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HomeMy WebLinkAbout1981-120-09/01/1981-ADOPTING THE RESTATEMENT OF THE CITY OF FORT COLLINS' GENERAL EMPLOYEES RETIREMENT PLAN AND AUTHORIZ r RESOLUTION 81-120 OF THE COUNCIL OF THE CITY OF FORT COLLINS ADOPTING THE RESTATEMENT OF THE CITY OF FORT COLLINS' GENERAL EMPLOYEES RETIREMENT PLAN AND AUTHORIZING THE CITY TO CONTRIBUTE TO THE ICMA RETIREMENT PLAN ON BEHALF OF ITS CAREER EMPLOYEES s WHEREAS, in December of 1980, the City hired A S Hansen Company as consultant to prepare a restatement of the City's general employees retire- ment plan, and WHEREAS, A S Hansen Company has proposed a restatement of the City's general employee retirement plan recommending the following changes, to-wit 1) An increase in the basic retirement benefit formula 2) The addition of an automatic spouses benefit for those employees who were eligible for retirement at time of death 3) The provision of retirement benefits to permanent part-time employees 4) The provision of an annual 5% ad hoc cost of living increase to those members presently retired and their beneficiaries 5) The incorporation of the provisions necessary for I R S approval of said plan P 6) The provision of increased long-term disability benefits 7) An early retirement eligibility requirement consistent with vesting provisions of the plan WHEREAS, in addition to the aforementioned plan, the City wishes to make available to career employees an optional retirement plan whereby the City will contribute up to 3% of said career employee's salary (equal to said employee's contribution) to the I C M A retirement plan, and WHEREAS, the General Employees Retirement Committee, the Pension Task Force and City staff have reviewed said restatement of the City's General Employee Retirement Plan and optional retirement plan and recommended approval of the same y� NOW, THEREFORE, BE IT RESOIVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the restatement of the City of Fort Collins ' General Employee Retirement Plan as submitted and prepared by A S Hansen Company be, and the same hereby is adopted BE IT FURTHER RESOLVED that effective January 1, 1982, the City be, and it hereby is, authorized to contribute up to 3% of a career employee's salary (equal to said career employee's contribution) to the I C M A retirement plan Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 1st day of September—, 1981 Mayor ATTEST City Clerk 4 d R -2- 7 �l C I T Y O F F 0 R T C 0 L L I N S G E N E R A L E M P L O Y E E S R E T I R E M E N T P L A N As Restated Effective September 1, 1981 N City of Fort Collins General Employees Retirement Plan TABLE OF CONTENTS Page No ARTICLE I Purpose I-1 ARTICLE II Definitions II-1 1 Name II-1 2 Definitions II-1 3 Construction II-3 ARTICLE III Membership III-1 1 Employees on January 1, 1971 III-1 2 Employees Hired After January 1, 1971 III-1 3 Termination III-1 4 Withdrawal III-1 ARTICLE IV Credited Service IV-1 1 Credited Service IV-1 2 Break in Service IV-1 3 Effect of Other Plans IV-2 4 Miscellaneous IV-2 ARTICLE V Retirement Dates V-1 1 Normal Retirement V-1 2 Early Retirement V-1 3 Delayed Retirement V-1 4 Disability Retirement V-1 5 Retirement Date V-2 ARTICLE VI Retirement Benefits VI-1 1 Normal or Delayed Retirement VI-1 2 Early Retirement VI-1 3 Disability Retirement VI-1 4 Payment of Benefits VI-1 5 Minimum Periodic Payment VI-2 6 Accrued Credits and Vested Benefits Under the Previous Plan Preserved VI-2 7 Increased Benefits for Retired Members of the Previous Plan VI-2 ARTICLE VII Optional Benefits VII-1 1 General VII-1 2 100/ Joint and Survivor Benefit VII-1 3 50/ Joint and Survivor Benefit VII-1 4 120 Months Certain and Life Benefit VII-2 5 Beneficiary VII-2 Y Page No ARTICLE VIII Death Benefits VIII-1 1 Death of an Active Member or Vested Member Prior to Normal Retirement Date VIII-1 2 Death of an Active Member Between Normal and Delayed Retirement Dates VIII-1 3 Death of a Retired Member VIII-1 4 Uniform Simultaneous Death Act VIII-2 ARTICLE IX Severance Benefits IX-1 1 Coverage IX-1 2 Six or More Years of Service IX-1 ARTICLE X Contributions X-1 1 Member Contributions X-1 2 City Contributions X-1 3 Application of Forfeitures X-1 ARTICLE XI Administration of the Plan XI-1 1 Retirement Committee XI-1 2 Management of the Plan XI-1 3 Miscellaneous XI-2 ARTICLE XII Method of Funding XII-1 1 Funding XII-1 2 Assets XII-1 3 Duties of the Funding Agent XII-1 4 Investment Powers XII-2 ARTICLE XIII Retirement Benefits and Rights Inalienable XIII-1 1 Inalienability XIII-1 2 Bankruptcy XIII-1 ARTICLE XIV Modification or Termination of Plan XIV-1 1 Expectation XIV-1 2 Amendment XIV-1 3 Approval Under the Internal Revenue Code XIV-1 4 Discontinuance XIV-2 5 Termination XIV-2 6 Distribution XIV-2 ARTICLE XV Benefit Restrictions on Early Termination XV-1 1 Restrictions XV-1 2 Members Affected by Section 1 XV-2 3 Amendment of Plan XV-2 ARTICLE XVI Limitations XVI-1 1 Reemployment of Former Members XVI-1 2 Reemployment of Retired Members XVI-1 3 Limitation of Benefits XVI-1 4 Consolidation or Merger XVI-2 ARTICLE I Purpose Effective as of September 1, 1981, the City Council of the City of Fort Collins adopted the amended and restated Plan, as set forth herein, to continue and replace the Plan previously in effect The Plan and Retirement Fund are intended to meet the requirements of Sections 401(a) and 501(a) of the Internal Revenue Code of 1954 The Plan and the separate related Retirement Fund forming a part hereof were established and shall be maintained for the exclusive benefit of the eligible employees of the City of Fort Collins and their beneficiaries No part of the Retirement Fund can ever revert to the City except as hereinafter provided, or be used for or diverted to purposes other than the exclusive benefit of the employees of the City and their beneficiaries This amendment and restatement of the Plan shall not, in any way, affect the rights of former Employees who participated in said Plan and who either retired or otherwise terminated