue Service. Such amend- ment shall become effective unless, within such 30-day period, the Employer notifies the Administrator, in writing, that it disapproves such amendment, in which case such amendment shall not become effective. In the event of such disapproval, the Administrator shall be under no obligation to continue acting as Administrator hereunder. 14.06 Optional Provisions. Any provision which is optional under this Plan shall become effective if and only if elected by the Employer and agreed to by the Plan Administrator. XV ADMINISTRATION 15.01 Powers of the Employer. The Employer shall have the following powers and duties: * (a) To appoint and remove, with or without cause, the Plan Administrator; (b) To amend or terminate the Plan pursuant to the provisions of Article XIV; (c) To appoint a committee to facilitate administration of the Plan and communications to Participants; MPP 10/25/00 30 '~.~ 'i; :.. (d) To decide all questions of eligibility (1) for Plan participation, and (2) upon appeal by any Participant, f =: Employee or Beneficiary, for the payment of benefits; :¢. ra.°-.; (e) To engage an independent qualified public accountant, when required to do so bylaw, to prepare an- nually the audited financial statements of the Plan's operation; (f) To take all actions and to communicate to the Plan Administrator in writing all necessary information to _, carry out the terms of the Plan and Trust; and (g) To notify the Plan Administrator in writing of the termination of the Plan. 15.02 Duties of the Plan Administrator. The Plan Administrator shall have the following powers and duties: (a) To construe and interpret the provisions of the Plan; (b) To maintain and provide such returns, reports, schedules, descriptions, and individual Account state- ments, as are required by law within the times prescribed by law; and to furnish to the Employer, upon '° *- .4 . ; request, copies of any or all such materials, and further, to make copies of such instruments, reports, . . . '`` - descriptions, and statements as are required by law available for examination by Participants and such of their Beneficiaries who are or may be entitled to benefits under the Plan in such places and in such '' " ,; manner as required by law; (c) To obtain from the Employer such information as shall be necessary for the proper administration of the ±~ ' ~- Plan; d' (d) To determine the amount, manner, and time of payment of benefits hereunder; ~, (e) To appoint and retain such agents, counsel, and accountants for the purpose of properly administering w= the Plan; ;~.. :~ ~" (f) To distribute assets of the Trust to each Participant and Beneficiary in accordance with Article X of the ~< Plan; ~, (g) To pay expenses from the Trust pursuant to Section 6.03 of the Plan; and (h} To do such other acts reasonably required to administer the Plan in accordance with its provisions or as may be provided for or required by law. 15.03 Protection of the Employer. The Employer shall not be liable for the acts or omissions of the Plan Adminis- trator, but only to the extent that such acts or omissions do not result from the Employer's failure to provide accurate or timely information as required or necessary for proper administration of the Plan. 15.04 Protection of the Plan Administrator. The Plan Administrator may rely upon any certificate, notice or direction purporting to have been signed on behalf of the Employer which the Plan Administrator believes to have been signed by a duly designated official of the Employer. 15.05 Resignation or Removal of Plan Administrator. The Plan Administrator may resign at any time effective ~pon sixty (60) days prior written notice to the Employer. The Plan Administrator may be removed by the Employer .t any time upon sixty (60) days prior written notice to the Plan Administrator. Upon the resignation or removal of the Plan Administrator, the Employer may appoint a successor Plan Administrator; failing such appointment, the Employer shall assume the powers and duties of Plan Administrator. Upon the resignation or removal of the Plan MPP 10/25/00 31 f Administrator, any Trust assets invested by or held in the name of the Plan Administrator shall be transferred to the trustee in cash or property, at fair market value, except that the return of Trust assets invested in a contract issued by an insurance company shall be governed by the terms of that contract. 15.06 No Termination Penalty. The Plan Administrator shall have no authority or discretion to impose any termina- tion penalty upon its removal. 15.07 Decisions of the Plan Administrator. All constructions, determinations, and interpretations made by the Plan Administrator pursuant to Section 15.02(a) or (d) shall be final and binding on all persons participating in the Plan, given deference in all courts of law to the greatest extent allowed by applicable law, and shall not be overturned or set aside by any court of law unless found to be arbitrary or capricious, or made in bad faith. XVI. MISCELLANEOUS 16.01 Nonguarantee of Employment. Nothing contained in this Plan shall be construed as a contract of employ- ment between the Employer and any Employee, or as a right of an Employee to be continued in the employment of the Employer, as a limitation of the right of the Employer to discharge any of its Employees, with or without cause. 16.02 Rights to Trust Assets. No Employee or Beneficiary shall have any right to, or interest in, any assets of the Trust upon termination of his/her employment or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable under the Plan to such Employee or Beneficiary out of the assets of the Trust. All payments of benefits as provided for in this Plan shall be made solely out of the assets of the Trust and none of the fiduciaries shall be liable therefor in any manner. 16.03 Nonalienation of Benefits. Except as provided in Section 16.04 of the Plan, benefits payable under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, prior to actually being received by the person entitled to the benefit under the terms of the Plan; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to benefits payable hereunder, shall be void. The Trust shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder. 16.04 Qualified Domestic Relations Order. Notwithstanding Section 16.03 of the Plan, amounts may be paid with respect to a Participant pursuant to a domestic relations order, but if and only if the order is determined to be a qualified domestic relations order within the meaning of section 414(p) of the Code or any domestic relations order entered before January 1, 1985. 16.05 Nonforfeitability of Benefits. Subject only to the specific provisions of this Plan, nothing shall be deemed to deprive a Participant of his/her right to the Nonforfeitable Interest to which he/she becomes entitled in accordance with the provisions of the Plan. 16.06 Incompetency of Payee. In the event any benefit is payable to a minor or incompetent, to a person otherwise under legal disability, or to a person who, in the sole judgment of the Employer, is by reason of advanced age> illness, or other physical or mental incapacity incapable of handling the disposition of his/her property, the Employer may apply the whole or any part of such benefit directly to the care, comfort, maintenance, support, educa-tion, or use of such person or pay or distribute the whole or any part of such benefit to: (a) The parent of such person; (b) .The guardian, committee, or other legal representative, wherever appointed, of such person; MPP 10/25/00 32 (c) The person with whom such person resides; (d) Any person having the care and control of such person; or (e) Such person personally. The receipt of the person to whom any such payment or distribution is so made shall be full and complete discharge therefor. 16.07 Inability to Locate Payee. Anything to the contrary herein notwithstanding, if the Employer is unable, after reasonable effort, to locate any Participant or Beneficiary to whom an amount is payable hereunder, such amount shall be forfeited and held in the Trust for application against the next succeeding Employer Contribution or contributions required to be made hereunder. Notwithstanding the foregoing, however, such amount shall be reinstated, by means of an additional Employer contribution, if and when a claim for the forfeited amount is subsequently made by the Participant or Beneficiary or if the Employer receives proof of death of such person, satisfactory to the Employer. To the extent not inconsistent with applicable law, any benefits lost by reason of escheat under applicable state law shall be considered forfeited and shall not be reinstated. 16.08 Mergers, Consolidations, and Transfer of Assets. The Plan shall not be merged into or consolidated with any other plan, nor shall any of its assets or liabilities be transferred into any such other plan, unless each Participant in the Plan would (if the Plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer that is equal to or greater than the benefit he/she would have been entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had then terminated). 16.09 Employer Records. Records of the Employer as to an Employee's or Participant's Period of Service, termina- tion of service and the reason therefor, leaves of absence, reemployment, Earnings, and Compensation will be conclu- sive on all persons, unless determined to be incorrect. 16.10 Gender and Number. The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise. 16.11 Applicable Law. The Plan shall be construed under the laws of the State where the Employer is located, except to the extent superseded by federal law. The Plan is established with the intent that it meets the requirements under the Code. The provisions of this Plan shall be interpreted in conformity with these requirements. ~'> In the event of any conflict between the Plan and a policy or contract issued hereunder, the Plan provisions shall ,:. control; provided, however, no Plan amendment shall supersede an existing policy or contract unless such amendment is required to maintain qualification under section 401(a) and 414(d) of the Code. MPP 10!25!00 33 DECLARATION OF TRUST DECLARATION OF TRUST This Declaration of Trust (the "Group Trust Agreement") is made as of the 19th day of May, 2001, by VantageTrust Company, which declares itself to be the sole Trustee of the trust hereby created. WHEREAS, the ICMA Retirement Trust was created as a vehicle for the commingling of the assets of governmental plans and governmental units described in Section 818(a)(6) of the Internal Revenue Code of 1986, as amended, pursuant to a Declaration of Trust dated October 4, 1982, as subsequently amended, a copy of which is attached hereto and incorporated by reference as set out below (the "ICMA Declaration"); and WHEREAS, the trust created hereunder (the "Group Trust") is intended to meet the requirements of Revenue Ruling 81-100, 1981-1 C.B. 326, and is established as a common trust fund within the meaning of Section 391:1 of Title 35 of the New Hampshire Revised Statutes Annotated, to accept and hold for investment purposes the assets of the Deferred Compensation and Qualified Plans held by and through the ICMA Retirement Trust. NOW, THEREFORE, the Group Trust is created by the execution of this Declaration of Trust by the Trustee and is established with respect. to each Deferred Compensation and Qualified Plan by the transfer to the Trustee of such Plan's assets in the ICMA Retirement Trust, by the Trustees thereof, in accord with the following provisions: Incorporation of ICMA Declaration by Reference; ICMA By-Laws. Except as otherwise provided in this Group Trust Agreement, and to the extent not inconsistent herewith, all provisions of the ICMA Declaration are incorporated herein by reference and made a part hereof, to be read by substituting the Group Trust for the Retirement Trust and the Trustee for the Board of Trustees referenced therein. In this respect, unless the context clearly indicates otherwise, all capitalized terms used herein and defined in the ICMA Declaration have the meanings assigned to them in the ICMA Declaration. In addition, the By- Laws of the ICMA Retirement Trust, as the same may be amended from time-to-time, are adopted as the By-Laws of the Group Trust to the extent not inconsistent with the terms of this Group Trust Agreement. Notwithstanding the foregoing, the terms of the ICMA Declaration and By-Laws are further modified with respect to the Group Trust created hereunder, as follows: (a) any reporting, distribution, or other obligation of the Group Trust vis-a-vis any Deferred Compensation Plan, Qualified Plan, Public Employer, Public Employer Trustee, or Employer Trust shall be deemed satisfied to the extent that such obligation is undertaken by the ICMA Retirement Trust (in which case the obligation of the Group Trust shall run to the ICMA Retirement Trust); and (b) all provisions dealing with the number, qualification, election, term and nomination of Trustees shall not apply, and all other provisions relating to trustees (including, but not limited to, resignation and removal) shall be interpreted in a manner consistent with the appointment of a single corporate trustee. 2. Compliance with Revenue Procedure 81-100. The requirements of Revenue Procedure 81-100 are applicable to the Group Trust as follows: (a) Pursuant to the terms of this Group Trust Agreement and Article X of the By-Laws, invest- ment in the Group Trust is limited to assets of Deferred Compensation and Qualified Plans, investing through the ICMA Retirement Trust. os.. ~. %: ~. (b) Pursuant to the By-Laws, the Group Trust is adopted as a part of each Qualified Plan that invests herein through the ICMA Retirement Trust. (c) In accord with the By-Laws, that part of the Group Trust's corpus or income which equitably belongs to any Deferred Compensation and Qualified Plan may not be used for or diverted to any purposes other than for the exclusive benefit of the Plan's employees or their benefici- aries who are entitled to benefits under such Plan. (d) In accord with the By-Laws, no Deferred Compensation Plan or Qualified Plan may assign any or part of its equity or interest in the Group Trust, and any purported assignment of such equity or interest shall be void. 3. Governing Law. Except as otherwise required by federal, state or local law, this Declaration of Trust (including the ICMA Declaration to the extent incorporated herein) and the Group Trust created hereun- der shall be construed and determined in accordance with applicable laws of the State of New Hampshire. 4. Judicial Proceedings. The Trustee may at any time initiate an action or proceeding in the appropriate state or federal courts within or outside the state of New Hampshire for the settlement of its accounts or for the determination of any question of construction which may arise or for instructions. IN WITNESS WHEREOF, the Trustee has executed this Declaration of Trust as of the day and year first above written. VANTAGETRUST COMPANY ~` T( ~~ c a By: Name: Paul F. Gallagher Title: Assistant Secretary ~TTa c H n-~ Fi4 'T' 70 h"Eso~UTi~nl 0~-vc~, ORDINANCE NO. 58-04-29 AN ORDINANCE OF THE CITY OF ATLANTIC BEACH, FLORIDA, AMENDING CHAPTER 2, ADMINISTRATION, ARTICLE VI, DIVISION 3, GENERAL EMPLOYEE RETIREMENT SYSTEM AND DIVISION 4, POLICE OFFICER RETIREMENT SYSTEM, TO PROVIDE A DEFERRED RETIREMENT OPTION PROGRAM FOR PARTICIPANTS; CHANGE PAYMENT OF PENSION BOARD EXPENSES; AND AMENDING CHAPTER 2, ADMININSTRATION, ARTICLE VI, DIVISION 4, POLICE OFFICER RETIREMENT SYSTEM, TO PROVIDE ADJUSTMENTS FOR NORMAL RETIREMENT BENEFITS; PROVIDING ADJUSTMENTS TO OPTIONAL FORMS OF PENSION PAYMENT; PROVIDING FOR EARLY RETIREMENT BENEFITS; PROVIDING ADJUSTMENTS FOR DEFERRED RETIREMENT BENEFITS; PROVIDING FOR DEATH BENEFITS; PROVIDING FOR CHANGE- TO PAYMENT OF PENSION BOARD EXPENSES; PROVIDING FOR SEVERABILITY; PROVIDING FOR CODIFICATION; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Atlantic Beach, Florida has an interest in the future retirement of its employees and wishes to improve the retirement systems whenever feasible; and WHEREAS, the City of Atlantic Beach, Florida recognizes the advantage of implementing a Deferred Retirement Option Program within its retirement systems, and WHEREAS, the City of Atlantic Beach, Florida in order to attain compliance with Chapter 185 of the Florida Statutes; and WHEREAS, the City Council has received and reviewed. an actuarial impact statement related to this change; and WHEREAS, the City of Atlantic Beach, Florida hereby amends its retirement systems to provide such a benefit as follows by indicated deletions, stril~~, and additions, underlines; NOW THEREFORE, BE IT ENACTED BY THE CITY COMNIISSION OF THE CITY OF ATLANTIC BEACH, FLORIDA, AS FOLLOWS: § 2-261 ATLANTIC BEACH CODE DIVISION 3. GENERAL EMPLOYEE RETIREMENT SYSTEM Sec. 2-261. Created, purpose. The city employees' retirement system is hereby created and established for the purpose of providing pensions and death benefits for the employees of the city and their dependents. The effective date of the retirement system is December 22, 1975. (Ord. No: 58-75-4, § 1, 12-22-75} Sec.2-262. Definitions. The following words and phrases as used in this division shall have the following meanings unless a different meaning is clearly required by the context: Actuarial equivalent shall mean that any benefit payable under the terms of this plan in a form other than the standard form of benefit for members shall have the same actuarial present value on the date payment commences as such standard form of benefit. For the purpose of establishing the actuarial present value of any form of payment, all future payments shall be discounted for interest and mortality by using the 1983 Group Mortality Table, with ages set ahead five (5) years in the case of disability. Beneficiary shall mean any person who is being paid, or has entitlement to future payment, of a pension or other benefit by the retirement system for a reason other than the person's membership in the retirement system. Board of trustees or board shall -mean the board of trustees provided for in this division. City shall mean the City of Atlantic Beach, Florida, and shall include officers, boards, departments and instrumentalities. City employee shall mean any person in the employ of the city, other than police officers and firefighters. Compensation shall mean the salary or wages paid a member for personal service rendered the city. Compensation shall include base salary or wages, longevity pay, overtime pay, cost of living payments, salary or wages while absent from work on account of vacation, holiday, or illness. Compensation shall not include redemptions or payments in consideration of unused vacation time or sick leave, the value of any fringe benefit, uniform allowances, equipment allowances, reimbursement of expenses, or any other item not specifically included. Credited service shall mean the service credited a member as provided in this division. Final average compensation shall mean one/sixtieth 1 /60th of the aggregate amount of compensation paid a member during the period of sixty (60) consecutive months of the member's credited service in which the aggregate amount of compensation paid is greatest. The sixty (60) consecutive months of credited service must be contained within the member's last one hundred twenty (120) months of credited service. If a member has less than sixty (60) consecutive months of credited service, final average compensation means the aggregate amount of compensation paid the member divided by the member's months of credited service. Member shall mean any person who is a member of the retirement system. Pension shall mean a series of monthly payments by the retirement system throughout the future life of a retirant or beneficiary, or for a temporary period, as provided in this division. 