HomeMy WebLinkAbout3342RESOLUTION NO. 3342
A 1% owLUTION of the City Council of the City of
Bremerton, Washington, desires to amend and restate in its entirety
City of Bremerton's 457(b) Deferred Compensation Plan
Document.
WHEREAS, the City adopted an employee 457(b) Deferred Compensation Plan
adopted by Resolution No. 1649 and amended and restated by Resolution(s) 1871 and 1918; and
WHEREAS, Section 457 of the Internal Revenue Code of 1986, as amended (the
"Code") and the applicable Treasury Regulations requires that Plan Documents be restated at
least every five years; and
WHEREAS, the City Council desires to restate and amend the Plan Document
and update its provisions consistent with the Internal Revenue Code and Treasury Regulations;
NOW THEREFORE,
THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON,
DOES (RESOLVE AS FOLLOWS:
SECTION 1. City of Bremerton's 457(b) Deferred Compensation Plan as
adopted by Resolution No. 1649 and as amended by Resolution No. 1918 and as it may have
otherwise been subsequently amended is hereby amended in entirety and restated as the City of
Bremerton's 457(b) Supplemental Retirement Program Plan Document, which is attached hereto
as Exhibit A and incorporated as if fully set forth herein.
SECTION 2. Sevelabilih�. If any one or more sections, subsections, or
sentences of this Resolution are to to be unconstitutional or invalid, such decision shall not
affect the validity of the remaining portion of this Resolution and the same shall remain in full
force and effect.
SECTION 3. Effective Dnte. This Resolution shall take effect and be in force
immediately upon its passage.
2021.
PASSED by the City Council the day of
TCEVTN GORMAN, Council President
Approved this {!.''� day of � G C.ow, � � f , 2021.
457 (h) Snpvlemental Retirement Plan
ATTEST:
ANGEL�Ii00VER5 City Clerk
t WHEELER, Mayor
APPROVED AS TO PORNI:
KYLIE FINNELL, City Attorney
457 (b) Supplententnl Rerire�ueat Plan
Cilllij'Zi3�t3i�!►�1WE711E�3►)
AMENDED AND RESTATED 457(U)
SUPPLEMENTAL RETIREMENT PROGRAM PLAN DOCUMENT
The Employer, by approval and execution of this document, hereby amends in its
entirety and restates the City of Bremerton's 457(b) Supplemental Retirement Program Plan as
adopted by Resolution No. 1649 and as amended by Resolution No. and as it may
have otherwise been subsequently amended ("Prior Plan"). The Prior Plan as amended herein
and as set forth in the provisions of this document is hereinafter referred to as the "Plan".
ARTICLE I. PURPOSE
1.01 "The primacy purpose of this Plan is to provide a supplemental retirement income
to the Employees of the Employer and the Employees' Beneficiaries in accordance with the
provisions of Section 457 of the Internal Revenue Code of 1986, as amended (the "Code") and
the applicable Treasury Regulations,
1.02 In accordance with Section. 457 of the Code, all amounts of Compensation
deferred or contributed under the Plan, all property and rights purchases with such amounts and
all income attributable to such amounts and all property and rights are held in trust for the
exclusive benefit of Participants and their Beneficiaries and Alternate Payees pursuant to the
applicable Trust Agreement.
1.03 The Plan and Trust Ag7•eements are intended to satisfy the requirements far
eligible deferred compensation and designated Roth plans under Section 457(e)(1)(A) of the
Code and shall be construed and administered accordingly. To the extent that any term of the
Plan is inconsistent with the provisions of Section 457 of the Code applicable to governmental
employers, the inconsistent term shall, to the fullest extent possible, be treated for all purposes of
the Plan as amended and reformed to conform to the applicable provisions of Section 457 of the
Code.
2.01 For purposes of this Plan, the following terms shall have the following meanings:
(a) "Account" means the bookkeeping account maintained for each
Participant reflecting the cumulative amount of the Participant's Deterred Compensation
account, Designated Roth 457(b) Account (after tax), Rollover Account, Alternate Payee
Account and Beneficiary account including any income, gains, losses, or increases or decreases
in market value attributable to the Plan's investment of the Participant's Account(s), and further
reflecting any distributions to the Participant or the Participant's Beneficiary and any fees or
expensed charged against such Participant's Account(s).
(b) "Account Balance" The bookkeeping account maintained with respect to
each Participant which reflects the value of the deferred compensation and/or designated Roth
credited to the Participant, including the Participant's annual deferrals and or contributions, the
earnings or loss of the Fund (net of Fund expenses) allocable to the Participant, any transfers for
die Participant's benefit, and any distribution made to the Participant or the Participant's
Beneficiary. if a Participant has more than one Beneficiary at the time of die Participant's death,
then a separate Account Balance shall be maintained for each Beneficiary. The Account Balance
includes any account established under Section 6 for rollover contributions and plan4o-plan
transfers made for a Participant, the account established for a Beneficiary after a Participant's
death, and any account or accounts established for an alternate payee (as defined in section
414(p)(8) of the Code).
(c) "Administrator" means the person or persons named to carry out certain
nondiscretionary administrative functions under the Plan.
(d) "Code" The Internal Revenue Code of 1986, as now in effect or as
hereafter amended. All citations to sections of the Code are to such sections as they may from
time to time be amended or renumbered.
(e) "Committee" means the Supplemental Retirement Committee which is
appointed by the Mayor. The. Committee has the power and authority to formally take action and
deliberate on Plan design and investment options on behalf of the Plan. The Committee may
delegate administrative and managerial duties under this Plan.
(f) "Age 50 Plus Catch-up contribution" means the catch-up contribution
for Participants who attain age 50 by the end of the calendar year, as permitted under Code
Section 414(v) and pursuant to Section 3.2(d).
(g) "Alternate Payee Account" means the Account established for an
Alternate Payee pursuant to a Qualified Domestic Relations Order.
(h) "Beneficiary" or "Designated Beneficiary" means the person properly
designated by a Participant to receive the Participant's benefit under this Plan in the event of the
Participant's death, or, if none, the Participant's estate.