their employment prior to September 1, 1981 The rights, if any, of such former Employees and of their beneficiaries and the amounts of their benefits, if any, shall continue to be governed by the provisions of the Plan as it was in effect on August 31, 1981, or the date, if earlier, of their retirement or termination of employment, unless specifi- cally provided for otherwise herein, or as the result of future amendments to this restated Plan I-1 ARTICLE II Definitions Section 1 Name The retirement income plan as set forth in this Ordinance shall be known as the City of Fort Collins General Employees Retirement Plan and is hereinafter referred to as the Plan Section 2 Definitions Unless the context otherwise requires, the definitions and general provisions contained in this section govern the construction of this restated Plan (a) "Accrued Benefit" means the benefit determined under the Plan expressed in the form of a monthly single life annuity, commencing at Normal Retirement Date (b) "Actuarial Equivalent" means a benefit of equal value when computed upon the basis of the mortality, interest and other tables last adopted by the Retirement Committee for this purpose (c) "Beneficiary" means and includes the Member's estate, his dependents, persons who are the natural objects of the Member' s bounty and any persons designated by the Member to share in the benefits of the Plan after the death of the Member (d) "City" shall mean the City of Fort Collins, State of Colorado (e) "City Council" shall mean the City Council of the City (f) "Committee" or "Retirement Committee" means the Committee appointed by the City Council and charged with the general administration of the Plan (g) "Compensation" means the total cash remuneration paid to an employee for a calendar year by the City for personal services as reported on the employee's income tax withholding statement or statements (Form W-2, or its subsequent equiva- lent) , excluding bonuses, extra pay, compensatory time, overtime pay, lump-sum payments for accrued vacation time, worker's compensation and any contribution by the City under this Plan, or the like, but including any deferred compensation used to purchase nonforfeitable annuities qualified under Section 403(b) of the Internal Revenue Code II-1 (h) "Credited Service" means the period of service rendered by an employee as a Member, for which credit is allowed Credited Service will cease when a Member' s service as an Employee terminates (i) "Disability" means a physical or mental condition which, in the ,judgment of the Federal Social Security Administration entitles the Member to receive disability benefits under Title II of the Federal Social Security Act, for the period of time from his Disability (after any waiting period required under the Act) continuously until his Normal Retirement Date (j) "Effective Date of this Plan" means January 1, 1971 This restated Plan is effective as of September 1, 1981 W "Employee" means any person who is hired to fill a permanent classified position as defined by the City Personnel Rules and Regulations, excluding Police Officers and paid Firefighters (1) "Final Average Monthly Compensation" means 1/60th of a Member's average compensation during the 60 consecutive full calendar months of Credited Service out of his last 120 calendar months of Credited Service, which will produce the highest average monthly compensation If a Member has less than 60 consecutive full calendar months of Credited Service, his Final Average Monthly Compensation shall be 1/60th of his average compensation during 60 successive full calendar months during the last 120 calendar months of Credited Service that would yield the highest average, or his Average Monthly Compensation during all full calendar months of Credited Service, if less than 60 months (m) "Funding Agent" means any insurance company or trustee appointed by the Retirement Committee as provided in Article XII, or the Retirement Committee, if no designation has been made (n) "Funding Agreement" means the insurance contract with the insurance company or the trust agreement with the trustee as approved by the Retirement Committee for the purpose of the investment and management of Retirement Fund assets (o) "Insurance Company" mean any insurance company or companies appointed by the City Council as provided in Article XII (p) "Member" means any person included in the membership of this Plan as provided in Article III hereof (q) "Plan Year" means the calendar year II-2 (r) "Retired Member" means a former member whose employment terminated by reason of retirement or Disability and who is receiving or is entitled to receive, or whose Beneficiary or estate is entitled to receive, benefits under this Plan (s) "Retirement Benefit" or "Pension" means any retirement benefit provided for in Article VI hereof (t) "Retirement Fund" or "Fund" means the "City of Fort Collins General Employees Retirement Fund," maintained by the Retirement Committee or in accordance with the terms of any Funding Agreement, as from time to time amended, which constitutes a part of this Plan (u) "Service" shall mean service rendered as an Employee of the City (v) "Trustee" shall mean any qualified and acting Trustee appointed by the City Council as Named Fiduciary for the investment and management of Plan assets (w) "Vested Member" means a former Member whose Credited Service has terminated by reason other than retirement or Disability and who is entitled to receive, or whose Beneficiary or estate is entitled to receive, benefits under this Plan A Vested Member shall become a Retired Member upon actual retirement Section 3 Construction The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender and words used in the singular shall include the plural unless the context clearly indicates to the contrary Words such as "hereof," "herein," and "hereunder," shall refer to the entire Plan, not to any particular provision or section The Plan and Trust shall each form a part of the other by reference and terms shall