HomeMy WebLinkAbout1995-001 Comp Plan - Key BankKEY BANK OF OREGON
DEFERRED COMPENSATION PLAN
Preamble
THIS RETIREMENT PLAN (hereinafter referred to as the "Plan"
and known as the Key Bank of Oregon Deferred Compensation Plan)
is adopted effective January 1, 1995 , by the City of Ashland
(hereinafter "Employer").
WHEREAS, the purpose of the Plan is to enable employees who
become covered under the Plan to enhance their retirement
security by permitting them to enter into agreements with the
Employer to defer compensation and receive benefits at
retirement, death, separation from service, and for financial
hardships due to unforeseeable emergencies; and
WHEREAS, the Plan shall be maintained for the exclusive
benefit of covered employees, and is intended to comply with the
eligible deferred compensation plan requirements of Section 457
of the Internal Revenue Code of 1986, as now in effect or as
hereafter amended, and regulations thereunder, and other
applicable law;
NOW, THEREFORE, effective Januarv 1, 1995 , the Employer
does hereby adopt the Plan as set forth in the following pages.
Article I. Definitions
The following terms when used herein shall have the
following meaning, unless a different meaning is clearly
required by the context.
1.01 Beneficiary: '~Beneficiary" means the person(s) or
estate entitled to receive benefits under this Plan after the
death of a Participant.
1.02 Code: "Code" means the Internal Revenue Code of
1986, as amended and including all regulations promulgated
pursuant thereto.
1.03 Compensation: "Compensation", for any year, means
the total cash remuneration earned by an employee for personal
services rendered to the Employer for such year including
amounts deferred under this Plan and any other deferred
compensation plan.
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America's neighborhood bank.
1.04 Deferral: "Deferral" means the annual amount of
Compensation that a Participant elects to defer receipt of
pursuant to a properly executed Voluntary Salary Deferral
Agreement.
1.05
Effective Date:
"Effective Date" means January 1, 1995
1.06 Eligible Employee: "Eligible Employee" means any
full time salaried employee of the Employer who is employed by
the Employer and who is designated by the Employer as eligible
to participate in this plan.
1.07 Eligible Deferred Compensation Plan or "Eligible
Plan": "Eligible Deferred Compensation Plan" or "Eligible Plan"
means any plan defined in Section 457 (b) of the Code and
includes this Plan among others.
1.08 Employer: "Employer" means City of Ashland .
1.09 Includible Compensation: "Includible Compensation"
means compensation earned during any year for services performed
for the Employer which is currently includible in gross income
as reported on the employee's federal income tax withholding
statement (W-2 Form).
A Participant's Includible Compensation for a taxable year
shall be determined without regard to any community property
laws.
1.10 Normal Retirement Age: "Normal Retirement Age" means
age 70 1/2 or other earlier age not earlier than age 55
specified in writing by the Participant. In no event shall
Normal Retirement Age be earlier than the earliest date at which
one may retire under the Employer's basic pension plan (if any)
without the Employer's consent and receive immediate retirement
benefits, without incurring an actuarial or similar reduction in
benefits.
1.11 Open Enrollment Period: "Open Enrollment Period"
means any of the following time periods:
(a)
December 1 through December 31, Deferrals effective
January 1 of the following year;
(b)
June 1 through June 30, Deferrals effective July 1;
and;
(c) any other period designated by the Employer.
1.12 Participant: "Participant" means an "Eligible
Employee" as defined in Article 1.06 or former "Eligible
Employee" who is or has been enrolled in the Plan and who
retains the right to benefits under the Plan.
1.13 Plan: "Plan" means this Key Bank of Oregon Deferred
Compensation Plan either in its present form or as amended from
time to time.
1.14 Plan Year: "Plan Year" means the twelve-month period
beginning January 1 and ending December 31 .
month & day month & day
1.15 Voluntary Salary Deferral Agreement: "Voluntary
Salary Deferral Agreement" means the agreement between a
Participant and the Employer to defer receipt by the Participant
of Compensation not yet earned. Such agreement shall state the
Deferral amount to be withheld from a Participant's paycheck and
shall become effective no earlier than the first day of the
month after it is executed by the Participant and accepted by
the Retirement Committee.
