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HomeMy WebLinkAboutResolutions - 1979.05.03 - 12413PE;t'SON;TEL COMMITTEE john McDoriald, *airman 8898 RESOLUTION NO. APRIL 5, 1979 RE : IMPLEMENTATION OF DEFERRED COMPENSATION PLAN BY: PERSONNEL COMMITTEE TO: THE OAKLAND COUNTY BOARD OF COMMISSIONERS MR. CHAIRMAN, LADIES AND GENTLEMEN: WHEREAS, a Deferred Compensation Plan will strengthen the County Personnel System by attracting and retaining competent employees; and WHEREAS, a Deferred Compensation Plan will allow County Employees a fringe benefit that will provide an income tax shelter and additional retirement security; and WHEREAS, a Deferred Compensation Plan may be estab- lished by the Board of Commissioners pursuant to Public Law 95-600 (Revenue Act of 1978); and WHEREAS, the start up costs to establish a Deferred Compensation Plan are minimal and after the first year of implementation, the plan will be self sustaining. NOW THEREFORE BE IT RESOLVED that pursuant to Public :Jaw 95-600 (Revenue Act of 1978), the attached Deferred Compensation Plan for Oakland County be and is hereby adopted. BE IT FURTHER RESOLVED that the sum of $9,960.00 be appropriated to cover the start up costs for implementing the Plan. The Personnel Commfttee, by Mr. John J. McDonald, Chairman, moves the adoption of the foregoing resolution. 10. SEVERABILITY. . A. If any provision of this plan, or its application to any person or circumstance, shall be deemed invalid by a court of competent jurisdiction, the remainder of this plan, or the application of the provisions to other persons or circumstance, shall not be affected. B. All resolutions of the Oaklad County Board of Commis- sioners, or any amendments thereto, which are in conflict herewith, are, to the extent of such conflict, hereby repealed. • .DEFERRED'COMPENSATION PLAN FOR OAKLAND COUNTY I. ESTABLISHMENT OF THE PLAN 1. NAME OF THE PLAN. This plan shall be known as the Oakland County Deferred Compensation Plan. 2. PURPOSE OF THE PLAN. • A. For Oakland County. To strengthen the Oakland County Personnel System and its ability to attract and retain competent employees through a deferred compensation plan. B. For the Employees. To permit the employees to partic- ipate in a deferred compensation plan, by entering into an agreement with Oakland County, wherein a portion of their salary, not yet earned, will be deferred for the purpose of providing an income tax shelter benefit and additional retirement security. 11. DEFINITIONS 1. "County" shall mean Oakland Coun 2. "Participant" or Participating EMployees" shall mean any employees of Oakland County who elect to participate in the Oakland County Deferred Compensation Plan. 3. 'Employee" shall mean an employee of Oakland County that has completed 6 months of employment. 4. "Board" shall be the Board of Trustees of the Oakland County Deferred Compensation Plan. 5. "Compensation" shall mean all salaries and wages paid to participants by Oakland County. 6. "Plan" shall mean the Oakland County Deferred Compensation plan as set forth herein and as may be amended from time to time. 7. "Deferred Compensation" shall mean the amount of compen- sation, not yet earned, which the participant and the County mutually agree shall be deferred in accordance with the terms and conditions of the plan. . • 8. *Participation Account Balance" is defined to equal the cumulative amounts of compensation an employee defers pursuant to his participation agreement plus any increases or decreases, that are realized from any investments or any administrative costs that may be determined by the board. 9. "Retirement" shall mean retirement from service with Oakland County in accordance with the County's retirement plan. 10. "Termination of Service" shall mean a participant terminating his employment relationship withithe County for reasons other than death, retirement, and leave of absence. III. ADMINISTRATION 1. ADMINISTRATOR. The plan shall be administered by the Oakland County Deferred Compensation Plan's Board of Trustees. A. The membership of the Oakland County Deferred Compen- sation Plan's Board of Trustees shall be: a. The County Director of Management and Budget b. The County Director of Prsonnel C. The County Civil Counsel! d. The County Treasurer e. The Chairman of the Couny Board of Commissioners. B. The Board shall serve withou compensation. C. The Board shall elect a Chaiiman and Vice Chairman at the first meeting of each caLendar year. The County Treasurer shall act as Secretary and Treasurer. 