HomeMy WebLinkAboutReso 98- 29
RESOLUTION NO. 98-29
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
SUNNY ISLES BEACH, FLORIDA, ESTABLISmNG AN EMPLOYEE
FUNDED 457 DEFERRED COMPENSATION PLAN.
WHEREAS, the Employer has employees rendering valuable services, and
WHEREAS, the establishment of a deferred compensation plan for such employees serves the
interests of the Employer by enabling it to provide reasonable retirement security for its employees, by
providing increased flexibility in its personnel management system, and by assisting in the attraction and
retention of competent personnel; and
WHEREAS, the Employer has determined that the establishment of a deferred compensation plan
to be administered by ICMA Retirement Corporation serves the above objectives; and
WHEREAS, the Employer desires that its deferred compensation plan be administered by the ICMA
Retirement Corporation and that the funds held under such plan be invested in the ICMA Retirement Trust,
a trust established by public employers for the collective investment of funds held under their retirement and
deferred compensation plans;
NOW THEREFORE, BE IT DUL Y RESOLVED BY THE CITY COMMISSION OF THE CITY OF
SUNNY ISLES BEACH, FLORIDA, AS FOLLOWS:
Section 1. The Employer hereby adopts or has previously adopted the deferred compensation plan (the
"Plan") in the form of The ICMA Retirement Corporation Deferred Compensation Plan and Trust, referred
to as Appendix A.
Section 2. The Employer hereby executes the Declaration of Trust of the ICMA Retirement Trust,
attached hereto as Appendix B, intending this execution to be operative with respect to any retirement or
deferred compensation plan subsequently established by the Employer, if the assets of the plan are to be
invested in the ICMA Retirement Trust.
Section 3. The assets of the Plan shall be held in trust, with the Employer serving as trustee, for the
exclusive benefit of the Plan participants and their beneficiaries, and the assets shall not be diverted to any
other purpose. The Trustee's beneficial ownership of Plan assets held in the ICMA Retirement Trust shall
be held for the further exclusive benefit of the Plan participants and their beneficiaries.
Section 4.
The Plan will permit loans.
Section 5.
The Employer hereby agrees to serve as trustee under the Plan.
Section 6. The City Manager shall be the coordinator for this program; shall receive necessary reports
notices, etc. from ICMA Retirement Corporation or the ICMA Retirement Trust; shall cast, on behalf of the
Employer, any required votes under the ICMA Retirement Trust; Administrative duties to carry out the plan
may be assigned to the appropriate departments, and is authorized to execute necessary agreements with
ICMA Retirement Corporation incidental to the administration of the Plan.
This Resolution shall become effective upon adoption.
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PASSED AND ADOPTED this ~ day of
Section 7.
Attest:
~~<MJ! ~ .~~~ll~
Richard E. Brown
City Clerk
APPROVED AS TO FORM
AND LEGAL SUFFICIENCY
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L . Daimheisser
City Attorney
Vote:
Mayor Samson
Vice Mayor Turetsky
Commissioner Iglesias
Commissioner Kauffinan
Commissioner Morrow
./ (Yes)
~(Yes)
~(Yes)
~(Yes)
---d- (Yes)
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'::]00M7 ' 1998.
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David Samson, Mayor
(No)
(No)
(No)
(No)
(No)
NOTE TO RECORD:
Please note that parts of
this exhibit (if not all)
has/have been inadvertently
lost.
At this time, we are unable
to recreate same.
Resolution No.
97-29
J City of Sunny Isles Beach
City Hall, 17070 Collins Avenue, Suite 250
Sunny Isles Beach, Florida
TO: Jim DiPietro DATE: January 13, 1997
City Manager
FROM: Richard E. Brown-Morilla4~t1\
City Clerk ( WY
SUBJECT: ICMA Retirement Corporation Deferred Compensation Plan and Trust
(Appendix A) and the Declaration of Trust of the ICMA Retirement Trust
(Appendix B) as authorized by Resolution No. 98-29 establishing an
employee funded 457 deferred compensation plan: Transmittal letter to
ICMA.
