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HomeMy WebLinkAbout686_Modifying Defined Contribution plan of OMRFTulsa County Clerk - EARLENE WILSON Doc# 01122985 76 -2577 Receipt 544205 10/25 /01 124629 Fee 15.00 A000544205002m AN ORDINANCE OF THE CITY OF OWASSO, OKLAHOMA ORDINANCE NO. 686 AN ORDINANCE AMENDING THE EMPLOYEE RETIREMENT SYSTEM, DEFINED CONTRIBUTION PLAN FOR CITY OF OWASSO, OKLAHOMA; PROVIDING RETIREMENT BENEFITS FOR ELIGIBLE EMPLOYEES OF CITY OF OWASSO, OKLAHOMA; PROVIDING FOR PURPOSE AND ORGANIZATION; PROVIDING FOR DEFINITIONS; PROVIDING FOR ELIGIBILITY AND PARTICIPATION; PROVIDING FOR NON - ALIENATION OF BENEFITS; LOSS OF BENEFITS FOR CAUSE AND LIMITATIONS OF BENEFITS; PROVIDING FOR EMPLOYER AND EMPLOYEE CONTRIBUTIONS; PROVIDING FOR ACCOUNTING, ALLOCATION, AND VALUATION; PROVIDING BENEFITS; PROVIDING FOR REQUIRED NOTICE; PROVIDING FOR AMENDMENTS AND TERMINATION; PROVIDING FOR TRANSFER TO AND FROM OTHER PLANS; CREATING A COMMITTEE AND PROVIDING FOR POWERS, DUTIES, AND RIGHTS OF RETIREMENT COMMITTEE; PROVIDING FOR PAYMENT OF CERTAIN OBLIGATIONS; PROVIDING FOR DURATION AND PAYMENT OF EXPENSES; PROVIDING FOR EFFECTIVE DATE; PROVIDING FOR VESTING SCHEDULES; PROVIDING FOR A FUND TO FINANCE THE SYSTEM TO BE POOLED WITH OTHER INCORPORATED CITIES TOWNS AND THEIR AGENCIES AND INSTRUMENTALITIES FOR PURPOSES OF ADMINISTRATION, MANAGEMENT, AND INVESTMENTS PART OF THE OKLAHOMA MUNICIPAL RETIREMENT FUND; PROVIDING FOR PAYMENT OF ALL CONTRIBUTIONS UNDER THE SYSTEM TO THE TREASURER OF CITY OF OWASSO, OKLAHOMA, AND FOR TRANSFER OF SUCH CONTRIBUTIONS AND FUND ASSETS TO THE OKLAHOMA MUNICIPAL RETIREMENT FUND FOR MANAGEMENT AND INVESTMENT, PROVIDING FOR REPEALER AND SEVERABILITY BE IT ORDAINED BY CITY COUNCIL OF THE CITY OF OWASSO, OKLAHOMA. Section 1. The Employee Retirement System, Defined Contribution Plan, of the City of Owasso, Oklahoma, is hereby amended as reflected on the attached Exhibit "A ", which is incorporated herein and adopted by reference. These amendments shall become effective on July 1, 2001. Section 2. The City Clerk and Mayor be and they are hereby authorized and directed to execute the amended Retirement System Plan documents and to do all the other acts necessary to put said amendment into effect and to maintain IRS qualification of the Plan. The executed amended document attached hereto as Exhibit "A" is hereby ratified and confirmed in all respects. Section 3. If, regardless of cause, any section, subsection, paragraph, sentence, or clause of this ordinance, including the System as set forth in Exhibit "A" is held invalid or to be unconstitutional, the remaining sections, subsections, paragraphs, sentences, or clauses shall continue in full force and effect and shall be construed thereafter as being the entire provisions of this ordinance. Section 4. Any ordinance inconsistent with the terms and provisions of this ordinance is hereby CD repealed; provided, however, that such repeal shall be only to the extent of such inconsistency and in all other respects this ordinance shall be cumulative of other ordinances regulating and governing the subject matter covered by this ordinance. ** *END * ** The foregoing ordinance was introduced before the City Council on the 18th day of 2001, and was duly adopted and approved by the Mayor and City Council on 2001, after compliance with notice requirements of the Open Approved as to form and legality on MAYOR OKLAHOMA MUNICIPAL RETIREMENT FUND MASTER DEFINED CONTRIBUTION PLAN JOINDER AGREEMENT City of Owasso, a city, town , agency, instrumentality, or public trust located in the State of Oklahoma, with its principal office at Owasso, Oklahoma, hereby establishes a Defined Contribution Plan to be known as City of Owasso Plan (the "Plan") in the form of the Oklahoma Municipal Retirement Fund Master Defined Contribution Plan. Except as otherwise provided herein, the definitions in Article II of the Plan apply. 