Article II. Participation
2.01 Eligibility for Participation: Each Eligible
Employee may become a Participant in this Plan on the first day
of the month next following a Participant's date of hire and
enrollment pursuant to Section 2.02, or during any Open
Enrollment Period thereafter.
2.02 Enrollment: Eligible Employees may enroll in the
Plan by completing a Voluntary Salary Deferral Agreement and
submitting it to the Retirement Committee. Enrollment shall be
effective no sooner than the first day of the month next
following acceptance of the Voluntary Salary Deferral Agreement
by the Retirement Committee. Enrollment during the Open
Enrollment Period shall be effective on the date specified in
Section 1.11 for such period.
Article III. Deferral of Compensation
3.01 Deferral Procedure: Pursuant to a Voluntary Salary
Deferral Agreement, each Participant's Deferral amount shall be
deducted from the Participant's paychecks in approximately equal
increments throughout the year, or throughout the balance of the
year for a Participant who enters the plan during the year. The
Deferral amount shall not be included as gross income on a
Participant's federal income tax withholding statement (W-2
Form) until it is actually paid to the Participant pursuant to
Article 4 hereof.
3.02 Maximum Deferral:
(a)
Primary Limitation - The Deferral amount in any
taxable year may not exceed the lesser of:
(1) $7,500, or
(2) 33 1/3% of the Participant's Includible
Compensation.
(b) Catch-up Limitation -
(1) A Participant may trigger the catch-up limitation
by electing a Normal Retirement Age pursuant to
Section 1.10. The maximum Deferral amount for each of
a Participant's last three (3) taxable years ending
before he or she attains Normal Retirement Age, is the
lesser of:
(i) $15,000, or
(ii) the primary limitation amount determined
under Section 3.02 (a) for the current
year, plus so much of the primary limitation
amount that was not utilized in prior taxable
years in which the employee was eligible to
participate in the Plan.
(2) The catch-up limitation is available to a
Participant only during one three-year period. If a
Participant used the catch-up limitation and then
postpones Normal Retirement Age or returns to work
after retiring, the limitation shall not be available
again before subsequent retirement.
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(c) Coordination With Other Plans - If a Participant
participates in more than one Eligible Deferred
compensation Plan, the total deferral under all plans
shall be subject to the maximum limitations specified in
this Section 3.02. The Employer may treat any Deferrals
under this plan as being made prior to or after deferrals
under any other plans at its discretion. Amounts excluded
from gross income in any taxable year under the Internal
Revenue Code, Sections 403 (b), 402 (e) (3) or 402 (h) (1)
(b), or which are deductible by reason of being contributed
to an entity described in Section 501 (c) (18) shall reduce
the primary limitation amount determined under this
agreement, Section 3.02 (a) (1) and (2), and the $15,000
limitation in Section 3.02 (b) (1) (i) of this agreement.
3.03 Minimum Deferral: A Participant must comply with any
minimum monthly deferral requirements which may be set by the
Employer from time to time on a nondiscriminatory basis.
3.04 Changing Deferrals: A Participant may reduce or
cancel Deferrals with respect to Compensation not yet earned by
executing a new Voluntary Salary Deferral Agreement or written
notice of cancellation. The reduction or cancellation shall be
effective on the first day of the pay period following
acceptance by the Retirement Committee. A Participant may
increase or reinstate Deferrals only during Open Enrollment
Periods by executing a new Voluntary Salary Deferral Agreement
and delivering it to the Retirement Committee. Any increase or
reinstatement shall be effective on the first day of the month
coinciding with or following completion of the new Agreement and
acceptance by the Retirement Committee.
3.05 Automatic Suspension of Deferrals: Deferrals shall
automatically be suspended for any month in which the
Participant has insufficient Compensation available to make the
entire deduction agreed upon. A Participant who has deferrals
automatically suspended may reinstate Deferrals only during Open
Enrollment Periods by executing a new Voluntary Salary Deferral
Agreement and delivering it to the Retirement Committee.
