HomeMy WebLinkAbout8.6 PublicAgencyRetirement
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: September 21, 2004
CITY CLERK
File # D~[QJ[Q]-[J51~
720..!PO
SUBJECT:
Agreement With The Public Agency Retirement System (PARS) To
Provide An Alternate Retirement System For Part-Time Employees
Report Prepared by Carole A. Perry, Administrative SenJices
Director and Fred W Marsh, Finance Manager
ATTACHMENTS:
1.
2.
Trust Agreement with PARS
Resolution
RECOMMENDATION~1 J JI:t' Adopt the Resolution authorizing the City Manager to enter into an
7,f./" agreement with PARS
FINANCIAL STATEMENT: Staff projects savings of approximately $14,000 in the first year.
The cost savings are achieved because under PARS, the City will contribute 1.5%, instead of the current
6.2%, of payroll for retirement benefits to part time employees. The costs, dependant on the number of
part-time employees and the hours worked, can vary; however, the implementation of PARS will
consistently provide savings to the City, due to the reduced percentage rate contribution.
DESCRIPTION:
The City of Dublin is required, on behalf of each part-time employee, to contribute to Social Security an
amount equal to 6.2% of his or her salary. The employee also contributes 6.2% to Social Security for a
total contribution of 12.4%. The United States Congress adopted the Omnibus Budget Reconciliation Act
(OBRA) in 1990. At that time, OBRA mandated that employees not covered by a retirement program be
enrolled in Social Security or in an alternate retirement system effective January 1, 1992. Congress
specifically provided alternatives with statutory language spelling out the minimum requirement for the
alternate system. The Public Agency Retirement System (PARS) offers an alternate retirement system that
meets the statutory requirements, as specified by Congress.
PARS is the third largest multiple employer public retirement system in California. Currently, there are
over 250 member agencies representing over 250,000 public employees. Several local agencies such as
the cities of Berkeley, Emeryville, Hayward, Napa, Antioch and San Rafael are members of PARS.
As the plan administrator, PARS will ensure that all City of Dublin part-time employees are enrolled and
will also hold orientation meetings to provide information regarding the program. PARS will provide
training for City Payroll Staff to ensure that the program is properly implemented. PARS will also
monitor the program and will generate and submit all required reports. Union Bank of California serves as
the trustee for the PARS retirement program. Union Bank has the second largest trust division in
California with $140 billion in trust assets. The assets are held separately from the assets of Union Bank
and cannot be accessed by creditors of either the Trustee or the City.
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COPIES TO:
g/finance/P ARS~agenda statement
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ITEM NO. 8.6
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Part-time employees who do not work over 1000 hours in a fiscal year will be enrolled in PARS (if an
employee works over 1000 hours, they are enrolled in the Public Employees' Retirement Systeµ1 - PERS).
As mentioned previously, under Social Security, both the City and the employee each contribute 6.2% for
a total contribution of 12.4%. In PARS, the employee's contribution will be reduced to 6.0% of their
salary and the City will contribute the remaining 1.5% for a total of7.5%. The reduced rate for the City is
estimated to result in a savings of approximately $14,000 in the first year. Staff is proposing to begin this
program starting with the first payroll issued in January 2005.
For employees, the benefit of PARS over Social Security is that the PARS plan participants are fully
vested in the contributions made to their individual accounts and, upon leaving City employment, the
participants can elect to either receive a lump-sum payment or have the funds rolled over into an IRA or
into another qualified retirement plan that accepts rollover amounts.
RECOMMENDATION:
Staff recommends that Council adopt the Resolution authorizing the City Manager to enter into an
agreement with PARS.
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PARS BENEFIT TRUST
FBO
CITY OF DUBLIN
PARS ALTERNATIVE RETIREMENT SYSTEM
EFFECTIVE DECEMBER 25, 2004
TRUST DOCUMENT
ATTACHMENT 1
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TABLE OF CONTENTS
ARTICLE PAGE
I Trust Fund 4
.
II Investments 6
III Trustee's Powers 9
IV Trustee's Duties 13
V Restrictions on Transfer 14
VI Resignation, Removal and Succession 15
VII Amendment 16
VIIl Liabilities 17
IX Duration and Termination 19
X Miscellaneous 20
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PARS Benefit Trust FBO City of Dublin
PARS Alternative Retirement System Effective December 25, 2004
This Trust Agreement (the "Trust Agreement") is made by and among City of Dublin (the "Agency") as
the sponsor of the PARS Benefit Trust FBO City of Dublin PARS Alternative Retirement System
Effective December 25, 2004 (the "Plan"), the Plan Administrator or the Plan's administrative
committee (the "Plan Administrator") and Union Bank of California, N.A., a national banking
association as Trustee ("Union Bank of California" or the "Trustee").