0) "CANES ACT Qualified Individual" is defined as:
l) who is diagnosed with the virus SARS—CoV-2 or with coronavirus
disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention;
2) whose spouse or dependent (as defined in section 152 of the
internal Revenue Code of 1986) is diagnosed with such virus or disease by such a test; or
3) who experiences adverse financial consequences as a result of
being quarantined, being furloughed or laid off or having work hours reduced due to such virus
or disease, being unable to work due to lack of childcare due to such virus or disease, closing or
reducing hours of a business owned or operated by the individual due to such virus or disease, or
other factors as determined by the Secretary of the Treasury (or the Secretary's delegate).
0) "Deferrals" means the annual amount of compensation deferred by a
Participant to the Plan, comprising of deferred compensation and Roth 457(b) contributions
(employer cannot make contributions to a designated Roth 457 Plan).
(k) "Deferred Compensation" means the portion of Includable
Compensation not yet. earned, which the Participant and Employer mutually agree shall be
deferred, any amount credited to a Participant's Account by reason of a transfer under this Plan,
or any other amount which the Employer agrees to credit to a Participant's Account in
accordance with the provisions of this Plan and IRC 457(b).
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(1) "Designated Roth Employer" means an Employer that permits (in
accordance with any applicable procedures as may be required by the Committee) Participants
who are its Employees to make Roth 457(b) Contributions pursuant to Article 6.
(m) "Eligible Deferred Compensation Plan" means a plan established and
maintained by an agency that complies with IRC 457 (b).
(n) gible Rollover Account" means the separate bookkeeping account
maintained by the Administrator within the Plan for a Participant for amounts of Eligible
Rollover Distributions as defined in IRC Section 402(c)(4), including eligible rollover
distributions to a surviving spouse under IRC Section 402(c)(9).
(o) "Eligible Retirement Plan" means an eligible retirement plan as defined
in IRC Section 402(c)(8)(B).
(p) "Employee" Each natural person, whether appointed or elected, who is
employed by the Employer as a common law employee, excluding any employee who is
included in a unit of employees covered by a collective bargaining agreement that does not
specifically provide for participation in the Plan.
(q) "Employer" means City of Bremerton, Washington, the Plan Sponsor.
(r) "Employer Administrator" means the City official(s) designated by the.
Mayor to make discretionary decisions in the administration of this Plan.
(s) "Includable Compensation" An Employee's actual wages in box 1 of
Form W-2 for a year for services to the Employer, but subject to a maximum of $200,000 (or
such higher maximum as may apply under section 401(a)(17) of the Code) and increased (up to
the dollar maximum) by any compensation reduction election under section 125 or 457(b) of the
Code (including an election to defer Compensation under Article 5).
(t) "IRC" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.
(u) "Normal Retirement Age" means the age specified in writing by the
Participant. The Normal Retirement Age specified by the Participant must be an age at which
the Participant is eligible to retire pursuant to either the LEOFF, PSERS or PERS retirement
system, by virtue of age, length of service, or both, without consent of the Employer and with the
right to receive immediate retirement benefits without actuarial or similar reduction because oi'
retirement before some later specified age.
(v) "Participant" An individual who is currently deferring Compensation, or
who has previously deferred Compensation under the Plan by salary reduction and who has not
received a distribution of his or her entire benefit under the Plan. Only individuals who perform
services for the Employer as an Employee may defer Compensation under the Plan.
(w) "Participation Agreement" means an agreement entered into between an
Employee and the Employer, including any amendments or modifications thereof. Such
agreement shall fix the amount of Deferred Compensation, specify a preference among the
investment alternatives designated by the Employer, designate the Employee's Beneficiary o►
Beneficiaries, and incorporate the terms, conditions, and provisions of the Plan by reference.
(x) "Plan4o-Plan Transfer" means a transfer of assets from one eligible
governmental IRC Section 457(b) plan to another eligible governmental IRC Section 457(b)
plan.
(y) "Plait Year" means the calendar year.
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(z) "Prior Plan" means the City of Bremerton's 457(b) Deferred
Compensation Plan as adopted by Resolution No. 1649 and as amended by Resolution No. 1918
and as it may have otherwise been subsequently amended.
(aa) "Qualified Roth Contribution Program" means a qualified Roth
contribution program as defined in Section 402A of the Code.
(bb) "Qualified Roth Distribution" means a distribution from a Roth
Contribution Account after the Participant has satisfied a five-year holding period and has
attained age 59 ''/2, died, or become disabled within the meaning of Code Section 72(m)(7), in
accordance with Code Section 402A(d). The five-year holding period is the period of five
consecutive taxable years that begins with the first day of the first taxable year in which the
Participant makes a designed Roth Contribution under the Plan or to another retirement plan
which amount was directly rolled over to the Plan or first makes a Voluntary Employee
Contribution to a Deemed Roth IRA pursuant to Article VI or a contribution to another
(cc) "Roth 457 (b) Account" means the Account(s) established under the Plan
to record a Participant's Roth 457(b) Contributions, and the income, gains, and losses credited
thereto. A Beneficiary Account or Alternate Payee Account corresponding to the deceased or
relevant Participant's Roth 457 (b) Contributions may also be referred to as a Roth 457(b)
Account.
(dd) "Roth Deferrals" means amounts contributed by the Employer at the
election of a Participant that (i) have been irrevocably designated by the Participant as Roth
deferrals pursuant to Article 110) and treated by the employer as gross income at the time the
Participant would have received that amount in cash if the Participant had not made such
election.
(cc) "Separation of Service" means the severance of the Participant's
employment with the Employer which constitutes a "separation from service" within tine
meaning of Section 402(d)(4)(A)(iii) of the Code. In general, a Participant shall be deemed to
have severed his employment with the Employer for purposes of this Plan when, in accordance
with the established practices of the Employer, the employment relationship is considered to
have actually terminated.
(ff) "Trust Agreement" The written agreement (or declaration) made by and
between the Employer and the Trustee tinder which the Trust Fund is maintained.
(gg) "Trust Fund" The trust fund created under and subject to the Trust
Agreement.
(hh) "Trustee" The Trustee duly appointed and currently serving under the
Trust Agreement.