2 Pension reserve shall mean the present value of all payments likely to be made on account of a pension. The present value shall be computed on the basis of such mortality and other tables of experience and regular annual compound interest as the actuary appointed by the board of trustees shall from time to time determine. Regular interest shall mean such rate or rates of interest per annum, compounded annually, as the board of trustees shall from time to time adopt: Retirant shall mean any person who has satisfied the condition for receiving a benefit and is being paid a pension by the retirement system on account of the person's membership in the retirement system. Retirement shall mean an employee's separation from city employment as an employee with immediate eligibility for receipt of benefits under the retirement system. Retirement systems or system shall mean the city retirement system created and established by this division. Service shall mean personal service rendered to the city by a city employee. Workers' compensation benefits shall mean any amounts paid a retirant, beneficiary, spouse or child pursuant to any workers' compensation or similar law. Redemptions or settlements of a workers' compensation claim shall be considered workers' compensation benefits. Payments in consideration of medical expenses shall be disregarded in the determination of workers' compensation benefits. (Ord. No. 5$-75-4, § 2, 12-22-75; Ord. No. 58-88-13, § 1, 11-28-88; Ord. No. 58-91-15, § 1, 4-22-91; Ord. No. 58-98-25, § 1, 11-23-98; Ord. No. 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Cross references: Definitions and rules of construction generally, § 1-2. Sec. 2-263. Benefit groups. (a) ~ :Benefit group general is hereby designated for the purpose of determining a retirement system member's applicable benefit eligibility conditions and benefit amount and shall include all employees not included in another City pension plan. b Y b (b) Benefit eligibility condition shall be based on the member's benefit group at the time of termination of city employment. Benefit amounts shall be based on the amount of credited service acquired in eael} benefit group general. (Ord. No. 58-75-4, § 3, 12-22-75; Ord. No. 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. Z-264. Board of trustees--Responsibilities and duties generally. The general administration, management, and responsibility for the proper operation of the retirement system, for construing, interpreting, and making effective the provisions of this division, and for making recommendations to the city commission on matters concerning this retirement system are vested in the board of trustees. (Ord. No. 58-75-4, § 4, 12-22-75; Ord. No. 58-98-25, § 2, 11-23-98) Cross references: Boards and commissions generally, § 2-131 et seq. Sec. Z-265. Same--Actuarial data; report to city commission. (a) The board shall keep or cause to be kept, in convenient form, such data as shall be recommended by the actuary as necessary for the operation of the retirement system on an actuarial basis. The board shall keep or cause to be kept, in convenient form, such additional data as is required to properly report the operations of the system. (b) The board shall render a report to the city commission on or before the first day of tail October of each year showing the fiscal transactions of the retirement system for the year ended the preceding thirtieth day of September, the assets of the retirement system as of the preceding thirtieth day of September, and a copy of the most recent actuarial report. (Ord. No. 58-75-4, § 10, 12-22-75) Sec.2-266. Same--Composition. The board of trustees shall consist of five (S) trustees as follows: (1) Two (2) residents of the city to be selected by the city commission. and serve at the pleasure of the city commission, who may also serve as trustees of the police officer retirement system created in division 4 hereof; (2) Two (2) members of tke this retirement system who are employees of the city, b~~~e~eliee to be elected by the members of the retirement system who are also similarly situated employees of the city; (3) One (1) resident of the city to be selected by the other four (4) members of the board of trustees, and whose appointment shall be confirmed by a vote of the city commission. The elections provided for in subsections (2) of this section shall be held in accordance with such rules as the board of trustees shall from time _to time adopt. (Ord. No. 58-75-4, § 5, 12-22-75; Ord. No. 58-86-7, § 1, 1-12-87; Ord. No. SS-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-267. Same--Term of office; oath of office. The regular term of office of a member of the board of trustees shall be four (4) years for civilian members, and four (4} years for employee representatives, unless they terminate employment, whereupon a new election will be held by the members of the plan to fill the unexpired term of their trustee representatives, and epe-Fly four 4 years for the trustee selected by a maiority of the other four (4) members of the board. Each trustee shall, before assuming the duties of trustees, qualify by taking an oath of office to be administered by the city clerk, whereupon a trustee's term of office shall begin. ~Eevae~.~ (Ord. No. S8-7S 4, § 6; 12-22-75; Ord. No. 58-86-7~§ 1, 1-12-87; Ord. No. 58-98-25, § 3, 11-23-98; Ord. No. 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-268. Same--Vacancy;; filling of vacancy. (a) A vacancy shall occur on the board of trustees if any member shall resign or any employee representative ceases to be employed by the city. A vacancy shall occur on the board if any trustee fails to attend three (3) consecutive meetings of the board unless, in each case, excused for cause by the trustees attending the meeting. (b) if a vacancy occurs on the board of trustees, the vacancy shall be filled within ninety (90) days for the unexpired term, if applicable, in the same manner as the position was previously filled. `` (Ord. No. S8-7S-4, § 7, 12-22-75; Ord. No. 58-86-7, § 1, 1-12-87; Ord. No. 58-98-25, § 4, 11-23-98) 4 Sec. 2-269. Same--Meetings; quorum; voting; compensation. The board of trustees shall hold meetings regularly, at least one (1) in each calendar quarter, and shall designate the time and place of each meeting. All meetings of the board shall be open to the public. Notice of such meetings shall be posted on employee bulletin boards so that employees will be aware of the meeting. The board shall adopt its own rules of procedure and shall keep a record of its proceedings. Three (3) trustees shall constitute a quorum at any meeting of the board, and at least three (3) concurring votes shall be necessary for a decision by the boazd. Each trustee shall be entitled to one (1) vote on each question before the boazd. Trustees shall serve without compensation for their services as trustees, but shall be entitled to their expenses actually and necessarily incurred in attending meetings of the board and in performing required duties as trustees. (Ord. No. 58-75-4, § 8, 12-22-75; Ord. No. 58-86-7, § 1, 1-12-87) Sec. 2-270. Officers and employed services. The officers and employed services of the retirement system shall be as follows: (1) Chairperson: The board shall annually elect a chairperson and a chairperson pro tem from its members. (2) Secretary: The board shall annually elect a secretary from its members who shall sign the minutes of each meeting (3) F4-}-Legal advisor: The board is empowered to employ independent legal counsel (34) Actuary: The board shall appoint an independent actuary who shall be the technical advisor to the board regarding the operation of the retirement system on an actuarial basis, and who shall perform such services as are required in connection therewith. The term actuary as used in this division shall mean an "enrolled actuary" who is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974 and who is a member of the Society of Actuaries of the American Academy of Actuaries. A partnership or corporation may be appointed actuary if the duties of the actuary are performed by or under the direct supervision of an enrolled actuary and the enrolled actuary signs and is responsible for all final documents submitted by the partnership or corporation. (g5) Administrative manager: The boazd may employ or contract for the services of an individual, firm or corporation, to be known as the "administrative manager", who shall under the direction of the board or any appropriate committee thereof, be ministerially responsible to: a. Administer the office or offices of the retirement system and of the board; b. Coordinate and administer the accounting, bookkeeping and clerical services; c. Provide for the coordination of actuarial services furnished by the actuary; d. Prepare (in cooperation or appropriate with the consulting actuary or other advisors) reports and other documents to be prepared, filed or disseminated by or on behalf of the retirement system in accordance with law; 5 e. Perform such other duties and furnish such other services as may be assigned, delegated or directed or as may be contracted by or on behalf of the board. (~6) Services: The board is authorized and empowered to employ such professional, medical, technical or other advisors as are required for the proper administration of the retirement system. These services shall be obtained and the compensation for these services shall be determined in accordance with procedures established by the board. (Ord. No. 58-75-4, § 9, 12-22-75; Ord. No. 58-86-7, § 1, 1-12-87; Ord. No. 58-91-15, § 1, 4-22-91; Ord. No. 58-98-25, §§ 5--8, 11-23-98) Sec.2-271. Membership. (a) All persons who are city employees, and all persons who become city employees, shall be members of the retirement system, except as provided in subsection (b) of this section. (b) The membership of the retirement system shall not include: (1) Any city employee who is employed in a position normally requiring less than one thousand (1,000) hours of work per annum; (2) Any city managerial or professional employee who is employed pursuant to an individual contract of employment which does not provide for the employee's participation in this retirement system; (3) Elected officials of the city; (4) Positions which are compensated on a basis not subject to the withholding of federal income taxes or FICA taxes by the city; (5) Temporary employees; (6) Any person initially employed as or promoted to a position designated by the city as executive or department head shall elect to participate or not participate in the retirement system. Such election shall be irrevocable for as long as the employee holds such executive or department head position. Should any such member elect to discontinue participation in the retirement system, the member's entitlement to benefits hereunder shall be governed by the system's provisions in effect at the time of such discontinuance. (c) An individual shall cease to be a member upon retirement, entry into DROP, termination of employment by the city, or upon ceasing to be employed in a position regularly requiring one thousand (1,000) or more hours of work in a year, or upon becoming employed in an excluded position. (d) Effective June 1, 1999, all firefighter employees of the City of Atlantic Beach are hereby consolidated into the City of Jacksonville Fire Department. On execution of this action, City of Atlantic Beach firefighter employees became members of the City of Jacksonville Police and Fire Pension Fund with full rights and benefits in accordance with Chapter 121, City of Jacksonville Ordinance Code, and with other applicable law. Such consolidation is in accordance with Resolutions 95-944-256 and 98-1006 of the City of Jacksonville, which provide for an interlocal agreement between the cities of Jacksonville and Atlantic Beach entered into by these cities effective on the 1st day of June 1999; and the City of Jacksonville's Ordinance 1999-472-E, which was enacted on the 25th day of May, 1999 and approved on the 1st day of June 1999. (Ord. No. 58-75-4, § 11, 12-22-75; Ord. No. 58-81-5, § 1, 9-28-81; Ord. No. 58-85-6, 1-13-86; Ord. No. 58-93-19, § 1, 9- 27-93; Ord. No. 58-98-25, § 9, 11-23-98; Ord. No. 58-99-26, § 1, 7-10-00) 6 Sec. 2-272. Credited service. Service rendered by a member of the retirement system shall be credited to the member's individual credited service account in accordance with rules the board of trustees shall from time to time prescribe and in accordance with the applicable provisions of the Florida Statutes. In no case shall more than one (1) year of credited service be credited on account of all service rendered by a member in any one period of twelve (12) consecutive calendar months. Service shall be credited to the nearest one-twelfth of a year. Service shall be credited for the total number of years, and fractional parts of years, of service of the member. (Ord. No. 58-75-4, § 12, 12-22-75; Ord. No. 58-91-15, § 1, 4-22-91; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-273. Loss of credited service. A retirement system member's credited service shall be forfeited and no longer in force if the member terminates city employment with less than five (5) years of credited service. Ord. No. 58-75-4, § 13, 12-22-75; Ord. No. 58-87-10, § 1, 11-23-87) Sec. 2-274. Reinstatement of credited service. A member's forfeited credited service shall be restored to his/her individual service account if re- employment by the city and membership in the retirement system occurs within five (5) years from and after the date of separation from city employment that caused the forfeiture, provided that the member repays to the retirement system the contributions refunded under subsection 2-298(d) hereof plus interest at the actuarially assumed rate in accordance with terms established by the board of trustees. (Ord. No. 58-75-4, § 14, 12-22-75; Ord. No. 58-9$-25, § 10, 11-23-98) Sec. 2-275. Military service credit. (a) A member of the retirement system who leaves or left city employment voluntarily or non- voluntarily to enter any armed service of the United States during time of war, period of compulsory military service, or period of national emergency recognized by the city commission shall have required periods of active duty credited as city service subject to the following conditions: (1) The member is re-employed by the city as provided in the Uniformed Services Employment and Reemployment Rights Act (USERRA) after the date of termination of such active duty;_ (2) In no case shall more than the years of service provided for in USERRA be credited on account of all military service. (3) Notwithstanding any provision of this article to the contrary, contributions, benefits, and service credit with respect to qualified military service will be provided in accordance with USERRA and Section 414(u) of the Internal Revenue Code. (b) The board of trustees shall determine the amount of service to be credited a member under the provisions of this section and USERRA. 7 (Ord. No. 58-75-4, § 15, 12-22-75; Ord. No. 58-98-25, § 11, 11-23-98; Ord. No. 58-99-26, § 1, 7- 10-00) Sec. 2-276. Voluntary retirement conditions; employment after retirement. (a) A member of the retirement system may retire upon satisfaction of each of the following requirements: (1) The member files written application for retirement with the board of trustees setting forth the date retirement is to be effective; (2) The member terminates all of his/her city employment normally requiring one thousand (1,000) hours of work or more per annum on or before the date retirement is to be effective; (3) The member has met the age and service requirements for retirement specified in subsection (b). Upon retirement, a member shall be paid a pension computed according to the applicable subsections of section 2-281 or section 2-282. (b) The age and service requirements for voluntary retirement are: , f ti, icy ,. ,._,. ,.,, r ,._,.a •4 a r .. ~..