HomeMy WebLinkAboutResolutions - 1993.11.18 - 23407MISCELLANEOUS RESOLUTION #93265 November 18 /1993
BY: Personnel Committee/ Marilynn Gosling/ Chairperson
IN RE: OAKLAND COUNTY EMPLOYEES' RETIREMENT SYSTEM/INT7INAL REV —NIUE
CODE REQUIREL:F.NTS FOR QUALIFIED PLAN STATUS
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS, the Rules and Regulations Governing the Oakland County Employees'
Retirement System provide that:
Section 64. (a) The County intends the retirement system to be a qualified pension
plan under Section 401 of the Internal Revenue Code, as amended, or successor provisions
of the law, and that the trust be an exempt organization under Section 501 of the Internal
Revenue Code. The Retirement Commission may adopt, or recommend to the Board of
County Commissioners for adoption, such additional provisions to the retirement system as
are necessary to fulfill this intent, and
WHEREAS. the Retirement System has been operated as a defined benefit plan
pursuant to plan provisions and applicable collective bargaining agreements, and
WHEREAS, the Retirement System has always been administered as a qualified trust
and plan pursuant to applicable sections of the Internal Revenue Code, and
WHEREAS, the Internal Revenue Service as a condition to issuing qualified plan
determination letter has requested certain amendments to the plan,
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners amend the defined benefit plan of the Oakland County Employees'
Retirement System by adding the following plan provisions to existing sections of the plan:
Section 3(c) amended to include the following language in conformity with Internal
Revenue Code (IRC) section 401(a) (17)
"Compensation" means the salary or wages paid in money to an employee for
personal services rendered the County while a member of the retirement system.
Salary and wages shall include overtime pay: longevity pay; payments in consideration
of unused vacation and sick leave to the extent permitted under the members
collective bargaining agreement or the merit system rules.. Compensation shall not
include any remuneration or reimbursement not specifically stated to be included.
FOR YEARS BEGINNING AFTER DECEMBER 31, 1988, THE ANNUAL
COMPENSATION OF EACH PARTICIPANT TAKEN INTO ACCOUNT UNDER
THE PLAN FOR ANY YEAR SHALL NOT EXCEED $200,000, THIS
LIMITATION SHALL BE ADJUSTED BY THE SECRETARY AT THE SAME
TIME AND IN THE SAME MANNER 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 EFFECTED ON JANUARY 1, 1990. IF A PLAN DETERMINES
COMPENSATION ON A PERIOD OF TIME THAT CONTAINS FEWER THAN 12
CALENDAR MONTHS, THEN THE ANNUAL COMPENSATION LIMIT IS AN
AMOUNT EQUAL TO THE ANNUAL COMPENSATION LIMIT FOR THE
CALENDAR YEAR IN WHICH THE COMPENSATION PERIOD BEGINS
MULTIPLIED BY THE RATIO OBTAINED BY DIVIDING THE NUMBER OF
FULL MONTHS IN THE PERIOD BY 12.
IN DETERMINING THE COMPENSATION OF A PARTICIPANT FOR
PURPOSES OF THIS LIMITATION, THE RULES OF SECTION 414(Q) (6) OF THE
CODE SHALL APPLY, EXCEPT IN APPLYING SUCH RULES, THE TERM "FAMILY"
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SHALL INCLUDE ONLY THE SPOUSE OF THE PARTICIPANT AND ANY LINEAL
DESCENDANTS OF THE PARTICIPANT WHO HAVE NOT Al I AINED AGE 19
BEFORE THE CLOSE OF THE YEAR IF, AS A RESULT OF THE APPLICATION OF
SUCH RULES THE ADJUSTED $200,000 LIMITATION IS EXCEEDED, THEN
(EXCEPT FOR PURPOSES OF DETERMINING THE PORTION OF COMPENSATION
UP TO THE INTEGRATION LEVEL IF THIS PLAN PROVIDES FOR PERMITTED
DISPARITY), THE LIMITATION SHALL BE PRORATED AMONG THE AFFECTED
INDIVIDUALS IN PROPORTION TO EACH SUCH INDIVIDUAL'S COMPENSATION
AS DETERMINED UNDER THIS SECTION PRIOR TO THE APPLICATION OF THIS
LIMITATION.
IF COMPENSATION FOR ANY PRIOR PLAN YEAR IS TAKEN INTO
ACCOUNT IN DETERMINING AN EMPLOYEE'S CONTRIBUTIONS OR BENEFITS
FOR THE CURRENT YEAR, THE COMPENSATION FOR SUCH PRIOR YEAR IS
SUBJECT TO THE APPLICABLE ANNUAL COMPENSATION LIMIT IN EFFECT FOR
THAT PRIOR YEAR. FOR THIS PURPOSE, FOR YEARS BEGINNING BEFORE
JANUARY 1, 1990, THE APPLICABLE ANNUAL COMPENSATION LIMIT IS $200,000.