In your January 5, 1998, letter to A.E. Dunston, ICMA Retirement Corporation (copy
attached) the City did not attach the authorizing legislation since it had not been
adopted by the City Commission yet. For your records, and for transmittal to ICMA,
attached please find an executed copy of Resolution No. 98-29, establishing an
employee funded 457 deferred compensation plan.
Please specifically request that ICMA return one fully executed set of originals of
Appendix A & B to me for the City's records. Thank you for your assistance.
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IC.\l\
RETIRE.\IENT
CORPORATION
457 Deferred Compensation Plan
Implementation Data Form
· Instructions to Employer: Pro.vide necessary information to establish your plan properly.
Please contact Customer Services at 1-800-326-7272, if you have any questions.
RC Use Only
1. Employer Number:
General
Information
2. Employer's Full Name: City of Sunny Isles Beach
3. Street Address: 17070 Collins Avenue, Suite 250
Sunny Isles Beach, FL 33160
4. City: Sunny Isles Beach State: FL
5. Primary Contact Name: James DiPietro
6, Primary Contact Title: City Manager
7. Primary Contact Telephone#: l.3..O..5 947 - 0 606 8. Fax #:( 3 0 ~ 947 - 4 386
9. Employer's Federal Tax Identification Number: 65-0784647
10, If of Employees: 7 11. # of Employees Eligible for Plan Participation:
Zip Cod~31 60
7
Plan
Implemen-
tation
Information
12, Plan Year-end Date: 09/30 13. Fiscal Year-end Date: 09/30
14. Plan Level Quarterly Statements: (Note: · = default)
a, Sort Order: 0 S=SSN. 0 N=Name
b. Output Media: 0 P=Paper. 0 M=Microfiche
c. Type: 0 S=Summary. 0 D=Detail
15. Contribution Information
a. Frequency: (check one):
o B=Bound
o (0) Bi-weekly. 0 (4) Monthly
o (1) Weekly 0 (5) Semi-monthly
o ~2) Semi-weekly 0 (6) Bi-quarterly
o ~) Bi-monthly 0 (7) Quarterly
o Check. 0 Wire
o Tape 0 RC Quickdisk
o Submittal Document.
d. First Pay Date Following Implementation:
e. Contribution Submittal Printing: 0 Do Not Print 0 Print wi $ Amount. 0 Print wlo $ Amount
f. Sort Order: 0 SSN. 0 Name
16. Allocation Change Frequency: 0 No Restrictions.
o '1 per 12 months
o 1 per 6 months
17, Default Fund for Investment Allocations:
Instructions: 1. Default investment allocation-enter the % to be used for investment allocation if
participant elected allocation is not available.
2.lnvestment restrictions-place an "x" in the funds that are NOT eligible for
contributions or fund transfers.
b, Deposit Medium:
c. Media Transmission:
o (8) Semi-quarterly
o (9) Bi-annually
o (10) Annually
o (11) Semi-annually
o EDT
o Diskette
o 1 per 4 months
o 1 per 3 months
o 1 per Plan Year
o (35) Aggressive Opportunities Fund _%
o (45) International Fund_%
o (20) Growth Stock Fund_%
o (50) Broad Market Index Fund _%
o (25) Equity Income Fund_%
o (40) Asset Allocation Fund_%
o (55) Social Responsibility Fund_%
o (30) Core Bond Fund _ %
o (75) U.S. Treasury Securities Fund_%
o (60) Cash Management Fund _ %
o (71) PLUS Fund _ %
...more funds on next page
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ICMA
RETIREMENT
CORPORATION
457 Deferred Compensation Plan
Implementation Data Form
RC Use Only
Employer Number:
Plan
Implemen-
tation
Information
Continued
Plan
Contacts
Iii any item :20.
26 IS leil blank,
Ihe Primary
Conlact in Q.: 5
will receive
maillngsi
17. Default Fund for Investment Allocations, cont'd:
o (81) Savings Oriented Fund_%
o (82) Conservative Growth Fund _ %
o (83) Traditional Growth Fund_%
o (84) Long-Term Growth Fund_%
18. Transferred Plan Asset Information:
Is there a tranfer of assets? 0 Yes 0 No
If no, go to question #19.