ARTICLE III. ADMINISTRATI®N
This Plan shall be administered as follows:
3.01 Duties of the Employer. The Employer shall have the authority to make all
discretionary decisions affecting the rights or benefits of Participants which may be required in
the administration of this Plan. Tine Employer, through the Mayor, may designate one or more
City officials to perform these functions (collectively, "Employer Administrator". The Employer
Administrator may,
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1) establish rules and procedures to implement this Plan,
2) enter into agreements with Plan Administrators approved by the
Employer's legislative body to administer the Plan,
3) make reasonable interpretations of the provisions of the Plan and
4) make minor amendments to the Plan when required to be consistent with
and in compliance with the applicable provisions of the IRC and Treasury Regulations. The
Employer Administrator's decisions shall be afforded the maximum deference permitted by
applicable law.
3.02 Duties of the Administrator. The Administrator, as agent for the Employer,
shall perform nondiscretionary functions in connection with the Plan, including the maintenance
of Participant's Accounts, the provision of periodic reports of the status of each Account, and the
distribution of benefits on behalf of the Employer in accordance with the provisions of this Plan.
3.03 Disbursement Pursuant to Ylan. Employer shall disburse those amounts which
arise from duly executed Participation Agreements. A duly executed Participation Agreement
shall bear the signatures of the Participant. Each employee's Participation Agreement shall
become a part of this Plan and is incorporated herein by this specitic reference thereto.
3.04 Benefits held in Trust. All amounts deferred under the Plan, ali property and
rights purchased with such amounts, and all Income Attributable to such amounts, property, or
rights, must be held in trust for the exclusive benefit of the Participants and their beneficiaries.
3.05 Individual Accounts. An individual account shall be maintained in the name of
each Participant, to which amounts deferred shall be credited.
3.06 Assets of Accounts. With respect to each account hereunder, all dividends,
interest, gains, rents and other increments thereon, shall be credited to such account, and the
assets of each account shall be valued not less than once each year at present value.
3.07 Appointment of Administrators}. The Employer's legislative body shall have
the authority to appoint Administrators) to carry out the terms and conditions of this Plan.
3.08 Limitation of Liability. The Employers liability is limited as follows:
(a) Employer shall not be required to invest assets nor be responsible for any
loss due to the investment or failure of investment of funds and assets in said deferred
compensation account nor shall Employer be required to replace any loss whatsoever which may
result from said investments.
(b) The Employer shall assume or incur no obligations hereunder except to
exercise due care with respect to the assets from time to time in their custody hereunder pending
application thereof as provided in this Agreement and to exercise due diligence in carrying out
their duties and functions under this Agreement. The Employer shall not be liable for any loss
unless such loss is caused by a breach of its obligations under this Plan.
g
4.01 A Participant who is an Employee may apply for and receive a loan from his or
her Account Balance as provided in this Section 4. Any such loan may not be for an amount less
than the minimum amount specified by the Administrator. Tf not specified by the Administrator,
the minimum loan amount shall be One Thousand Dollars ($1,000).
4.02 Maximum Loan Amount. No loan to a Participant hereunder may exceed the
lesser of:
(a) $50,000, reduced by the greater of (i) the outstanding balance on any loan
from the Plan to the Participant on the date the loan is made or (ii) the highest outstanding
balance on loans from the Plan to the Participant during the one-year period ending on the day
before the date the loan is approved by the Administrator (not taking into account any payments
made during such one-year period), or
(b) one half of the value of the Participant's vested Account Balance (as of the
Valuation Date immediately preceding the date on which such loan is approved by the
Administrator).
For purposes of this Section 4.02, any loan from any other plan maintained b_y a
participating employer shall be treated as if it were a loan made from the Plan, and the
Participant's vested interest under any such other plan shall be considered a vested interest under
this Plan; provided, however, that the provisions ol'this paragraph shall not be applied so as to
allow the amount of a loan under this Section 4.02 to exceed the amount that would otherwise be
permitted in the absence of this paragraph.
4.03 Terms of Loan. The terms of the loan shall:
(a) require level amortization with payments not less frequently than quarterly
throughout the repayment period, except that alternative arrangements for repayment may apply
in the event that the borrower is on an bona tide unpaid leave of absence for a period not to
exceed one year for leaves other than a qualified military leave within the meaning of section
414(u) of the Code or for the duration of a leave which is due to qualified military service;
(b) require that the loan be repaid within five years unless the Participant
certifies in writing to the Administrator that the loan is to be used to acquire any dwelling unit
which within a reasonable time is to be used (determined at the time the loan is made) as a
principal residence of the Participant; and
(c) provide for interest at a rate equal to one percentage point above the prime
rate as published in the Wall Street Journal on the first business day of the month in which the
loan is approved by the Administrator.
4.04 Security for Loan; Default.
(a) Sec.ttt•ity. Any loan to a Participant under the Plan shall be secured by the
pledge of the portion of the Participant's interest in the Plan invested in such loan.
(b) Default. In the event that a Participant fails to make a loan payment under
this Section 4 within 90 days after the date such payment is due, a default on the loan shall occur.
[n the event of such default, (i) all remaining payments on the loan shall be immediately due and
payable, (ii) effective as of the first day of the calendar month next following the month in which
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any such loan default occurs, the interest rate for such loan shall be (if higher than the rate
otherwise applicable) the rate being charged on loans from the Plan that are approved by the
Administrator in the month in which such default occurs, (iii) no contributions shall be made on
such Participant's behalf prior to the first payroll period that follows by 12 calendar months the
date of repayment in full of such loan, and (iv) the Participant shall be permanently ineligible for
any future loans from the Plan.
In the case of any default on a loan to a Participant, the Administrator shall apply the
portion of the Participant's interest in the Plan held as security for the loan in satisfaction of the
loan on the date of Severance from Employment. In addition, the Administrator shall take any
legal action it shall consider necessary or appropriate to enforce collection of the unpaid loan,
with the costs of any legal proceeding or collection to be charged to the Account Balance of the
Participant.
Notwithstanding anything elsewheee in the Plan to the contrary, in the event a loan is
outstanding hereunder on the date of a Participant's death, his or her estate shall be his or her
Beneficiary as to the portion of his or her interest in the Plan invested in such loan (with the
Beneficiary or Beneficiaries as to the remainder of his or her interest in the Plan to be determined
in accordance with otherwise applicable provisions ofthe Plan).
