HomeMy WebLinkAbout526_Amending Defined Contribution Portion of Municipal Retirement PlanDefined Contribution
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ORDINANCE NUMBER 526
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 OW ASSO,
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 of the Internal Revenue Service regarding the tax qualified status of the Retirement
Plan the 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:
in the
forth
set
compensation'
"Effective as of July 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
months in 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 the limitation under Section 401(a)(17) of the Code shall mean the OBRA '93 annual
compensation limit set forth in 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
for that 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, the OBRA '93 annual compensation limit is $150,000.00."
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in conflict herewith are hereby repealed
section, or subsection of this ordinance shall be
such holding shall not be construed to impair or
notwithstanding such holding
All
SECTION FOUR: If any part
held or unconstitutional for any reason,
invalidate the remainder of this ordinance
ordinances
article
SECTION THREE
SECTION FIVE: It being immediately necessary for the preservation of the public
peace, health, safety, and welfare of the City of Owasso and the inhabitants thereof that this
ordinance shall be put into full force and effect, an emergency is hereby declared to exist by
reason whereof this ordinance shall be in full 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
of May, 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
Law (25 OS, Section 301, et seq).
CITY
By:
Danny Ewing
2
legality on
Approved as to form and
Defined Contribution
Published In the Owasso Reporter, Owasso, Tulsa County, Oklahoma, May
30, 1996.
ORDINANCE NO. 526
CITY OF OWASSO, OKLAHOMA
AN OROlNANCE AMENOlNG THE RETIREMENT PlJ\N OF THE CITY
OF OWASSO, OKLAHOMA, AS ADMINISTERED BY THE OKlAHOMA
MUNICIPAL RETIREMENT FUND BY ADDING ADDITlONAL
DEFINITIONS OF 'COMPENSATION' TO THE PlJ\N; PROVIDING
FOR REPEALER AND SEVERABILITY; AND DEClJ\RING
AN EMERGENCY.
The foregoing ordinance was introduced before the Owasso City Council
on the 21 at day ol May, 1996, and was duly adopted and approved by the
Mayor and City Council of the Clly ol Owasso, Oklahoma, on the 21st day
01 May, 1996, wllh the emergency clause being acled upon and approved
separately, aller compliance wIIh nolloa requirements of the Open Meeting
Law (26 OS, Section 301, at """j.
CITY OF OWASSO. OKlJ\HOMA
By: Is! DANNY EWING
Danny Ewing, Mayor
SEAL
ATTEST:
Is! MARCIA BOUlWELl
Marcia Boul_n, City Clerk
Approved as tolorm and legality on May 21.1996.
Is! RONALD D. CATES
Ronald D Cales, City A1tomsy
'"
Of Publication
STATE OF OKLAHOMA, TULSA COUNTY, SS:
Bm It Retherford, of lawful age, being duly sworn
and authorized, says that he is the publisher of the
OWASSO REPORTER , fA weekly
newgpllper in the city of OWASSO
Tulsa Oklahoma, 0 new~pnper qualified to
legal notices, advertisements m.d publications
as in Section 106 of Title 25, Oklahoma
Statutes 1971 and 1983 us amended, and thereai'ter,
and complies with 011 other requirements of the laws
of Oklahoma with reference to legal publications.
Thnt said notice, lJ. true copy of which is attached
hereto, was ished in the regular edition of said
newspaper the period and time of publication
llnd not in 11 supplement, on the following dates:
-&:u."it~9A-
Subscribed and sworn to before me this 30th
day of May _,199~
Jt10tlAA ~?M ~
) tary
Commission expires: March 20 1997
PUBLISHER'S FEE $ 29.50
MEMORANDUM
HONORABLE MAYOR AND CITY COUNCIL
CITY OF OW ASSO
TO:
MICHELE DEMPSTER
PERSONNEL OFFICER
FROM:
#526 AND
EMPWYEE
REQUEST APPROVAL OF ORDINANCES #525,
RESOLUTION #96-07 RELATING TO THE CITY'S
RETIRE:MENT SYSTEM PLAN (OMRF)
SUBJECT:
1996
May 13,
DATE:
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
% vested 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 City
of Owasso Defined Benefit Plan and Thrift Plan to remain a "qualified planll 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 II Compensation II - 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.
RECOMMENDA TION:
Staff recommends approval of Ordinance #525, amending the Oklahoma
Municipal Retirement Fund Defmed Benefit Plan, approving plan amendment
required by the Internal Revenue Service in order to remain an IRS "qualified
plan"
Agenda Item #9
Staff recommends approval of an emergency clause to Ordinance #525
allowing such Ordinance to be submitted by May 30, 1996.
Agenda Item
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 II qualified plan II .
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