Will total plan assets be transferred or is co-administration required?
o In total 0 Co-administration
Administrator Name (if app.)
Company
Address
Telephone L-l Fax (~
How many participants will be eligible to transfer assets to RC?
What is the estimated cash value of the assets to be transferred to RC? $
Date and methods (check, wire!etc.) the assets will be transferred to RC:
To ensure your funds are posted timely and accurately, please forward the following information to
your RC implementation analyst before any assets are transferred.
· Copies of most recent participant statements.
· Complete list of participant names, social security numbers, total assets to be transferred,
· Employer plan conversion form for each participant for allocation of funds or letter from employer if
allocations are the same as contributions.
Administrative enrollment for retired or terminated participants with assets.
· Copies of participant disbursement request forms for those currently receiving disbursements,
· Copy of existing plan document for individually designed plan.
James DiPietro
19. Plan's Coordinator (named in resolution): Name
Title Ci ty Manager
Mailing Address 17070 Collins
Telephone (305 ) 947-0606
Avenue, Suite 250, SIB, FL 33160
Fax ( 305 ) 947-4386
20. Contact Person for Benefit Payments: Name Jack Neus tadt
Title Finance Director
MailingAddress 17070 Collins Avenue, Suite 250, SIB, FL 33160
Telephone ( 305) 947-0fiOfi Fax{J05 ) 947-4386
Contact Person for Benefit Payments should receive RC correspondence, reports and bulletins relating to
benefit payments.
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leMA
RETIREMENT
CORPORATION
457 Deferred Compensation Plan
Implementation Data Form
RC Use Only
Employer Number:
Plan
Contacts
Cont'd
21. Contact Person for Contributions: Name .T~~k Neustadt
Title Finance Director
Mailing Address 17070 Collins Avenue, Suite 250, SIB, FL 33160
Telephone (305 ) 947-0606 Fax (305 ) 947-4386
Contact Person for Contributions should receive RC correspondence, reports and bulletins relating to
contributions.
22. Contact Person for Tape/Diskette Return Name Same as above
Title
Mailing Address
Telephone ( Fax (
Contact Person for Tape/Diskette Return should receive RC correspondence, reports and bulletins relating to
tapes/diskettes.
23. Contact Person for Statements Name Same as above
Title
Mailing Address
Telephone ( ) Fax ( )
Contact Person for Statements should r~ive RC correspondence, reports and bulletins relating to statements,
24. Contact Person for Billing Name Same as above
Title:
Mailing Address
Telephone ( Fax (
Contact Person for Billing will receive RC correspondence, reports and bulletins relating to statements,
Ii
25. Contact Person for Remittance Reconciliation Name
Title:
Mailing Address
Telephone (
Same as above
Fax (
Contact Person for Remittance Reconciliation should receive RC correspondence, reports
and bulletins relating to remittance reconciliation.
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ADMINISTRATIVE SERVICES AGREEMENT
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Type: 457
Account Number: 4596
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Plan # 4596
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, made as of the day of
, 199 , (herein referred to as the "Inception Date"), between The International
City Management Association Retirement Corporation ("RC"), a nonprofit corporation
organized and existing under the laws of the State of Delaware; and the City of
Sunny Isles-2 ("Employer") a City organized and existing under the laws of the State
of Florida with an office at 7903 East Drive, North Bay Village, Florida 33141.
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 leMA Retirement Trust (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 In~estment Guide." The Funds are available
only to public employers and only throud'h 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.
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Plan # 4596
Agreements
1.
AppointmAnt of Rr.
Employer hereby designates RC as Administrator of the Plan to perform
all non-discretionary functions 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;
(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.
Arlortion of Tn I~t
!
Employer has adopted the Declaration of Trust of the ICMA Retirement
Trust and agrees to the commingled investment of assets of the Plan within the Trust.