PURPOSE
The Agency has established the PARS Benefit Trust FBO City of Dublin PARS Alternative
Retirement System Effective December 25, 2004 for the benefit of eligible employees.
The Agency has established this Trust for the exclusive purpose of providing Plan benefits to its
employees ("Participants") and their beneficiaries ("Beneficiaries") and defraying reasonable expenses of
the Plan and Trust. The Agency has reserved the right to amend this Trust from time to time.
The Plan provides that, from time to time, cash and other assets may be provided or forwarded to the
Trustee by the Agency to be held and administered in trust for the uses and purposes of the Plan, solely
for the purpose of providing such benefits. Subject to specific conditions set forth in this Trust
Agreement, the Trustee agrees that it will receive cash and other property of the Plan acceptable to the
Trustee, constituting Plan contributions from the Agency or transfers for the benefit of the Plan, and shall
hold and invest such cash and other property (the "Assets") for the uses and purposes and upon the terms
and conditions stated in this Trust Agreement (the "Trust"). The Agency intends that the Plan shall
qualify under Section 457(b) of the Internal Revenue Code of1986, as amended (the "Code"), and that
the Trust hereby created shall be treated as a trust exempt from tax under Section 501 of the Code, and
shall not be subject to any claims of the Agency's creditors.
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ARTICLE I
TRUST FUND
1.1 Sie:nine: Authoritv. The Agency's Board of Trustees, Board of Directors or other duly
authorized governing body shall certify in writing to the Trustee the names and specimen signatures of
all those who are authorized to act as, and on behalf of, the Plan Administrator, and those names and
specimen signatures shall be updated as necessary by such governing board or other duly authorized
officer of the Agency.
1.2 Acceptance of Assets. All contributions or transfers shall be received by the Trustee in cash or
in any other property acceptable to the Trustee. The Trust shall consist of the contributions and transfers
of Assets received by the Trustee, together with the income and earnings from such Assets, and any
increments accruing to them. The Trustee shall manage and administer the Trust without distinction
between principal and income. The Trustee shall have no other duty to compute any amount to be
transferred or paid to it by the Agency and it shall not be responsible for the collection of any
contributions or transfers due to the Trust.
1.3 Establishment of Trust. The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Agency and shall be used exclusively for the uses and purposes of
Participants and Beneficiaries as herein set forth. Participants and Beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust.
1.4 Oneoine Contributions to Trust. Agency, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property acceptable to the Trustee to augment the
principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement.
Neither the Trustee nor any Participant shall have any right to compel such additional deposits.
1.5 No Duty of Trustee to Enforce Collection. Notwithstanding anything herein to the contrary,
the Trustee shall have no authority or obligation to enforce the collection of any contribution or transfer
to the Trust.
1.6 Plan Administration. The Agency and not the Trustee shall be responsible for administering
the Plan (including without limitation determining the rights of the Agency's employees to participate in
the Plan, determining any Participant's right to benefits under such Plan), and issuing statements to
Participants of their interest in the Trust and Plan.
1. 7 Participant Accounts. The Agency shall maintain, or cause to be maintained, a separate
account for each Participant under the Plan (the "Account") in which it shall keep a record of the share of
such Participant under such Plan in the Trust. The Agency may appoint a third-party administrator or
record-keeper (the "Record-keeper") to maintain such Accounts. A Participant's Account under the Plan
shall represent the portion ofthe Trust allocated to provide such Participant benefits under such Plan. If
the Trustee is directed by the Agency to segregate the Trust into separate Accounts for each Participant,
at the time it makes a contribution to the Trust, the Agency shall certify to the Trustee the amount of
such contribution being made in respect of each Participant under the Plan.
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1.8 Tax Reportine:. The Agency and not the Trustee shall be responsible for all income tax
reporting and calculation and payment of any wage withholding or other tax requirements in connection
with the Trust and any contributions thereto, and any income earned thereby, and payments or
distributions therefrom, and Agency agrees to indemnify and defend Trustee against any liability for any
such taxes, interest or penalties resulting from or relating to the Trust, provided, however, that UBOC as
Trustee shall file such tax reports for the Trust as required by law and as agreed to by the parties in
writing from time to time.