Reinstatement shall be effective on the first day of the first
month following the open enrollment period.
Article IV. Time of Benefit Payment
4.01 Eligibility for Payment: Payments from the Plan
shall be made only upon (i) Separation from Service, (ii) an
approved financial Hardship that results from an unforeseeable
emergency or (iii) attainment of age 70 1/2.
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(a) Separation from Service - "Separation from Service"
means the severance of a Participant's employment with the
Employer.
(b) Hardship Withdrawal
Procedure - A Participant may request a withdrawal for
Hardship by submitting a written request to the
Retirement Committee, accompanied by evidence that the
Participant's financial condition warrants an advance
release of funds and results from an unforeseeable
emergency which is beyond the Participant's control.
The Retirement Committee shall review the request and
determine whether payment of any amount is justified.
If payment is justified, the amount shall be limited
to an amount reasonably needed to meet the emergency.
The Retirement Committee shall determine the amount
and form of payment. Any money remaining in the
account after Hardship withdrawal shall be distributed
in accordance with the provisions of this Plan.
(2)
HardshiD Defined - "Hardship" means a severe financial
setback of the Participant resulting from a sudden and
unexpected illness or accident of the Participant or
a dependent of the Participant, loss of the
participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances,
arising from events beyond the Participant's control.
Whether circumstances constitute an unforeseeable
emergency depends on the facts of each case, but, in
any case, payment may not be made to the extent that
such hardship is or may be relieved:
(i)
through reimbursement or compensation by
insurance of otherwise;
(ii) by liquidation of the Participant's assets,
to the extent that liquidation itself would
not cause severe financial hardship; or
iii) by cessation of Deferrals under the Plan.
(3) Hardship Withdrawals After Benefit Commencement -
Once regular installment payments to a Participant have
commenced under the Plan, the Participant may request
payment acceleration if the Participant suffers a Hardship
as defined above. The Retirement Committee may permit
accelerated payments. However, the amount of an accelerated
payment shall not exceed the amount needed to meet the
emergency. Any amount remaining in the account after such
accelerated payment shall be distributed in accordance with
the provisions.
4.02 Benefit Commencement Date:
(a)
Time of Commencement - Except for a Hardship
withdrawal pursuant to Section 4.01 (b), benefit
payments to a Participant shall commence 60 days after
the date of Separation from Service, unless the
Participant elects a later date pursuant to Section
4.02 (b), but in no event shall benefit payments commence later
than April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2. In the event of a
Participant's death prior to the commencement of the payment of
benefits, benefit payments to Beneficiaries shall commence 60
days after the date of the Participant's death.
(b)
Participant Election - A Participant or Beneficiary
may make a one-time irrevocable election to defer
commencement of benefits to a date later than 60 days
after the Participant's separation from service. An
election to defer benefit commencement must be
completed at least 30 days prior to the date benefits
would otherwise commence.
Article V. Form and Amount of Benefit Payment
5.01 Election: A Participant or Beneficiary may elect the
form of payment of benefits, and may revoke that election (with
or without a new election) at any time before 30 days preceding
the benefit commencement date, by notifying the Retirement
Committee in writing (subject to the Retirement Committee's
approval). The City of Ashland should decide whether
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employee elections regarding the form of benefit should be
subject to the consent of the Retirement Committee.
5.02 Participant Forms of Payment: A Participant may
elect payment in one of the following forms:
(a)
Lump Sum - A single payment of the entire balance
credited to the Participant's account.
(b)
Annuity - Monthly annuity payments for the life of the
Participant or joint lives of the Participant and his
spouse, with or without a guaranteed period certain of
not more than 15 years purchased with amounts credited
to the Participant's account.
(c)
Installments - Periodic payments not less frequently
than annually over a specified period of time not
longer than the life expectancy of the Participant out
of amounts credited to the Participant's account.
(d)
Combination - A specified single sum less than the
entire balance credited to the Participant's account
with the remainder distributed as an annuity or
installment payments.
Following the death of a Participant whose benefit commenced in
the form of an annuity pursuant to Section 5.02 (b) or (d),
benefits, if any, shall be continued to such participant's
Beneficiary in accordance with the terms of the annuity.
