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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. 1 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. 4 (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. 5 (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 7 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. 10 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. 12 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 ~