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ARTICLE II
INVESTMENTS
2.1 Plan Administrator Authoritv. Except as otherwise provided in this Article II, the Plan
Administrator appointed by the Agency shall have all power over and responsibility for the management,
disposition, and investment of the Trust Assets, and the Trustee shall comply with proper written
directions of the Plan Administrator concerning those Assets. The Plan Administrator shall not issue
directions in violation of the terms ofthe Plan and Trust or prohibited by any applicable federal or state
laws or regulations governing the establishment and operation of trusts by governmental entities for the
purpose of providing retirement benefits for their employees or other individuals providing services to
such entities, including, but not limited to, laws governing the actions of plan fiduciaries. Except to the
extent required by applicable state or federal law or regulations, or otherwise provided in this Trust
Agreement, the Trustee shall have no duty or responsibility to review, initiate action, or make
recommendations regarding Trust Assets and shall follow investment directions and retain Assets until
directed in writing by the Plan Administrator to dispose of them. The Trustee shall not be liable for any
investment decisions of the Plan Administrator or any investment losses in the Account attributable to
investment decisions of the Plan Administrator.
2.2 Trustee as Manaeer. The Plan Administrator may also delegate all or a portion of its
investment authority to the Trustee for all or a portion of the Trust Assets. Upon written acceptance of
that delegation, the Trustee shall have full power and authority to invest and reinvest that portion ofthe
Trust so designated by the Plan Administrator in investments of any kind. The Trustee shall be
responsible for proper diversification of the Assets only if all the Plan Assets are subject to its
management.
The Plan Administrator shall have the responsibility for establishing and carrying out a funding policy
and method consistent with the objectives ofthe Plan, taking into consideration the Plan's short-term and
long-term financial needs (hereinafter referred to as the "Permissible Investment Guidelines"). The
Trustee's responsibility for investment and diversification of the Assets in the portion of the Trust for
which Trustee has investment discretion shall be subject to, and is limited by, the funding policy and
investment guidelines issued to it by the Plan Administrator and any Statutes.
It is understood and acknowledged that the Plan Administrator, rather than the Trustee, shall be
responsible for the funding policy, for overall diversification of Trust Assets (unless the Trustee has
investment responsibility for all Plan Assets), for benefit allocation, distribution, and for overall
compliance ofthe Trust with statutory limitations on the amount ofthe Trust's investment in any assets.
2.3 Insurance Contract. The Plan Administrator may direct the Trustee in writing to invest
assets of the Trust in group or individual insurance contracts of all kinds authorized under the Plan,
Statutes and Permissible Investment Guidelines provided such contracts are issued by an insurance
company or companies qualified to do business in more than one state, and the Plan Administrator shall
have the sole responsibility and shall direct the Trustee with respect to such insurance contracts. The
administration of these insurance contracts shall be the sole responsibility of the Plan Administrator, and
the Trustee shall follow the directions ofthe Plan Administrator with respect to the administration of any
such contracts.
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2.4 Independent Investment Manae:er. The Plan Administrator may appoint one or more
investment managers to direct the Trustee in the investment of all or a specified portion of the Trust
Assets. Any investment manager shall be a qualified investment advisor under the Investment Advisors
Act of 1940. The Plan Administrator may also remove any investment manager. The Plan
Administrator shall promptly notify the Trustee in writing of the appointment or removal of any
investment manager.
The Plan Administrator shall cause the investment manager to acknowledge to the Trustee in writing that
the investment manager is a fiduciary with respect to the Plan and Trust. If the foregoing conditions are
met, the investment manager shall have the power to manage, acquire, retain, or dispose of any Trust
Assets subject to the investment manager's management and direction. The Trustee shall not be liable
for the acts or omissions of such investment manager, or be under an obligation to review the
investments of, or to invest or otherwise manage any asset ofthe Trust that is subject to the management
and direction of such investment manager.
