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HomeMy WebLinkAbout11-176 - Resolutions RESOLUTION NO. 11-176 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, AUTHORIZING THE ADOPTION OF THE ACCUMULATION PROGRAM FOR PART- TIME AND LIMITED SERVICE EMPLOYEES (THE APPLE PLAN) TO PROVIDE RETIREMENT BENEFITS TO PART-TIME AND TEMPORARY EMPLOYEES OF THE CITY OF RANCHO CUCAMONGA AND THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT. WHEREAS, Section 11332 of the Omnibus Budget Reconciliation ACT of 1990 (OBRA '90) extends Social Security retirement benefit coverage to employees of state and local governments who are not covered by a state or local government system and subjects the employer and employee to Federal Insurance Contributions Act (FICA) taxes on the employee's wages; and WHEREAS, OBRA '90 excludes from the requirement of Social security coverage governmental employees who are covered by a compulsory retirement system of a state or local government; and WHEREAS, California Government Code section 53216, et seq., authorizes a local agency to establish and fund a pension plan covering its employees on a compulsory basis; and WHEREAS, certain part-time and temporary City and Fire District employees not covered by a bargaining unit of the City of Rancho Cucamonga or the Rancho Cucamonga Fire Protection District and are not currently covered under any other retirement program through the City or the Fire District or the State of California in lieu of coverage under Social Security, as permitted by OBRA '90; and WHEREAS, the City Council desires to adopt a compulsory retirement plan, qualified under section 457 of the Internal Revenue Code of 1986 (the Code), for the part-time and temporary city and fire district employees not covered by a bargaining unit of the City of Rancho Cucamonga or the Rancho Cucamonga Fire Protection District in lieu of coverage under Social Security, as permitted by OBRA '90; and WHEREAS, Code section 414 (h)(2) permits the City to pick up the employee portion of contributions to a section 457 Plan and to treat them as employer contributions; and WHEREAS, such "picked up" contributions are not taxable to the employee until distributed; and WHEREAS, the Council has reviewed the Accumulation Program for Part-time and Limited-service Employees (the APPLE Plan) provided by Keenan and Associates; NOW, THEREFORE, BE IT RESOLVED the City Council does hereby adopt the City of Rancho Cucamonga APPLE Plan to provide retirement benefits to part-time and temporary employees of the City and Fire District in lieu of coverage under Social Security, to be effective as soon as practical after January 31 , 2011; BE IT FURTHER RESOLVED, that the Council hereby designates the City as the Plan Administrator; BE IT FURTHER RESOLVED, that the Council hereby designates the City as the Trustee of the Plan; BE IT FURTHER RESOLVED, that the Council hereby authorizes MidAmerica Administrative Solutions (MidAmerica), to execute, on behalf of the City, the APPLE Plan and any other documents necessary to carry out the provisions of the APPLE Plan; BE IT FURTHER RESOLVED, that the Council hereby authorizes MidAmerica to enter into contracts with Keenan and Associates to provide ongoing administrative consulting services in connection with the operation of the APPLE Plan; to arrange the funding of the Plan through a funding company; to communicate the Plan to eligible employees of the City and Fire District; and to perform related services in connection with the APPLE Plan; BE IT FURTHER RESOLVED, that the Council has determined that it is appropriate for the City to pick up the employee portion of contributions to the APPLE Plan in order to afford participants the tax benefit provided by section 414 (h); BE IT FURTHER RESOLVED, I. That each participant of the Plan shall make contributions to the Plan on a pre-tax basis. Such participant contributions shall be treated as employer pick up contributions, as permitted under IRS Section 414 (h), and allocated to that participant's account. II. That employees shall not have the option of choosing to receive the contributed amounts directly instead of having them paid by the City to the APPLE Plan. III. That the City shall pay to the APPLE Plan the contributions designated as employee contributions from the same source of funds used to pay employees' salary. IV. That the amount of the contributions designated as employee contributions and paid by the City to the APPLE Plan on behalf of an employee shall be the entire contributions required of the employee under the Plan. BE IT FURTHER RESOLVED, that the appropriate City officials, as designated by the City Manager, are hereby authorized, empowered and directed, in the name and on behalf of the City, to execute such documents and instruments and to take all such other and further actions as the official or officials so acting may deem necessary or appropriate to carry out the purpose and intent of the foregoing resolutions. Please see the following page for formal adoption,certification and signatures Resolution No. 11-176 - Page 2 of 3 PASSED, APPROVED, AND ADOPTED this 7'" day of December 2011. AYES: Alexander, Buquet, Michael, Spagnolo, Williams NOES: None ABSENT: None ABSTAINED: None • ,v L. Den is Michael, Mayor ATTEST: Jp—nice C. Reynolds, City-Clerk I, JANICE C. REYNOLDS, CITY CLERK of the City of Rancho Cucamonga, California, do hereby certify that the foregoing Resolution was duly passed, approved and adopted by the City Council of the City of Rancho Cucamonga, California, at a Regular Meeting of said City Council held on the 7'" day of December 2011. Executed this 8'" day of December 2011, at Rancho Cucamonga, California. nice C. Reynolds, Cit Clerk Resolution No. 11-176 - Page 3 of 3