Employer agrees that operation ot~tl~)::gta'1 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 terrijls and conditions may be adjusted from time
to time. It is understood that the te1rm "Employer Trust" as it is used in the
Declaration of Trust shall mean this Administrative Services Agreement.
3.
Fmr10YAr nllty to Fllrni~h InforrY)Rtion
Employer agrees to furnish to RCon 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
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Plan # 4596
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. All account discrepancies must be reported to RC within
120 days of the close of the quarter in which the discrepancy occurs. After that
time the report, statement, or accounting shall be deemed to have been accepted by
the Employer and the participants
4.
Cp.rt;:dn Rp.rrp.~p.ntrltinn~, Wrlrrrlntip.~, rlnn r.nvp.nrlnt~
RC represents and warrants to Employer that:
(a) RC is a non-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 a broker-
dealer with the Securities and Exchange ~ommission (SEC) and is a member in good
standing of the National Association of ~ecurities Dealers, Inc.
RC covenants with employer that:
(c) RC shall maintain and administer the Plan in compliance with the
requirements for eligible deferred compensation plans under Section 457 of the
Internal Revenue Code; provided, however, RC shall not be responsible for the eligible
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 457 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 eligible 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
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--... -...... --
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Plan # 4596
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.
P::lrticir::ltion in CP.rt::lin Procp.p.ciings
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.
Comrp.ns::ltion ::lnci P::lymp.nt
(a) Plan Administration Fee. The amount to be paid for plan
ad ministration services under this Agreement shall be 0.75 % 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 I Fee. There shall be an annual account
maintenance fee of $18.00. The accdunt maintenance fee is payable in full on
January 1 of each year on each account in existence on that date. For accounts
established after January 1, 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 remaining on the day of payment.
(c) Compensation for Management Services to the Trust. Employer
acknowledges that in addition to amounts payable under this Agreement, RC receives
fees from the Trust for investment ma,nagement services furnished to the Trust,
except that this fee is not assessed in th'e Mutual Fund Series
(d) Mutual Fund Services Fee. There is an annual charge of 0.25% of
assets under management that are held in the Trust's Mutual Fund Series.
(e) Model Portfolio Fund Fee. There is an annual charge of 0.10% of
assets under management that are held in the Trust's Model Portfolio Funds.
(f) Payment Procedures. All payments to RC pursuant to this Section
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Plan # 4596
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.
Cllstociy
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.
Rp.~ron~ihility
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.
Ier.m
This Agreement may be terminated without penalty by either party on
sixty days advance notice in writing to the other.
10. Amp.ncimp.nt~ ::lnci Acijll~tmp.nt~
(a) This Agreement may no~ be amended except by written instrument
signed by the parties.
(b) The parties agree that compensation for services under this
Agreement and administrative and operational arrangements may be adjusted as
follows:
RC may propose an adjustment by written notice to the Employer given
at least 60 days before the effective d,ate of the adjustment and the notice may
appear in disclosure documents such ~s Employer Bulletins and the Retirement
Investment Guide. 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.
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Plan # 4596
11 . Noticp.~
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. ComrlP.tp. Agrp.p.mp.nt
This Agreement shall constitute the sole agreement between RC and
Employer relating to the object of this 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. Govp.rning L ::lW
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.
In Witness Whereof, the pCJ[ties hereto have executed this Agreement
as of the Inception Date first above wri~en.
CITY OF SUNNY ISLES-2
by:
Signature/Date
II
Name and Title (Please Print)
INTERNATIONAL CITY MANAGEMENT
ASSOCIATION RETIREMENT
CORPORATION
by:
Stephen Wm. Nordholt/Date
Corporate Secretary
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ICMA RETIREMENT CORPORATION
V. Length of loan
In determining the maximum repayment
period for residential loans, you should be
mindful that the loan term may extend beyond
the period the 457 participant is employed by
you. If you allow employees to continue to pay
their loans after they separate from service (see
Section X, Acceleration below), repayments
could continue to be made by the participant,
through you, for the entire term of the loan
(e.g. 30 years). Every payroll period, the partici-
pant (former employee) will be required to give
you a check for the periodic loan repayment
amount. You then include this amount with
your next contribution submittal to RC. Loan
I repayments may not be made directly to RC by the
participant.