2. DUTIES AND RESPONSIBILITIES OF TliE BOARD IN THE ADMINISTRATION OF THE PLAN. The powers, duties and responsibpities of the Board, with respect to the administration of the plan, shall include but not be limited to the following: A. To determine and authorize payment of benefits specified under the plan. B. To make, amend and enforce all necessary rules and regu- lations for administration of the plan. C. To resolve any and all issues and problems as may arise in connection with the interpretation, construction and administration of the plan. J D. To invest the amounts. deferrid in accordance with Section IV hereof. E. To insure that the plan complies with all Federal, State, and local statutory and regu atory agency reporting requirements. F. To cause the preparation and filing of all required tax agency reports. G. To furnish an annual account to all participants of their respective participation account balances by the 15th day of the second month after each calendar year. H. To establish and maintain appropriate books and records for the plan. I. To prepare and furnish the County Board of Commissioners with an annual report regarding the status of the plan. J. To draft and disseminate information regarding the plan. K. The Board may enter into agreements to provide services for the administration of the plan. 3. BINDING ACTION. Any decision or action of the board con- cerning or in respect to any issue or problem arising out of or in connection with the construction, interpretation, administration and application of the plan, including any rules and regulations promulgated hereunder, shall lie within the absolute discretion of the Board and shall be final, conclusive, and binding u on all participants in the plan and any and all persons clat ming under, by or through them. I 4. COST. All costs of administratin of the plan will be paid by the Board out of the plan assets if possible. The method of defraying said cost shall be determined by the Board. The Board of Commissioners may appropriate necessary start up funds for the plan and necessary annual operating costs. IV. INVESTMENT OF DEFERRED COMPENSATION ASSETS 1. TYPES OF INVESTMENT. The Board may invest the deferred amounts of the plan and other assets in one or more of the following: A. In any contract offered by a life insurance company author- ized to do business in the State of Michigan. B. In an investment fund estabiished and maintained by any State chartered bank, National bank or trust company. C. In stocks, bonds, or 'Other ilLivestment deemed appropriate by the Board that confOrm'to:the laws governing the in- vestment of public funds or Public Employee Retirement funds in the State of Michigan. 2. OWNERSHIP OF INVESTMENTS. The County shall own, hold title to, and be beneficiary to all the investments purchas6d pursuant to provisions of this article and no participant shall have any interest in such investments. 3. EARNINGS ON INVESTMENTS. The Board shall annually set an interest rate for the ensuing ye!ir for credit to a partici- pants' participation account to e paid from the investment earnings. The Board may revise he interest rate during the ensuing year if it deems necessa y. V. OWNERSHIP OF DEFERRED COMPENSATION ASSETS Ownership of and title to all assetsi of the Oakland County Deferred Compensation Plan shall be frested in Oakland County until such time as a participant is entitled to receive bene- fits under the plan; no participant shall have any legal or equitable interest in any asset or assets of the plan. Further, the County shall establish separate accounts for plan funds. VI. PARTICIPATION IN THE PLAN 1. ELIGIBILITY. Employees of the County, who report their income for income tax return purposes, using the cash receipts and disbursements method of accounting and who enter into a participation agreement with the County to irrevocably elect to defer a portion of his or her compen- sation, are eligible to participate in the plan. 2. ENROLLMENT IN THE PLAN. An employee may become a partici- pant in the plan by executing a participation agreement anytime after six months of county service. Said partici- pation agreement shall only defer income, as of the calendar year that it becomes effective. 3. AMOUNT OF DEFERRED INCOME. A participant must agree, pursuant to the terms of the participation agreement to defer a minimum amount of not less than $20.00 per pay period. The maximum amount of 4eferred income shall not exceed the lesser of $7,500.00 çr 33-1/3% of participant's includable compensation in any alendar year. However, one or more of a participant's lastj three taxable years ending before attainment of normal ret.rement age, an increased deferred compensation limit of he lessor of $15,000.00 or previously "unused" eligible am unts may be used to increase the maximum. 4. MODIFICATION. A participant who executes a participation agreement to defer compensation, may modify such partici- pation agreement so as -to change the amount of deferred compensation upon 30 days written notice to the Board. A reduction of deferred compensation shall be to no less than $20.00 per pay period. 5. COMPENSATION TO BE DEFERRED. Compensation deferred under any participation agreement entered into with the County will not be considered to be current compensation and the participant shall have no present interest in the amount otherwise made available to said participant. 