4.05 Repayment. The Participant shall be required, as a condition to receiving a loan,
to enter into an irrevocable agreement authorizing the Employer to make payroll deductions from
his or her Compensation as long as the Participant is an Employee and to transfer such payroll
deduction amounts to the Trustee in payment of such loan plus interest. Repayments of a loan
shall be made by payroll deduction of equal amounts (comprised of both principal and interest)
from each paycheck, with the first such deduction to be made as soon as practicable after the loan
funds are disbursed; provided however, that a Participant may prepay the entire outstanding
balance of his loan at any time (but may not make a partial prepayment); and provided, further,
that if any payroll deductions cannot be made in full because a Participant is on an unpaid leave
of absence or is no longer employed by a participating employer (that has consented to make
payroll deductions for this purpose) or the Participant's paycheck is insufficient for any other
reason, the Participant shall pay directly to the Plan the full amount that would have been
deducted from the Participant's paycheck, with such payment to be made by the last business day
of the calendar month in which in which the amount would have been deducted.
ARTICLE V. PARTICIPATION
5.01 Eligibility. Any Employee shall be eligible to participate and defer or contribute
compensation under this Plan and upon becoming employed by the Employer.
5.02 Election to Participate. Any Employee may elect to be a Participant by
executing and filing with the Administrator a Participation Agreement consenting to defer or
contribute a portion of his or her salary by the deferral amount specified in the Participation
Agreement. The amount of Deferred Compensation or Roth contribution must be at least $30.00
per month. This minimum amount may be changed by the Employer from time to time. The
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Participation Agreement shall include a designation of a Beneficiary. Such Beneticiary
designation shall remain in effect until the Participant files an executed amendment with the
Administrator designating a new Beneficiary. The Employee shall become a Participant as soon
as administratively possible following the Employee's filing of a completed and executed
Participation Agreement, or as otherwise permitted by law. Compensation may be deferred or
contributed for any calendar month only if the Participation Agreement has been entered into
before the first day of the month in which compensation is paid or made available.
5.03 Commencement of Participation. An Employee shall become a Participant as
soon as administratively practicable following the date the Employee files a participation election
pursuant to Section 5.02. Such election shall become effective no earlier than the calendar
month following the month in which the election is made. A new Employee may defer or
contribute compensation payable in the calendar month during which the Participant first
becomes an Employee if an agreement providing for the deferral or contribution is entered into
on or before the first day on which the Participant performs services for the Employer.
5.04 Amendment of Annual Deferrals or Contributions Election. Subject to other
provisions of the Plan, a Participant may at any time revise his or her participation election,
including a change of the amount of his or her Annual Deferrals or Contributions, his or her
investment direction and his or her designated Beneficiary. Unless the election specifies a later
effective date, a change in the amount of the Annual Deferrals or Contributions shall take effect
as of the first day of the next following month or as soon as administratively practicable if later.
A change in the investment direction shall take effect as of the date provided by the
Administrator on a uniform basis for all Employees. A change in the Beneficiary designation
shall take effect when the election is accepted by the Administrator.
5.05 Leave of Absence. Unless an election is otherwise revised, if a Participant is
absent from work by leave of absence, Annual Deferrals or Contributions under the Plan shall
continue to the extent that Compensation continues.
5.06 Disabilit,�. A disabled Participant may elect Annual Deferrals or contributions
during any portion of the period of his or her disability to the extent that he or she has actual
Compensation (not imputed Compensation and not disability benefits) from which to make
contributions to the Plan and has not had a Severance from Employment.
ITNIFITFISITIFFOMNLENINYM
6.01 Maximum 457(b) Contribution Limit. Except as provided in Sections 6.02 and
6.03, the maximum deferred and contributed amount under the Plan for the Participant's taxable
year shall not exceed the lesser of (a) the maximum dollar amount under IRC Section 457(b) (2)
(A) and as adjusted for cost of living adjustments described in IRC Section 457(e) (15), both
provisions as currently enacted and hereinafter amended, or (b) 100% of the Participant's
Includable Compensation as provided in IRC Section 457(b) (2) (B). These limits apply to the
combined amount of deferred compensation and Roth 457 (b) plan contributions.
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6.02 Special 457(b) Catch -Up Deferral and/or Contributions. For one or more of
the Participant's last three taxable years ending before the attainment of Normal Retirement Age
under the Plan, the maximum deferral and or contributions shall be the lesser of
(a) twice the applicable dollar amount set forth in Section 6.01; or
(b) the sum of,
(i) The limitation established for the taxable year under Section 6.01,
plus
(ii) The limitation established for purposes of Section 6.01 for each of
the prior taxable years during which the Participant was eligible to participate less the amount of
Compensation deferred by the Participant under the Plan for each of such prior taxable years.
6.03 Age :�0 Catch -Up Deferral or Contributions. A Participant who will attain age
50 or more by the end of the calendar year is permitted to elect an additional amount of Annual
Deferrals and/or Contributions, up to the maximum age 50 catch-up Annual Deferrals for the
year. The combined deferrals and contributions shall not be greater than the
(a) amount set forth in 1RC Section 414(v)(2)(B) and as adjusted for cost -of -
living adjustments described in 1RC Section 414(v)(2)(C), both provisions as currently enacted
and hereinafter amended, or
(b) The amount determined under any other applicable Section of this Plan
(without regard to this Section).
6.04 Participation in more than one Plan. The amount deferred or contributed from
a Participant's gross income under this Plan or any other eligible plan under section 457 of the
Code shall not exceed the maximum amount allowed under this Article less any amount
excluded from gross income under section 403(b), 402(a)(8), or 402(h)(1)(B) of the Code, or any
amount with respect to which a deduction is allowable by reason of a contribution to an
organization described in section 501(c)(18) of the Code. Consequently, an Employee who
participates in more than one plan (whether or not maintained by the same sponsor) must allocate
the dollar limitation among the plans in which he or she participates.
