HomeMy WebLinkAbout525_Amending Defined Benefit Portion of Municipal Retirement PlanDefined Benefit Plan
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ORDINANCE NUMBER 525
CITY OF OW ASSO, OKLAHOMA
AN ORDINANCE AMENDING THE RETIREMENT PLAN OF THE CITY
OF OW ASSO, OKLAHOMA, AS ADMINISTERED BY THE OKLAHOMA
MUNICIPAL RETIREMENT FUND BY ADDING ADDITIONAL
DEFINITIONS OF "COMPENSATION" TO THE PLAN; PROVIDING FOR
REPEALER AND SEVERABILITY; AND DECLARING AN EMERGENCY .
CITY OF OWASSO,
CITY COUNCIL OF THE
BE IT ORDAINED BY THE
OKLAHOMA THAT:
SECTION ONE Due to changes in Federal law, and in order to comply with certain
requirements the Internal Revenue Service regarding the tax qualified status of the Retirement
Plan City of Owasso, Oklahoma, it is necessary to amend the definition of compensation
contained the Plan as hereinafter set forth
SECTION TWO: The Retirement Plan of the City of Owasso, Oklahoma, as adopted
by Ordinance No. 146, on June 19, 1972, is hereby amended only by adding the following
language to the definition of compensation in the Plan:
forth in the
set
compensation'
"Effective as of 1, 1994, the definition of
is hereby amended to add the following paragraphs
addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan years beginning
on or after January 1, 1994, the annual compensation of each employee taken into
account under the Plan shall not exceed the Omnibus Budget Reconciliation Act of 1993
(OBRA '93) annual compensation limit. The OBRA '93 annual compensation limit is
$150,000.00, as adjusted by the Commissioner for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months over which
compensation is determined (determination period) beginning in such calendar year. If
a determination period consists of fewer than 12 months, the OBRA '93 annual
compensation limit will be multiplied by a fraction, the numerator of which is the number
the determination period, and the denominator of which is 12
For Plan years beginning on or after January 1, 1994, any reference in this Plan
to limitation under Section 401 (a) (17) of the Code shall mean the OBRA '93 annual
compensation limit set forth this provision.
Compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current Plan year, the compensation
prior determination period is subject to the OBRA '93 annual compensation limit
effect for that prior determination period. For this purpose, for determination periods
beginning before the first day of the first Plan year beginning on or after January 1,
1994, OBRA '93 annual compensation limit is $150,000.00."
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herewith are hereby repealed
SECTION FOUR: If any part, article, section, or subsection of this ordinance shall be
or unconstitutional for any reason, such holding shall not be construed to impair or
invalidate the remainder of this ordinance. notwithstanding such holding
conflict
ordinances
All
SECTION THREE
SECTION FIVE It being immediately necessary for the preservation of the public
peace, safety, and welfare of the City of Owasso and the inhabitants thereof that this
ordinance be put into full force and effect, an emergency is hereby declared to exist by
reason whereof this ordinance shall be force and effect from and after its passage and
approval
***END***
The foregoing ordinance was introduced before the Owasso City Council on the 21st day
1996, and was duly adopted and approved by the Mayor and City Council of the City
of Owasso, Oklahoma, on the 21st day of May, 1996, with the emergency clause being acted
upon and approved separately, after compliance with notice requirements of the Open Meeting
OS, Section 301, et seq)
legality on May 21
2
as to form and
Defined Benefit
Of Publication
STATE OF TULSA COUNTY, 8S:
Bill R. oflawfulage, being duly sworn
and says that he is the publisher of the Published In the Owasso Reporter, Owasso, Tulsa County, Oklahoma, May
30, 1900.
OWASSO REPORTER , a weekly ORDINANCE NO. 525
CiTY OF OWASSO, OKLAHOMA
newspaper in the city of OWASSO AN ORDINANCE AMENDING THE RETIREMENT PLAN OF THE CITY
OF OWASSO, OKLAHOMA, AS ADMINISTERED BY THE OKLAHOMA
Tulsa a neWllpl1per qualified to MUNICIPAL RETIREMENT FUND BY ADDING ADDITIONAL
DEFINITIONS OF 'COMPENSATION" TO THE PLAN; PROVIDING
FOR REPEALER AND SEVERABILITY; AND DECLARING
advertisements and publications AN EMERGENCY.
The foregoing ordinance was Introduced belorethe Owasso City Council
as in Section 106 of Title 25, Oklahoma on the 21 oil day of May, 1996, and was duly adopted and approved by the
Mayor and City Council of the Clly o! Owasso, Oklahoma, on the 21s1 day
01 May, 1900, wllh the emergency clause being acled upon and approved
Statutes 1971 and 1983 as amended, and thereafter, separately, OIlier compliance with notice requirements otthe Open Meeting
Law (25 OS, Section 301. et seq).
and with all other requirements of the laws CITY OF OWASSO, OKLAHOMA
of Oklahoma with reference to legal publications. By: Is! DANNY EWING
Danny Ewing, Mayor
That said Ii true copy of which is attached SEAl
ATTEST:
hereto, was in the regular edition of said Is! MARCIA BOUTWEll
the period and time of publication Marcia BoulweR, City Clerk
newspnper
Approved as to lorm and legality on May 21, 1996.
