2023RESOLUTION NO.2023
A RESOLUTION AMENDING THE CITY OF MOSES LAKE'S DEFERRED COMPENSATION
PLAN WITH THE HARTFORD
Recitals:
1. The City of Moses Lake heretofore established a DeferredCompensation Plan(the "Plan).
2. The City of Moses Lake desires to amend the Plan to conform with changes in the federal law
broughtabout by the Small Business Job Protection Act of 1996 (the "Act")requiring that,within
the time prescribed by such Act,eligible deferredcompensation plansestablished and maintained
[^J by governmental employers be amended to provide that all assets ofthe plan be held in trust,or
under one or more appropriate annuitycontracts or custodial accounts,for the exclusive benefit
of plan participants and their beneficiaries.
3.It is also the desire of the City of Moses Lake to amend the Plan in order to provide employees
with certain other advantages brought about by the Act, including indexed limitation of deferred
amounts and certain elections with respect to the commencement of distributions under the Plan.
Resolved:
1.Article 11 of the Plan setting forth the rules governing the ownership of deferred amounts is
deleted in its entirety and replaced with the following:
11.1 Effective immediately all amounts of compensation deferred under the Plan, all property
and rights purchased with such amounts,and all income attributable to such amounts,
propertyor rights shall be held in trust or under one or more annuity contracts described
in Section 401(f)of the Code.Except as may otherwise be permitted or required by law,
no assets or income of the Plan shall be used for, or diverted to,purposes other than for
the exclusive purpose of providing benefits for Participants and their Beneficiaries or
defraying reasonable expenses of administration of the Plan.
2. The following defined term is added to Article 2 of the Plan and each Section of Article 2 is
renumbered appropriately:
2.2 "Adjusted"means adjusted for the cost of living at the time and in the manner as pre-
{^J scribed under section 457(3)(15)ofthe Code.
3. Paragraphs (a) and (b) of Section 3.5 providing for regularcontributions are amended to read as
follows:
3.5 Regular Contributions.The regular contribution is the amount of compensation which may
be deferred by a Participant subject to the following limitations:
(a)Calendar Year Maximum.The maximum amount a Participant may defer during
a calendar year shall not exceed the lesser of (i)$7,500 (as Adjusted),or (ii)33-
1/3% of the Participant's Includible Compensation (typically 25% of the
Participant's gross taxable income from the Employer).
(b) Pay Period Maximum.The maximum amount a Participant may defer during a
pay period,when combined with previous deferrals duringthe calendar year, shall
not exceed the lesser of (i)$7,500 (as Adjusted)or (ii)33-1/3% of the
Participant's year to date Includible Compensation (typically 25% of the
Participant's year-to-date gross taxable income from the Employer).
4.Section 5.2 of the Plan is amended to read as follows:
5.2 Distribution and Deferral.Distribution must follow the minimum distribution requirements
ofSections401(a)(9)and 457(d)oftheCodeandthe regulations thereunder as they may
be amended from time to time. There is a substantial penalty (federal excise tax)for not
satisfying the minimum distribution requirements.
v>Upon becoming eligible in accordance with Section 5.1 hereof,distribution is subject to
the following guidelines:
(a) A Participant may elect to commence distribution in accordance with the
distribution schedules set forth at Section 5.3 hereof.Unless the Participant fails
to make any election or if the Participant elects a postponed distribution com
mencementdate pursuant to Section 5.2(b)below,the Participant's Participation
Account shall be,or shall commence to be,distributed not later than sixty (60)
days after the close of the Plan Year in which the Participant's Participation
Account becomes eligible for distribution.If a Participant fails to make any
election,distribution shall commence in accordance with Section 5.5 hereof.
(b) A Participant may elect to postpone the commencement date specified in the
election made pursuant to Section 5.2(a) to a later date if (i)such postponement
election is made prior to the original commencement date specified inthe election
made pursuant to Section 5.2(a), and (ii)no other postponement election has
been made pursuant to this Section 5.2(b); provided further,that a Participant
may change the form of payment elected at any time that is at least sixty (60)
days priorto the date on which payments will commence.
(c)A Participant may elect to postpone distribution,even after using the "catch-up"
provision.
(d)If eligibility for distribution is on account of the Participant's death,distribution **\
shall commence in accordance with Section 5.8 hereof.'
(e)Notwithstanding any provision of the Plan to the contrary,distribution must
commence no later than April 1st following the later of (i)the calendar year in
which the Participant attains age 70-1/2 or (ii)the calendar year in which the
Participant separates from service, and must be completed by the Participant's
allowable lifeexpectancy, defined as the single or joint (spousal) lifeexpectancy
as set forth in the life annuity actuarial tables (Code Section 72 and regulations
thereunder).
5.Section 5.4 of the Plan is amended to read as follows;
5.4 Participation Accounts Not Exceeding $3.500.Notwithstanding any provision of the Plan
to the contrary, ifthe total amount of a Participant's Participation Account under the Plan
does not exceed $3,500, the Participant may elect to receive (orthe Employer may elect
to pay to the Participant withoutthe Participant's consent) the totalamount ina lump sum
payable within 60 days of such election;provided,however,such amount may be
distributed pursuant to this Section 5.4 only if;(a) no amount has been deferred under the
Plan with respect to such Participant during the two-year period ending on the date of the
distribution,and (b)there has been no prior distribution underthe Plan to such participant
to which this Section 5.4 applied.
6.Section 5.5 of the Plan is amended to read as follows:
5.5 Default Distribution Schedule.If the Participant fails to select a payment option for any ^v
event which causes amounts to become available under the Plan,the Participant shall be _}
deemed to have elected,pursuant to Section 5.2(b)hereof,to postpone distribution ofhis ~"
benefit until the year in which the Participant attains age 70%.Upon such Participant's
attainment of age 701/4,payments shall commence fora specified periodof ten (10)years
as provided for in Option 2. Notwithstanding the foregoing, Participation Accounts not
exceeding $3,500 shall be subject to earlier distribution in accordance with Section 5.4
hereof.
7. The City Manager is authorized to take any actions, including execution of a restated Plan
document incorporating the provisions of said Amendment which are necessary and desirable to
effect this resolution.
Adopted by the City Council on March 11,1997.
ATTEST:
fl)iJULJ
Finance Director
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