be used therein interchangeably H-3 ARTICLE III Membership Section 1 Employees on January 1, 1971 Every person who was an Employee of the City of Fort Collins on January 1, 1971 became a Member in the Plan on such date Section 2 Employees Hired On or After January 1, 1971 Each Employee of the City of Fort Collins hired on or after January 1, 1971, shall become a Member in the Plan on his date of employment Section 3 Termination Membership of any Member shall terminate if and when he shall cease to be an Employee for any reason, except as provided in Article IV, Section 2 Section 4 Withdrawal Unless otherwise provided herein, once an Employee has become a Member of the Plan, he may not withdraw from membership in the Plan unless he ceases to be an Employee Section 5 Exceptions Any Employee who is covered by an employment contract, a Department Head, an Assistant City Manager or an Assistant City Attorney may, if designated by the City Manager, elect to participate in the ICMA Retirement Program in lieu of participation in this Plan III-1 ARTICLE IV Credited Service Section 1 Credited Service A Member's Credited Service shall be used to determine his Accrued Benefit and eligibility for benefits under the Plan A Member' s Credited Service is the elapsed time period from his date of employment with the City, as an Employee, to his date of termination of such employment, except as limited within this section Section 2 Breaks in Service A Member shall incur a Break in Service if his service as an Employee terminates and he does not return to service as an Employee within twelve (12) months of the date such service terminated The Retirement Committee shall have the power to determine when a Break in Service shall have occurred, and such determination shall be made in a nondiscriminatory manner However, the following shall not be considered as a Break in Service (a) A temporary lay-off because of an illness or for purposes of economy, suspension, or dismissal, followed by reinstatement, reemployment or reappointment within one year (b) A formal leave of absence followed by reinstatement, reemployment or reappointment within 30 days after termination of the leave of absence (c) A leave of absence on account of entering into the military service of the United States, followed by a return to employment as an Employee of the City within 90 days after the time when a discharge from such military service was first available to such member Credited Service shall not include the time during which a Member is not in active service of the City for any of the reasons stated in this sub- section 2 IV-1 Upon incurring a Break in Service, a Member shall lose all his prior Credited Service If a Member returns to service as an Employee prior to incurring a Break in Service and repays the Fund, within twelve (12) months of rehire, any amounts received because of his prior termination, with interest at the rate used to determine an Actuarial Equivalent from the date received to the date of repayment, the prior Credited Service for which such amounts were received shall be restored Section 3 Effect of Other Plans Credited Service shall not include any period on the basis of which a retirement benefit is payable under any other defined benefit retirement or pension plan to which the City made contributions, other than benefits payable under the Federal Social Security Act Credited Service shall not include any period of time during which an Employee participates in the ICMA Retirement Plan in lieu of this Plan as provided in Section 5 of Article III Section 4 Miscellaneous No period of Credited Service shall be deemed to be increased or extended by overtime In determining all Credited Service, service for fractional years shall be allowed on the basis of 1/12th year for each full month of employment as an Employee IV-2 ARTICLE V Retirement Dates Section 1 Normal Retirement The Normal Retirement Date of a Member shall be his 65th birthday upon which date he shall become fully vested in his Accrued Benefit For purposes of the commencement of payment of a Retirement Benefit, Normal Retirement Date shall mean the first of the month coincident with or following a Member's 65th birthday Section 2 Early Retirement A Member or Vested Member who has attained the age of 55 years and has completed at least six years of Credited Service may elect to retire as of the first day of any calendar month, which shall not be less than 30 nor more than 90 days after the filing of written notification with the Retirement Committee Section 3 Delayed Retirement A Member may continue in the employment of the City after his Normal Retirement Date If the retirement of a Member is delayed under this Article V, Section 3, his "Delayed Retirement Date" shall be the first day of the month, coincident with or next following the date of his actual retirement As a condition precedent to continuance in employment beyond the Normal Retirement Date, the Member shall file with the Retirement Committee a written designation of a Beneficiary, whether or not the Member elects one of the optional benefits in accordance with Article VII Section 4 Disability Retirement If it is established by the Retirement Committee that a Member has become Totally and Permanently Disabled then such Member shall be eligible to receive a Retirement Benefit commencing V-1 one month after his Disability Retirement Date For purposes of this Plan, a Member shall be deemed totally and permanently disabled upon a determination by the Social Security Administraton that he is entitled to Social Security disability benefits, provided that he is eligible for and receiving such disability benefits under the Social Security Act (after any waiting period required under the Act) If, prior to age 65, a Member's Social Security disability benefits terminate, he will be considered to be recovered from Disability If a Member returns to service with the City as an Employee upon recovery from Disability prior to age 65, his Credited Service will include