1. Dates. This instrument is a new Plan effective. X This instrument is an amendment, restatement and continuation of the Previous Plan, which was originally effective July 1, 1992. This instrument is intended to conform to the changes required by the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the Unemployment Compensation Amendments of 1992, the Uniformed Service Employment and Reemployment Rights Act of 1994, the Uruguay Round Agreements Act of 1993, the Small lBusiness Job Protection Act of 1996, the Taxpayer Relief Act of 1997 and other applicable laws, regulations and administrative authority. Therefore, the effective date of this Joinder agreemenet is July 1, 2001, excpet as otherwise stated in the Plan and the Joinder Agreement. 2. Employee. The word "Employee" shall mean: X Any person, other than a Leased Employee, who, on or after the Effective Date, is considered to be a regular full-time employee in accordance with the Employer's standard personell policies and practices, and is receiving remuneration for such services rendered to the Employer (including any elected official and any appointed officer or emplotee of any department of the Employer, whether governmental or proprietary in nature), including persons on Authorized Leave of Absence. Employees shall not include independent contractors. Elected members of the City Council shall not be considered to be Employees solely by reason of their holding such office. Any person other than a Leased Employee, who, on or after the Effective Date, is considered to be regular employee in accorance with the Employer's standard personnel policies and practices (including part-time, seasonal and temporary employees, and is receiving remuneration for such servicesrendered to the Employer (including any elected official and any appointed officer or employee of any department of the Employer, hether governmental or proprietary in nature), including persons on Authorized Leave of Absence. Employees shall not include independent contractors. Elected members of the City Council shall not be considered to be Employees solely by reason of their holding such office. Any person who, on or after the Effective Date, The word "Employee" shall not include: Any person who is currently accruing benefits under any other state or local retirement system. Any person who _ 3. Eligibility. Employees shall be eligible to participate in the Plan: (Select only one) months (any number of months up to twelve) after the later of the Employee's Employment Commencement Date or the date the definition of Employee shown above was met. X On the Employee's Employment Commencement Date. Of the Employer has opted out of Old Age and Disability Insurance (OADI), this option must be elected). The Employer hereby elects the following Plan design: Pick-up Option. Each Employee shall be required to contribute to the Plan 0/6 (not to exceed 10%) of his or her Compensation. These contributions shall be picked up and assumed by the Employer and paid to the Fund in lieu of contributions by the Participant. No Participant shall have the option of receiving the contributed amounts directly as Compensation. [ X ] Thrift Plan Option. X The Employer shall contribute to the Fund an amount equal to 50% of the total Mandatory Contributions contributed by Participants. The Employer contribution together with amounts forfeited, if any, shall • allocated in the proportion which the Mandatory Contributions • each such Particit.,ant for such Valuation Period b6A • the total Mandatory Contributions contributed by all such Participants for such Valuation Period. The Employer shall not contribute to the Fund a percentage of the total Mandatory Contributions contributed by Participants. Fixed Contribution. The Employer shall contribute to the Fund an amount which when added to amounts available from Amounts Forfeited in prior periods, if any, shall equal % of the total covered Compensation of all Participants for the Valuation