Following the death of a Participant whose benefit commenced in
the form of installment payments pursuant to Section 5.02 (c) or
(d), any remaining benefits shall be paid to the Participant's
Beneficiary in continued installments or in a lump sum, at the
election of the Beneficiary, provided that such benefits shall
be paid in full within (1) the life of the Beneficiary, if the
Beneficiary is the Participant's surviving spouse, or (2) within
15 years after the death of the Participant for all other
Beneficiaries. The benefits payable to such Beneficiary shall
commence 60 days after the Participant's death. The
Beneficiary's election must be made not more than 30 days after
the Participant's death.
5.03 Beneficiary Forms of Payment: Following the death of
a Participant prior to the commencement of benefits, the
Participant's Beneficiary may elect payment in one of the
following forms:
(a)
Lump Sum - A single sum payment of the entire balance
credited to the Participant's account.
(b)
Spousal Annuity - If the Beneficiary is the
Participant's surviving spouse, monthly annuity
payments for the life of the Beneficiary, with or
without guaranteed period certain of not more than 15
years purchased with amounts credited to the
Participant's account.
(c)
Non-Spousal Annuity - If the beneficiary is not the
Participant's surviving spouse, monthly annuity
payments for a guaranteed period certain of not more
than 15 years purchased with amounts credited to the
Participant's account.
(d)
Installments - Periodic payments not less frequently
than annually over a specified period of time not
longer than the life expectancy of the Beneficiary,
or, if the Beneficiary is not the Participant's
surviving spouse, not longer than 15 years out of the
amounts credited to the Participant's account.
(e)
Combination - A specified single sum less than the
entire balance credited to the Participant's account
with the remainder distributed as an annuity or
installment payments.
5.04 Failure to Elect: If a Participant or Beneficiary
fails to timely elect a form of payment the Participant's
account shall be paid in a lump sum.
5.05 The amount credited to a Participant's account shall
be Deferrals made by the Participant, adjusted to reflect
investment gains or losses in accordance with elections of the
Participant pursuant to Section 7.05 and further adjusted to
reflect distributions or the purchase of an annuity.
Article VI. Beneficiaries
6.01 Designation: A Participant shall have the right to
designate a Beneficiary, and amend or revoke such designation at
any time, in writing. Such designation, amendment or revocation
shall be effective upon receipt by the Retirement Committee.
Notwithstanding the foregoing, a Participant who elects a joint
and survivor annuity form of payment may not elect a nonspouse
joint annuitant, and may not change a joint annuitant pursuant
to this Article 5 without the approval of the Retirement
Committee.
6.02 Failure to Designate a Beneficiary: If no designated
Beneficiary survives the Participant and benefits are payable
following the Participant's death, the Retirement Committee may,
subject to any limitations of State laws of descent and
distribution, direct that payment of benefits be made to the
person or persons in the first of the following classes of
successive preference as deemed Beneficiaries. The
Participant's:
(a) spouse,
(b) descendants, per stirpes
(c) parents,
(d) brothers and sisters,
(e) estate.
Article VII. Plan Administration
7.01 Plan Administrator: The Plan shall be administered
by a Retirement Committee (see note below) selected by the
Employer and composed of not less than three persons and an
alternate. The Retirement Committee shall have responsibility
for the operation and administration of the Plan and shall
direct payment of Plan benefits. The Retirement Committee shall
have the power and authority to adopt, interpret, alter, and
amend or revoke rules and regulations necessary to administer
the Plan and to delegate ministerial duties and employ such
outside professionals as may be required for prudent
administration of the Plan.
Note:
In lieu of a Retirement Committee, an Employer may
select a Benefit Director to administrator the plan,
or portion of the plan, as directed by the Employer.
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The Retirement Committee shall also have authority to enter
agreements on behalf of the Employer necessary to implement this
Plan. The members of the Retirement Committee, if otherwise
eligible, may participate in the Plan, but shall not be entitled
to make decisions solely with respect based on their own
participation. The Retirement Committee may also serve as
Trustee.