the period of his Disability If a Member whose Disability terminates before age 65 is not reemployed as an Employee by the City, his Pension payable, if any, will be determined by his Credited Service and his Final Average Monthly Compensation on his Disability Retirement Date If a Member recovers from Disability after his 65th birthday and he does not return to employment with the City, his Disability Pension shall continue as if his Disability had continued Section 5 Retirement Date A Member' s "Retirement Date" shall be on his Normal Retirement Date, his Early Retirement Date, his Delayed Retirement Date, or his Disability Retirement Date, whichever is applicable V-2 ARTICLE VI Retirement Benefits Section 1 Normal or Delayed Retirement Upon retirement at or after his Normal Retirement Date, each Retired Member shall receive a monthly Retirement Benefit equal to 1-1/2/ of the Member's Final Average Monthly Compensation multiplied by the total number of years of the Member's Credited Service Section 2 Early Retirement A Member or Vested Member, eligible for early retirement and retiring prior to his Normal Retirement Date, shall be entitled to a reduced Retirement Benefit which shall be his Vested Accrued Benefit on his Early Retirement Date, reduced by 1/180 for each of the first 60 months and 1/360 for each additional month by which the payments commence prior to the first of the month following his Normal Retirement Date Section 3 Disability Retirement The Disability Retirement benefit of a Member eligible therefor shall be his Accrued Benefit on his Disability Retirement Date Section 4 Payment of Benefits The basic monthly Retirement Benefit, computed as set forth above, shall be paid in equal monthly payments commencing on the first day of the month on or after the Retirement Date, and continuing at monthly intervals for the Retired Member's lifetime thereafter Retirement Benefits shall not be paid to any Retired Member during any period of employment subsequent to his actual retirement date during which he is receiving Compensation and is considered an Employee of the City Monthly payments shall commence on the first of the month coin- cadent with or next following such Retired Member' s subsequent termination of VI-1 -service with the City as an Employee and shall be determined_pursuant to Section 2 of Article XVI herein Section 5 Minimum Periodic Payment If the amount of the monthly Retirement Benefit payable to a Retired Member is less than $50, the Retirement Committee, in its discretion, may make Actuarially Equivalent Retirement Benefit payments quarterly, semi-annually, annually or in a single sum Section 6 Accrued Credits and Vested Benefits Under the Previous Plan Preserved The restatement of the Previous Plan by this Plan shall not operate to exclude, diminish, limit or restrict the payment or continuation of payment of benefits accrued as of August 31, 1981 The amount of such Previous Plan benefits, if any, in the course of payment by the Funding Agent under said Previous Plan, to any person on August 31, 1981, shall be continued by the Funding Agent under the Funding Agreement forming a part of this Plan, in the same manner, undiminished, preserved, and fully vested under this Plan, except as provided in Section 7 of this Article VI The eligibility for, and amount of, any benefit of any kind, payable commencing after August 31, 1981 under this Plan to or for any person who was a Member of the Previous Plan and who became a Member of this restated Plan as of September 1, 1981, shall be determined under the provisions of this Plan Section 7 Increased Benefits for Retired Members and Beneficiaries of the Previous Plan Effective September 1, 1981, the monthly benefits to current Retired Members and Beneficiaries of the Previous Plan whose payments commenced prior to September 1, 1981, shall be increased, effective September 1, 1981, as follows VI-2 Year of Retirement Percentage Date Increase 1981 5% 1980 10 1979 15 1978 20 1977 25 1976 30 1975 35 1974 40 1973 45 1972 50 1971 55 If a benefit is being paid to a Beneficiary or Contingent Annuitant, the Year of Retirement Date for purposes of using the above table shall be the initial Retirement Date of the Member or the date the Beneficiary's benefit commenced, if no benefit payments were made to the Member VI-3 ARTICLE VII Optional Benefits Section 1 General Subject to such uniform rules and regulations as the Retirement Committee may prescribe, a Member or Vested Member may, in lieu of the basic Retirement Benefits provided in Article VI, elect one of the following forms of Retirement Benefits which shall be the Actuarial Equivalent of the benefit to which he would otherwise be entitled The Member or Vested Member must make any election of an optional benefit in writing, and such election must be filed with the Retirement Committee at least 30 days prior to the due date of the first payment of Retirement Benefits under the Plan The election of an option may be changed at any time prior to 30 days preceding the due date of the first payment of Retirement Benefits under the Plan However, an optional form of income may not be elected unless the value of the payments expected to be paid to the Member exceeds 50/ of the value of the total benefits to be paid under such optional form Section 2 100/ Joint and Survivor Benefit The Member may elect a 100/ Joint and Survivor Benefit which provides reduced monthly Retirement Benefit payments during the Retired Member's life, and, upon his death after retirement, continues payments in the same reduced amount to a designated Beneficiary during the life of such Beneficiary Section 3 50/ Joint and Survivor Benefit The Member may elect a 50/ Joint and Survivor Benefit which provides reduced monthly Retirement Benefit payments during the Retired Member' s life, and, upon his death after retire- ment, continues payments in an amount equal to one-half of the amount of such VII-1 reduced payment to the designated Beneficiary during the life of such Beneficiary