~ ~,.::~.,., j".,u""tircr~~rcc~crcrcczrrrvr~ Normal retirement: the member has attained age sixty (60) years or older, and has five (5) or more years of credited service in force. Early retirement: the member has attained age fifty-five (55) years or older and has five (5) or more years of credited service in force (c) Employment after retirement: (1) Any person who has retired as a member of this retirement system maybe reemployed by the city in a position normally requiring less than one thousand (1,000) hours of work per annum or in a position not covered by this pension plan and receive retirement benefits from his/her previous employment and compensation from his/her reemployment. (2) Any person who has retired as a member of this retirement system and is subsequently reemployed by the city in any position normally requiring one thousand (1,000) hours or more of work per annum in a position covered by this pension elan shall have his/her pension benefit suspended during the,period of such reemployment and shall receive additional credited service from his/her reemployment. (Ord. No. 58-75-4, § 16, 12-22-75; Ord. No. 58-87-10, § 1, 11-23-87; Ord. No. 58-91-14, § 1, 4-8-91; Ord. No. 58-93-19A, § 1, 10-25-93; Ord. No. 58-98-25, §§ 12, 13, 11-23-98; Ord. No. 58-99-27, § 1, 11- 8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-277. ;~r=:~ Normal retirement date and payment date. (a) The normal retirement date of each member shall be the first day of the month following the effective retirement of the member as indicated in the member's retirement application and as approved by the board of trustees. The early retirement date of each member shall be the first day of the month following the effective retirement of the member as indicated in the member's retirement anplication_ and as annroved by the board of trustees. (c) The monthly retirement income payable in the event of normal or early retirement shall be payable on the first day of each month. (Ord. No. 58-99-26, § 2, 7-10-00) Editor's note: Ord. No. 58-98-25, § 14, adopted Nov. 23, 1998, repealed § 2-277 which pertained to compulsory separation from employment; extensions; retirement, and derived from Ord. No. 58-75-4, § 17, adopted Dec. 22, 1975 and Ord. No. 58-87-10, § 1, adopted Nov. 23, 1987. Sec. 2-278. Deferred retirement upon separation from employment (vesting). (a) A member of the retirement system who terminates city employment prior to satisfying the requirements for voluntary retirement under section 2-276 for a reason other than retirement or death, who has not received a refund of his or her member contributions, and who has the applicable period of credited service specified in subsection (b) shall remain a member and be entitled to be paid a pension upon attaining the age and service requirements for voluntary retirement, as set forth in section 2-276. Upon attaining the age and service requirement for voluntary retirement, the member shall be paid a pension computed according to the applicable subsections of section 2-281 or section 2-282 as the subsections were in force at the time a member left city employment. (b) The credited service requirement for separation from city employment with entitlement to deferred retirement is five (5) years. (Ord. No. 58-75-4, § 18; 12-22-75; Ord. No. 58-87-10, § 1, 11-23-87; Ord. No. 58-98-25, § 15, 11-23-98; Ord. No. 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-279. Disability retirement-General conditions for eligibility. (a) A member having five (5) or more continuous years of credited service and having contributed to the retirement system for five (5) years or more may retire from the service of the city if he/she becomes totally and permanently disabled as defined in subsection (b) by reason of any cause other than a cause set out in subsection (c). Such retirement shall herein be referred to as "disability retirement." (b) A member will be considered disabled if, in the opinion of the board of trustees, the member is totally and permanently prevented from rendering useful and efficient service as a city employee. (c) A member will not be entitled to receive any disability retirement income if disability is as a result of: (1) Excessive and habitual use by the employee of drugs, intoxicants, or narcotics; (2) Injury or disease sustained by the employee while willfully and illegally participating in fights, riots, or civil insurrections or while committing a crime; (3) Injury or disease sustained by the employee while serving in any armed forces; or (4) Injury or disease sustained by the employee after his/her employment has terminated. (d) No member shall be permitted to retire under the provisions of this section until he/she is examined by a duly qualified physician or surgeon, to be selected by the board. of trustees for that purpose, and is found to be disabled in the degree and in the manner specified in this section. Any member retiring under this section may be examined periodically by a duly qualified physician or surgeon or board of physicians and surgeons to be selected by the board of trustees for that purpose, to determine 9 if such disability has ceased to exist. If a member refuses to submit to such an examination, the member's disability pension shall be suspended until such time as the member submits to the examination. (e) The benefits payable to a member who retires from the service of the city with a total and permanent disability as a direct result of a disability commencing prior to his normal retirement date is the monthly income computed according to the applicable subsections of section 2-281 or section 2-282. (f) The monthly retirement income as computed in section 2-281 or section 2-282 to which a member is entitled in the event of his disability retirement shall be payable monthly after the board of trustees determine such entitlement retroactive to the date of application or the last day on payroll, whichever is later. If the member recovers from the disability prior to his norrnal retirement date, the last payment will be the payment due next preceding the date of such recovery. If the member dies without recovering from his disability or attains his normal retirement date while still disabled, the last payment will be the payment due next preceding his death. (g) If the board of trustees finds that a member who is receiving a disability retirement income is, at any time prior to his normal retirement date, no longer disabled, as provided herein, the board of trustees shall direct that the disability retirement income be discontinued. Recovery from disability as used herein means the ability of the member to render useful and efficient service as an employee of the city. (h) If the member recovers from disability and reenters the service of the city as an employee, his service will be deemed to have been continuous, but the period beginning with the first month for which he received disability retirement income payment and ending with the date he reentered the city service will not be considered as credited service for the purpose of the system. (Ord. No. 58-75-4, § 19, 12-22-75; Ord. No. 58-87-10, § 1, 11-23-87; Ord. No. 58-88-13, § 1, 11-28-88; Ord. No. 58-93-19A, § 1, 10-25-93; Ord. No. 58-95-20, § 1, 6-12-95; Ord. No. 58-96-21, § 1, 2-12-46; Ord. No. 58-98-25, § 16, 11-23-98; Ord. No: 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-2$0. Same--Continuation subject to re-examination; return to employment. (a) The board of trustees may require a disability retirant to undergo a periodic medical examination if the disability retirant has not attained age sixty (60) years. (b) If a disability retirant refuses to submit to a medical or psycholo~cal examination, payment of the disability pension may be suspended by the board of trustees until '`'-a ~--~-' "~ `''~ '~~'-"' the retirant \ / J^ aOllll V l l k N F ~l submits to the examination. ° ' a ~ ' `' ~' " ` - ~" ~° a' '-'' '* . ~ N ~.. (c) A disability retirant who has been restored to employment with the city as provided in subsection (a) shall again become a member of the retirement system. (Ord. No. 58-75-4, § 20, 12-22-75; Ord. No. 58-98-25, § 17, 11-23-98; Ord. No. 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-281. Amount of level straight life pension. (a) Benefit group general. Subject to section 2-285, the amount of level straight life pension shall be equal to the retiring member's benefit group general credited service multiplied by the sum of two and eighty-five hundredths (2.85) percent of the retiring member's final average compensation. Early retirement benefit The amount of an early retirement benefit shall be calculated as provided in subsection 2 281 (a) above taking into account credited service to the date of actual retirement and final monthly compensation as of such date. Such amount of retirement income shall be actuariallyreduced to take into account the participant's youneer aee and earlier commencement of retirement incomepa~ts• 10 (bc) Cost-of-living adjustment. All retirement system members and beneficiaries who retired prior to January 1, 1997, shall receive none-time cost-of-living adjustment, which shall be in an amount equal to three (3) percent of the benefits paid to such retired members and beneficiaries during the unmediately preceding month. Effective October 2001, all retirement system members and beneficiaries who retired prior to January 1, 2001, shall receive aone-time cost-of-living adjustment, which shall be in an amount equal to five (5) percent of the benefits paid to such retired members and beneficiaries during the immediately preceding month. -(Ord. No. 58-75-4, § 21, 12-22-75; Ord. No. 58-87-8, § 1, 10-26-87; Ord. No. 58-92-18, § 1, 9-28-92; Ord. No. 58-93-19A, § 1, 10-25-93; Ord. No. 58-97-23, § 1, 7-14-97; Ord. No. 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00; Ord. No. 58-01-28, § 1, 10-8-01) Sec. 2-282. Optional forms of pension payment. A member of the retirement system may elect to be paid under one (1) of the following optional forms of payment in lieu of the level straight life form of payment. The election must be made in writing and filed with the board of trustees prior to the date retirement is effective. Payment will be made under the level straight life form of payment if a timely election of an optional form of payment is not made. The amount of pension under Option A and Option B shall be the actuarial equivalent of the amount of pension under the level straight life form of payment. In no event may a member's annual benefit exceed the lesser of (1) Option A; one hundred (100) percent survivor pension: Under Option A, a retirant shall be paid a reduced pension for life with the provision that upon the retirant's death, the reduced pension shall be continued throughout the future lifetime of and paid to such person as the retirant shall have nominated by written designation. duly executed and filed with the board of trustees at the time of election of the optional form of payment. (2) Option B; fifty (50) percent survivor pension: Under Option B, a retirant shall be paid a reduced pension for life with the provision that upon the retirant's death, one-half of the reduced pension shall be ~.. continued throughout the future lifetime of and paid to such person -~ as the retirant shall have nominated by written designation duly executed and filed with the board of trustees at the time of election of the optional form of payment. (3) Option C; social security coordinated pension: Under Option C, a retirant shall be paid an increased pension to attainment of the age when the retirant is eligible to receive regular social security retirement benefits, and a reduced pension thereafter. The increased pension paid to attainment of regular social security retirement age shall approximate the sum of the reduced pension payable thereafter plus the retirant's estimated social security primary insurance amount. (4) Other benefit form: Any other actuarially equivalent form of benefit requested by a member and approved, in their sole discretion, by the board of trustees. (Ord. No. 58-75-4, § 22, 12-22-75; Ord. No. 58-98-25, § 18, 11-23-98) (S) A Deferred Retirement Option Program (DROPI shall be established and administered by the Board of Trustees of the City of Atlantic Beach General Employees' Retirement System. Such DROP shall be a self directed program A General Emgloyee may enter the DROP as set forth herein. (a) Eligibility. A partic~ant of the City of Atlantic Beach General Em l~oyees' Retirement System may enter into the DROP on the first day of the month following the attainment of age fifty-five (551 and five (51 years of service with the City of Atlantic Beach However a participant entering the DROP prior to attaining a¢e si%ty (60) shall have their benefit actuarially reduced for each year under the age of six 60. 11 Participants who attained eligibility prior to the enactment of the DROP shall be afforded the option of particiRating immediately. Written election. A participant electing to participate in the DROP must complete and execute the proper forms, which shall be su plp ied bathe Board of Trustees. Election into the DROP is irrevocable once a participant enters the DROP. ~ Limitation/disqualification for other benefits. A participant may_~articipate in the DROP only once. After commencement of participation in the DROP the employee shall no longer earn or accrue additional vesting credits toward retirement benefits and shall not be eligible for disabili orpre-retirement death benefits in the City of Atlantic Beach General Employees' Retirement System. (d) Cessation or reduction of contributions Upon the effective date of a participant's commencement of participation in the DROP, all contributions on behalf of the participant to the City of Atlantic Beach General Employees' Retirement System shall be discontinued. (e) Benefit calculation For all City of Atlantic Beach General Employees' Retirement System purposes, the service and vesting credits of a partici Rant participating in the DROP shall remain as they existed on the effective date of commencement of participation in the DROP. The participant shall not earn or be credited with any additional vesting credits after beginning DROP participation. Service thereafter shall not be recognized by the City of Atlantic Beach General Employees' Retirement System or used for the calculation or determination of any benefits payable by such Retirement System. The average final compensation of the participant shall remain as it existed on the effective date of commencement of participation in the DROP Payment for unused Compensatory Time shall be made when the participant enters the DROP and shall be utilized in determining the final average compensation Payment for accrued unused leave (vacation holiday etc.) shall be made when the participant actually terminates employment with the City. Earnings thereafter shall not be recognized by the Retirement System or used for the calculation or determination of any benefits payable by the Retirement System. ~f) Payments to DROP account. The monthly retirement benefits including any future cost of living increases, that would have been payable had the participant elected to cease employment and receive a normal retirement benefit shall be deposited into the participant's DROP account. fig} Drop account earnings. Earnings of each DROP account shall be in accordance with the self-directed options selected by the participant and shall continue for qp to sixty (601 months at which time all deposits into the account shall cease Neither the City the Retirement System nor the system's Board of Trustees shall have any responsibility or liability for any of the self-directed options selected by the participant. (h) Maximum participation. 