2.5 Participant Directed Accounts. The Member Agency may, by written resolution and execution
of the Adoption Agreement, terminate the Plan Administrator's right to direct the investment and
management of all or any portion of the Assets ofthe Agency Trust and allow Participants to direct their
own account balances ("Participant Directed Accounts"). Notwithstanding any other provision of this
Trust Agreement, for Participant Directed Accounts, the Trustee shall be entitled to act upon proper
directions of the Plan Administrator, Trust Administrator, and Participants including directions in
writing, or oral instructions which Trustee in its discretion may follow without receipt of written
instructions, instruction given by photostatic teletransmission using facsimile signature, or those
instructions which are digitally recorded on the UBOC Voice Response Unit ("VRU") or internet
website. Trustee is hereby authorized to record conversations and transmissions made in connection
with the Agency Trust. Trustee's recording or lack of recording of any such oral, internet or digital
instructions, and/or receipt or lack of receipt of facsimile transmissions, as reflected in the Trustee's
records maintained in the ordinary course of business shall constitute conclusive proof of Trustee's
receipt or non-receipt of such instructions.
The Trustee and/or Trust Administrator shall not be liable in any manner for investment or other losses
or other liability attributable to Participant's directions, or lack thereof, or exercise of control over the
investments of their Participant Directed Accounts. Likewise, the Trustee and/or Trust Administrator
shall have no duty or responsibility to review, monitor or make recommendations regarding investments
made at the direction ofthe Participants or the Plan Administrator. In order for Agency to be relieved of
investment fiduciary liability, the requirements of California law including Section 53213.5 of the
California Government Code must be met. The Plan Administrator shall establish uniform and
nondiscriminatory rules for the operation of the Participant Directed Accounts, including whether the
Participant shall direct the Trustee or direct the Plan Administrator who directs the Trust Administrator
who forwards such directions to the Trustee. Agency shall designate whether Participant Directed
Accounts are to be established pursuant to the provisions of section 2.5(a) or 2.5(b), below:
(a) Participant Direction in Individually Directed Accounts. If the Agency has so elected,
Participants may have investment direction power over their own segregated account
balances ("Individually Directed Account" or "IDA"). Investments may be directed by
Participants into assets administratively acceptable to Trustee, as limited by guidelines
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developed by the Plan Administrator (the "Permissible Investment Guidelines"). Plan
Administrator shall notify Participants of the Plan's Permissible Investment Guidelines
as in effect from time to time. In the absence of directions from a Participant, the Plan
Administrator may direct the investment of the IDA. The Trustee may refuse to comply
with the directions of the Participant to invest in assets other than those listed in its
Permissible Investments Guidelines or with directions which the Trustee deems to be
improper or contrary to the provisions of the Plan and Agency Trust or the Internal
Revenue Code and shall have no liability for such refusal.
(b) Participant Directed Account within Plan Administrator Selected Investment ÜPtions
("SelectBENEFIT Accounts"): If the Agency so elects, the Participant's Account
Balance shall be segregated into a Participant Directed Account ("SelectBENEFIT
Account"), over which the Participant may direct investment into one or more investment
alternatives ("Investment Options"). The Plan Administrator or its appointed Investment
Fiduciary shall have full responsibility for designating the Investment Options under the
Plan and for selecting the underlying investment vehicle(s) for each designated
Investment Option into which a Participant may direct investment of his or her
SelectBENEFIT Account. To the extent allowed by law, neither the Agency, the Plan
Administrator, the Trust Administrator nor the Trustee shall have any responsibility for
monitoring the directions of the Participant nor shall the Agency, the Plan Administrator,
the Trust Administrator or the Trustee be liable in any manner for investment or other
losses or other liability for following directions of a Participant.
( c) If SelectBENEFIT Accounts are established, notwithstanding any other provision oftms
Trust Agreement, the Agency may appoint the Trustee to provide ministerial services as
recordkeeper for such accounts by so indicating in the Agency's Plan, provided that an
acceptable service agreement has been executed by and between the Agency, the Plan
Administrator, the Trustee and the Trust Administrator.
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ARTICLE III
TRUSTEE'S POWERS
3.1 General Trustee's Powers. Except as otherwise provided in Article II, the Trustee shall have
full power and authority with respect to property held in the Trust to do all such acts, take all
proceedings, and exercise all such rights and privileges, whether specifically referred to or not in this
document, as could be done, taken or exercised by the absolute owner, including, without limitation, the
following:
(a) To invest and reinvest the Trust or any part hereof in anyone or more kind, type, class,
item or parcel of property, real, personal or mixed, tangible or intangible; or in anyone or more kind,
type, class, item or issue of investment or security; or in anyone or more kind, type, class or item of
obligation, secured or unsecured; or in any combination ofthem; and to retain the property associated
with such investment or reinvestment for the period of time that the Trustee deems appropriate.
