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Home My WebLink AboutDocumentation_Regular_Tab 08_5/14/2020Agenda Item #8. Regular Council STAFF MEMO a Meeting: Regular Council - May 14 2020 Staff Contact: Hugh Dunkley, Finance Director Department: Finance IV, III RESOLUTION NO. 14-20, A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, FLORIDA, APPROVING AMENDMENT NO. 1 TO THE ADOPTION AGREEMENT FOR GOVERNMENTAL MONEY PURCHASE PLAN NO. 98781-02; AND PROVIDING AN EFFECTIVE DATE. In 2013, the Village established a Section 401(a) Defined Contribution Plan to provide retirement benefits for police officers hired on or after February 1, 2013. Under the terms of the DC Plan, the Village contributed nine percent (9%) of each police officer's compensation into the officer's 401(a) account, and police officers were required to contribute at least 1 % but no more than 12% of compensation to their account. In 2016, the Village agreed to increase its contribution to the DC plan on behalf of the Assistant Police Chief to 10% of his compensation, starting May 9, 2016. Likewise, in 2018, the Village agreed to increase its contribution to the DC plan on behalf of the Police Chief to contribute 10% of his compensation, starting April 2, 2018. The DC Plan Adoption Agreement has not been amended to reflect the increased employer contributions for these management employees. In June 2018, the DC Plan was closed to new members. At that time, existing members of the DC Plan were given the option to join the Public Safety Officers Pension Plan. The Police Chief and Assistant Police Chief elected to stay in the DC Plan and are the only remaining participants in the DC Plan. Pursuant to IRS rules and regulations, the Village has a duty to correct operational errors arising from retirement plan administration in order to maintain the plan's qualified status. Operational errors occur when a plan is not operated in accordance with the written terms of the plan. The Village is hereby amending its plan adoption agreement (attached hereto as Exhibit A), so as to be in concert with the terms and conditions of the aforementioned management employees' compensation arrangement as well as to be in compliance with IRS guidelines. Staff recommends approval of the amended adoption agreement. Resolution Amendina 401(a) Plan Adoption Aareement.ADA Page 261 of 308 Agenda Item #8. RESOLUTION NO. 14-20 A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, FLORIDA, APPROVING AMENDMENT NO. 1 TO THE ADOPTION AGREEMENT FOR GOVERNMENTAL MONEY PURCHASE PLAN NO. 98781-02; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Village of Tequesta has adopted and maintains a Governmental Money Purchase Plan & Trust designated as "Plan No. 98781-02" (hereinafter referred to as the "401(a) Plan" or "Plan"); and WHEREAS, the Plan is administered by Empower Retirement LLC in accordance with Section 401(a) of the Internal Revenue Code for the benefit of certain Village employees and their beneficiaries; and WHEREAS, certain terms of the 401(a) Plan are set forth in the Adoption Agreement for Governmental Volume Submitter Money Purchase Plan ("Adoption Agreement"); and WHEREAS, the Village and the participating employees make specified mandatory contributions to the 401(a) Plan in accordance with the terms of the Adoption Agreement; and WHEREAS, the Village agreed to increase its contribution to the 401(a) Plan on behalf of the Assistant Police Chief effective May 9, 2016, and agreed to increase its contribution to the 401(a) Plan on behalf of the Police Chief effective April 2, 2018; and WHEREAS, the 401(a) Plan was closed to new members on June 11 2018, and employees who were participating in the Plan on that date were given a one-time option to join the Public Safety Officers Pension Plan or continue participating in the 401(a) Plan; and WHEREAS, the Police Chief and the Assistant Police Chief elected to continue participating in the 401(a) Plan; and WHEREAS, the Adoption Agreement has not been amended to reflect the changes in the contribution rates or Plan eligibility requirements; and 01277435-2 1 Page 262 of 308 Agenda Item #8. WHEREAS, an amendment to the Adoption Agreement is necessary to reflect the current operation of the Plan; and WHEREAS, the Village Council has determined that the adoption of this Resolution is in the best interest and the Village and its employees. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS: Section 1: The foregoing "Whereas" clauses are confirmed as true and incorporated herein. Section 2: The Village Council hereby approves Amendment No. 1 to the Adoption Agreement for Governmental Volume Submitter Money Purchase Plan No. 98781-02, as set forth in Exhibit A, which is attached hereto and incorporated by reference herein. Section 3: This Resolution shall become effective immediately upon passage, and shall operate retroactively to the dates referenced in Amendment No. 1. 01277435-2 2 Page 263 of 308 Agenda Item #8. EXHIBIT A AMENDMENT NO. 1 TO VILLAGE OF TEQUESTA ADOPTION AGREEMENT FOR GOVERNMENTAL VOLUME SUBMITTER MONEY PURCHASE PLAN NO. 98781-02 The Adoption Agreement for Village of Tequesta Governmental Volume Submitter Money Purchase Plan No. 98781-02 (hereinafter referred to as "Adoption Agreement") is hereby amended as follows: 01277435-2 1. Section 12. "Eligible Employees" is hereby amended as follows: 12. ELIGIBLE EMPLOYEES (Plan Section 1.17) means all Employees (including Leased Employees) EXCEPT those Employees who are excluded below or elsewhere in the Plan: a. [ ] No excluded Employees. There are no additional excluded Employees under the Plan (skip to Question 13). b. [X] Exclusions. The following Employees are not Eligible Employees for Plan purposes (select one or more): 1. [ ] Union Employees (as defined in Plan Section 1.17) 2. [ ] Nonresident aliens (as defined in Plan Section 1.17) 3. [ ] Leased Employees (Plan Section 1.28) 4. [ ] Part-time/temporary/seasonal Employees. A part-time, temporary or seasonal Employee is an Employee whose regularly scheduled service is less than Hours of Service in the relevant eligibility computation period (as defined in Plan Section 1.54). However, if any such excluded Employee actually completes a Year of Service, then such Employee will no longer be part of this excluded class. 5. [X] Other: All except certified police department employees (must be definitely determinable under Regulations §1.401-1(b). Exclusions may be employment title specific but may not be by individual name nor result in only a finite group of individuals (e.g., excluding anyone hired after 12/31/12.) Effective June 1, 2018, participation in the Plan shall be closed to new members, and employees who are not participating in the Plan on such date shall not be eligible to participate in the Plan. Employees who are participating in the Plan on such date shall have a one-time irrevocable option to participate in the Public Safety Officers Pension Plan. Those employees who elect to continue Participating in this Plan shall maintain their existing accounts in the Plan and continue to manaae their Plan account investments until 3 Page 264 of 308 Agenda Item #8. 01277435-2 they retire or terminate Village employment, in accordance with the Plan. 2. Section 24. "Employer Contributions" is hereby amended as follows: 24. EMPLOYER CONTRIBUTIONS (OTHER THAN MATCHING CONTRIBUTIONS) (Plan Section 4.1(a) (2)) (skip to Question 26 if Employer contributions are NOT selected at Question 11.b.) CONTRIBUTION FORMULA (select one or more of the following contribution formulas:) a. [X] Fixed contribution equal to (only select one): 1. [-X] (� 9 0/ of each Pal4inipaRt's OMPe RsatiGR for eaGh 7cJ a. [ ] Plan Year b. [ ] calendar quarter c. [ ] month d. [X] pay period e. [ ] week 2. [ ] $ per Participant. 3. [ ] $ per Hour of Service worked while an Eligible Employee a. [ ] up to hours (leave blank if no limit) 4. [X] other (the formula described must satisfy the definitely determinable requirement under Regulations §1.401-1(b)): The fixed contribution is equal to 9% of each participant's compensation for each pay period, except as follows: The fixed contribution for the Police Chief shall be 10% of his compensation for each pay period effective April 2, 2018, and the fixed contribution for the Assistant Police Chief shall be 10% of his compensation for each pay period effective May 9, 2016. 4 Page 265 of 308