12 A participant may participate in the DROP for a maximum of sixty (60) months. At the conclusion of the sixty (60) months, deposit's into the participant's DROP account shall cease. The participant may terminate DROP participation by terminating from covered ci employment on a date prior to sixty (60) months from the date the articipant entered the DROP. A~articipant that elects to participate in the DROP may_ articipate for a maximum of sixty (60) months. At the conclusion of the maximum time period theparticipant's covered city employment must terminate pursuant to the resignation submitted by the participant as part of the DROP application. The participant may terminate DROP participation by advancing their resignation from covered city employment to a date prior to that submitted by the participant as part of the DROP application. (i) Expenses. All administrative fees charged for the administration and operation of the participant's DROP account shall be in accordance with the self-directed options selected by the participant and shall be the responsibility of the participant. Papout• ~i) Upon the termination of a partlclpant's covered City employment (for any reason whether by retirement, resignation, discharge or death), the retirement benefits payable to the participant or to the participant's beneficiary (if theparticipant selected an optional form of retirement benefit which provides for payments to the beneficiary) shall be paid to the participant, the participant's beneficiary or the member's estate and shall no longer be deposited into the participant's DROP account. (ii) Within thirty days after the end of any calendar quarter following the termination of a participant's employment, the balance in the participant's DROP account shall be payable in accordance with the self-directed options selected by the participant. Regardless of the option selected by the participant, the Board of Trustees has the right to accelerate payments in order to comely with Section 401(A)(9) of the Internal Revenue Code and the right to defer payments to comply with Section 415 of the Internal Revenue Code. Sk) Death. If a DROP participant dies before the account balance is paid out in full, the participant's designated beneficiary shall have the same rights as the participant to elect and receive the pay-out options set forth in paragraph j above. DROPpayments to a beneficiary shall be in addition to any retirement benefits payable to the participant. Participants who are or have been DROP participants are not eligible for pre-retirement death or disability benefits. ~l) Forms. The forms and notices shall be approved for use in administering the DROP by the Board of Trustees. {m) Amendment. The City Commission may amend the DROP at any time. Such amendments shall be consistent with the provisions covering deferred retirement option plans and shall be binding upon all future DROP participants and upon all DROP participant's who have balances in their accounts. Such 13 amendments may increase the expense decrease the account earnings or limit or restrict the payout options. Sec. 2-283. Death while in city employment; elective survivor pension. (a) Each member may; on a form provided for that purpose, signed and filed with the board of trustees, designate a beneficiary (or beneficiaries) to receive the benefit, if any, which maybe payable in the event of his/her death, and each designation may be revoked by such member by signing and filing with the board of trustees a new designation of beneficiary form. (b) Upon the death of a member who has a valid nomination-of-beneficiary in force, the beneficiary, if living, shall be paid a level straight life pension computed according to section 2- 281 in the same manner in all respects as if the member had elected Option A provided in section 2-282 and retired the day preceding his/her death, notwithstanding that the member may not have satisfied the conditions for retirement. Upon a member's retirement, entry into DROP, resignation or termination as a city employee, eligibility for the death benefit payable under this section will automatically terminate. (c) If a member failed to name a beneficiary in the manner prescribed in subsection (a) above, or if the beneficiary (or beneficiaries) named by a deceased member predeceases the member, the death benefit, if any, which may be payable under the plan with respect to such deceased member, may be paid in the discretion of the board of trustees either to: (i) Any one (1) or more of the persons comprising the group consisting of the member's spouse, the member's descendants, the member's parents, or the member's heirs at law, and the board of trustees may pay the entire benefit to any member of such group or portion such benefit among any two (2) or more of them in such shares as the board of trustees, in its sole discretion, shall determine; or (ii) The estate of such member, provided that in any of such cases the board of trustees, in its discretion, may direct that the commuted value of the remaining monthly income payments be paid in a lump sum. Any payment made to any person pursuant to the power and discretion conferred upon the board of trustees by the preceding sentence shall operate as a complete discharge of all obligations under the plan with regard to such deceased member and shall not be subject to a review by anyone, but shall be final, binding and conclusive on all persons ever interested hereunder. (Ord. No. 58-75-4, § 23, 12-22-75; Ord. No. 58-87-10, § 1, 11-23-87; Ord. No. 58-88-13, § 1, 11-28-88; Ord. No. 58-98-25, § 19, 11-23-98) Sec. 2-284. Alternate death while in city employment; pension to spouse and/or children. (a) The applicable benefits provided in subsections (b) and (c) of this section or, if the member designated the member's spouse or children, as set forth below, the benefits provided in section 2-283, whichever are greater, shall be paid if a member of the retirement system who has five (5) or more years of credited service and dies while in the employ of the city. The provisions of this section shall not apply in the case of death of a member who has a valid designation of beneficiary, other than the member's spouse or children as set forth below, in force pursuant to section 2-283. (b) The person to whom the deceased member was married at the time of death shall be paid a pension equal to a seventy-five (75) percent of the amount of level straight life pension computed according to the applicable subsection of section 2-281, based on the deceased member's final average compensation and credited service. A surviving spouse's pension shall terminate upon death. (c) The deceased member's unmarried children under the age of nineteen (19) years, or twenty-three (23) years if enrolled full-time as a student in an educational institution shall each be paid an equal share of a level straight life pension computed according to the applicable subsection of section 2-281, based on 14 the deceased member's final average compensation and credited service. The percent shall be zero (0} percent during periods a pension is being paid in accordance with the provisions of subsection (b}; and fifty (SO) percent during periods a pension is not being paid in accordance with the provisions of subsection (b). A surviving child's pension shall terminate upon attainment of age nineteen (19) years or, if over nineteen (19), but less than twenty-three (23), upon no longer being enrolled as a fulltime student in an educational institution, marriage, or death, and the pension of each remaining eligible child shall be recomputed. (Ord. No. 58-75-4, § 24, 12-22-75; Ord. No. 58-87-10, § 1, 11-23-87; Ord. No. 58-98-25, § 20, 11-23-98; Ord. No. 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-285. Maximum amount of pension. (a) The normal retirement pension payable to a member of the retirement system and who has not previously participated in such system, on or after January 1, 1980, shall not exceed one hundred (100) percent of his final average compensation. However, nothing contained in this section shall apply to supplemental retirement benefits or to pension increases attributable to cost-of-living increases or adjustments. (b) No member of the system covered by this article who is not now a member of such system shall be allowed to receive a retirement pension which is, in part or in whole, based upon any service with respect to which the member is already receiving, or will receive in the future, a retirement pension from another retirement system or plan; provided that this restriction does not apply to social security benefits or federal benefits under Chapter 67, Title 10, U.S. Code. (c) In no event may a member's annual benefit exceed the lesser of: (1) One hundred fifty thousand dollars ($150,000.00) (adjusted for cost of living in accordance with Section 415(d) of the Internal Revenue Code, but only for the year in which such adjustment is effective); or (2) Notwithstanding the provisions of paragraphs (a) and (b) above, the annual benefit payable to a member having at least fifteen (1S) years of service shall not be less than the annually adjusted amount provided in the provisions of IRC Section 41S(d). (3) Compensation in excess of limitations set forth in Section 401(a)(17) of the Internal Revenue Code shall be disregarded. The limitation on compensation for an "eligible employee" shall not be less than the amount which was allowed to be taken into account hereunder as in effect on July 1, 1993. "Eligible employee" is an individual who was a member before the first plan year beginning after December 31, 1995. (4) If the member has less than ten (10) years of service with the employer (as defined in Section 41S(b)(S) of the Internal Revenue Code and as modified by Section 41S(b)(6)(D) of the Internal; Revenue. Code), the applicable limitation in subsection (1) or subsection (2) of this subsection shall be reduced by multiplying such limitation by a fraction, not to exceed one (1). The numerator of such fraction shall be the number of years, or part thereof, of service with the employer; the denominator shall be ten. (10) years. For purposes of this subsection, annual benefit means a benefit payable annually in the form of a straight-line annuity with no ancillary or incidental benefits and with no member or rollover contributions. To the extent that ancillary benefits are provided, the limits set forth in subsections (1) and (2) of this subsection will be reduced actuarially, using an interest rate assumption equal to the greater of five (S) percent or the interest rate used in the most recent annual actuarial valuation, to reflect such ancillary benefits. If distribution of retirement benefits begins before age sixty-two (62), the dollar limitation as described in subsection (1) of this subsection shall be reduced actuarially using an interest rate assumption equal to the greater of five (S) percent or the interest rate used in the most recent 15 annual actuarial valuation; however, retirement benefits shall not be reduced below seventy-five thousand dollars ($75,000.00) if payment of benefits begins at or after age fifty-five (SS). If retirement benefits begin after age sixty-five (6S), the dollar limitation of subsection (1) of this subsection shall be increased actuarially using an interest assumption equal to the lesser of five (S) percent or the interest rate used in the most recent annual actuarial valuation. For purposes of this subsection, average annual compensation for a member's three (3) highest paid consecutive years means the member's greatest aggregate compensation during the period of three (3) consecutive years in which the individual was an active member of the plan. The special maximum retirement income limitation applicable to police officers at the normal retirement date shall be as set forth in Section 41S(G) and (H) of the Internal Revenue Code of 1986 and amendments thereto and such amount shall be adjusted in accordance with regulations promulgated by the secretary of the treasury or his/her delegate. (Ord. No. 58-75-4, § 2S, 12-22-75; Ord. No. 58-88-12, § 1, 8-8-88; Ord. No. 58-88-13, § 1, 11-28-88; Ord. No. 58-98-25, § 21, 11-23-98) State law references: Limitation of benefits, F.S. § 112.65. Sec. 2-286. Subrogation rights. If a member of the retirement system, retirant or beneficiary becomes entitled to a pension as the result of an accident or injury caused by the act of a third party, the retirement system shall be subrogated to the rights of such member, retirant or beneficiary against such third party to the extent of pensions which the retirement system pays or becomes liable to pay on account of such accident or injury. (Ord. No. 58-75-4, § 26, 12-22-75; Ord. No. 58-98-25, § 22, 11-23-98) Sec.2-287. Reserved. Editor's note: Ord. No. 58-98-25, § 23, adopted Nov. 23, 1998, repealed § 2-287 which pertained to reserve for retired benefit payments and derived from Ord. No. 58-75-4, § 27, adopted Dec. 22, 1975. Sec. 2-288. City contribution. (a) The plan shall be funded by contributions from member contributions, as provided in section 2- 298, contributions from the city and other income sources as authorized by law. (b) City contributions shall be made to the plan, on at least a quarterly basis, in an amount which, together with the member contributions provided for in section 2-298 and other income sources as authorized by law, sufficient to meet the normal cost of the plan and to fund the actuarial deficiency over a period of not more than forty (40) years, as determined by the Florida Statutes required a~~ra}-actuarial valuation. Such contributions shall be computed as level percents of member payroll in accordance with generally accepted actuarial principles on the basis of such rates of interest and tables of experience as the board of trustees shall from time to time adopt. The board shall annually certify to the city the contributions determined according to this section, and the city shall appropriate and pay to the retirement system, the contributions so certified. (c) All benefits and expenses shall be paid in accordance with the provisions of this pension plan and consistent with Florida Statutes and the Internal Revenue Code. (Ord. No. S8-7S-4, § 28, 12-22-75; Ord. No. 58-98-25, § 24, 11-23-98; Ord. No. 58-99-26, § 1, 7-10-00) Sec.2-289. Reserved. Editor's note: Ord. No. 58-98-25, § 2S, adopted Nov. 23, 1998, repealed § 2-289 which pertained to reserve for undistributed investment income and derived from Ord. No. S 8-75-4, § 29, adopted Dec. 22, 1975. 16 Sec. 2-290. Investment of retirement system assets. The board of trustees shall be the trustee of the monies and assets of the retirement system. The board shall have full power and authority, in their sole discretion, to invest and reinvest such funds as are not necessary for current expenditures or liquid reserves, as they may from time to time determine. The trustees may sell, exchange or otherwise dispose of such investments at any time. The trustees shall have the authority, in respect to any stocks, bonds or other property, real or personal, held by them as trustees, to exercise all such rights, powers and privileges as might be lawfully exercised by any person owning similar stocks, bonds or other property in his own right. The trustees are authorized to invest in those stocks, bonds and other securities permitted by the investment policies or guidelines adopted by the trustees. (a) Delegation and allocation of investment functions. (1) The Trustees shall have the power and authority to appoint one (1) or more investment managers who shall be responsible for the management, acquisition, disposition, investing and reinvesting of such of the assets of the Trust Fund as the Trustees shall specify. Any such appointment may be terminated by the Trustees upon written notice. The fees of such investment manager shall be paid out of the Trust Fund. The Trustees shall require that the investment manager acknowledge in writing that it is a named fiduciary with respect to the plan. (2) In connection with any allocation or delegation of investment functions under this section, the Trustees shall, from time to time, adopt appropriate investment policies or guidelines. (Ord. No. 58-75-4, § 30, 12-22-75; Ord. No. 58-85-5, § 1, 7-22-85; Ord. No. 58-92-17, § 1, 1-27- 92; Ord. No. 58-98-25, § 26, 11-23-98; Ord. No. 58-99-26, § 1, 7-10-00) Sec.2-291. Reserved. Editor's note: Ord. No. 58-99-26, § 1, adopted July 10, 2000, deleted the former § 2-291, which pertained to divisions and derived from Ord. No. 58-75-4, § 31, adopted 12-22-75, and Ord. No. 58-99- 27, § 1, adopted 11-8-99. Sec.2-292. Expenses. The expenses of administering a retirement system, including the premiums for fiduciary liability and waiver of recourse insurance covering the board of trustees and the retirement system, shall be paid by the Plan ei~ (Ord. No. 58-75-4, § 32, 12-22-75; Ord. No. 58-98-25, § 27, 11-23-98) Sec.2-293. Reserved. Editor's note: Ord. No. 58-98-25, § 28, adopted Nov. 23, 1998, repealed § 2-293 which pertained to insurance coverage for retirants and beneficiaries and derived from Ord. No. 58-75-4, § 33, .adopted Dec. 22, 1975. Sec. 2-294. Method of making payments. All payments under this division shall be made according to the provisions of the City Charter and city ordinances governing the disbursement of city monies. No payment shall be made that has not been authorized by the board of trustees. (Ord. No. 58-75-4, § 34, 12-22•-75) Sec. 2-295. Assignments prohibited. (a) Generally. The right of a person to a pension, disability, death or survivor benefit, and any other right accrued or accruing to any person under the provisions of this division, and any monies in assets belonging to the retirement system, shall not be subject to execution, garnishment, attachment, the 17 operation of bankruptcy or insolvency law, or any other process of law whatsoever, and shall be unassignable except as is specifically provided in this division. If a member is covered under a group insurance or prepayment plan participated in by the city, and should the member or his/her beneficiary be permitted to and elect to continue the coverage as a retirant or beneficiary, the member or beneficiary may authorize the board of trustees to deduct required payments to continue coverage under the group insurance or prepayment plan. The city shall have the right of set off for any claim arising from embezzlement by or fraud of a member, retirant or beneficiary in addition to any other remedies, including forfeiture of benefits, provided by law. (b) Direct transfers of eligible rollover distributions. This subsection applies to distributions made on or after October 1, 1993. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the board of trustees, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (1) "Eligible rollover distribution" means any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include any distribution that is one (1) of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary or for a specif ed period often (10) years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (2) "Eligible retirement" means an individual retirement account described in Section 408(a) of the Internal Revenue Code, an individual retirement annuity described in Section 408(b) of the Internal Revenue Code, an annuity plan described in Section 403(a) of the Internal Revenue ~+~ Code, or a qualified trust described in Section 401(a) of the Internal Revenue Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (3) "Distributee" includes an employee or former employee. In addition, the employee's or former employee's surviving spouse, or the employee's or former employee's spouse or former spouse who is the alternate payee under an income deduction order, is a distributee with regard to the interest of the spouse or former spouse. (4) "Direct rollover" means a payment by the plan to the eligible retirement plan specified by the distributee. (Ord. No. 58-75-4, § 35, 12-22-75; Ord. No. 58-98-25, § 29, 11-23-98) Sec.2-296. Errors. Should the board of trustees determine that any member, retirant or beneficiary is being paid from the retirement system more or less than is correct, the board of trustees shall correct the error and, as far as practicable, shall adjust the payment in such manner that the actuarial equivalent of the benefit to which the member, retirant or beneficiary was correctly entitled shall be paid. (Ord. No. 58-75-4, § 36, 12-22-75; Ord. No. 58-98-25, § 30, 11-23-98) Sec. 2-297. Protection against fraud. Whoever with intent to deceive shall make any statements and/or reports required under this division which are untrue, or shall falsify or permit to be falsified any record or records of the retirement system, 18 or who shall otherwise violate, with intent to deceive, any of the terms or provisions of this division, shall be guilty of a city offense. Any member who is convicted as provided in F.S. § 112.3173 of a specified offense committed prior to retirement, or whose employment is terminated by reason of an admitted commission, aid or abatement of a specified offense, shall forfeit all rights and benefits under this pension plan, except for return of accumulated contributions as of his date of termination. (Ord. No. 58-75-4, § 37, 12-22-75; Ord. No. 58-98-25, § 31, 11-23-98) Sec. 2-298. Member contributions. (a) Member contributions for benefit group general shall be two (2) percent of salary and said contribution shall be deducted from the member's pay and paid over into the retirement system at least monthly. (b) The City of Atlantic Beach shall assume and pay the member contributions set forth above in lieu of payroll deductions from such members' earnings. No member shall have. the option of choosing to receive the contributed amounts directly instead of having them paid by the city directly to the retirement system. All such contributions by the city shall be deemed and considered as part of the member's contributions and subject to all provisions of this plan pertaining to contributions of members. Such contributions shall additionally be considered as part of the member's compensation for purposes of determining final average compensation and any other benefits hereunder and for determining the member's hourly wage rate for purposes of FICA contributions, worker's compensation, and overtime compensation. This city pick up of contributions is a result of a commensurate reduction of each member's pay and is intended to comply with Section 414(h)(2) of the Internal Revenue Code. (c) If an employee leaves the service of the city before accumulating aggregate time of five (5) years toward retirement and before being eligible to retire under the provisions of this article he/she shall be entitled to a refund of all of his or her contributions made to the city pension trust fund, plus any interest accumulated at a rate of interest determined annually by the board of trustees, less any disability benefits paid to him/her. If an employee who has been in the service of the city for at least five (5) years and has contributed to the pension trust fund as provided elects to leave his or her accrued contributions in the trust fund, such employee, upon attaining the age as required in section 2-278, may retire with the actuarial equivalent of the amount of such retirement income otherwise payable to him/her. (d) If a member who terminates employment elects a refund of contributions and: (1) Some or all of the refund is eligible for rollover treatment, as defined by the Internal Revenue Service; (2) Elects to have such eligible distribution paid directly to an eligible retirement plan or IR.A; and (3) Specifies the eligible retirement plan or IRA to which such distribution is to be paid (in such form and at such. time as the distributing plan administration may prescribe), the distribution will be made in the form of a direct trustee-to-trustee transfer to the specified. eligible retirement plan. (Ord. No. 58-87-8, § 2, 10-26-87; Ord. No. 58-88-13, § 1, 11-28-88; Ord. No. 58-93-19A, § 1, 10-25-93; Ord. No. 58-96-21, § 1, 2-12-96; Ord. No. 58-97-22, § 1, 2-24-97; Ord. No. 58-97-23, § 2, 7-14-97; Ord. No. 58-97-24, § 1, 9-8-97; Ord. No. 58-98-25, § 32, 11-23-98; Ord. No. 58-99-27, § 1, 11-8-99; Ord. No. 58-99-26, § 1, 7-10-00) Sec. 2-299. Benefit limitations and required distributions. 19 (a) Benefits paid under the city employees retirement system shall not exceed the limitations of Internal Revenue Code Section 415, the provisions of which are hereby incorporated by reference. (b) Notwithstanding any provisions in this section to the contrary, the distribution of benefits shall be in accordance with the following requirements and otherwise comply with Internal Revenue Code Section 401(a)(9) and the regulations thereunder, the provisions of which are incorporated herein by reference: (1) A member's benefit shall be distributed to hun/her not later than April 1 of the calendar year following the later of the calendar year in which the member attains age seventy and one- half (70 ll2) or the calendar year in which the member retires. Alternatively, distributions to a member must begin no later than the applicable April 1, as determined under the preceding sentence, and must be made over the life of the member (or the life expectancies of the member and the member's designated beneficiary) in accordance with regulations. (2) Distributions to a member and his/her beneficiary shall only be made in accordance with the incidental death benefit requirements of [Internal Revenue] Code Section 401(a)(9)(G) and the regulations thereunder. {Ord. No. 58-96-21, § 1, 2-12-96) 20 DIVISION 4. POLICE OFFICERS' RETIREMENT SYSTEM* Sec. 2-300. Created, purpose. ""~ The police officers' retirement system is hereby created and established for the purpose of providing pensions and death benefits for the police officers of the city and their dependents in accordance with Chapter 185 of the Florida Statutes. The effective date of the retirement system is on adoption of this division. However, all benefits in existence under all previous retirement systems or plans effective after December 22, 1975 shall remain in effect and be included as a part of this retirement system. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-301. Definitions. The following words and phrases as used in this division shall have the following meanings unless a different meaning is clearly required by the context: Actuarial equivalent shall mean that any benefit payable under the terms of this plan in a form other than the standard form of benefit for members shall have the same actuarial present value on the date payment commences as such standard form of benefit. For the purpose of establishing the actuarial present value of any form of payment, all future payments shall be discounted for interest and mortality by using the 1983 Group Mortality Table, with ages set ahead five (5) years in the case of disability. Beneficiary shall mean any person who is being paid, or has entitlement to future payment, of a pension or other benefit by the retirement system for a reason other than the person's membership in the retirement system. Board of trustees or board shall mean the board of trustees provided for in this division City shall mean the City of Atlantic Beach, Florida, and shall include officers, boards, departments and instrumentalities. Compensation shall mean the total cash remuneration paid a member for service rendered to the city. Compensation shall include base salary or wages, longevity pay, overtime pay, cost of living payments, salary or wages while absent from work on account of vacation, holiday, or illness, and will also include incentive pay as defined in Chapter 943.22 Florida Statutes. Compensation shall not include redemptions or payments in consideration of unused vacation time or sick leave, the value of any fringe benefit, uniform allowances, equipment allowances, reimbursement of expenses, or payments for extra duty or a special detail work performed on behalf of a second party employer or any other item not specifically included. Credited service shall mean the service credited a member as provided in this division. Final average compensation shall mean one-sixtieth (1/60th) of the aggregate amount of compensation paid a member during the period of sixty (60) months of the member's credited service in which the aggregate amount of compensation paid is greatest. The sixty (60) months of credited service must be contained within the member's last one hundred twenty (120) months of credited service. If a member has less than sixty (60) months of credited service, final average compensation means the aggregate amount of compensation paid the member divided by the member's months of credited service. Member shall mean any person who is a member of the retirement system. *Editor's note: Ord. No. 58-99-26, § 2, adopted July 10, 2000, set out provisions intended. for use as Division 4, §§ 2-261A--2-310A. For purposes of clarity and at the editor's discretion, these provisions have been included herein as §§ 2-300--2-310.29. 21 Pension shall mean a series of monthly payments by the retirement system throughout the future life of a retirant or beneficiary, or for a temporary period, as provided in this division. Pension reserve shall mean the present value of all payments likely to be made on account of a pension. The present value shall be computed on the basis of such mortality and other tables of experience and regulaz annual compound interest as the actuary appointed by the board of trustees shall from time to time determine. Police officer shall mean a city employee employed by the police department who is certified or required to be certified as a law enforcement officer in compliance with Sections 185.02(11) and 943.14 Florida Statutes, and who holds the rank of patrol officer or higher, including probationary patrol officer. The term police officer shall not include any civilian city employee employed in the police department, any person employed as a police officer for an emergency, or any person privately employed as a police officer. Regular interest shall mean such rate or rates of interest per annum, compounded annually, as the board of trustees shall from time to time adopt. Retirant shall mean any person who has satisfied the condition for receiving a benefit and is being paid a pension by the retirement system on account of the person's membership in the retirement system. Retirement shall mean a police officer's separation from city employment as a police officer with immediate eligibility for receipt of benefits under the retirement system. Retirement systems or system shall mean the city retirement plan created and established by this division. Service shall mean personal service rendered to the city by a police officer. Workers' compensation benefits shall mean any amounts paid a retirant, beneficiary, spouse, or child pursuant to any workers' compensation or similar law. Redemptions or settlements of workers' compensation claim shall be considered workers' compensation benefits. Payments in consideration of medical expenses shall be disregarded in the determination of workers' compensation benefits. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-302. Benefit groups. (a) ~ :Benefit ~rou~police is hereby designated for the purpose of determinine a retirement system member's applicable benefit eli ibility conditions and benefit amount and. shall consist of all members who are also full time sworn police officers. (b} Benefit eligibility conditions shall be based on the member's benefit group at the time of termination of city employment. Benefit amounts shall be based on the amount of credited service acquired in benefit group police. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-303. Board of trustees-Responsibilities and duties generally. The general administration, management, and responsibility for the proper operation of the retirement system, for construing, interpreting, and making effective the provisions of this division, and for making recommendations to the city commission on matters concerning this retirement system are vested in the board of trustees. Such responsibilities and duties shall be conducted in such manner as to comply with 22 the requirements of Chapter 185 of the Florida .Statutes, and shall specifically include compliance with section 185.06 therein. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-304. Same--Actuarial data; report to city commission. (a) The board shall keep or cause to be kept, in convenient form, such data as shall be recommended by its actuary and as required by state law (Chapters 112 & 185 F.S.) for the operation of the retirement system on a sound actuarial basis. The board shall keep or cause to be kept, in convenient form, such additional data as is required to properly report the operations of the system. (b) The board shall render all reports required by state (Chapter 185, F.S.) or federal law to appropriate agencies, with a copy to the city commission, on or before the first day of ~i} October of each year showing the fiscal transactions of the retirement system for the year ended the preceding thirtieth day of September, the assets of the retirement system as of the preceding thirtieth day of September, and a copy of the most recent actuarial report. (Ord. No. 58-99-26, § 2, 7-10-00) Sec.2-305. Same--Composition. The board of trustees shall consist of five (5) trustees as follows: (1) Two (2), unless otherwise prohibited by law, shall be legal residents of the city, appointed by the city commission, who may serve as trustees of other city boards including the general employees retirement system provided herein; (2) Two (2) police officers to be elected by the active police officers who are members of the retirement system; (3) One (1) trustee to be selected by the other four (4) members of the board of trustees, and appointed as a ministerial act by the city commission. The elections provided for in subsection (2) of this section shall be held in accordance with such rules, as the board of trustees shall from time to time adopt. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-306. Same--Term of office; oath of office. The regular term of office of a member of the board of trustees shall be two (2) years for resident appointees, and two (2) years for elected representatives, unless they terminate employment, whereupon a new election will be held by the member of the plan to fill the unexpired term of their trustee representatives. The terra of office for the trustee selected by the other four (4) members of the board shall be two (2) years. Each trustee shall, before assuming the duties of trustees, qualify by taking an oath of office to be administered by the city clerk, whereupon a trustee's term of office shall begin. (Ord. No. 58-99-26, § 2, 7-10,00) Sec. 2-307. Same--Vacancy; filling of vacancy. (a) A vacancy shall occur on the board of trustees if any member resigns or any employee representative ceases to be employed by the city. (b) If a vacancy occurs on the board of trustees, the vacancy shall be filled within ninety (90) days for the unexpired term, in the same manner as the position was previously filled. (Ord. No. 58-99-26, § 2, 7-10-00) 23 Sec. 2-308. Same--Meetings; quorum; voting; compensation. The board of trustees shall hold meetings regularly, at least one (1) in each calendar quarter, and shall designate the time and place of each meeting. All meetings of the board shall be open to the public. Notice of such meetings shall be posted on employee bulletin boards so that all members will be aware of the meeting. The board shall adopt its own rules of procedure and shall keep a record of its proceedings. Three (3) trustees shall constitute a quorum at any meeting of the board, and at least three (3) concurring votes shall be necessary for a decision by the board. Each trustee shall be entitled to one (1) vote on each question before the board. Trustees shall serve without compensation for their services as trustees, but shall be entitled to their expenses actually and necessarily incurred in attending meetings of the board and in performing required duties as trustees in accordance with Florida Law. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-309. Officers and employed services. The officers and employed services of the retirement system shall be as follows: (1) Chairperson: The board shall annually elect a chairperson from its members. (2) Secretary: The board shall annually elect a secretary of the board from its members, who shall sign the minutes of each meeting and shall perform such duties as required in Chapter 185 of the Florida Statutes. (3) Legal advisor: The board is empowered to employ independent legal counsel. (4) Actuary: The board is empowered to employ an independent actuary who shall be the technical advisor to the board regarding the operation of the retirement system on an actuarial basis, and who shall perform such services as are required in connection therewith. The term actuary as used in this division . shall mean an "enrolled actuary" who is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974 and who is a member of the Society of Actuaries of the American Academy of Actuaries. A partnership or corporation may be appointed actuary if the duties of the actuary are performed by or under the direct supervision of an enrolled actuary and the enrolled actuary signs and is responsible for all final documents submitted by the partnership or corporation. (5) Administrative manager: The board is empowered to employ or contract for the services of an individual, firm, or corporation; to be known as the "administrative manager", who shall, under the direction of the board or any appropriate committee thereof, be ministerially responsible to: (a) Administer the office or offices of the retirement system and of the board; (b) Coordinate and administer the accounting, bookkeeping, and clerical services; (c) Provide for the coordination of actuarial services furnished by the actuary; (d) Prepare (in cQOperation or appropriate with the consulting actuary or other advisors) reports and other documents to be prepared, filed or disseminated by or on behalf of the retirement system in accordance with law; (e) Perform such other duties and furnish such other services as maybe assigned, delegated, or directed or as may be contracted by or on behalf of the board. (6) Other services: The board is authorized and empowered to employ such professional, medical, technical, or other advisors as are required for the proper administration of the retirement system. These services shall be obtained. and the compensation for these services shall be determined in accordance with procedures established by the board in accordance with Chapter 185 of the Florida Statutes. 24 (Ord. No. 58-99-26, § 2, 7-10-00) Sec.2-310. Membership. (a) All persons who are city police officers, and all persons who become city police officers, shall be members of the retirement system, except as provided in subsection (b) of this section. (b) The membership of the retirement system shall not include: (1) Any police officer who is employed in a position normally requiring less than one thousand (1,000) hours of work per annum; (2) The chief of the police department may opt not to become a member of the retirement system. Such option shall be made within sixty (60) days of appointment as police chief and shall be irrevocable; (3) Police officer positions which are compensated on a basis not subject to the withholding of federal income taxes or FICA taxes by the city; (4) Temporary police officers; (5) Elected officials of the city. (c) An individual shall cease to be a member upon retirement, entry into DROP, termination of employment by the city, or upon ceasing to be employed in a position regularly requiring one thousand (1,000) or more hours or work in a year, or upon becoming employed in an excluded position. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.1. Credited service. Service rendered by a member of the retirement system shall be credited to the member's individual credited service account in accordance with rules the board of trustees shall from time to time prescribe and in accordance with the applicable provisions of Chapters 185, Florida Statutes. In no case shall more than one (1) year of credited service be credited on account of all service rendered by a member in any one (1) period of twelve (12) consecutive calendar months. Service shall be credited to the nearest one- twelfth (1/12) of a year. Service shall be credited for the total number of years, and fractional parts of years, of service of the member. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.2. Loss of credited service. A retirement system member's credited service shall be forfeited and no longer in force if the member terminates city employment with less than five (5) years of credited service. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.3. Reinstatement of credited service. A member's forfeited credited service shall be restored to his/her individual service account if re- employment by the city and membership in the retirement system occurs within five (5) years from and after the date of separation from city employment that caused the forfeiture, provided that the member repays to the retirement system the contributions refunded under section 2-310.25(c) hereof, plus interest at the actuarially assumed rate, in accordance with terms established by the board of trustees. (Ord. No. 58-99-26, § 2, 7-10-00) 25 Sec. 2-310.4. Military service credit. (a) A member of the retirement system who leaves or left city employment voluntarily or non- voluntarily to enter any armed service of the United States during time of war, period of compulsory ""` military service, or period of national emergency recognized by the city commission shall have required periods of active duty credited as city service subject to the following conditions: (1) The member is re-employed by the city as provided in the Uniformed Services Employment and Reemployment Rights Act (USERRA) after the date of termination of such active duty;-_ (2) In no case shall more than the years of service provided for in USERRA or within FS 185 be credited on account of all military service. (3) Notwithstanding any provision of this article to the contrary, contributions, benefits, and service credit with respect to qualified military service will be provided in accordance with USERRA, FS 185, and section 414(u) of the Internal Revenue Code. (b) The board of trustees shall determine the amount of service to be credited a member under the provisions of this section and USERRA. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.5. Voluntary retirement conditions; employment after retirement. (a) A member of the retirement system may retire upon satisfaction of each of the following requirements: (1) The member files written application for retirement with the board of trustees setting '^ forth the date retirement is to be effective. (2) The member terminates all his/her city employment normally requiring one thousand (1,000) hours of work per annum on or before the date retirement is to be effective. (3) The member has met the age and service requirements for retirement specified in subsection (b). Upon retirement, a member shall be paid a pension computed according to the applicable subsections of section 2-310.10 or section 2-310.11. (b) The age and service requirements for voluntary retirement are: (1) Normal retirement: the member has attained the age of fifty (50) or older and has twenty (20) years or more of credited service in force; or the member has obtained the age of fift -five (55) years and has ten (10) or more years of credited service in force• or the member at any age has twenty-five (25) years of credited service in force; or the member has attained the age of sixty (60) years, and has five (5) years of credited service in force. (2) Early retirement: the member has attained the age of fifty (501 or older and has ten (10) of more years of credited service in force, shall be eligible for an early retirement (c) Employment after retirement: ~*. (1) Any person who has retired as a member of this retirement system maybe reemployed by the city in a sworn Police Officer position normally requiring less than one thousand (1000) hours 26 of work per annum or in a position not covered by this pension plan and receive retirement benefits from his/her previous employment and compensation from his/her reemployment. (2) Any person who has retired as a member of this retirement system and is subsequently "' reemployed by the city in any position normally requiring one thousand (1000) hours or more of work per annum in a position covered by this pension plan shall have his/her pension benefit suspended during the period of such reemployment and shall receive additional credited service from his/her reemployment. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.6. Normal retirement date and payment date. (a) The normal retirement date of each member shall be the first day of the month following the effective retirement of the member as indicated in the member's retirement application and as approved by the board of trustees. .(b) The early retirement date of each member shall be the first day of the month following the effective retirement of the member as indicated in the member's retirement application and as approved by the boazd of trustees. (bc) The monthly retirement income payable in the event of normal or early retirement shall be payable on the first day of each month (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.7. Deferred retirement upon separation from employment (vesting). (a) A member of the retirement system who terminates city employment prior to satisfying the requirements for voluntary retirement under section 2-310.5 for a reason other than retirement or death, who has not received a refund of his/her member contributions, and who has the applicable period of credited service specified in subsection (b) shall remain a member and be entitled to be paid a pension upon attaining the age and service requirements for voluntary retirement, as set forth in section 2-310.5. Upon attaining the age and service requirement for voluntary retirement, the member shall be paid a pension computed according to the applicable subsections of section 2-310.510 as those subsections were in force at the time a member left city employment. Such benefit shall be paid as a standard benefit form (ten (10) year certain and life thereafter) as provided in section 2-310 11 (b) The credited service requirement for separation from city employment with entitlement to deferred retirement is five (5) years. Provided, that any member who attained five (5 or more years of service with the city and elected to leave his or her accrued contributions in the plan shall be entitled to a benefit under the provisions as set out in section 2-310.7(a) upon attaining normal retirement age (c) A member of the retirement system who terminates city employment prior to satisfying the five (5) year requirement for deferred retirement under section 2-310.5 is entitled to a full refund of his/her contributions, plus interest as determined by the board of trustees. (Ord. No. 58-99-26, § 2, 7-10,00) Sec. 2-310.8. Disability retirement--General conditions for eligibility. (a) If a member, prior to his normal retirement date, becomes totally and permanently disabled as defined in subsection (b) by reason of any cause other than. a cause set out in subsection (c) the member shall be eligible for disability retirement. The minimum benefit for any member disabled in the line of duty shall be forty-two (42) percent of the final average salary, regardless of years of credited service. The minimum benefit for any member disabled not in the line of duty who has eight and one third (8 1/3) years of credited service shall be twenty-five (25) percent of the final average salary. 27 (1) A permanent disability which is the result of or caused by tuberculosis, hepatitis, meningococcal meningitis, hypertension, heart disease, or hardening of the arteries shall be presumed to have been incurred in the line of duty unless the contrary is shown by competent evidence or unless a physical examination of the member conducted upon initial hiring by the city revealed the existence of such condition at that time, and provided that a member claiming disability due to tuberculosis or meningococcal meningitis provides the affidavit required by F.S. section 112.181(2). (b) A member will be considered disabled if, in the opinion of the board of trustees, the member is totally and permanently prevented from rendering useful and efficient service as a city police officer and will be considered permanently disabled if, in the opinion of the board of trustees, he is likely to remain so disabled continuously and permanently from a cause other than as specified in subsection (c). (c) A member will not be entitled to receive any disability retirement income if disability is as a result of: (1) Excessive and habitual use by the employee of drugs, intoxicants, or narcotics; (2) Injury or disease sustained by the employee while willfully and illegally participating in fights, riots, or civil insurrections or while committing a crime; (3) Injury or disease sustained by the employee while serving in any armed forces; or (4) Injury or disease sustained by the employee after his/her employment has terminated. (5) Injury or disease sustained by the police officer while working for anyone other than the city and arising out of such employment. (d) No member shall be permitted to retire under the provisions of this section until he/she is examined by a duly qualified physician, surgeon, or other medical or psychological professional to be selected by the board of trustees for that purpose, and is found to be disabled in the degree and in the manner specified in this section. Any member retiring under this section may be examined periodically by a duly qualified physician, surgeon, or other medical or psychological professionals or board of physicians, surgeons, and other medical or psychological professionals to be selected by the board of trustees for that purpose, to determine if such disability has ceased to exist. If a member refuses to submit to such an examination, the member's disability pension shall be suspended until such time as the member submits to the examination. (e) The benefits payable to a member who retires from the service of the city with a total and permanent disability as a direct result of a disability commencing prior to his/her normal retirement date, is the greater of the monthly income computed according to the applicable subsections of section 2- 310.10 or the minimums established in section 2-310.8(x). Provided, that such benefits shall be paid in the standard form, (ten 101 year certain and life thereafter (f) The monthly retirement income as computed in Section 2-310.10 to which a member is entitled in the event of his/her disability retirement shall be payable monthly after the board of trustees determine such entitlement retroactive to the date of application or the last day on payroll, whichever is later. If the member recovers from the disability prior to his normal retirement date, the last payment will be the payment due next preceding the date of such recovery. If the member dies without recovering from his disability or attains his/her normal retirement date while still disabled, the last payment will be the payment due next preceding his/her death. (g) If the board of trustees finds that a member who is receiving a disability retirement income is, at any time prior to his normal retirement date, no longer disabled, as provided herein, the board of trustees shall direct that the disability retirement income be discontinued. Recovery from disability as used herein 28 means the ability of the member to render useful and efficient service as a police officer employee of the city, regardless of whether the member is re-employed by the city. (h) If the member recovers from disability and reenters the service of the city as a police officer employee, his/her service will be deemed to have been continuous, but the period beginning with the first month for which he/she received disability retirement income payment and ending with the date he/she reentered the city service will not be considered as credited service for the purpose of the system. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.9. Same--Continuation subject to re-examination; return to employment. (a) The board of trustees may require a disability retirant to undergo periodic medical or psychological examination if the disability retirant has not attained ug~si~c-t~-({~j his or her normal retirement eli ibility date. (b) If a disability retirant refuses to submit to a medical or psychological examination, payment of the disability pension may be suspended by the board of trustees until the retirant submits to the examination. (c) A disability retirant who has been restored to employment with the city as provided in subsection 2-2$8:310.8(h) shall again become a member of the retirement system. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.10. Calculation of pension benefit. (a) Normal retirement benefit. Subject to section 2-310.14, the amount of level straight life pension shall be equal to the retiring member's credited service multiplied by three (3) percent of the retiring member's final average compensation. (b) Early retirement benefit. The amount of an early retirement benefit shall be calculated as provided in subsection 2-310.10(a) above taking into account credited service to the date of actual retirement and fmal average compensation as of such date. Such amount of retirement income shall be actuarially reduced to take into account the participant's younger aye and earlier commencement of retirement income payments. In no event shall the early retirement reduction exceed three (3) percent for each year by which the member's age at retirement preceded the member's normal retirement age {bj ~ Cost-of-living adjustment. All retirement system members and beneficiaries who retired prior to January 1, 1997, shall receive aone-time cost-of-living adjustment, which shall be in an amount equal to three (3) percent of the benefits paid to such retired members and beneficiaries during the immediately preceding month. Effective October 2001, all retirement system members and beneficiaries who retired prior to January 1, 2001, shall receive aone-time cost-of-living adjustment, which shall be in an amount equal to five (5) percent of the benefits paid to such retired members and beneficiaries during the immediately preceding month. (Ord. No. 58-99-26, § 2, 7-10-00; Ord. No. 58-01-28, § 2, 10-8-01) Sec. 2-310.11. Optional forms of pension payment. A member of the retirement plan may elect to be paid under one (1) of the following optional forms of payment in lieu of the standard normal or early retirement benefit form of payment. The election must be made in writing and filed with the board of trustees prior to the date retirement is effective. Unless otherwise elected, the standard normal benefit form shall be "Option A" below Payment will be made under the standard normal retirement benefit form if a timely election of an optional form of payment is not made. The amount of pension under any option shall be the actuarial equivalent of the amount of pension under the standard normal retirement benefit form payment. 