6.05 Participatio�i in Tax -Sheltered Annuity. If an individual who participates in
an eligible deferred compensation plan also participates in atax-sheltered annuity program,
contributions that are excludable from his or her gross income under Code Sec. 403 (b) reduce
the limitation, under Code Sec. 457, on the amount of compensation which may be deferred
under the eligible 457 Plan. For purpose of computing the exclusion under Code Sec. 403 (b), an
amount deferred in an earlier taxable year under ail eligible State deferred compensation plan
with regard to the sponsoring entity) is treated as an amount contributed by the employer and
excluded by the employee under Code Sec. 403 (b), if the taxable year of the deferral counts as a
year of service for purposes of Code Sec. 403 (b).
ARTICLE VII. UNIFORMED SERVICES EMPLOYMENT AND
REE1VIPi,OYMI,N`T RIGHTS ACT OF 1994.
7.01 uniformed Services Employment and Reemployment Rights Act of 1994.
Notwithstanding the preceding provisions of Article V, a Participant who is entitled to
reemployment pursuant to the terms of the Uniformed Services Employment and Reemployment
r
Rights Act of 1994 (USERRA) may defer or contribute an additional amount under the Plan as
provided in that Act for the years of his or her service in the uniformed services (as defined in
USERRA). Any such deferrals or contributions will not be subject to the limits set forth above
in the year in which deferred or contributed but will be subject to the limits for the year to which
such deferrals or contributions relate.
ARTICLE VIII. EMPLOYER CONTRIBUTIONS
$.Ol The Employer may contribute to the Plan for Participants. Employea
contributions shall vest at the time such contributions are made. For purposes of administering
ARTICLE VI relating to deferral of compensation, Employer contributions shall apply toward
the maximum deferral limits in the Plan Year. The Employer cannot contribute to the
Employee's Roth account.
AI2'I'ICLE IX. DISTRIBUTION OF BENEFITS
9.O1 Commencement of Distributions. Except for Unforeseeable Emergency
withdrawals pursuant to Article X or otherwise specifically allowed by the Plan, distributions
from the Plan may not be made to a Participant earlier than:
(a) the calendar year in which the Participant attains age 70 % (72 if you reach
age 70 % after December 31, 2019)4 or
(b) the Participant retires or otherwise has a severance from employment. All
irrevocable elections of a benefit commencement date by a Participant or a Beneficiary made
prior to January 1, 2002, and defaulted distributions (other than a defaulted distribution to an
annuity option) may be voided at the election of the Participant or the Beneficiary.
9.02 Election of Benefit Commencement Date. A Participant may elect to
commence distributions of benefits at any time after retirement or other Severance from
Employment, as determined and confirmed by the Plan Sponsor by a notice filed with d1e
Administrator before the date on which benefits are to commence. The entire trust shall be
distributed to the Participant not later than the Required Beginning Date described in Section
7.05 or shall be distributed, beginning not later than the Required Beginning Date, over the life
A such Participant or over the lives of such Participant and a Designated Beneficiary, or over a
period not extending beyond the life expectancy of'such Participant and Designated Beneficiary,
as provided by regulations. However, in no event may distribution of benefits commence later
than the date described in Section 7.05, Required Beginning Date,
9.03 Forms of Distribution. Benefits shall be paid in accordance with the payment
option elected by the Participant. Payment, method of payment, and settlement options are
available as provided by each of the available investment specifications. The Participant shall
elect the method of payment based upon the options then available under the Plan, including but
not limited to lump sum distributions, periodic payment by Fixed amount, periodic payment by
fixed time period, partial lump sum payment or purchased annuity. A Participant or Beneficiary
who has chosen a payment option, other than the purchased annuity option, shall have the ability
to change his payment option subject to any restrictions or limitations imposed by the Plan, the
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Administrator, an investment option provider, any regulatory agency, or as otherwise required by
law.
9.04 Treasury Regulations Incorporated into Plan. All distributions required under
this Article VIII will be determined and made in accordance with the Treasury Regulations
under promulgated under IRC Section 401(a)(9).
9.U5 Required Beginning Date. The Participant's entire interest will be dish ibuted,
or begin to be distributed, to the Participant no later than the Participant's required beginning
date, which is to begin no later than April 1 of the calendar year following the later of the
calendar year in which the Participant attains age 70 '/2 (72 if you reach age 70 '/2 after
December 31, 2019) or has a Severance from Employment.
9.06 Required Minimum Distributions, All distributions under the Plan must
comply with IRC Section 401(a) (9) and the regulations issued thereunder.
(a) Participant dies before entire interest is distributed. If a Participant
dies after the distribution of the Participants interest has begun but before the entire interest has
been distributed to him or her, the remaining portion of such interest will be distributed to the
Beneficiary at least as rapidly as under the method of distribution in effect at the time of the
Participant's death.
(b) Participant dies before the distribution of the employee's interest has
begun. If a Participant dies before the Required Beginning Date of distribution, payments to a
Beneficiary must comply with one of the following requirements.
(i) Generally. The entire account value must be distributed within 5
years after the death of such Participant's death; or
(ii) Designated Beneficiary. If the Designated Beneficiary is a person
other than the Participant's spouse, distributions to the Designated Beneficiary of the account
must begin no later than I year (or such later date as prescribed by the IRC or Treasury
regulations) after the date of the Participant's death, payable over a period not extending beyond
the life expectancy of the Beneficiary; or
(ill) Spouse as Designated Beneficiary. If the Designated Beneficiary
is the Participant's surviving spouse, distributions to the surviving spouse must begin no later
than I year (or such later date as prescribed by the IRC or Treasury regulations) after either 1)
the date of death of the participant or 2) the date which the Participant would have attained age
70 % (72 if you reach age 70 '/z after December 31, 2019), whichever is later. The account must
then be paid over a period not extending beyond the life expectancy of the spouse.
(c) If the Participant dies before the date distributions begin, the Participant's
surviving Spouse is the Participant's Designated Beneficiary, and the surviving Spouse dies
before distributions are required to begin, this Article VIII will apply as if the surviving Spouse
were the Participant.
(d) If the Beneficiary is not a person, such as a trust or an estate, the entire
account value must be distributed according to the five-year rule in (b) (i) above.