(b) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose, including mineral
leases, and for terms within or extending beyond the life of this Trust), exchange and in any other
manner to acquire, manage, deal with and dispose of all or any part of the Trust property, for cash or
credit and upon any reasonable terms and conditions.
(c) To make "deposits" with any bank or savings and loan institution, including any such
facility of the Trustee or an affiliate thereof provided that the deposit bears a reasonable rate of interest;
(d) To retain all or any portion of the Trust in cash temporarily awaiting investment or for
the purpose of making distributions or other payments, without liability for interest thereon,
notwithstanding Trustee's receipt of "float" fÌ'om such uninvested cash;
(e) To place uninvested cash and cash awaiting distribution in one or more mutual funds
and/or commingled investment funds maintained by or made available by the Trustee, and to receive
compensation from the sponsor of such fund(s) for services rendered, separate and apart fÌ'om any
trustee's fees hereunder. Trustee or Trustee's affiliate may also be compensated for providing investment
advisory and other services to any such mutual fund or commingled investment funds. Agency
acknowledges receipt of prospectuses for such funds;
(f) To borrow money for the purposes of the Trust fÌ'om any source other than a party in
interest of the Plan, with or without giving security and to pay interest, to issue promissory notes and to
secure the repayment thereof by pledging all or any part of the Trust assets;
(g) To take all of the following actions as directed by a fiduciary or other person with
investment discretion over the Trust assets; to vote proxies of any stocks, bonds or other securities; to
give general or special proxies or powers of attorney with or without power of substitution; to exercise
any conversion privileges, subscription rights or other options, and to make any payments incidental
thereto; to consent to or otherwise participate in corporate reorganizations or other changes affecting
corporate securities and to delegate discretionary powers and to pay any assessments or charges in
connection therewith; and generally to exercise any of the powers of an owner with respect to stocks,
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bonds, securities or other property held in the Trust;
(h) To make, execute, acknowledge and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or appropriate to carry out the
powers herein granted;
(i) To pay, or cause to be paid, from the Trust any and all real or personal property taxes,
income taxes or other taxes or assessments of any or all kinds levied or assessed upon or with respect to
the trust or the Plan;
(j) To enter into, modifY, renew and terminate annuity contracts of deposit administration
of immediate participation or other group or individual type with one or more insurance companies and
to payor deposit all or any part of the Trust thereunder; to provide in any such contract for the
investment of all or any part of funds so deposited with the insurance company in securities under
separate accounts; to exercise and claim all rights and benefits granted to the contract holder by any such
contracts;
(k) To exercise all the further rights, powers, options and privileges granted, provided for,
or vested in trustees generally under applicable federal or state laws, as amended from time to time, it
being intended that, except as herein otherwise provided, the powers conferred upon the Trustee herein
shall not be construed as being in limitation of any authority conferred by law, but shall be construed as
in addition thereto.
3.2 Additional Powers. In addition to the other powers enumerated above, and whether or not the
Plan Administrator has retained investment authority, the Trustee in any and all events is authorized and
empowered:
(a) To invest funds in any type of interest-bearing account including without limitation,
time certificates of deposit or interest-bearing accounts issued by Union Bank of California, N.A., or any
mutual fund or short term investment fund ("Fund"), whether sponsored or advised by Union Bank of
California or any affiliate thereof; Union Bank of California, N.A. or its affiliate may be compensated for
providing investment advice or other services to such Fund, in addition to any Trustee's fees received
pursuant to this Trust Agreement; provided, that such compensation is reasonable;
(b) To cause all or any part of the Trust to be held in the name of the Trustee (which in such
instance need not disclose its fiduciary capacity) or, as permitted by law, in the name of any nominee,
and to acquire for the Trust any investment in bearer form; but the books and records of the Trust shall at
all times show that all such investments are a part of the Trust and the Trustee shall hold evidences of
title to all such investments;
(c) To serve as sole custodian with respect to the Trust assets with the sole exception of
insurance policy or annuity contracts, the underlying assets of which shall be maintained by the insurance
company Issuer;
(d) To employ such agents and counsel as may be reasonably necessary in managing and
protecting the Trust assets and to pay them reasonable compensation; to employ any broker-dealer,
including any broker-dealer affiliated with the Trustee, and pay to such broker-dealer its standard
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commissions; to settle, compromise or abandon all claims and demands in favor of or against the Trust;
and to charge any premium on bonds purchased;
(e) In addition to the powers listed herein, to do all other acts necessary or desirable for the
proper administration of the Trust, as though the absolute owner thereof and to exercise and perform any
and all of the other powers and duties specified in this Trust Agreement;
(f) To abandon, compromise, contest, arbitrate or settle claims or demands; to prosecute,
compromise and defend lawsuits, but without obligation to do so, all at the risk and expense ofthe Trust;
(g) To permit such inspections of documents at the principal office of the Trustee as are
required by law, subpoena or demand by United States agency and to disclose the Agency's name to
issuers of securities in connection with shareholder communications unless directed otherwise in writing;
(h) To comply with all requirements imposed by applicable state Statutes or other
applicable provisions of state or federal law;
(i) To seek written instructions from the Agency, Plan Administrator or other fiduciary or,
to the extent Participants are permitted to direct the investment of all or any portion of their Accounts
under the Plan, ITom a Participant, on any matter and await written instructions ITom such person without
incurring any liability. If at any time the Agency, the Plan Administrator, a fiduciary or Participant
should fail to give directions to the Trustee, the Trustee may but is not required to act in the manner that
in its discretion seems advisable under the circumstances for carrying out the purposes of this Trust.