6. REVOCATION. A participant may, at anytime, revoke his participation agreement to defer compensation upon 30 days written notice to the board; notwithstanding the foregoing, however, said participant shall receive accrued benefits only insofar as authorized pursuant to Article VII, hereof. Revocations shall not be retroactive. 7. RE-ENTRY IN THE PLAN. A participant who has received bene- fits pursuant to the plan, or who has revoked a participa- tion agreement to defer compensation, may execute a new participation agreement to defer compensation not yet earned, but such agreement must be made at least 30 days prior to the beginning of the calendar year and can only be effective for the next calendar year. 8. PARTICIPATION IN THE COUNTY RETIREMENT PLAN. Participation in the plan shall have no effect, whatsoever, upon the retirement plan the County provides for its' employees. 9. LEAVE OF ABSENCE. If a participant is granted a compensated leave of absence, approved by the County, participation in the plan shall continue during such period of leave of absence. If a participant is granted an uncompensated leave of absence by the County, participation in the plan shall be temporarily suspended during such leave of absence. Partici- pation shall automatically be reinstated as of the date of the termination of said leave of absence. VII. PLAN BENEFITS 1. RETIREMENT BENEFITS. The County agrees to pay the partici- pants, the participant's participation account balance in one of the following forms, as selected by the participant at least 30 days prior to retirement. A. A lump sum payment. • -5- • B. A monthly fixed income to the participant for as long as the participantl.s participation account lasts. No monthly payments shall be less than $50.00. C. A yearly fixed income spread over 3 years in install- ments agreed to by the participant. D. Payments shall commence no later than 30 days from date of retirement except as may be determined in VII. 1. C. 2. DEATH BENEFIT PRIOR TO TERMINATION OF SERVICE. If a partic- ipant dies while in the employ of the County, the Board shall make a single lump sum death benefit payment of the partici- pant's participation account to the participant's designated beneficiary. Payment shall be made within 30 days of Notice of Death. 3. DEATH BENEFIT AFTER TERMINATION pF SERVICE. If a partici- pant dies after termination of gervice with the County and prior to the receipt of all guaranteed payments, the Board shall make a single lump sum payment of the remaining funds in the participant's participation account to the partici- pant's designated beneficiary. Payment shall be made within 30 days of Notice of Death. 4. TERMINATION OF SERVICE BENEFITS. The County agrees to pay the participant the participant's participation account balance in one of the following selections: A. A lump sum payment. B. A monthly fixed income for as long as the participant's participation account lasts but in no case more than 24 months. No monthly payment shall be less than $50.00. • C. A lump sum payment made within 12 months of termination of employment upon 30 days written notice. D. Payments shall commence no later than 45 days from date of selection except as may be determined in VII, 4.C. Selection of benefits under Termination of Service must be made in writing within 15 days of termination or a lump sum payment will automatically be made. 5. LIFE INSURANCE COMPANY BENEFITS. The Board may enter into an agreement that will provide for participating employees to apply deferred compensation towards the purchase of life insurance protection or an annuity plan. 6. WITHDRAWALS FROM THE PLAN. In the event of serious financial hardship, a participant may elect to apply to the Board to withdraw a specified amount from the plan. Approval of with- drawals by the Board shall be based upon rules and regulations consistently and uniformly applied. The amount which the Board may approve for withdrawal, may be only such amount as is required to satisfy the serious financial hardship specified in the participant's application for withdrawal of funds. Any amount so withdrawn by a participant shall be paid to said participant in a single lump sum payment. Serious financial hardships include, but are not limited to, unreimbursed major medical expenses related to or resulting from illness or accident to the participant and/or member of his or her immediate family, and/or various other unforeseen and unreimbursed expenses and ccjsts of a major and/or emer- gency nature and where refusal 10 allow the withdrawal would work a severe and serious financial hardship upon the partic- ipant. No withdrawals, hereunder, shall be allowed by the Board for foreseeable, normal, budgetable expenditures, including, by way of example, and not by way of limitation, down payment on a home, vacation expenses, down payment and/ or purchase of an automobile. VIII. MISCELLANEOUS PROVISIONS 1. AMENDMENT OF PLAN BY THE COUNTY BOARD OF COMMISSIONERS. The County Board of Commissioners may, from time to time, amend the provisions of this plan; provided, however, that in no event shall