Period. The Employer contribution together with amounts available from Amounts Forfeited in prior periods shall be allocated in the proportion which the Compensation of each such Participant for such Valuation Period bears to the Compensation paid to all such Participants for such Valuation Period. [ ] Variable Funding Option. The Employer intends to make a contribution to the Plan for the benefit of the Participants for each Valuation Period. The contribution may be varied from year to year by the Employer. (Select one option below) The Employer contribution together with Amounts Forfeite,41 if any, shall be allocated in the proportion which the Compensation of each such Participant for such Valuation Period bears to the Compensation paid to all such Participants for such Valuation Period. I (This Option available only if elected prior to May 1, 1986) Participant Deferral Elections shall be allowed under the provisions of Section 4.9 of the Plan. Participants shall be allowed to defer no more than % of their Compensation for each election period. The election period shall be the one month period preceding each [ ] Valuation Period [ ] calendar quarter of the Valuation Period. 3 X Voluntary Nondeductible Contributions by Participants shall be allowed under the provisions of Section 4.5 of the Plan (but not exceeding 15% of Compensation). A Participant may not withdraw Voluntary Nondeductible Contributions. Participants shall not contribute to the Plan. X Are permitted. Are not permitted. 7 Allocation of Forfeitures Available® Shall be added to Employer contribution. X Shall reduce the Employer contribution. 8. Valuation Date. 9 Service for Worker's Compensation Period. If a Participant is on an Authorized Leave of Absence and is receiving worker's compensation during such Authorized Leave of Absence, such Participant X shall be credited with Service for such period for purposes of vesting only and not for purposes of allocations of Employer Contributions. shall not be credited with Service for such period. 4 10. Vesting. For purposes of vesting under Section 6.4 of the Plan, the Employer hereby elects the following Option: [ ] Option A Vested Forfeited Years of Service Percentage Percentage less than 1 0% 100% at least 1 but less than 2 10% 90% at least 2 but less than 3 20% 80% at least 3 but less than 4 30% 70% at least 4 but less than 5 40% 60% at least 5 but less than 6 50% 50% at least 6 but less than 7 60% 40% at least 7 but less than 8 70% 30% at least 8 but less than 9 80% 20% at least 9 but less than 10 90% 10% 10 or more 100% 0% Vested Forfeited Years of Service Percentage Percentage less than 3 0% 100% at least 3 but less than 4 20% 80% at least 4 but less than 5 40% 60% at least 5 but less than 6 60% 40% at least 6 but less than 7 80% 20% 7 or more 100% 0% Vested Forfeited Years of Service Percentage Percentage less than 5 0% 100% at least 5 but less than 6 50% 50% at least 6 but less than 7 60% 40% at least 7 but less than 8 70% 30% at least 8 but less than 9 80% 20% at least 9 but less than 10 90% 10% 10 or more 100% 0% 5 [ X ] Option D The Schedule indicated below Option E Participant Loans [ X ] Participant loans shall be offered pursuant to Section 6.14 of the Plan. Vested Forfeited Years of Service Percentage Percentage Less than 2 0% 100% at least 2 but less than 3 40% 60% at least 3 but less than 4 60% 40% at least 4 but less than 5 80% 20% at least 5 but less than 6 100% 0% Option E 11® Participant Loans® [ X ] Participant loans shall be offered pursuant to Section 6.14 of the Plan. METE"I BMW mg MI 12. Committee. The Committee, consisting of the following members, agrees to administer the Plan pursuant to the provisions thereof. Name (Please print) Signature Mary Lou Barnhouse Randy Brogdon H.C. Williams Rebecca Armstrong Michael Helm 13. The Employer has consulted with and been advised by its attorney concerning the meaning of the provisions of the Plan and the effect of entry