(9.07) "Coronavirus-Related Distribution" Except as provided in paragraph (2) of
Section 2202 the CARES Act ,the term Coronavirus-Related Distribution or• `CRD" means any
distribution from an eligible retirement plan made—
a. on or atter January 1, 2020, and before December 31, 2020,
ba to a "CARES Act Qualified Individual"
i4 who is diagnosed with the virus SARS—CoV-2 or with coronavirus
disease 2019 (COVID—I9) by a test approved by the Centers for Disease Control and Prevention,
ii. whose spouse or dependent (as defined in section 152 of the
Internal Revenue Code of 1986) is diagnosed with such virus or disease by such a test, or
iii. who experiences adverse financial consequences as a result of
being quarantined, being furloughed or laid off or having work hours reduced due to such virus
or disease, being unable to work due to lack of childcare due to such virus or disease, closing or
reducing hours of a business owned or operated by the individual due to such virus or disease, or
other factors as determined by the Secretary of the Treasury (or the Secretary's delegate).
1 U.01 Disfribution. If the Participant has an Unforeseeable Emergency before
retirement or other Severance from Employment, the Participant may elect to receive a lump sum
distribution equal to the amount requested or, if less, the maximum amount determined by the
Administrator to be permitted to be distributed under this Article.
10.02 Unforeseeable Emergency Relined. An Unforeseeable Emergency is defined as
a severe financial hardship of the Participant resulting from: an illness or accident of the
Participant, the Participant's Spouse, or the Participant's dependent (as defined in IRC Section
152(a)); loss of the Participant's property due to casualty (including the need to rebuild a home
following damage to a home not otherwise covered by homeowners insurance, e.g. as a result of
a natural disaster); the need to pay fot• the funeral expenses of the Participant's Spouse or
dependent (as defined in IRC Section 152(a)); or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant, or as otherwise
permitted by law. For example, the imminent foreclosure of or eviction from the Participant's
primary residence may constitute an Unforeseeable Emergency. In addition, the need to pay for
medical expenses, including non-refundable deductibles, as well as for the cost of prescription
drug medication, may constitute an Unforeseeable Emergency. Except as otherwise specifically
provided in this Article, neither the purchase of a home nor the payment of college tuition is an
Unforeseeable Emergency.
10.03 Unforeseeable Emergency Distribution Standard. A Distribution on account
of Unforeseeable Emergency may not be made to the extent that such emergency is or may be
relieved through reimbursement or compensation from insurance or otherwise, by liquidation of
the Participant's assets, to the extend the liquidation of such assets would not itself cause severe
financial hardship, or by cessation of deferrals under the Plan, or as otherwise permitted by law.
This section does not apply to designated Roth Accounts.
10.04 Distribution Necessary to Satisfy Emergency Need. Distributions because of
an Unforeseeable Emergency may not exceed the amount reasonably necessary to satisfy the
emergency need (which may include any amounts necessary to pay any federal, state, or local
income taxes or penalties reasonably anticipated to result from the distribution)
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ARTICLE XI. ELIGIBLE ROLLOVERS AND PL-TO-PLAN TRANSr'ERS
11.01 Eligible Rollovers to the an.
(a) Incoming Rollover Contributions. A Participant who is entitled to
receive an Eligible Rollover Distribution from another Eligible Retirement Plan may request to
have all or a portion of the Eligible Rollover Distribution paid to the Plan, provided,
(1) the Eligible Rollover Distribution is made entirely in the form of
U.S. dollars, and,
(2) the Participant demonstrates to the Administrator's satisfaction that
the amount is a qualifying Eligible Rollover Distribution under IRC Sections 402(c)(4),
403(a)(4), or 408(d)(3),
(b) Definitions of Eligible Rollover Distribution. For purposes of Section
9.01(a) Incoming Rollover Contributions, an Eligible Rollover Distribution means any
contribution of all or any portion of a Participant's benefit under another Eligible Retirement
Plan to the Plan, except that an Eligible Rollover Distribution does not include:
(i) any installment payment for a period of 10 years or more,
(ii) any distribution made as a result of an Unforeseeable Emergency,
(iii) For any other distribution, the portion, if any, of the distribution
that is a required minimum distribution under IRC Section 401(a)(9).
(c) Separate Account for Eligible Rollover Contributions. The Plan shall
establish and maintain for the Participant an Eligible Rollover Account for any Eligible Rollover
Distribution paid to the Plan from any Eligible Retirement Plan that is not an eligible
governmental plan under IRC Section 457(b). In addition, the Plan shall establish and maintain
for the Participant an Eligible Rollover Account for any Eligible Rollover Distribution paid to
the Plan from any Eligible Retirement Plan that is an eligible governmental plan under IRC
Section 457(b).
l 1.02 Eligible Rollovers from the Plan. A Participant or the su►•viving Spouse of a
Participant (or a Participant's former Spouse who is the Alternate Payee under a Domestic
Relations Order, as defined in IRC Section 414(p)) who is entitled to an Eligible Rollover
Distribution may elect, at the time and in the manner prescribed by the Administrator, to have all
or any portion of the distribution paid directly to an Eligible Retirement Plan specified by the
Participant in a direct rollover.
11.03 Plan -to -Plan Transfers - to the Plan.
(a) Permissive Plan -to -flan Transfers. At the direction of the Employer,
the Administrator may permit a class of Pa►°ticipants who ace Participants in another eligible
governmental IRC Section 457(b) plan to transfer assets from said eligible governmental IRC
Section 457(b) plan to the Plan as provided herein. Such a transfer is permitted only if the other
Plan provides for the direct transfer of each Participant's interest therein to the Plan. Transfers
from other eligible 457 Plans (as defined in IRC Section 457) to the Plan Nvill be accepted at the
Participant's request if such transfers are in cash.
(b) Effect of Transfers on Annual Deferral and/or Contribution
Limitations. Any such transferred amount shall not be subject to the limitations of Section 6.01
Basic Annual Limitation, 6.02 Special Section 457 Catch-up Limitation, and 6.03 Age 50 Catch-
13
Up Annual Deferral and/or Roth Contributions, as an Annual Deferral/COntributlotl, provided
however, that the actual amount deferred during the calendar year under both Plans shall be
taken into account in calculating the maximum Annual Deferral/Contribution for that year. The
amount so transferred shall be credited to the Participant's Account Balance and shall be held,
accounted for, administered, and otherwise treated in the same manner as an Annual
Deferral/Contribution by the Participant under the Plan.