Instructions
These Loan Guidelines must be completed before loans
can be made from your deferred compensation plan.You
should consider each option carefully before making
your selections because your selections will apply to all
loans made while the selection is in effect. If you later
change any provision, the changes will apply only to
loans made after the change is adopted. Loans in exist-
ence at the time of any future changes will continue to
operate under the guidelines that were in effect at the
time the loan was originally made.
Note: If you have more than one 457 provider or if loans are
available to your employees from another retirement plan (e.g.
Section 401 money purchase or profit sharing plan) there are
some important issues you should consider prior to completing
these Loan Guidelines. Please refer to the "Special Circum-
stances" section of the RC brochure titled "A Guide to
Establishing a 457 Deferred Compensation Loan Program".
The following instructions correspond to the informa-
tion you must complete beginning on the next page.
Name of Plan: Please state the Employer's complete
name. including State.
II. Eligibility
You may allow a loan to be taken either (1) for
all purposes or (2) only in the case of hardship
or other certain specified financial situations.
The option you choose will have a significant
impact on the number of loans made from your
plan. If you choose "for all purposes", you will
be contending with significantly more loan
requests than if you select "hardship or other
specified financial situations only".
III. Frequency of loans
You may elect to allow participants to have
either (1) only one loan outstanding at a time
or (2) no more than five loans outstanding at
one time (but no more than one per calendar
year). The option you choose will have an
impact on the number of loans made from your
plan. It will also have a direct impact on your
payroll system. Each loan repayment for each
pay period must be accounted for separately.
Repayments of multiple loans are a much larger
burden on your payroll system (and personnel)
than repayment of a single loan.
X. Acceleration
You have three options for determining how
outstanding loans are accelerated:
1. All loans are due and payable in full
("called") upon separation from service.
The employee may not continue to payoff
..
I his/her loan once he/she separates from
service.
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2. After separation from service, all loans are
called only when the participant withdraws
his/her entire account balance.
3. After separation from service, all loans are
called as soon as the participant takes a
withdrawal of any amount from the plan.
You should consider these options carefully because a
call provision could result in a taxable event for the
p~rticipant. If a participant does not repay the out-
standing loan amount when the loan is called. the
loan is "foreclosed". This means that the outstanding
loan amount will be reported by RC as a taxable
distribution to the participant in the year of the
foreclosure. On the other hand, given the burdens
associated with collecting loan repayments from
former employees, you may not wish to maintain a
potentially long term "rela'tionship" with former
employees (especially in the case of residential loans) .
.................... I............................................................................
457 Plan Loan Guidelines
Name of Plan:
City of Sunny Isles Beach 457 Plan
I. Purpose
The purpose of these guidelines is to establish the terms and conditions under which the employer will grant
loans to participants. This is the only official Loan Program Document of the above named Plan.
II. Eligibility
Loans are available to all active employees. Loans will not be granted to participants who have an existing loan
in default.
Loans will be pro-rated among all the funds in which the participant is invested at the time the loan is made.
Loans are available for the following purposes: [select one]
m All purposes
o Loans shall only be granted in the event of a participant's hardship or for the purpose of
enabling a participant to meet certain specified financial situations. The employer shall deter-
mine, based on all relevant facts and circumstances, that the amount of the loan is not in
excess of the amount required to relieve the financial need. For this purpose, financial need
shall include, but not be limited to: unreimbursed medical expenses of the participant or
members of the participant's immediate family, establishing or substantially rehabilitating the
principal residence of the participant, or paying for a college education (including graduate
studies) for the participant or his~er dependents.
III. Frequency of loans
[select one]
o Participants may receive one loan per calendar year. Moreover, participants may have only one
outstanding loan at a time.
W Participants may receive one loan Iper calendar year. Moreover, no participant may have more
than five (5) loans outstanding at one time.
................................................................................................ .
one
ICMA RETIREMENT CORPORATION
IV. Loan amount
The minimum loan amount is $1,000.