Section 23 amended to include the following language in conformity with Internal
Revenue Code (IRC) Section 401(a) (25)
A member may elect to have pension payments made under any one, and only
one, of the following forms of payment and name a survivor beneficiary. The election
and naming of survivor beneficiary shall be made on a form furnished by and filed with
the retirement system prior to the date the first pension payment is made. An election
of form of payment may not be changed on or after the date the first pension payment
is made. A named survivor beneficiary may not be changed on or after the date the
first pension payment is made if form of payment A, B or D is elected. A named
survivor beneficiary may be changed or may be more than one person if form of
payment SL or C is elected. A named survivor beneficiary must have an insurable
interest in the life of the member or vested former member when named.
Payment shall be made under form of payment SL if there is not a timely
election of another form of payment.
The amount of pension under forms of payment A, B, C, D or E shall have the
same actuarial present value, computed as of the effective date of the pension, as the
amount of pension under form of payment SL. ACTUARIAL ASSUMPTIONS USED
TO DETERMINE THE AMOUNT OR LEVEL OF ANY OPTIONAL BENEFIT FORMS
SHALL RESULT IN THE ACTUARIAL EQUIVALENT OF THE NORMAL RETIREMENT
BENEFIT PAYABLE UNDER THE PLAN.
No payments shall be made to a survivor beneficiary under form of payments A,
B, C or D if duty death benefits under Section 33 become payable on account of the
death of the retired member.
Form of Payment SL - Straight Life Pension. The retired member is paid a
pension for life under form of payment SL. All payments stop upon the death of the
retired member.
Form of Payment A - Life Payments with Full Continuation to Survivor
Beneficiary. The retired member is paid a reduced pension for life under form of
payment A. Upon the death of the retired member during the lifetime of the named
survivor beneficiary, the named survivor beneficiary is paid the full amount of reduced
pension until death.
Form of Payment B - Life Payments with One-Half Continuation to Survivor
Beneficiary. The retired member is paid a reduced pension for life under form of
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payment B. Upon the death of the retired member during the lifetime of the named
survivor beneficiary, the named survivor beneficiary is paid one-half the amount of
reduced pension until death.
Form of Payment C - Life Payments with Ten Years Certain. The retired
member is paid a reduced pension for life under form of payment C. Upon the death
of the retired member, if the retired member received fewer than 120 monthly pension
payments, the named survivor beneficiary is paid the full amount of reduced pension
for the remainder of 120 months. If the named survivor beneficiary has died before
the retired member, or dies before the 120 months have elapsed, the remaining
monthly payments shall be paid to the estate of the last alive of the retired member
and the named survivor beneficiary.
Form of Payment D - Life Payments with Continuation to Survivor Beneficiary
with Pop-up.
(1) Full Continuation - The retired member is paid a reduced pension for life
under form of payment D-1. Upon the death of the retired member during the lifetime
of the named survivor beneficiary, the named survivor beneficiary is paid the full
amount of reduced pension until death. Should the named survivor beneficiary die
before the retired member, the retired member's pension shall be recomputed (pop-up)
to a straight life pension (form of payment SL).
(2) One-Half Continuation - The retired member is paid a reduced pension for
life under form of payment D-2. Upon the death of the retired member during the
lifetime of the named survivor beneficiary, the named survivor beneficiary is paid one-
half the amount of reduced pension until death. Should the named survivor beneficiary
die before the retired member, the retired member's pension shall be recomputed
(pop-up) to a straight life pension (form of payment SL).
Form of Payment E - Life Payments with Social Security Equating. The retired
member is paid an increased pension until age 65 and a reduced pension for life
thereafter under form of payment E. The increased pension payable until age 65 shall
approximate the sum of the reduced pension payable after age 65 and the retiring
member's estimated age 65 Social Security primary insurance amount. Form of
payment E is available only to members who retire after attaining age 60 and before
attaining age 65. All payments stop upon the death of the retired member.
BE IT FURTHER RESOLVED that the Defined Benefit Plan of the Oakland County
Employees' Retirement System is hereby amended by adding the following new plan
provisions to Section 64 of the Plan and amend Section 64(b) to change the existing
language in conformity with Internal Revenue Code (IRC) Section 415
(a) The County intends the retirement system to be a qualified pension plan
under Section 401 of the Internal Revenue Code, as amended, or successor provisions
of law, and that the trust be an exempt organization under Section 501 of the Internal
Revenue Code. The Retirement Commission may adopt, or recommend to the Board
of County Commissioners for adoption, such additional provisions to the retirement
system as are necessary to fulfill this intent.