(c) Required Documentation for Transfers to the Plan. The Administrator
may require such documentation from the other Plan as it deems necessary to effectuate the
transfer in accordance with IRC Section 457(e)(10) and Treasury Regulation Section 1.457-10(b)
and to confirm that the other Plan is an eligible governmental plan as defined in Treasury
Regulation 1.457-2(f).
1 l .04 Plan -to -Plan Transfers -from the Plan.
(a) Outgoing Plan -to -Plan Transfers Puy°suant to Severance of
Employment. At the direction of the Employer, the Administrator may permit a class of
Participants and Beneficiaries to elect to have all or any portion of their Account Balance
transferred to another eligible governmental plan with the meaning of IRC Section 457(b) and
Treas. Reg. 1.457-2(f). A transfer is permitted under this Section 9.04(a) for a Participant only if
the Participant has had a Severance from Employment with the Employer and is a public
employee of the entity that maintains the other eligible governmental 457(b) Plan. Further, a
transfer is permitted under this Section 9.04(a) only if the other eligible governmental 457(b)
plan provides for the acceptance of plan -to -plan transfers with respect to the Participants and
Beneficiaries and for each Participant and Beneficiary to have an amount deferred and or
contributed under the other plan immediately after the transfer at least equal to the amount
transferred.
(b) Outgoing Plan -to -Plan Transfers While Employed. If the Employer
offers an eligible governmental 457(b) plan other than the Plan, and such other plan accepts
transfers, the Participant may transfer the Account Balance in cash from the Plan to the other
plan.
(c) Limitation of Liability. Upon the transfer of assets under this Section
9.04, the Plan's liability to pay benefits to the Participant or Beneficiary under this Plan shall be
discharged to the extent of the amount so transferred for the Participant or Beneficiary. The
Administrator may require such documentation from the receiving plan as it deems appropriate
or necessary to comply with the is Section 9.04 (for example, to confirm that the receiving plan
is an eligible governmental plan under paragraph (a) of this Section 9.04, and to assure that the
transfer is permitted under the receiving plan) or to effectuate the transfer pursuant to Treas. Reg.
I A57-10 (b).
(d) Correction of Excess Deferrals and/or Contributions. If the Annual
Deferral and/or Contribution on behalf of a Participant for any calendar year exceeds the
limitations described above, or the Annual Deferral and/or Contribution on behalf of a
Participant for any calendar year exceeds the limitations described above when combined with
other amounts deferred or contributed by the Participant under another eligible 457 Plan under
section 457(b) of the Code for which the Participant provides information that is accepted by the
Administrator, then the Annual Deferral and/or Contribution, to the extent in excess of the
applicable limitation (adjusted for any income or loss in value, if any, allocable thereto), shall be
distributed to the Participant.
ARTICLE XII. DOMESTIC RELATIOI�TS ORDERS
12.01 Receipt of Domestic Relations Orders. When the Employer, Administrator; or
Plan receives a Domestic Relations Order (DRO), judgment, decree, or order (including approval
of a property settlement agreement) pursuant to 26 USC 414(p) that relates to the provision of
child support, alimony payments, or the marital property rights of Spouse or former Spouse,
child or other dependent of a Participant is made pursuant to the domestic relations law of any
State, then the amount of the Participant's Account Balance shall be paid in the manner and to
the person or persons so directed in the DRO as the Alternate Payee. Such payments shall be
made without regard to whether the Participant is eligible for a distribution of benefits under the
"tan. The Administrator shall establish reasonable procedures for determining the status of any
such decree or order and for effectuating distribution pursuant to the DRO. Upon receipt of a
DRO:
(a) The Administrator shall notify the Participant and Alternate Payee of the
receipt of the DRO, and
(b) Within a reasonable time, the Administrator will follow the procedure
adopted by the Employer to determine the validity of the DRO. In the event the Administrator
believes that the DRO is acceptable, it will process the DRO in accordance with the
Administrator's procedures. If the DRO does not appear to be acceptable, the Administrator may
contact the Employer for a final determination and instruction regarding final disposition of the
DRO.
12.02 Validity of DRO. For purposes of this Article Xl, a valid DRO is a judgment,
decree, order, or approval of a marital property settlement made pursuant to a state domestic
relations law (including community property law), relating to the property rights of a Participant
and Alternate Payee. ht addition, the DRO must.
(a) Create or recognize the existence of the right of an Alternate Payee to all
or a portion of benefits payable with respect to a Participant under the Plan,
(b) Clearly specify the following information:
(i) The name and last blown mailing address of the Participant and
Alternate Payee covered by the DRO; and
(ii) The amount or percentage, or the manner in which the amount or
percentage is to be determined, of the Participant's benefits to be paid to the Alternate Payee;
and
(iii) "The number of payments or period which the DRO applies; and
(iv) The Plan to which such DRO applies.
(c) Provide a form of payment to the Alternate Payee that is permitted under
the Plan; and,
(d) Not require the payment of benefits to an Alternate Payee which are
required by a prior DRO to be paid to another Alternate Payee.
12.03 Processing of a DRO. if it has been determined that a DRO applies to a
Participant's account, unless specifically directed othertivise by the Employer, the Administrator
shall comply with the DRO. The Administrator may place a restrictive hold on a Participant's
Account Balance while it determines the validity ol', and/or processes a DRO. The Administrator
15
shall establish a separate Account Balance for the Alternate Payee and transfer the assigned
value or benefit from the Participant's account into the Alternate Payee's separate Account
Balance.
12.04 Rights of an Alternate Payee to Receive Dl3ti'lbl1t10I13. The Alternate Payee is
entitled to receive distributions immediately upon the establishment of the separate Account
Balance pursuant to Section 10.03 Processing of a DRO. Commencement of distributions must
begin no later than April Is' following the year in which the Alternate Payee attains age 70 '/2 (72
if you reach age 70 %z after December 31, 2019). Distributions made to an Alternate Payee are
reported as taxable income to the Alternate Payee in the calendar year in which the distributions
are received by the Alternate Payee. State taxes, if applicable, and federal taxes will be withheld
from any distribution on the Alternate Payee's Account Balance based upon the tax withholding
elections of the Alternate Payee. The Alternate Payee may not make any contributions to the
account but is permitted to designate Beneficiaries for the Account Balance and to exercise
exchanges among the investment options as permitted by the Plan.