Section 4 120 Months Certain and Life Benefit The Member may elect a 120 Months Certain and Life Benefit which provides reduced monthly Retirement Benefit payments during the Retired Member's life, and in the event he dies prior to receiving 120 monthly payments, the same reduced amount shall be continued to his Beneficiary until a total of 120 monthly payments have been made Section 5 Beneficiary The designated Beneficiary for optional benefits may be the spouse of the Member or Vested Member, if living, at the time the optional Retirement Benefit is elected, or any of his children, either natural or adopted, parents, brothers or sisters If the designated Beneficiary dies prior to the due date of the first payment of Retirement Benefits under the Plan and no new Beneficiary has been designated, Retirement Benefits shall be paid as though no optional benefit had been elected VII-2 ARTICLE VIII Death Benefits Section 1 Death of an Active Member or Vested Member Prior to Normal Retirement Date In the event a Member, who has attained age 55 and has completed at least six years of Credited Service, and who is actively employed by the City or whose employment terminated after having completed such age and service requirements, dies prior to his Normal Retirement Date and prior to the commencement of his Retirement Benefit, a monthly benefit for life shall be paid to his surviving spouse, if any, in an amount equal to 50/ of the Member's Vested Accrued Benefit on his date of death If however, the Member' s spouse is more than five years younger than the Member, the monthly benefit to his spouse shall be reduced actuarially to reflect the difference in age as being more than five years Section 2 Death of an Active Member Between Normal and Delayed Retirement Dates In the event a Member continues in City employment after his Normal Retirement Date, and dies before actually retiring, then he shall be deemed to have retired on the first day of the calendar month in which he dies If no other form of payment has been elected, the Member shall be deemed to have elected the 100/ Joint and Survivor Optional Benefit provided for in Article VII, Section 2, and payments shall be made in accordance with this option to the Beneficiary designated by the Member Section 3 Death of a Retired Member In the event a Retired Member dies while receiving Retirement Benefit payments, his death benefit, if any, will be determined by the form of Retirement Benefit being paid VIII-1 Section 4 Uniform Simultaneous Death Act The provisions of any State law providing for the distribution of estates under the Uniform Simultaneous Death Act, when applicable, shall govern the distributon of money payable under this Plan VIII-2 ARTICLE IX Severance Benefits Section 1 Coverage Benefits shall be paid to a Member under this Article if his employment terminates for reasons other than retirement, disability or death Section 2 Six or More Years of Service In the event a Member' s employment terminates prior to a his Normal Retirement Date, and he has six or more years of Credited Service, he shall become a Vested Member A Vested Member shall be entitled to a deferred Retirement Benefit which shall be the vested portion (as shown in the table below) of his Accrued Benefit on the date of the termination of his Credited Service Completed Years Percent of Accrued Of Credited Service Benefit Vested Less than 6 0/ 6 20/ 7 4 0/ 8 60/. 9 80% 10 or more 100/ Such deferred Retirement Benefit shall be payable at the Vested Member' s Normal Retirement Date If the deferred Retirement Benefit to which a Vested Member will be entitled at his Normal Retirement Date is less than $SO per month, the Vested Member may be paid, as of the date his employment terminates, a single sum equal to the Actuarial Equivalent of such deferred Retirement Benefit, in lieu of all other benefits under the Plan IX-1 In lieu of receiving the deferred Retirement Benefit upon his Normal Retirement Date, the Vested Member may elect to receive a reduced Retirement Benefit beginning upon the first of any month subsequent to his attainment of age 55 The reduction shall be 1/180 for each of the first 60 months and 1/360 for each additional month by which payments commence prior to the first of the month following his Normal Retirement Date IX-2 ARTICLE X Contributions Section 1 Member Contributions Members are not required or permitted to make contributions under this Plan Section 2 City Contributions The City shall make contributions to the Fund adequate to finance the benefits provided for the Plan on a sound actuarial basis The required contributions to the Plan shall be determined by a competent actuary The City expects to continue such contributions to the Plan, but assumes no responsibility to do so and reserves the right to suspend or to reduce contributions at any time upon appropriate action by an amendment to the Plan by the City Council Notwithstanding any other provisions hereof or any amendment hereto to the contrary, at no time shall any assets of the Fund revert to, or be recoverable by, the City or be used for, or diverted to, purposes other than for the exclusive benefit of Members, Retired Members, Vested Members, or their Beneficiaries under the Plan except such funds which upon termination of the Plan are in excess of the amount required to fully fund the Plan and are due to erroneous actuarial assumptions Section 3 Application of Forfeitures Any amount forfeited because of termination of employment of a Member prior to his having acquired a fully vested right to Retirement Benefits, because of death of any Member or for any other reason, shall not be applied to increase the benefits provided by the Plan unless such benefits are increased by appropriate amendment, as provided in Article XIV X-1 ARTICLE XI Administration of the Plan Section 1 Retirement Committee A Retirement Committee composed of five members shall administer the Plan One of said members shall be the Director of Finance, who shall keep all records