(b) Retirement benefits provided under this Resolution shall not exceed the
governmental plan limits set forth in Internal Revenue Code Section 415
AND THE REGULATIONS THEREUNDER.
(C) THE CORPUS OR INCOME OF THE TRUST MAY NOT BE DIVERTED TO
OR USED FOR OTHER THAN THE EXCLUSIVE BENEFIT OF THE PARTICIPANTS
OR THEIR BENEFICIARIES.
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(D) (1) ALL DISTRIBUTIONS REQUIRED UNDER THIS ARTICLE SHALL BE
DETERMINED AND MADE IN ACCORDANCE WITH THE PROPOSED
REGULATIONS UNDER SECTION 401(A) (9) OF THE CODE, INCLUDING THE
MINIMUM DISTRIBUTION INCIDENTAL BENEFIT REQUIREMENT OF SECTION
1401(A) (9)-2 OF THE PROPOSED REGULATIONS.
(D) (2) THE REQUIRED BEGINNING DATE OF DISTRIBUTIONS TO A
PARTICIPANT SHALL BE THE LATER OF APRIL 1 OF THE CALENDAR YEAR
FOLLOWING THE CALENDAR YEAR IN WHICH THE PARTICIPANT ATTAINS AGE
70 1/2 OR APRIL 1 OF THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR
IN WHICH THE EMPLOYEE RETIRES.
(E) IN THE EVENT OF TERMINATION OR PARTIAL TERMINATION OF THIS
PLAN, THE RIGHTS OF ALL AFFECTED EMPLOYEES TO BENEFITS ACCRUED TO
THE DATE OF SUCH TERMINATION OR PARTIAL TERMINATION (TO THE EXTENT
FUNDED AS OF SUCH DATE) SHALL BE NONFORFEITABLE.
BE IT FURTHER RESOLVED that the Defined Benefit Plan of the Oakland County
Employees' Retirement System is hereby amended by adding the following new Section 69:
THIS ARTICLE APPLIES TO DISTRIBUTIONS MADE ON OR AFTER
JANUARY 1, 1993, NOTWITHSTANDING ANY PROVISION OF THE PLAN TO THE
CONTRARY THAT WOULD OTHERWISE LIMIT A DISTRIBUTEE'S ELECTION
UNDER THIS ARTICLE, 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.
AS OF JANUARY 1, 1993 THE ONLY LUMP SUM PAYMENTS PERMITTED BY THE
PLAN ARE FOR NON-VESTED PARTICIPANTS WHO TERMINATE SERVICE.
DEFINITIONS
(1) ELIGIBLE ROLLOVER DISTRIBUTION: AN ELIGIBLE ROLLOVER
DISTRIBUTION IS 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 OF TEN YEARS OR MORE; ANY DISTRIBUTION TO THE EXTENT
SUCH DISTRIBUTION IS REQUIRED UNDER SECTION 401(A) (9) OF THE
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 PLAN: AN ELIGIBLE RETIREMENT PLAN IS
AN INDIVIDUAL RETIREMENT ACCOUNT DESCRIBED IN SECTION
408(A) OF THE CODE, AN INDIVIDUAL RETIREMENT ANNUITY
DESCRIBED IN SECTION 408(B) OF THE CODE, AN ANNUITY PLAN
DESCRIBED IN SECTION 403(A) OF THE CODE, OR A QUALIFIED
TRUST DESCRIBED IN SECTION 401(A) OF THE CODE, THAT
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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: A DISTRIBUTEE INCLUDES AN EMPLOYEE OR
FORMER EMPLOYEE. IN ADDITION, THE EMPLOYEE'S OR FORMER
EMPLOYEE'S SURVIVING SPOUSE AND THE EMPLOYEE'S OR
FORMER EMPLOYEE'S SPOUSE OR FORMER 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 DIRECT ROLLOVER IS A PAYMENT BY THE
PLAN TO THE ELIGIBLE RETIREMENT PLAN SPECIFIED BY THE
DISTRIBUTEE.
Chairperson, on behalf of the Personnel Committee, I move the
adoption of the foregoing resolution.
Name of Committee
Resolution #93265 November 18, 1993
Moved by Gosling supported by Aaron the resolution be adopted.
AYES: Jensen, Johnson, Kaczmar, Kingzett, Law, McCulloch, McPherson,
Miltner, Moffitt, Oaks, Obrecht, Palmer, Pernick, Powers, Price, Schmid, Taub,
Aaron, Crake, Douglas, Garfield, Gosling, Huntoon. (23)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the
foregoing resolution is a true and accurate copy of a resolution adopted by the
Oakland County Board of Commissioners on November 18, 1993 with the original
record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the
County of Oakland at Pontiac, Michigan this 18th day L Aovember 199,?. /
Lynn D. Allen, County Clerk