7.02 Ownership of Assets: All amounts deferred under this
Plan, all property and rights purchased with such amounts, and
all income attributable to such amounts, property or rights
shall remain (subject to the provisions of the Trust and until
made available to the Participant or Beneficiary) solely the
property and rights of the Employer, and shall be subject to the
claims of the Employer's general creditors.
7.03 Plan-to-Plan Transfers: Notwithstanding any other
Plan provision, distribution of amount deferred by a former
Participant of this Plan shall not commence upon Separation from
Service, but instead shall be automatically transferred to
another Eligible Deferred Compensation Plan, of which the former
Participant has become a Participant, if:
(a)
the Plan receiving such amounts provides for the
acceptance of such transfers, and
(b)
a Participant Separates from Service with the Employer
in order to accept employment with another eligible
entity.
This plan will accept the transfer of amounts previously
deferred by a Participant under another Eligible Deferred
Compensation Plan.
7.04 Accounts and Expenses: The Employer shall establish
and maintain accounts on behalf of each Participant. Accounts
shall be valued at least once each Plan year and each
Participant shall receive written notice of his or her account
balance following such valuation. Account balances shall
reflect the Deferral amount, any earnings attributable to such
amount, and shall be reduced by administrative, investment and
other fees, in such amounts and at such times as the Retirement
Committee deems is necessary for the maintenance of this Plan.
7.05 Investments: A Participant or Beneficiary may
request that Deferrals be allocated among available investment
options established by the Retirement Committee. The initial
allocation request may be made at the time of enrollment.
Investment allocation requests shall remain effective with
regard to all subsequent Deferrals, until changed in accordance
with the provisions of this section. A Participant or
Beneficiary may change an allocation request by notifying the
Retirement Committee or Director in writing. Such changes shall
become effective as soon as administratively feasible. The
Employer shall have no obligation to actually invest Deferrals
according to the Participant requests. Each Participant shall
be an unsecured general creditor of the Employer with respect to
Participant benefits under this Plan and shall have no rights or
interest in any assets of the Employer.
Article VIII. Amendment and Termination
8.01 Amendment: The Employer shall have the right to
amend this Plan, at any time and from time to time, in whole or
in part. The Employer shall notify each Participant in writing
of any Plan amendment.
8.02 Termination: Although the Employer has established
this Plan with a bona fide intention and expectation to maintain
the Plan indefinitely, the Employer may terminate or discontinue
the Plan in whole or in part at any time without any liability
for such termination or discontinuance. Upon Plan termination,
all Deferrals shall cease. The Employer shall retain all
Deferrals until each Participant Separates from Service or
incurs a Hardship and benefits commence under Sections 5.01 and
5.02, in the form determined under Article 6.
Article IX. Miscellaneous
9.01 Limitation of Rights: Employment Relationship:
Neither the establishment of this Plan nor any modification
thereof, nor the creation of any fund or account, nor the
payment of any benefits, shall be construed as giving a
Participant or other person any legal or equitable right against
the Employer except as provided in the Plan. In no event shall
the terms of employment of any employee be modified or in any
way be affected by the Plan.
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9.02 Limitation of Assignment: Benefits under this Plan
may not be assigned, sold, transferred, or encumbered, and any
attempt to do so shall be void. A Participant's or
Beneficiary's interest in benefits under the Plan shall not be
subject to debts or liabilities of any kind and shall not be
subject to attachment, garnishment or other legal process.
9.03 Severability: If a court of competent jurisdiction
holds any provisions of this Plan to be invalid or
unenforceable, the remaining provisions of the Plan shall
continue to be fully effective.
9.05 Applicable Law: This Plan shall be construed in
accordance with applicable federal law and, to the extent
otherwise applicable, the laws of the State of Oregon.
The Key Bank of Oregon Deferred Compensation Plan is
adopted to be effective Januarv 1, 1995 .
IN WITNESS W~EREOF, the Employer has caused this Plan to be
executed by its duly authorized representative this ninth day
of January 19 95
By:
( s ignatur e)
Jill Turner
(print name)
Title:
Witness:
Di3;ector of Finance
review by on ~