12.05 No Liability for Prior Distributions. In the event that it is determined that a
DRO is valid and the Participant has begun receiving distributions 114om the Plan, the Alternate
Payee must commence distribution within sixty (60) days following the date the DRO is
determined to be valid. The Administrator shall only process a DRO to the extent possible based
upon the then current value or benefit in the Participant's Account Balance.
ARTICLE III. CORONAVIRIJS-RELATIJD DISTRIBUTIOIetS
13.01 Coronavirus-Related Distribution, A Participant who is a Qualified
Individual as defined below may apply for and receive a Coronavirus-Related Distribution, on or
after January 1, 2020, and before December 31, 2020, only, in an amount not to exceed the lesser
of the present value of the vested portion of the Participant's Account on the date of distribution,
or $100,000. The Program Administrator may rely on the Participant's certification that the
Participant satisfies the requirements of this subsection (t) in determining whether any
distribution is a Coronavirus-Related Distribution. A Coronavirus-Related Distribution shall not
be treated as an Eligible Rollover Distribution.
(1) A "Qualified Individual" is a Participant who:
(a) is diagnosed with the virus SARS-CoV-2 or with coronavirus
disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention,
or
(b) has a spouse or dependent (as defined in section 152 of the Internal
Revenue Code of 19$6) diagnosed with COVID-19 by a test approved by the Centers for Disease
Control and Prevention, or
(c) experiences adverse financial consequences as a result of
(i) being quarantined, furloughed or laid off or having work
hours reduced due to COV ID-19,
(ii) being unable to work due to lack of child care due to
COVII7-19,
16
(iu) being unable to work due to closing or reducing hours of a
business owned or operated by the Participant due to COVID-19, or
(iv) other factors as determined by the Secretary of the
Treasury.
(2) A Participant who receives a Coronavirus-Related Distribution may repay
such distribution in one or more contributions to the Plan or to a deemed IRA established with
this Plan within three years of the Distribution. Such repayment shall be treated for tax purposes
as a Direct Rollovej•.
13.02. Payment Options. The election of a payment option by a Participant ar a
Beneficiary under Section 12.1 must be made no later than thirty (30) days before the
commencement of such benefits. Subject to restrictions established by the Program
Administrator, the Plan shall permit payout options in the form of lump sums, periodic payments
of a fixed amount or fixed duration, or life contingent annuities. Absent such an election, the
Account will be paid in a lump sum. If at the time the payment of a participant or beneficiary's
vested accumulated account balance (including that portion of the balance attributable to rollover
contributions and earnings) is $1,000 or less, the vested balance shall be paid to the participant or
beneficiary in a hump sum as soon as administratively possible on or after the date the benefit is
otherwise payable, unless the participant or beneficiary elects to have the account balance rolled
over to an eligible retirement plan or remain in the plan subject to restrictions established by the
Program Administrator. See Article XV for rollover distribution options.
ARTICLE XIV. AMENDIdIEN'T AND TERMINATION
14.01 Employer may, at any time, amend, modify or suspend this Plan, in whole or in
part, at any time, or cease deferring and or contributing Compensation pursuant to the Plan.
Notwithstanding any other provision of the Plan, Employer in its sole discretion, may terminate
this Plan and discharge in full its obligations under Plan to all Participants or all Participant's
beneficiaries by distributing to such Participants or beneficiaries the value of the Participant's
account. No amendment, modification, suspension, termination or cessation shall affect the
rights of Participants or their beneficiaries to the extent of any amount deferred or contributed
prior to the amendment, modification, suspension, termination or cessation.
ARTICLE XV. TRUST FUNDS
15.01 Trust Fund. A11 amounts of Annual Deferrals and Contributions, all property
and rights purchased with such amounts, and all income attributable to such amounts, property,
or rights shall be held and invested in the Trust Fund in accordance with this Plan and the Trust
Agreement. The Trust Fund, and any subtrust established under the Plan, shall be established
pursuant to a written agreement that constitutes a valid trust under the law of the City of
Bremerton. The Trustee shall ensure that all investments, amounts, property, and rights held
under the Trust Fund are held for the exclusive benefit of Participants and their Beneficiaries.
The Trust Fund shall be held in trust pursuant to the Trust Agreement for the exclusive benefit of
Participants and their Beneficiaries and defraying reasonable expenses of the Plan and of the
Trust Fund. It shall be impossible, prior to the satisfaction of all liabilities with respect to
17
Participants and their Beneficiaries, for any part of the assets and income of the Trust Fund to be
used for, or diverted to, purposes other than for the exclusive benefit of Participants and their
Beneficiaries.
16.01 This Plan amends in its entirety and restates the City of B� ernerton's Prior Plan.
This Plan shall apply to all Participants in the Prior Plan on the effective date hereof, and also to
each Employee who elects to participate in this Plan on or after the effective date hereof.
ARTICLE XVII. MISCELLANEOUS
I7.Ol Choice of Law. This Plan shall be construed under the laws oF the State of
Washington.
17.02 Section Headings. The sections headings of this Plan are not a part of this Plait
and shall have no effect upon the construction or interpretation of any part hereof.
17.03 Nonassignability. Neither Participant nor his or her beneficiary shall have any
right to sell, assign, transfer or otherwise convey the right to receive any payment hereunder; nor
shall any such payments be subject to attachment, garnishment or execution of any kind in
connection with any claim against Participant or his or her beneficiary.
17.04 Conflict between Plan and Law. In the event of a contlict of any provision of
this Plan with applicable provisions of the IRC or Treasury Regulations, the provisions of the
IRC or Treasury Regulations will be controlling.
17.05 Severability. Any provisions of this Plan which shall prove to be invalid, void,
or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other
provision shall remain in full force and effect.
IN WITNESS WHEREOF, Employer has caused this PIan to be signed and
attested on this day of _, 2021.
Attest:
City Cleric, ANGELA I-fOOVER
CITY OF BREMERTON, Employer
GREG WHEELER, Mayor