The maximum amount of all loans to the participant from the plan and all other plans sponsored by the
employer that are qualified employer plans under section 72(P)(4) of the Code is the lesser of:
(1) $50,000, reduced by the excess (if any) of:
a. The highest outstanding balance ofloans during the one-year period ending on the day
before the date a loan is to be made, over
b. The outstanding balance ofloans on the date the loan is to be made; or
(2) one half of the participant's vested account balance.
I
If a participant has any loans outstanding at the time a new loan is requested, the new loan will be limited to
the maximum amount calculated above reduced by the total of the outstanding loans.
A loan cannot be issued for more than the above amount. The participant's requested loan amount is subject to
downward adjustment without notice due to market fluctuation between the time of application and the time
the loan is made.
V. Length of loan
,1
,
A loan must be repaid in substantially equal installments of principal and interest, at least monthly, over a
period that does not exceed five (5) years.
I
Loans for a principal residence must be repaid in substantially equal installments of principal and interest, at
least monthly, over no more than 5 [state, number of years] years (maximum 30 years).
VI. Loan repayment process
Loans for active employees must be repaid through payroll deduction. Repayment will begin as soon as
practicable on a date determined by the employer's payroll cycle.
Loans outstanding for former employees or employees on a leave of absence must be repaid on the same
schedule as if payroll deductions were still being made Jnless they reamortize their loans and establish a new
repayment schedule that provides that substantially equal payments are made at least monthly over the remain-
ing period of the loan. All repayments must be made through the employer.
Loan payments, including loan payments from former employees, are allocated to the participant's current
election of investment options on file with Re.
The participant may payoff all or a portion of the principal and interest early without penalty or additional
fee. Extra payments are applied forward to both principal and interest as specified in the original repayment
schedule, unless the additional payment is for the balance due.
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4 5 7 P I an'. Loa n Cui d t I ; n t s
VII. Loan interest rate
The rate of interest for loans of five (5) years or less will be based on prime plus 0.5%.
The rate of interest for loans for a principal residence will be based on the FHA/VA rate.
Interest rates are determined on the last business day of the month preceding the month the loan is disbursed. The
interest rate is locked in at the time a loan is approved and remains constant throughout the life of the loan.
The prime interest rate is determined on the last business day of each month using the Wall Street Journal as
the source. The FHA/VA interest rate is also determined on the last business day of each month using the
Telerate Information Service as the source.
Loan interest rates for new loans may fluctuate upward or downward monthly, depending on the movement of
the prime and FHA/VA interest rates.
The employer may modify the manner in which loan interest rates will be determined, but only with respect
to future loans.
VIII. Loan application procedure
All loans must be requested in writing on an application approved by the plan administrator. The application
must be signed by the participant. The employer ~ust review and approve the application.
The participant will be required to sign a promissory note evidencing the loan and a disclosure statement that
includes an amortization schedule prior to receiving a loan check. Loan checks will generally be issued on the
Friday following the receipt of a complete loan application. The loan check, promissory note, disclosure
statement and truth-in-Iending recision notice will be sent to the employer, who will obtain the necessary
signatures and deliver the check to the participan~All executed documents must be returned to the plan
administrator within 10 calendar days from the date the check is issued.
IX. Security/Collateral
That portion of a participant's account balance that is equal to the amount of the loan is used as collateral for
the loan. The collateral amount may not exceed 50 percent of the participant's account balance at the time the
loan is taken. Only that portion of the account balance that corresponds to the amount of the outstanding
loan balance is used as collateral.
I,
X. Acceleration
[select one]
o All loans are due and payable in full upon separation from service.
m All loans are due and payable when a participant receives a distribution of all of his/her
account balance after separation from service. The amount of the outstanding loan balance
will be reported as a distribution in addition to the amount of cash distributed from the plan.
o All loans are due and payable when a participant receives a distribution of part of his/her
account balance after separation from service. The amount of the outstanding loan balance
will be reported as a distribution in addition to the amount of cash distributed from the plan.