and not in a on the following dates: Is! RONALD D. CATES
Ronald D Cates, City AIIomey
-&:<<;2~9
Subscribed and sworn to before me this 30th
day of May _,199 _
3M~ j-fM ~
)tary
Commission expires: March 20 1997
PUBLISHER'S FEE $ 29.50
'"
TO: HONORABLE MAYOR AND CITY COUNCIL
CITY OF OWASSO
FROM: MICHELE DEMPSTER
PERSONNEL OFFICER
SUBJECT: REQUEST APPROVAL OF ORDINANCES Gi525� #526 AND
RESOLUTION #96-07 RELATING TO THE CITY'S EMPLOYEE
RETIREMENT SYSTEM PLAN (OMRF)
DATE: May 13, 1996
BACKGROUND:
The Oklahoma Municipal Retirement Fund is a system by which city or town governments and
municipally owned hospitals in Oklahoma are authorized by law to "pool" or "join" funds to
provide for the retirement of their employees.
Since 1972, full time employees of the City of Owasso (who are not active members of a state
police or fire pension system) have been required to participate in the Oklahoma Municipal
Retirement Fund (OMRF) Defined Benefit Plan. Throughout the years modifications have been
made to our plan either to enhance or increase benefits. Currently employees are eligible to
participate upon hire and are 100% vested after five years of service. Retirement benefits are
based upon the average of the highest 60 consecutive months salary within the last 120 months.
July 1992, the City of Owasso established the Thrift Plan as a supplemental optional retirement
plan for all city employees. The Thrift Plan allows employees to contribute up to 2% of their
base wages and the city will match such contributions with a 1 % contribution. Employees are
100% vested in the citys matching contributions after five years.
The OMRF system is governed by a Trust Indenture which is adopted through resolution by all
participating municipalities. The Trust Indenture is the document which allows municipalities
to join together-in the common goal of administering and investing for retirement plans. The
Master Benefit Plan customizes each municipality's plan to their specifications, this document
is updated and changed as need through ordinances approved by the Retirement Committee. The
Retirement Committee is comprised of the members of the City Council with the Personnel
Officer appointed as the authorized agent or coordinator between OMRF administrators and the
Retirement Committee.
EMPLOYEE RETIREMENT SYSTEM OMRF
MARCH 25, 1996
PAGE TWO
COMMENTS REGARDING ORDINANCE #525 AND ORDINANCE #526:
Approval of Ordinance #525 and Ordinance #526 will not result in a benefit change for
participants. However, approval of both of these ordinances is required in order for the Cites
of Owasso Defined Benefit Plan and Thrift Plan to remain a "qualified plan" within the IRS
guidelines. Ordinance #525 will amend the City's Defined Benefit Plan and Ordinance #526 will
amend the City's Defined Contribution or Thrift Plan. The result of both of these ordinances
will be to change the plan definition of "Compensation" - limiting the amount to be considered
for contributions and benefit purposes to $150,000 per year. Simply put, the requested change
will affect only people whose salary is in excess of $150,000 per year. Since we do not have
anyone who falls in that category, the action has no impact on our employees and is made only
to remain in compliance with the IRS. In order to maintain compliance with IRS regulations
Ordinance #525 and Ordinance #526 must be approved and submitted to OMRF by May 30,
1996 and in effect by July 1, 1996. Therefore approval of these ordinances is requested with
emergency clauses.
COMMENTS REGARDING RESOLUTION #96 -07:
The OMRF Trustees have approved a proposed amendment to the OMRF Trust Indenture. The
purpose of the proposed amendment is to allow municipalities the option of modifying their
Defined Contribution (Thrift) Plan document to permit participant loans. Participant loans would
enable an employee to borrow up to 50% of their vested balance, to be repaid through payroll
deduction. In order for the OMRF Trust Indenture to be changed, a two- thirds majority of the
membership must approve the amendment. Approval of this Resolution would not automatically
result in a change in our current benefit plan. Should the amendment be approved by the
required two- thirds majority, each municipality would then decide if they will incorporate the
change into their individual plan document. The Benefits Committee will review and consider
the participant loan option should it become available.
RECOMMENDATION:
Agenda Item #9: Staff recommends approval of Ordinance #525, amending the Oklahoma
Municipal Retirement Fund Defined Benefit Plan, approving plan amendment
required by the Internal Revenue Service in order to remain an IRS "qualified
plan".
Agenda Item #10: Staff recommends approval of an emergency clause to Ordinance #525,
allowing such Ordinance to be submitted by May 30, 1996.
EMPLOYEE RETIREMENT SYSTEM OMRF
MARCH 25, 1996
PAGE THREE
Agenda Item #11: Staff recommends approval of Ordinance #526, amending the Oklahoma
Municipal Retirement Fund Defined Contribution (Thrift) Plan, approving
plan amendment required by the Internal Revenue Service in order to remain
an IRS "qualified plan".
Agenda Item #12: Staff recommends approval of an emergency clause to Ordinance #526,
allowing such Ordinance to be submitted by May 30, 1996.
Agenda Item #13: Staff recommends approval of Resolution #96 -07 approving amendment to
the OMRF Trust Indenture, pertaining to authorizing participant loans.
ATTACHMENT:
1. Summary of Participant Loan Policies
2. Ordinance #525
3. Ordinance #526
6. Resolution #96 -07