Such actions shall be conclusive on the Plan Administrator and the Agency and the Participant if written
notice of the proposed action is given to the Plan Administrator five (5) days prior to the action being
taken, and the Trustee receives no response;
(j) As directed by the Plan Administrator:
(i) To cause the benefits provided under the Plan to be paid directly to the
persons entitled thereto under the Plan, and in the amounts and in the manner specified, or to disburse
such sums to the Agency, who shall be responsible to distribute sums due; and make appropriate tax
reports to Participants, Beneficiaries and taxing authorities, and to charge such payments against the
Trust with respect to which such benefits are payable;
(ii) To compensate such executive, consultant, actuarial, accounting, investment,
appraisal, administrative, clerical, secretarial, custodial, depository and legal, personnel and other
employees or assistants as are engaged by the Plan Administrator in connection with the administration
of the Plan and to pay ITom the Trust the necessary expenses of such, personnel, employees and
assistants, to the extent not paid by the Agency and directed by the Plan Administrator;
(iii) To impose a reasonable charge to cover the cost of furnishing to Participants or
Beneficiaries upon their written request documents as may be legally required by applicable state or
federal law or regulations;
(iv) To act upon proper directions ofthe Agency, the Plan Administrator or any other
fiduciary or Participant including directions in writing, or oral instructions which Trustee in its discretion
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may follow prior to receipt of written instructions, instruction given by photostatic teletransmission using
facsimile signature, or those instructions which are digitally recorded on the Trustee's oral recording or
VRU communications system. If oral or digital instructions are given, to act upon those in Trustee's
discretion prior to receipt of written instructions. Trustee's recording or lack of recording of any such
oral or digital instructions taken in Trustee's ordinary course of business shall constitute conclusive proof
of Trustee's receipt or non-receipt of the oral or digital or VRU instructions;
In exercising the power and authority under this subparagraph (iv), the Trustee will perform telephonic
verification to the Plan Administrator, or other authorized representative properly designated by the Plan
Administrator or the Agency, or such other security procedure selected by the Plan Administrator prior to
wire transfer of funds as the Trustee may require. The Plan Administrator, the Agency, and the Plan
assume all risk with respect to delays or transfers ifthe Trustee is unable to reach the Plan Administrator
or other authorized representative properly designated by the Plan Administrator, or in the event of delay
as a result of attempts to comply with any other security procedure selected by the Plan Administrator in
connection with wire transfers or otherwise;
(v) To pay from the Trust the expenses reasonably incurred in the
administration of the Trust as provided in the Plan, to the extent such expenses are not paid by the
Agency pursuant to Section 10.2;
(vi) To maintain insurance for such purposes, in such amounts and with such
companies as the Plan Administrator shall elect, including insurance to cover liability or losses occurring
by reason of the acts or omissions of fiduciaries (but only if such insurance permits recourse by the
insurer against a fiduciary in the case of a breach of a fiduciary obligation by such fiduciary).
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ARTICLE IV
TRUSTEE'S DUTIES
4.1 Powers Subiect to Duties. The Trustee shall exercise any of the foregoing powers from time
to time as required by any applicable federal or state law.
4.2 Records. The Trustee shall maintain or cause to be maintained suitable records, data and
information relating to its functions hereunder. The Trustee shall keep accurate and detailed accounts of
all investments, receipts, disbursements and other actions hereunder. Its books and records relating to
the Trust shall be open to inspection and audit at all reasonable times by the Agency, the Plan
Administrator or their duly authorized representatives.