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ICMA RETIREMENT CORPORATION
XI. Reamortization
Any outstanding loan may be reamortized. Reamortization means changing the terms of a loan, such as length
of repayment period, interest rate, and frequency of repayments. A loan may not be reamortized to extend the
length of the loan repayment period to more than five (5) years from the date the loan was originally made, or
in the case of a loan to secure a principal residence, beyond the number of years specified by the employer in
Section V above.
A participant must request the reamortization of a loan in writing on a reamortization application acceptable
to the plan administrator. Upon processing the request, a new disclosure statement will be sent to the em-
ployer for endorsement by the participant and approval by the employer. The executed disclosure statement
must be returned to the plan administrator within 10 calendar days from the date it is signed. The new disclo-
sure statement is considered an amendment to the original promissory note, therefore a new promissory note
will not be required.
A reamortization will not be considered a new loan for purposes of calculating the number of loans outstand-
ing or the one loan per calendar year limit.
XII. Refinancing existing loans
If a participant has one outstanding loan, that loan may be refinanced. If a participant has more than one
outstanding loan. no loans may be refinanced. Refinancing means concurrently repaying an existing loan and
borrowing an additional amount through a new loan. A participant may not refinance a residential loan.
In order to refinance an existing loan, a participant must r91uest a new loan in writing on an application
approved by the plan administrator. Such request must be made at a time when the participant is eligible to
obtain a loan as defined by the employer in Section III above. The amount of a new loan requested for the
purpose of refinancing is subject to the loan limits speciped in Section IV above.
"
Because a refinancing is considered a new loan, only active ,employees may refinance an outstanding loan.
XIII. Reduction of loan
If a participant dies prior to full repayment of the outstanding loan(s), the outstanding loan balance(s) will be
deducted from the account prior to distribution to the beneficiary(ies). The unpaid loan amount is a taxable
distribution and may be subject to early withdrawal penalties. The participant's estate is responsible for taxes or
penalties on the unpaid loan amount, if any. The beneficiary is responsible for taxes due on the amount he/she
I
receives. A Form 1099 will be issued to both the beneficiary and the estate for these purposes.
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457 Plan Loan Guidelines
XIV. Loan default
If a required payment of principal and interest is not made within 90 days of the date such payment is due. the
loan is considered in default. If a loan is in default, the loan will be foreclosed during the calendar year in
which the participant separates from service. If a participant has separated from service and defaults on a loan,
then the loan will be foreclosed during the calendar year in which the default occurs.
If the employer has elected in Section X, and the promissory note so provides, a loan becomes due and payable
when the participant separates from service. If the terms of the loan contain this provision, the outstanding
loan amount is "deemed" in default as of the date of separation from service. The amount of the outstanding
loan. including accrued interest, will be reported to the IRS as a distribution that may be subject to taxes.
If the employer has so elected in Section X, and the promissory note so provides, a loan becomes due and
payable when the participant takes a distribution of some or all of the balance in his/her account after separa-
tion from service. If the terms of the loans contain such a provision and the outstanding loan balance is not
paid prior to the distribution from the account, the outstanding loan amount will be considered in default
upon issuance of the distribution check. The amount of the outstanding loan, including accrued interest, will
be reported to the IRS as a distribution that may be subject to taxes. Participants who have an existing loan in
default will not be eligible for additional loans.
XV. Fees
Fees may be charged for various services associated, with the application for and issuance of loans. All appli-
cable fees will be debited from the participant's account balance and/or from the participant's loan repayments
prior to crediting the repayment of principal and interest to the participant's account. A schedule of fees
applicable to this plan is available from the plan administrator.
XVI. Other
u
~"
The employer has the right to set other terms and conditions as it deems necessary for loans from the plan in
order to comply with any legal requirements. All terms and conditions will be administered in a uniform and
non-discriminatory manner.
In Witness Whereof, the employer hereby caused these Guidelines to be executed this
II
of , 19 .
day
EMPLOYER
Accepted: ICMA RETIREMENT CORPORATION
By:
By:
Title:
City Manaqer
Title:
Attest:
Attest:
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