29 (1) Option A; Ten (10) years certain and retirant's life thereafter: Under Option A, a retirant shall be paid a pension for life, however in the event the retirant dies after retirement but before receiving retirement benefits for a period of ten (10) years, the same monthly benefit will be paid for the balance of such ten year period. Benefit payments shall be made to the retirant's designated beneficiary or estate for such period. (2) Option B; Modified joint survivor pension: Under Option B, a retirant shall be paid a reduced pension for life with the provision that upon the retirant's death, a benefit as designated by the retirant of either, one hundred (100), seventy-five (75), sixty-six and two thirds (66 2/3) or fifty (50) percent of the reduced pension benefit shall be continued throughout the future lifetime of and paid to such person as the retirant shall have specified by written designation duly executed and field with the board of trustees at the time of election of the optional form of payment. (3) Option C; Retirant's life only: Under Option C, a retirant shall be paid a pension for his or her life only. All monthly payments shall cease on the death of the retirant. Option ED; Social security coordinated pension: Under Option ~D, a retirant shall be paid an increased pension to attainment of the age when the retirant is eligible to receive regular social security retirement benefits, and a reduced pension thereafter. The increased pension paid to attainment of regular social security retirement age shall approximate the sum of the reduced pension payable thereafter plus the retirant's estimated social security primary insurance amount. (~5) Other benefit form. Any other actuarially equivalent form of benefit requested by a member and approved, in their sole discretion, by the board of trustees. (Ord. No. 58-99-26, § 2, 7-10-00) f 6) ADeferred-Retirement Option Program (DROP) shall be established and administered b_y the Board of Trustees of the City of Atlantic Beach Police Officers' Retirement System Such DROP shall be aself-directed program. A Police Officer Employee may enter the DROP as set forth herein. (, Eligibility. A participant of the City of Atlantic Beach Police Officers' Retirement System may enter into the DROP on the first day of the month following the attainment of age and service retirement requirements provided in the City of Atlantic Beach Code section 2-310 5(b) Participants who attained eligibility prior to the enactment of the DROP shall be afforded the option of participating immediately. (b) Written Election. A participant electing to participate in the DROP must complete and execute the proper forms, which shall be supplied by the Board of Trustees Election into the DROP is irrevocable once a participant enters the DROP. (c) Limitation/Disqualification for Other Benefits. A participant mawparticipate in the DROP only once. After commencement of participation in the DROP, the employee shall no longer earn or accrue additional vesting credits toward retirement benefits and shall not be eligible for disabili or pre-retirement death benefits in the City of Atlantic Beach Police Officers' Retirement System 30 (d) Cessation or Reduction of Contributions. Upon the effective date of a participant's commencement of participation in the DROP the participant's contributions to the City of Atlantic Beach Police Officers' Retirement S sy tem "` shall be discontinued. (e) Benefit Calculation. For all City of Atlantic Beach Police Officers' Retirement S s~purposes the service and vesting credits of a participant participating in the DROP shall remain as they existed on the effective date of commencement of participation in the DROP This shall include current and future Cost of Living Adjustments (COLA) as provided in the City of Atlantic Beach Code of Ordinances. The participant shall not earn or be credited with any additional vesting credits after beginning DROP participation Service thereafter shall not be recognized by the City of Atlantic Beach Police Officers' Retirement System or used for the calculation or determination of any benefits pavable by such Retirement System The final average compensation of the participant shall remain as it existed on the effective date of~commencement of participation in the DROP. Payment for unused Compensatory Time shall be made when the participant enters the DROP and shall be utilized in determining the final average compensation. Payment for accrued unused leave (vacation holiday etc ) shall be made when the participant actually terminates employment with the Citv Earnings thereafter shall not be recognized by the Retirement System or used for the calculation or determination of any benefits pavable by the Retirement System (fl Payments to DROP Account. The monthly retirement benefits including any future cost of living increases that would have been pavable had the participant elected to cease employment and receive a normal retirement benefit shall be deposited into the "" participant's DROP account. DROP Account Earnings. Earnings of each DROP account shall be in accordance with the self-directed options selected by the participant and shall continue for up to sixty (60) months at which time all deposits to the participant's account shall cease. Neither the City the Retirement System nor the system's Board of Trustees shall have any responsibility or liability for any of the self-directed options selected by the participant. (h) Maximum- Participation. A participant may participate in the DROP for a maximum of sixty (60) months At the conclusion of the sixty (60) months the participant's DROP account deposits shall cease The participant may terminate DROP participation by terminating from covered city employment on a date prior to sixty (60) months from the date the participant entered the DROP. A participant that elects to participate in the DROP_ma_y participate for a maximum of six X60) months. At the conclusion of the maximum time period theparticipant's covered city employment must terminate pursuant to the resignation submitted by the partici ant as part of the DROP application. The articipant may terminate DROP participation by terminating from covered city e_mplo_yment on a date prior to sixty (601 months from the date the participant entered the DROP. ~i) Ex ep nses• 31 All administrative fees charged for the administration and operation of the participant's DROP account shall be in accordance with the self-directed options selected by the participant. """ (j) Payout. (i) Upon the termination of a participant's covered Citv em~loyment (for any reason whether by retirement, resignation discharge or death) the retirement benefits pale to the participant or to the participant's designated beneficiary shall be paid to the participant, the participant's designated beneficiary or theparticipant's estate and shall no longer be deposited into the participant's DROP account (ii) Within thirty days after the end of any calendar quarter following the termination of a participant's employment. the balance in the participant's DROP account shall be payable in accordance with the self-directed options selected by the participaIIt Regardless of the option selected by the participant, the Board of Trustees has the right to accelerate payments in order to comply with Section 401(A)(91 of the Internal Revenue Code and the right to defer payments to comply with Section 415 of the Internal Revenue Code. (k) Death. If a DROP participant dies before the account balance is paid out in full the participant's designated beneficiary shall have the same rights as the participant to elect and receive the pay-out options set forth in paragraph j above. DROP payments to a beneficiary shall be in addition to any retirement death benefit payable to the participant Participants who are or have been DROP participants are not eligible for pre-retirement death or disability ~"""~ benefits. (1) Forms. The forms and notices for use in administering the DROP shall be approved by the Board of trustees. (m) Amendments. The City Commission may amend the DROP at any time Such amendments shall be consistent with the provisions covering deferred retirement option plans set forth in any applicable collective bargaining agreement and shall be binding upon all future DROP participants and upon all DROP participant's who have balances in their accounts Such amendments may increase the expense, decrease the account earnings or limit or restrict the payout options. Sec. 2-310.12. Death while in city employment; elective survivor pension. (a) Each member may, on a form provided for that purpose, signed and filed with the board of trustees, designate a beneficiary (or beneficiaries) to receive the benefit, if any, which may be payable in the event of his/her death, and each designation may be revoked by such member by signing and filing with the board of trustees a new designation of beneficiary form. (b) Upon the death of a member who has a valid designation-of-beneficiary in force, the beneficiary, if living, shall be paid a pension benefit computed according to section 2-310.10 in the same manner in all respects as if the member had elected Option B at the one hundred (100) percent level provided in Section 2-310.11 and retired the day preceding his/her death, notwithstanding that the member may not have 32 satisfied the conditions for retirement. Provided, that if the member had at least five (SZyears of credited service at the time of death, his or her beneficiary shall be entitled to all benefits otherwise savable to the member at early or normal retirement aQe paid in the standard benefit form (ten 102year certain and life thereafter . Upon a member's retirement, entry into DROP, resignation, or termination as a city employee, eligibility for the death benefit payable under section 2-310.10 will automatically terminate. (c) If a member failed to name a beneficiary in the manner prescribed in subsection (a) above, or if the beneficiary (or beneficiaries) named by a deceased member predeceases the member, the death benefit, if any, which maybe payable under the plan with respect to such deceased member, shall be paid by the board of trustees to the estate of such member, provided that in any of such cases the board of trustees, in its discretion, may direct that the commuted value of the remaining monthly income payments be paid in a lump sum. Any payment made to any person pursuant to this subsection shall operate as a complete discharge of all obligations under the plan with regard to such deceased member and shall not be subject to a review by anyone, but shall be final, binding, and conclusive on all persons ever interested hereunder. Notwithstanding any other provision of law to the contrary, the surviving spouse of any member killed in the line of duty shall not lose survivor retirement benefits if the spouse remarries. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.13. Alternate death while in city employment; pension to spouse and/or children. (a) The applicable benefits provided in subsections (b) and (c) of this subsection or, if the member designated the member's spouse or children, as set forth below, the benefits provided in section 2-310.12, whichever are greater, shall be paid if a member of the retirement system has five (5) or more years of credited service and dies while in the employ of the city. The provisions of this section shall not apply in the case of death of a member who has a valid designation of beneficiary, other than the member's spouse or children as set forth below, in force pursuant to section 2-310.132. (b) The person to whom the deceased member was married at the time of death shall be paid a pension equal to seventy-five (75) percent of the amount of Option ~C-Retirant's life only pension computed according to the applicable subsection of section 2-310.11, based on the deceased member's final average compensation and credited service. A surviving spouse's pension shall terminate upon death. (c) The deceased member's unmarried children under the age of nineteen (19) years, or twenty-three (23) years if enrolled full-time as a student in an educational institution, shall each be paid an equal share of a retirant's life only pension benefit computed according to the applicable subsection of section 2- 310.1 1, based on the deceased member's final average compensation and credited service. The percent shall be zero (0) percent during periods a pension is being paid in accordance with the provisions of subsection (b); fifty (50) percent during periods a pension is not being paid in accordance with the provisions of subsection (b). A surviving child's pension shall terminate upon attainment of age nineteen (19) years or, if over nineteen (19) years but less than twenty-three (23) years, upon no longer being enrolled as a full-time student in an educational institution, marriage, or death, and the pension of each remaining eligible child shall be recomputed. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.14. Maximum amount of pension. (a) The normal retirement pension payable to a member of the retirement plan who has not previously participated in such system, on or after January 1, 1980, shall not exceed one hundred (100) percent of his/her final average compensation. However, nothing contained in this section. shall apply to supplemental retirement benefits or to pension increases attributable to cost-of-living increases or adjustments. 33 (b) No member of the system covered by this article who is not now a member of such system shall be allowed to receive a retirement pension which is, in part or in whole, based upon any service with respect to which the member is already receiving, or will receive in the future, a retirement pension from ~"^ another retirement system or plan; provided that this restriction does not apply to social security benefits ~` or federal benefits under Chapter 67, Title 10, U.S. Code. (c) In no event may a member's annual benefit exceed the lesser of (1) Any limits (adjusted for cost of living) in accordance with section 415(d) of the Internal Revenue Code, but only for the year in which such adjustment is effective); or (2) Notwithstanding the provisions of paragraph (a) and (b) above, the annual benefit payable to a member having at least fifteen (15) years of service shall not be less than the annually adjusted amount provided in the provisions of IRC Section 415(d). (3) Compensation in excess of limitations set forth in Section 401(a)(17) of the Internal Revenue Code shall be disregarded. The limitation on compensation for an "eligible employee" shall not be less than the amount, which was. allowed to be taken into account hereunder as in effect on July 1, 1993. "Eligible employee" is an individual who was a member before the first plan year beginning after December 31, 1995. (4) If the member has less than ten (10) years of service with the employer (as defined in Section 415(b)(5) of the Internal Revenue Code and as modified by Section 415(b)(6)(D) of the Internal Revenue Code), the applicable limitation in subsection (1) or subsection (2) of this subsection shall be reduced by multiplying such limitation by a fraction, not to exceed one (1). The numerator of such fraction shall be the number of years, or part thereof, of service with the employer; the denominator shall be ten (10) years. For purposes of this subsection, annual benefit means a benefit payable annually in the form of a straight-line annuity with no ancillary or incidental benefits and with no member or rollover contributions. To the extent that ancillary benefits are provided, the limits set forth in subsections (1) and (2) of this subsection will be reduced actuarially, using an interest rate assumption equal to the greater of five (5) percent or the interest rate used in the most recent annual actuarial valuation, to reflect such ancillary benefits. If distribution of retirement benefits begins before age sixty-two (62), the dollar limitation as described in subsection (1) of this subsection shall be reduced actuarially using an interest rate assumption equal to the greater of five (5) percent or the interest rate used in the most recent annual actuarial valuation; however, retirement benefits shall not be reduced below seventy-five thousand dollars ($75,000.00) if payment of benefits begins at or after age fifty-five (55). If retirement benefits begin after age sixty-five (65), the dollar limitation of subsection (1) of this subsection shall be increased actuarially using an interest assumption equal to the lesser of five (5) percent or the interest rate used in the most recent annual actuarial valuation. For purposes of this subsection, average annual compensation for a member's three (3) highest paid consecutive years means the member's greatest aggregate compensation during the period of three (3) consecutive years in which the individual was an active member of the plan. The special maximum retirement income limitation applicable to police officers at the normal retirement date shall be as set forth in Section 415(g) and (h) of the Internal Revenue Code of 1986 and amendments thereto and such amount shall be adjusted in accordance with regulations promulgated by the secretary of the treasury or his/her delegate. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.15. Subrogation rights. If a member of the retirement system, retirant, or beneficiary becomes entitled to a pension as the result of an accident or injury caused by the act of a third party, the retirement system shall be subrogated to the 34 rights of such member, retirant or beneficiary against such third party to the extent of pensions which the retirement system pays or becomes liable to pay on account of such accident or injury. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.16. City contribution. (a) The plan shall be funded by contributions from member contributions, as provided in section 2- 310.27, state funding provided for in F.S. § 185.08, contributions from the city, and other income sources as authorized by law. (b) State funding shall be provided from premium taxes collected and disbursed pursuant to F.S. § 185.08, which moneys shall be deposited in the fund within five (5) calendar days of receipt be the city with the understanding that these premium tax revenues shall be deposited into and become an integral part of this fund and may not be used for any other purpose. (c) City contributions shall be made to the plan, on at least a quarterly basis, in an amount which, together with the member contributions provided for in section 2-310.27 and the state premium taxes funding provided for in subsection (b) and other income sources as authorized by law, sufficient to meet the normal cost of the plan and to fund the actuarial deficiency over a period of not more than thirty (30) years, as determined by the Florida Statutes required a~tal-actuarial valuation. Such contributions shall be computed as level percents of member payroll in accordance with generally accepted actuarial principles on the basis of such rates of interest and tables of experience as the board of trustees shall from time to time adopt. The board shall annually certify to the city the contributions determined according to this section, and the city shall appropriate and pay to the retirement system, the contributions so certified. (d) All benefits and expenses shall be paid in accordance with the provisions of this pension plan and consistent with Florida Statutes and the Internal Revenue Code. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. Z-310.17. Investment of retirement system assets. The board of trustees shall be the trustee of the monies and assets of the retirement system. The board shall have full power and authority, in their sole discretion, to invest and reinvest such funds as are not necessary for current expenditures or liquid reserves, as they may from time to time determine. The trustees may sell, exchange or otherwise dispose of such investments at any time. The trustees shall have the authority, in respect to any stocks, bonds, or.other property, real or personal, held by them as trustees, to exercise all such rights, powers and privileges as might be lawfully exercised by any person owning similar stocks, bonds, or other property in his own right. The trustees are authorized to invest in those stocks, bonds, and other securities permitted by the investment policies or guidelines adopted by the trustees in compliance with all requirements and limitations of Chapter 185, of the Florida Statutes. (a) Delegation and allocation of investment functions. (1) The trustees shall have the power and authority to appoint one (1) or more investment managers who shall be responsible for the management, acquisition, disposition, investing, and reinvesting of such of the assets of the trust fund as the trustees shall specify. Any such appointment may be terminated by the trustees upon written notice. The fees of such investment manager shall be paid out of the trust fund. The trustees shall require that the investment manager acknowledge in writing that it is a named fiduciary with respect to the plan. (2) In connection with any allocation or delegation of investment functions under this section, the trustees shall, from time to time, adopt appropriate investment policies or guidelines that comply with all requirements and limitations of Chapter 185 of the Florida Statutes. 35 (Ord. No. 58-99-26, § 2, 7-10-00) Sec.2-310.18. Ezpenses. The expenses of administering the retirement system, including the premiums for fiduciary liability and waiver of recourse insurance covering the board of trustees and the retirement system, shall be paid by the Plan ei~: (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.19. Method of making payments. All payments under this division shall be made according to the provisions of the city charter and city ordinances governing the disbursement of city monies. No payment shall be made that has not been authorized by the board of trustees. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.20. Assignments prohibited. (a) Generally. The right of a person to a pension, disability, death, or survivor benefit, and any other right accrued or accruing to any person under the provisions of this division and any monies in assets belonging to the retirement system, shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency law, or any other process of law whatsoever, and shall be unassignable except as is specifically provided in this division. If a member is covered under a group insurance or prepayment plan participated in by the city, and should the member or his/her beneficiary be permitted to and elect to continue the coverage as a retirant or beneficiary, the member or beneficiary may authorize the board of trustees to deduct required payments to continue coverage under the group insurance or prepayment plan. The city shall have the right of set off for any claim arising from embezzlement by or fraud of a member, retirant, or beneficiary in addition to any other remedies, including forfeiture of benefits, provided by law. (b) Direct transfers of eligible rollover distributions. This subsection applies to distributions made on or after October 1, 1993. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the board of trustees, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (1) "Eligible rollover distribution" means any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include any distribution that is one (1) of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary or for a specified period often (10) years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Internal Revenue Code; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (2) "Eligible retirement" means an individual retirement account described in Section 408(a) of the Internal Revenue Code, an individual retirement annuity described in Section 408(b) of the Internal Revenue Code, an annuity plan described in Section 403(a) of the Internal Revenue Code, or a qualified trust described in Section 401(a) of the Internal Revenue Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (Ord. No. 58-99-26, § 2, 7-10-00) Sec.2-310.21. Errors. 36 Should the board of trustees determine that any member, retirant, or beneficiary is being paid from the retirement system more or less than is correct, the board of trustees shall correct the error and, as far as practicable, shall adjust the payment in such manner that the actuarial equivalent of the benefit to which the member, retirant, or beneficiary was correctly entitled shall be paid. ''" (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.22. Protection against fraud; forfeiture. (a) Whoever willfully and knowingly makes, or causes to be made, or assists, conspires with, or urges another to make, or causes to be made, any false, fraudulent, or misleading oral or written statement, or withholds or conceals material information with the intent to obtain any benefit available under this retirement system shall be in violation of section 185.185 of the Florida Statutes. Any member convicted of such violation may, in the discretion of the board of trustees, be required to forfeit the right to receive any or all benefits he/she may be otherwise be entitled to under this retirement system. For purposes of this subsection, "conviction" shall mean a determination of guilt that is the result of a plea or trial, regardless of whether adjudication is withheld. (b) Any member who is convicted as provided in F.S. Section 112.3173 of a specified offense committed prior to retirement, or whose employment is terminated by reason of an admitted commission, aid, or abatement of a specified offense, shall forfeit all rights and benefits under this pension plan, except for return of accumulated contributions as of his/her date of termination. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.23. Response to claims and inquiries. All inquiries shall be answered promptly. The final decision for approval of benefits shall be made by the board of trustees. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.24. Denial of benefits. If any claim for benefits is denied, suspended or terminated, in whole or in part, then the claimant shall be furnished with a notice of denial, suspension, or termination no later than thirty (30) days after the final decision has been made. The notice shall be provided in writing, by certified mail, and shall set forth: (1) The specific reasons for the denial, suspension, or termination of benefits; (2) The specific references to the pertinent provisions of the pension plan upon which the action is based and a copy of the pension plan provisions shall be furnished with this notice; (3) A description of any additional material or information necessary for the claimant to perfect the claim, along with an explanation of why such material or information is necessary; and (4) An explanation of the claims review procedure. (Ord. No. 58-99-26, § 2, 7-1000) Sec. 2-310.25. Claim review procedure. (a) Requests for review. If a claim for benefits is denied, suspended or terminated, in whole or in part, then the claimant may appeal to the board of trustees for a full and fair review. In order to file an appeal, a written notice of appeal must be submitted within sixty (60) days after the notice of denial, suspension, or termination is received by the claimant (or such later time as the board of trustees deems reasonable). The notice of appeal shall briefly describe the grounds upon which the appeal is based on shall be signed by the claimant. The claimant shall be allowed to review all pertinent documents during 37 normal business hours, and shall be permitted to submit comments and a statement of issues for consideration by the board of trustees. (b) Representation. Aclaimant may designate an attorney or any other duly authorized person to act as his or her representative at any stage of the claims review procedure. Any rights provided to the claimant during the claims review procedure shall automatically extend to the representative designated by the claimant. A designation of representative shall be signed by the claimant and the representative, and shall be submitted in writing. (c) Claims review board. The board of trustees shall rule on all appeals brought under this section. A decision to grant or deny an appeal shall be based solely on the record before the board of trustees, unless the board of trustees determines, in its sole discretion, that a hearing is necessary for the proper resolution of the appeal. The board of trustees shall decide, by majority vote, to grant or deny an appeal. The final decision shall be made by the board of trustees, in writing, and shall be made no later than sixty (60) days after receipt of the notice of appeal, unless special circumstances (such as the need for a hearing) require an extension of time. In no event, however, should the decision of the board of trustees be made later than one hundred twenty (120) days after receipt of the notice of appeal. If an appeal is denied, in whole or in part, then the decision shall set forth the specific reasons for the action, with specific references to those pension plan provisions upon which the decision is based. The claimant shall be promptly provided with a copy of this decision. The decision of the board of trustees shall be final and binding. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.26. Exhaustion of claims review procedure. No action in law or in equity shall be brought to contest a denial, suspension, or termination of benefits until the claimant has complied with the procedures provided in section 2-310.25, unless the board of trustees fails to render a decision as provided in 2-~}8{ej310.27 c . In no case, however, shall any action be brought unless instituted within one (1) year from the time the claimant received the notice. of denial, suspension or termination provided in section 2-310.24. (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.27. Member contributions. (a) Member contributions for benefit group police bargaining unit members covered by the current collective bargaining unit collective bargaining agreement shall be one (1) percent of salary and for other benefit group police members shall be four and eight hundred fifteen thousandths (4.815) percent of salary, which said contribution shall be deducted from the member's pay and paid over into the retirement system each pay period. (b) The City of Atlantic Beach shall assume and pay the member contributions set forth above in lieu of payroll deductions from members' earnings. No member shall have the option of choosing to receive the contributed amounts directly instead of having them paid by the city directly to the retirement system. All such contributions by the city shall be deemed and considered as part of the member's contributions and subject to all provisions of this plan pertaining to contributions of members. Such contributions shall additionally be considered as part of the member's compensation for purposes of determining fmal average compensation and other benefits hereunder and for determining the member's hourly wage rate for purposes of FICA contributions, worker's compensation, and overtime compensation. This city pick up of contributions is a result of a commensurate reduction of each member's pay and is intended to comply with Section 414(h)(2) of the Internal Revenue Code. (c) If an employee leaves the service of the city before accumulating aggregate time of five (5) years towards retirement and before being eligible to retire under the provisions of this article he/she shall be entitled to a refund of all of his/her contributions made to the city pension trust fund, plus any interest accumulated at a rate of interest determined annually by the board of trustees, less any disability benefits paid to him/her. Any such member may voluntarily leave his or her contributions in the fund for a period 38 of five (5) years after leaving the employ of the police department pending the possibility of his or her being rehired by the same department, without losing credit for the time he or she has participated actively as a police officer. If he or she is not reemployed as a police officer with the same department within five (5) years, his or her contributions shall be returned to him or her. (d) If an employee who has been in the service of the city for at least five (5) years and has contributed to the pension trust fund as provided, elects to leave his/her accrued contributions in the trust fund, such employee, upon attaining the age as required in section 2-310.5, may retire with the actuarial equivalent of the amount of such retirement income otherwise payable to him/her. (e) If a member who terminates employment elects a refund of contributions and: (1) Some or all of the refund is eligible for rollover treatment, as defined by the Internal Revenue Service; (2) Elects to have such eligible distribution paid directly to an eligible retirement plan or IItA, and (3) Specifies the eligible retirement plan or IRA to which such distribution is to be paid (in such form and at such time as the distributing plan administration may prescribe). The distribution will be made in the form of a direct trustee-to-trustee transfer to the specified eligible retirement plan: (Ord. No. 58-99-26, § 2, 7-10-00) Sec. 2-310.28. Benefit limitations and required distributions. (a) Benefits paid under this city police officer employees retirement system shall not exceed the limitations of Internal Revenue Code Section 415, the provisions of which are hereby incorporated by reference. (b) Notwithstanding any provisions in this section to the contrary, the distribution of benefits shall be in accordance with the following requirements and otherwise comply with Internal Revenue Code Section 401(a)(9) and the regulations thereunder, the provisions of which are incorporated herein by reference: (1) A member's benefit shall be distributed to him/her not later than April 1 of the calendar year following the later of the calendar year in which the member attains age seventy and one- half (70 1/2) or the calendar year in which the member retires. Alternatively,.. distributions to a member must begin no later than the applicable April 1, as determined under the preceding sentence, and must be made over the life of the member (or the life expectancies of the member and the member's designated beneficiary) in accordance with regulations. (2) Distributions to a member and his/her beneficiary shall only be made in accordance with the incidental death benefit requirements of [Internal Revenue] Code Section 401(a)(9)(G) and the regulations thereunder. (Ord. No. 58-99-26, § 2, 7-10-00) f"' . 39 ~~~~e 6r~cl~~ ~ ...,~aa~3e 40 Ordinance No. 58-04-29 PASSED by the City Commission on first reading on the 9th day of February 2004. DEFERRED by the City Commission at Public Hearing and second reading on the 23rd day of February 2004. PASSED by the City Commission at Public Hearing and final reading this 8th day of March 2004. ATTEST: ~~ Ma en King; City er Approved as to form and correctness: an Jen 'n ity Attorney LEGEND: Underlining is new language e~..;i.e+i.,.,.,,,.t, ; ,.ia i,,,,,..,,,,~e 41