into the Plan. IN WITNESS WHEREOF the City of Owasso, OK has caused its corporate seal to be affixed hereto and this instrument fo be duly executed in its name and behalf by its duly authorized officers this 1ffj A day of A I-en a gol 14. The foregoing Joinder Agreement is hereby approved by the Oklahoma Municipal Retirement Fund this day of (SEAL) By: Title: N1 STATE OF OKLAHOMA, TULSA COUNTY, ss. October 4th Subscribed and sworn to before me this 5th day of October. My Commission expires Published in the Owasso Reporter, Owasso, Tulsa County, Oklahoma, October 4, 2001. AN ORDINANCE OF THE CITY OF OWASSO, OKLAHOMA ORDINANCE NO. 686 AN ORDINANCE AMENDING THE EMPLOYEE RETIREMENT SYSTEM, DEFINED CON- TRIBUTION PLAN FOR CITY OF OWASSO, OKLAHOMA; PROVIDING RETIREMENT BENEFITS FOR ELIGIBLE EMPLOYEES OF CITY OF OWASSO, OKLAHOMA; PROVIDING FOR PURPOSE AND ORGANIZATION; PROVIDING FOR DE- FINITIONS; PROVIDING FOR ELIGIBILITY AND PART- ICIPATION; PROVIDING FOR NON- ALIENATION OF BENE- FITS; LOSS OF BENEFITS FOR CAUSE AND LIMIT- ATIONS OF BENEFITS; PRO- VIDING FOR EMPLOYER AND EMPLOYEE CONTRIBUTIONS; PROVIDING FOR ACCOUNT- ING, ALLOCATION, AND VALUATION; PROVIDING BENEFITS; PROVIDING FOR REQUIRED NOTICE; PRO- VIDING FOR AMENDMENTS AND TERMINATION, PRO- VIDING FOR TRANSFER TO AND FROM OTHER PLANS; CREATING A COMMITTEE AND PROVIDING FOR POWERS, DUTIES, AND RIGHTS OF RETIREMENT COMMITTEE; PROVIDING FOR PAYMENT OF CERTAIN OBLIGATIONS; PROVIDING FOR DURATION AND PAYMENT OF EXPENSES; PROVIDING FOR EFFECTIVE DATE; PROVIDING FOR VESTING SCHEDULES; PROVIDING FOR A FUND TO FINANCE THE SYSTEM TO BE POOLED WITH OTHER INCORPORATED CITIES TOWNS AND THEIR AGENCIES AND INSTRU- MENTALITIES FOR PURPOSES OF ADMINIST- RATION, MANAGEMENT, AND INVESTMENTS PART OF THE OKLAHOMA MUNICIPAL RETIREMENT FUND; PROVIDING FOR PAYMENT OF ALL CONTRIBUTIONS UNDER THE SYSTEM TO THE TREASURER OF CITY OF OWASSO, OKLAHOMA, AND FOR TRANSFER OF SUCH CONTRIBUTIONS AND FUND ASSETS TO THE OKLAHOMA MUNICIPAL RETIREMENT FUND FOR MANAGEMENT AND INVESTMENT; PRO- VIDING FOR REPEALER AND SEVERABILITY. BE IT ORDAINED BY CITY COUNCIL OF THE CITY OF OWASSO, OKLAHOMA. Section 1. The Employee Retirement System, Defined Contribution Plan, of the City of Owasso, Oklahoma, is hereby amended as reflected on the attached Exhibit "A ", which is incorporated herein and adopted by reference. These amend- ments shall become effective on July 1, 2001. Section 2. The City Clerk and Mayor be and they are hereby authorized and directed to execute the amended Re- tirement System Plan docu- ments and to do all the other acts necessary to put said amendment into effect and to maintain IRS qualification of the Plan. The executed amended document attached hereto as Exhibit "A" is hereby ratified and confirmed in all respects. Section 3. If, regardless of cause, any section, subsection, paragraph, sentence, or clause of this ordinance, including the System as set forth in Exhibit "A" is held invalid or to be un- constitutional, the remaining sections, subsections, para- graphs, sentences, or clauses shall continue in full force and effect and shall be construed thereafter as being the entire provisions of this ordinance. Section 4. Any ordinance inconsistent with the terms and provisions of this ordinance is hereby repealed; provided, however, that such repeal shall be only to the extent of such inconsistency and in all other respects this ordinance shall be cumulative of other ordinances regulating and governing the subject matter covered by this ordinance. The foregoing ordinance was introduced before the City Council on the 18th day of September, 2001, and was duly adopted and approved by the Mayor and City Council on the 18th day of September, 2001, after compliance with notice requirements of the Open Meeting Law (25 OSA, Section 301, at seq.) Mary Lou Barnhouse MAYOR (SEAL) ATTEST: Marcia Boutwell CITY CLERK Approved as to form and legality on September 18, 2001. Ronald Cates