4.3 Accounts. Within ninety days after the close of each Plan Year and within ninety days after the
resignation or removal of the Trustee as provided in Article VI hereof, the Trustee shall render to the
Agency a written account showing in reasonable summary the investments, receipts, disbursements and
other transactions engaged in by the Trustee during the preceding Plan Year or accounting period with
respect to the Trust. Such written accounts shall set forth the assets and liabilities of the Trust. The
Agency or Plan Administrator shall have ninety days after the Trustee's mailing of each such written
account within which to file with the Trustee written objections. Upon the expiration of each such
period, the Trustee shall be forever released and discharged from all liability and accountability to the
Agency, the Plan Administrator and Participants with respect to the propriety of its acts and transactions
shown in such account except with respect to any such acts or transactions as to which the Agency files
written objections within such ninety-day period with the Trustee.
4.4 Reports. The Trustee shall file such descriptions and reports and shall furnish such
information and make such other publications, disclosures, registrations and other filings as are required
of the Trustee by the Code or any other applicable law or regulation.
4.5 Follow Plan Administrator and Investment Manae:er Direction. The Trustee shall have the
power and duty to comply promptly with all proper directions of the Plan Administrator, the Agency, and
any duly appointed investment manager. Except as to investment directions received from the Plan
Administrator or investment manager, the Trustee shall not act on any directions or requests received
from Participants.
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ARTICLE V
RESTRICTIONS ON TRANSFER
5.1 Persons to Receive Payment.
(a) As directed by the Plan Administrator, the Trustee shall, except as otherwise provided
in subsection (b), pay all amounts distributable hereunder only to the person or persons designated under
the Plan or deposit to the Participant's or Beneficiary's checking or savings account and not to any other
person or corporation, and only to the extent of assets held in the Trust. The Plan Administrator's
instructions to the Trustee regarding whether or not to make distributions, and the amount of such
distributions, shall be conclusive on all Participants and Beneficiaries.
(b) In the event any controversy shall arise as to the person or persons to whom any
distribution or payment is to be made by the Trustee, or as to any other matter arising in the
administration of the Plan or Trust, the Trustee may, (i) retain the amount in controversy pending
resolution of the controversy or the Trustee, (ii) file an action seeking declaratory relief, (iii) interplead
the Trust Assets in issue, and (iv) name the Agency and/or any or all persons making conflicting
demands as necessary parties.
(c) The Trustee shall not be liable for the payment of any interest or income on any amount
withheld or interpleaded under subsection (b).
(d) The expenses incurred by the Trustee for taking any action under subsection (b) shall be
charged by the Trustee to the Trust unless paid by the Agency.
5.2 AssÍ!mment and Alienation Prohibited. In accordance with Section 457 of the Code, Trust
Assets shall not be subject to any claims of Agency or other creditors. Additionally, no benefit or
interest available hereunder shall be subject in any manner to assignment or alienation, whether
voluntarily or involuntarily, or to legal process except as permitted in the Internal Revenue Code,
applicable state or federal law, or as provided in the Plan.
14
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ARTICLE VI
RESIGNATION, REMOVAL AND SUCCESSION
6.1 Resienation or Removal of Trustee. The Trustee may resign at any time upon ninety days'
prior written notice to the Agency (which notice may be waived by the Agency). Agency may remove
the Trustee upon ninety days' prior written notice to the Trustee (which notice may be waived by the
Trustee).
6.2 Desienation of Successor. Upon notice of the Trustee's resignation or removal, Agency shall
promptly designate a Successor Trustee who will accept transfer of the assets of the Trust. If no
Successor Trustee is designated within thirty days of notice of Trustee's resignation or removal, the Plan
Administrator shall designate a Successor Trustee.
6.3 Court Appointment of Successor. If neither the Agency nor the Plan Administrator
designates a Successor Trustee within thirty days after the Trustee gives notice of resignation or receives
notice of removal, the Trustee may, at the expense of the Trust, apply to a court of competent jurisdiction
to appoint a Successor Trustee. Until a Successor Trustee is appointed, and all Trust assets are delivered
to the Successor Trustee, the Trustee shall be entitled to be compensated for its services according to its
published fee schedule then in effect for acting as Trustee in accordance with the Plan and Trust.