any amendment have the effect of reducing any benefits payable hereunder or otherwise affecting the rights of participants or their beneficiaries with respect to the receipt of benefit payments, to the extent of any compen- sation deferred as of the date of said amendment, as adjusted for investment gains or losses, as provided for in Article III. 2. TERMINATION OF THE PLAN BY THE COUNTY BOARD OF COMMISSIONERS. The County Board of Commissioners shall have the right to terminate this plan at anytime. In the event that the County Board of Commissioners should elect to terminate this plan, as of the effective date of termination, all participants shall be deemed to have withdrawn from the plan. In such event, each participant shall be entitled to receive and paid a single lump sum distribution of the balance standing to the participant's participation account. 3. ASSIGNABILITY. Participants hereunder shall not have the right and shall be absolutely prohibited from assigning any rights or benefits payable under the plan. 4. SPENDTHRIFT PROVISION. The rights of any participant or beneficiary to receive any payments under the plan may not be anticipated, alienated, disposed of or encumbered. In addition, any such rights shall not be subject to attachment, garnishment or other legal or equitable process or assigned or transferred in any bankruptcy or insolvency proceedings and shall be free from the control of the creditors of the participant, his or her spouse, and beneficiary. 5. NO GUARANTEES. The County neither guarantees to any partic- ipant hereunder: T A. Any tax benefits to be deri d by said participant by participating in this plan. However, the plan is drawn to conform to Public Law 95 -1600 (Revenue Act of 1978). 11.1 B. Any gain or losses to be ex erienced by participants with respect to the investm t of any deferred compen- sation assets hereunder. 6. EMPLOYMENT RELATIONSHIP. Notwithstanding any provision contained herein, no provision of this plan shall be deemed to constitute an employment agreement between participant ' and the County and this plan shall not be construed so as to create an obligation for the County to retain the partic- ipant in it's employment. 7. RULES AND REGULATIONS. Upon execution of the participation agreement, the participant shall be deemed to have consented to be bound by all rules and regulations which may be estab- lished from time to time, by the Board in connection with the administration of this plan, and by any amendment of this plan. 8. LAW GOVERNING. This plan shall be governed and construed in accordance with Federal and State Law. 9. INDEMNIFICATION OF BOARD. The Board in the administration of this plan and the investment of plan assets shall not be held liable to either the County or any participant with respect to any errors and omissions in the performance of their duties and obligations hereunder; nor shall they be held liable with respect to any losses which may be incurred in making any investment decision hereunder; nor for any other acts except those constituting gross and intentional malfeasance, misfeasance, or negligence. ki7 yp, FISCAL NOTE BY: FINANCE COMMITTEE, DENNIS MURPHY, CHAIRPERSON IN RE: IMPLEMENTATION OF DEFERRED COMPENSATION - MISCELLANEOUS RESOLUTION #8898 TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Mr. Chairperson, Ladies and Gentlemen: Pursuant to Rule XI-C of this Board, the Finance Committee has reviewed Miscellaneous Resolution #8898 and finds $9,960 to be necessary start-up costs for the Deferred Compensation Plan. Ongoing costs would come from the Plan's investment income and would not represent a cost to the County. However, the Board of Commissioners can, if it chooses, assume administrative costs. The Finance Committee finds $9,960 available from the Contingent Fund, said funds to be transferred to the Non-Departmental appropriation for Employees Deferred Compensation. FINANCE COMMITTEE Dennis Murphy, Chairperson ' #8898 May 3, 1979 Moved by McDonald supported by Gorsline the report be accepted and Resolution #8898 be adopted. AYES: Fortino, Gabler, Gorsline, Hobart, Kasper, Kelly, Lewand, McConnell, McDonald, Moffitt, Montante, Moore, Moxley, Murphy, Page, Patterson, Perinoff, Pernick, Peterson, Price, Roth, Wilcox, DiGlovanni, Doyon, Dunaskiss. (25) NAYS: Aaron. (1) A sufficient majority having voted therefor, the report was accepted and Resolution #8898 was adopted. STATE OF MICHIGAN) COUNTY OF OAKLAND) 1, Lynn D. Allen, Clerk of the County of Oakland and having a seal, do hereby certify that I have compared the annexed copy of Miscellaneous Resolution #8898 adopted by the Oakland County Board of Commissioners at their meeting held on May 3, 1979 with the original record thereof now remaining in my office, and that it is a true and correct transcript therefrom, and of the whole thereof. In Testimony Whereof, I have hereunto set my hand and affixed the seal of said County at Pontiac, Michigan 3rd May 79 this day of 19..„ Lynn D. Allen Clerk By Deputy Clerk