and minutes of meetings Three of said members, other than the Director of Finance, shall be employees who are covered by the Plan All members of the Committee, other than the Director of Finance, shall be appointed by the City Council to serve at its pleasure and for overlapping terms designated by the City Council All members of the Committee who are not employees of the City shall be tax-paying electors of the City A majority of the five members of the Committee shall constitute a quorum All actions taken by the Committee shall be approved by a maljority vote of all of the members of the Committee present No member of the Committee shall receive compensation for his service on the Committee but a member may be reimbursed for reasonable expenses incurred in connection with his duties as a member of the Committee Section 2 Management of the Plan The Retirement Committee shall have all powers necessary to effect the management and administration of the Plan in accordance with its terms, including, but not limited to, the following (a) To designate a Funding Agent, which may be the Retirement Committee, to manage the Retirement Fund (b) To establish rules and regulations for the administration of the Plan, for managing and discharging the duties of the Committee, for the Committee's own government and procedure in so doing, and for the preservation and the protection of the Funds XI-1 (c) To interpret the provisions of the Plan and to determine any and all questions arising under the Plan or in connection with the administration thereof A record of such action and all other matters properly coming before the Committee shall be kept and preserved (d) To determine all considerations affecting the eligibility of any employee to be or become a Member of the Plan (e) To determine the Credited Service of any Member and to compute the amount of Retirement Benefit, or other sum, payable under the Plan to any person (f) To authorize and direct all disbursements of Retirement Benefits and other sums under the Plan (g) With the advice of its actuary to adopt, from time to time for purposes of the Plan, such mortality and other tables as it may deem necessary or appropriate for the operation of the Plan (h) To make or arrange for valuations and appraisals of Fund assets held under the Plan, and, with the advice of the actuary, to determine the liabilities of the Plan (i) To hold assets of the Plan in a special account entitled "Retirement Plan Fund," and invest and reinvest the same and to make such withdrawals therefrom as are authorized by the Plan for the payment of Retirement Benefits and the expenses of the Committee and the members thereof (j) To maintain such records and accounts and to render such financial statements and reports as may be required by the City Council (k) To authorize one or more members of the Retirement Committee to sign all legal documents and reports on behalf of the Retirement Committee Section 3 Miscellaneous All proper expense incurred by the Retirement Committee in the administration of the Plan, if not paid by the City, shall be paid from the Fund when authorized by the Retirement Committee The Retirement Committee shall have no power to add to, subract from or modify any of the terms of the Plan, nor to change or add to any benefits XI-2 provided by the Plan, nor to waive or fail to apply any requirements of eligibility for Retirement Benefits under the Plan A member of the Retirement Committee shall not vote on any matter relating solely to himself or to his rights or benefits under the Plan If a Committee member is so disqualified to act and the remaining members cannot agree, the City Council shall appoint a temporary substitute member to exercise all the powers of the disqualified member concerning the matter in which he is disqualified The decision of the Retirement Committee and any action taken by it in respect to the management of the Plan shall be conclusive and binding upon any and all employees, officers, former employees and officers, Members, Retired Members, Vested Members, their Beneficiaries, heirs, distributees, executors, administrators and assigns and upon all other persons whomsoever, but the Committee at all times shall act in a uniform and nondiscriminatory manner Neither the establishment of this Plan nor any modifications thereof or any action taken thereunder or any omission to act, by the Committee, the City Council or any of their members shall be construed as giving to any Member or other person any legal or equitable right against the City or any officer or employee thereof or against the Retirement Committee, the City Council, or any of their members XI-3 ARTICLE XII Method of Funding Section 1 Funding The Retirement Committee shall decide whether it shall handle the Fund or shall appoint an insurance company, a trustee, or another funding vehicle, to hold and invest the Retirement Fund The Retirement Committee shall have the power to change such funding at any time upon notice required by the terms of the Funding Agreement Section 2 Assets All of the assets of the Plan shall be held by the Funding Agent acting under a Funding Agreement for use in providing the benefits under the plan No part of the said corpus or income shall be used for or diverted to purposes other than the exclusive benefit of the Members, Retired Members, Vested Members, their Beneficiaries or estates under the Plan, prior to the satisfaction of all liabilities hereunder with respect to them, except such funds which, upon termination of the Plan, are in excess of the amount required to fully fund the Plan and are due solely to erroneous actuarial assumptions No person shall have any interest in or right to any part of the assets of the Fund except as and to the extent expressly provided in the Plan Section 3 Duties of the Funding Agent The duties of the Funding Agent shall include but shall not be limited to the following (a) It shall receive from the City, all contributions to the Fund herein established (b) It shall receive all