CITY ATTORNEY TO: HONORABLE MAYOR & CITY COUNCIL CITY OF OWASSO FROM: ALLAN HARDER HUMAN RESOURCES DIRECTOR SUBJECT: AN ORDINANCE #685, MODIFYING THE DEFINED BENEFIT PLAN OF THE OKLAHOMA MUNICIPAL RETIREMENT FUND (OMRF) TO COMPLY WITH IRS REGULATIONS, CLARIFY TERMS AND DEFINITIONS, TO UPGRADE FROM A PLAN "BB" TO "AA" AND TO PROVIDE ADDED BENEFITS TO CURRENT BENEFIT RECIPIENTS, and AN ORDINANCE #686, MODIFYING THE DEFINED CONTRIBUTION PLAN OF THE OKLAHOMA MUNICIPAL RETIREMENT FUND (OMRF) TO COMPLY WITH IRS REGULATIONS AND CLARIFY TERMS AND DEFINITIONS DATE: September 12, 2001 BACKGROUND: Full -time City of Owasso employees except police officers and firefighters are required to participate in an OMRF Defined Benefit retirement program. All full -time employees including police and firefighters are allowed to participate voluntarily in an OMRF Defined Contribution retirement program. Periodically pension plans that define the operations of the pension programs are updated for various reasons. Reasons range from compliance to new IRS Regulations, updates to clarify terms and conditions noted as needed through operation of the programs and /or to include changes designed to enhance the plans. In this instance, all three reasons cause the need to amend the plan documents. OMRF prepared documents identify Plan Document Changes for both Plans and are included as attachments to this memorandum. To adopt the changes to the Plan Documents, the City must amend its Defined Benefit Plan Document and its Defined Contribution Plan Documents by approval of the City Council in its role as Retirement Committee. Ordinance #685 is submitted for consideration and approval to implement the modifications to the Defined Benefit Plan. Ordinance #686 is submitted for consideration and approval to implement the modifications to the Defined Contribution Plan. After approval of the ordinances, the Retirement Committee must execute new Joinder Agreements in which they agree to administer the plans in accordance with the new plans. DISCUSSION: In June 2001, the budget for FY 2001 -2002 was approved by the City Council. Included in that budget was an increase in retirement contributions to allow for a change /upgrade in the Defined Benefit from a "BB" plan to a "AA" plan. Also included was funding for an increase in benefits for current recipients under the "BB" plan who will not benefit from the change to "AA". The effect of the change to plan "AA" is an increase in contributions by the City for each participant from 2.93 % to 5.89 % of salary for the affected employee. Employees continue to contribute 4.26 %. Future City contributions are subject to annual change based on actuarial calculated needs. In return, retirement benefits are calculated using a 2.625 % multiplier, up from 2.25 %. Retirees receiving benefits will receive an increase calculated as $3.166 per month for each year of service to the City of Owasso. Actual increases for each current OMRF recipient is included in a spreadsheet attachment. Pursuant to discussions with representatives from OMRF, it was decided that calculations and collections of contributions would begin July 1 and subsequent documentation making the actual changes to the Plan Documents would be dated July 1 as well. City Attorney, Ronald D. Cates has reviewed and approved all documents. RECOMMENDATION: Staffs recommends the City Council approval of Ordinance No. 685, amending the OMRF Defined Benefit Retirement Plan and authorize of the execution of any required documents, and City Council approval of Ordinance No. 686, amending the OMRF Defined Contribution Retirement Plan and authorize of the execution of any required documents. ATTACHMENTS AND ENCLOSURERS: Ordinance #685 OMRF Defined Benefit Plan Document OMRF Master Defined Benefit Plan Joinder Agreement Ordinance #686 OMRF Defined Contribution Plan Document OMRF Master Defined Contribution Plan Joinder Agreement Current Retiree Spreadsheet