of the income from the Fund (c) It shall pay out of the Fund, upon written instructions from the Retirement Committee, the funds required for payments under the Plan XII-1 (d) It shall invest and reinvest the corpus and income of the Fund, subject to the requirements of the Plan, as directed by the Retirement Committee and set forth in the funding agreement (e) It shall maintain such records and accounts of the Fund, and shall render such financial statements and reports thereof, as may be required from time to time by the City Council or the Retirement Committee Section 4 Investment Powers The investment of the corpus of the Fund shall be made according to the powers and limitations set forth in the Funding Agreement XII-2 ARTICLE XIII Retirement Benefits and Rights Inalienable Section 1 Inalienability Members, Retired Members, Vested Members and their Beneficiaries under the Plan are hereby restrained from selling, transferring, anticipating, assigning, hypothecating, or otherwise disposing of their Retirement Benefit, prospective Retirement Benefit, or any other rights or interest under the Plan, and any attempt to anticipate, assign, pledge, or otherwise dispose of the same shall be void Said Retirement Benefit, prospective Retirement Benefit and rights and interests of said Members, Retired Members, Vested Members or Beneficiaries shall not at any time be subject to the claims of creditors or liabilities or torts of said Members, Retired Members, Vested Members or Beneficiaries, nor be liable to attachment, execution, or other legal process Section 2 Bankruptcy If any Member, Retired Member, Vested Member or Beneficiary shall become bankrupt or attempt to anticipate, assign or pledge any benefits under the Plan, then such benefits shall, in the discre- tion of the Retirement Committee, cease, and in that event the Retirement Committee shall have authority to cause the same, or any part thereof, to be held or applied to or for the benefit of such Member, his spouse, his children, or other dependents, or any of them, in such manner and in such proportions as the Retirement Committee may deem proper XIII-1 ARTICLE XIV Modification or Termination of Plan Section 1 Expectation It is the expectation of the City Council that it will continue this Plan and the payment of its contributions hereunder indefinitely, but continuance of the Plan is not assumed as a contractual obligation of the City Section 2 Amendment The City Council reserves the right to alter, amend, or terminate the Plan or any part thereof in such manner as it may determine, and such alterations, amendment or termination shall take effect upon notice thereof from the City Council to the Retirement Committee, provided that no such alteration or amendment shall permit any part of the Fund to revert to or be recoverable by the City or be used for or diverted to purposes other than the exclusive benefit of Members, Retired Members, Vested Members or Beneficiaries under the plan, except such funds, if any, as may remain at termination of the Agreement after satisfaction of all liabilities with respect to Members, Retired Members, Vested Members and Beneficiaries under the Plan and are due solely to erroneous actuarial assumptions Section 3 Approval Under the Internal Revenue Code The Plan is intended to comply with the requirements of the applicable provisions of Section 401(a) of the Internal Revenue Code as now in effect or hereafter amended, and any modification or amendment of the Plan may be made retro- active, as necessary or appropriate, to establish and maintain such compliance XIV-1 Section 4 Discontinuance The City Council reserves the right at any time and for any reason satisfactory to it to discontinue permanently all contributions under this Plan Such discontinuance shall be deemed to be a complete termination of the Plan Section 5 Termination In the event of a partial or complete termination of the Plan, all affected funds covered by the Agreement shall be allocated to affected Members, Retired Members, Vested Members and Beneficiaries in proportion to the actuarial reserves for each Member's Accrued Benefit at the date of termination of the Plan Section 6 Distribution When the funds covered by the Agreement have been allocated as indicated above, the distribution may be made in the form of cash or nontransferable annuity contracts as determined by the Retirement Committee, provided that any affected funds remaining after the satisfaction of all liabilities to Members, Retired Members, Vested Members and Beneficiaries under the Plan may be withdrawn by the Retirement Committee from the Fund and refunded to the City XIV-2 ARTICLE XV Benefit Restrictions on Early Termination Section 1 Restrictions Notwithstanding any other provision hereof, the benefits provided by City contributions for Members described in Section 2 herein shall be subject to the following conditions (a) Payment in full shall be made of such benefits which have been provided by City contributions not exceeding the larger of the following amounts (1) $20,000, or (11) an amount equal to 20/ of the first $50,000 of the Member' s average regular annual Compensation multiplied by the number of years between the date of the establishment of this Plan and (1) the date that the Plan terminates or (2) if benefits become payable to a Member described in Section 2 herein within ten years after the date of the establishment of this Plan, the date the benefits of such Member first become payable (if before the date of termination of this Plan) or (3) if benefits become payable to a Member described in Section 2 herein after the Plan has been in effect for ten years and if the full current costs of the plan for the first ten years have not been met or if the full current costs have not been met on the dates referred to in (1) or (2) above, the date of the failure to meet the full current costs, (b) If (1) this Plan is terminated within ten years after its establishment or (2) the benefits of any of the Members described in Section 2 herein become payable within ten years after the establishment of this Plan or (3) the benefits of any of such Members become payable after this Plan has been in effect for ten years and at the time such benefits become payable the full current costs for the first ten years have not been met, the benefits which any of such Members may receive from City contributions shall not exceed the benefits set forth in paragraph (a) of this section This limitation shall cease to be effective at such time, at or after the expiration of ten years from the date of the establishment of this Plan, as the full current costs of the Plan have first been met, (c) If a Member described in Section 2 herein leaves the employ of the City, the benefits which he may receive from City contributions shall not at any time, within the first ten years after the establishment of this Plan, exceed the benefits set forth in (a) herein, if, at the end of ten years after the date of the establishment of this Plan the full current costs of the XV-1 first ten years have not been met, the benefits such Member may receive from City contributions shall not exceed the benefits set forth in (a) herein until the first time that the full current costs of this Plan have been met, (d) These conditions shall not restrict the full payment of any benefits on behalf of a Member who dies while this Plan is in full effect and its full current costs have been met, (e) These conditions shall not restrict the current payment of full Retirement Benefits called for by this Plan for any Retired Member while this Plan-is in full effect and its full current costs have been met, (f) This section is intended to conform to the require- ments of Treasury Regulation, Secton 1 401-4(c) and shall cease to be effective at such time as the provisions of Treasury Regulation 1 401-4(c) or any substitute therefor are no longer effective or applicable Section 2 Members Affected by Section 1 The Members referred to in Section 1 herein shall be limited to those whose anticipated annual benefit hereunder shall exceed $1,500 and who at the Effective Date hereof are among the twenty-five highest paid employees of the City, whether or not initially eligible for membership Section 3 Amendment of Plan If the Plan is amended to increase benefits which would substantially increase the extent of possible discrimi- nation as to contributions or as to benefits upon termination of the Plan, the restrictions set forth in Section 1 of this Article XV shall be applied to the Plan as if it were a new plan established on the date of such change XV-2 ARTICLE XVI Limitations Section 1 Reemployment of Former Members If a Member' s employment terminates prior to becoming eligible for a Retirement Benefit and the Member is subsequently reemployed as an Employee, such Member shall not be entitled to receive credit for his previous Credited Service under the Plan, except as provided in Article IV Section 2 Reemployment of Retired Members If a Retired Member is reemployed as an Employee of the City, no Retirement Benefit payments shall be made during the period of such reemployment Upon the subsequent termination of employment by such a Member, the Member shall be entitled to receive a Retirement Benefit based on his total Credited Service prior to the date of his previous Retirement, during the period of his reemployment and in the case of a disabled Member, his Credited Service while disabled In the case of reemployment of a Retired Member who received any Pension payments prior to his reemployment, the Retirement Benefit payable upon his subsequent Retirement shall be reduced by the Actuarial Equivalent of the Pension payments, other than Disability Pension payments, he received prior to his Normal Retirement Date Section 3 Limitation of Benefits The annual benefit in the form of a straight life annuity (with no ancillary benefits) provided by City contributions for a Member with ten or more years of Credited Service at his Normal Retirement Date shall not exceed the lesser of $75,000 (subject to annual cost-of-living adjustments which take effect no sooner than the XVI-1 effective date of the adjusted limitation published by the Internal Revenue Service) or 100/ of the Member' s average compensation for his highest paid three consecutive calendar years of Credited Service Regardless of his average compensation, an annual benefit of $10,000 or less payable to such Member under this and all other defined benefit plans of the City shall not be deemed to be a violation of this section if such Member has not participated at any time in a defined contribution plan maintained by the City If a Member retires with less than ten years of Credited Service, the $75,000 (as adjusted) limitation on annual benefits provided by City contributions shall be reduced by multiplying the maximum annual benefit above by a fraction, the numerator of which is the number of years of the Member's Credited Service and the denominator of which is ten If the benefits of a Member are payable before age 55, such benefit shall be adjusted to the Actuarial Equivalent of a benefit commencing at age 55 for purposes of applying this limitation No contributions shall be made on behalf of any Member which would cause such Member's annual benefit to exceed such limitations as provided in the Internal Revenue Code of 1954, as amended, and accompanying regulations For purposes of this section the limitation year shall be the Plan Year Section 4 Consolidation or Merger The Plan shall not be merged or consolidated with, nor shall any assets or liabilities be transferred to any other Plan, unless the benefits payable to each Member if the Plan were terminated immediately after such action would be equal to or greater than the benefits to which such Member would have been entitled if this Plan had been terminated immediately before such action XVI-2 r RECOMMENDED AND APPROVED in Fort Collins, Colorado, this day of , 1981 THE CITY COUNCIL OF THE CITY OF FORT COLLINS ATTEST XVI-3