6.4 Successor's Powers. A Successor Trustee shall have the same powers and duties as those
conferred upon the original Trustee hereunder. A resigning Trustee shall transfer the Trust Assets and
shall deliver the books, accounts and records ofthe Trust to the Successor Trustee as soon as practicable.
The resigning Trustee is authorized, however, to reserve such amount from the Assets of the Trust as
may be necessary for the payment of its fees and expenses incurred prior to its resignation, and the Trust
Assets shall remain liable to reimburse the resigning Trustee for any costs, expenses or attorneys' fees or
losses incurred, whether before or after resignation, due solely to Trustee's holding title to and
administration of the Trust Assets.
6.5 Successor's Duties. A Successor Trustee shall have no duty to audit or otherwise inquire into
the acts and transactions of its predecessor.
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ARTICLE VII
AMENDMENT
7.1 Power to Amend. The Agency shall have the right at any time, and from time to time, to
modify or amend this Trust Agreement in whole or in part, effective upon thirty days' prior written
notice to the Trustee, provided, however, that the Trustee's duties and responsibilities shall not be
amended without the Trustee's express written consent.
7.2 Limitation on Amendment. No amendment shall be made, at anytime, under which any part
of the Trust may be diverted to purposes other than for the exclusive benefit of Participants and their
Beneficiaries.
7.3 Conformitv with Law. Notwithstanding anything herein to the contrary, this Trust Agreement
may be amended prospectively or retroactively at any time by the Agency if deemed necessary to
conform to the provisions and requirements of the Internal Revenue Code or regulations promulgated
pursuant thereto in order to maintain the tax-exempt status hereof thereunder, or to conform to the
provisions and requirements of any law, regulation, order or ruling affecting the character or purpose of
the Plan or Trust. No such Amendment shall be effective to add or change the Trustee's powers or duties
absent Trustee's written consent.
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ARTICLE VIII
LIABILITIES
8.1 Declaration of Intent. Nothing in this Article purports to relieve a fiduciary from liability for
any responsibility, obligation or duty under any applicable Statutes. However, to the full extent
permitted by law, it is the intent ofthis Article to relieve each fiduciary from all liability for any acts or
omissions of any other fiduciary or any other person and to declare the absence of liabilities of all
persons referred to in this Article to the extent not imposed by law or by provisions of this Trust
Agreement. Each of the following Sections, in declaring such limitations, is set forth without limiting
the generality of this Section but in each case shall be subject to the provisions, limitations and policies
set forth in this Section.
8.2 General Limitations of Liabilitv.
(a) No fiduciary shall be liable with respect to a breach of fiduciary duty under any
applicable Statutes if such breach was committed before he or she became a fiduciary or after he or she
ceased to be a fiduciary.
(b) No fiduciary shall be liable for any act or omission of any other person to whom
fiduciary responsibilities (other than Trustee responsibilities) are allocated by the Plan, the Trust
Agreement or by a fiduciary.
8.3 Liabilitv of the Trustee.
(a) The Trustee shall have no powers, duties or responsibilities with regard to the
administration of the Plan or to determine the rights or benefits of any person having or claiming an
interest under the Plan or in the Trust or under this Trust Agreement or to examine or control any
disposition ofthe Trust or part thereof which is directed by the Plan Administrator.
(b) The Trustee shall have no liability for the adequacy of contributions for the purposes of
the Plan or for enforcement of the payment thereof.
(c) The Trustee shall have no liability for the acts or omissions of the Agency or the Plan
Administrator .
(d) The Trustee shall have no liability for following proper directions of a fiduciary, the
Agency, the Plan Administrator or a Participant when such directions are made in accordance with this
Trust Agreement.
(e) During such period or periods of time, if any person other than the Trustee, including
but not limited to a Participant, is directing the investment and management of Trust Assets, the Trustee
shall have no obligation to determine the existence of any conversion, redemption, exchange,
subscription or other right relating to any securities purchased on the directions of such person if notice
of any such right was given prior to the purchase of such securities. If such notice is given after the
purchase of such securities, the Trustee shall notify the Plan Administrator, which shall transmit the
17
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notice to the directing party. The Trustee shall have no obligation to exercise any such right unless it is
informed ofthe existence of the right and is instructed to exercise such right, in writing, by a fiduciary or
a Participant through the Plan Administrator within a reasonable time prior to the expiration of such
right.
(f) During such period or periods oftime, ifthe Trustee is directed to purchase securities
issued by any foreign government or agency thereof, or by any corporation domiciled outside of the
United States, it shall be the responsibility of the directing party to advise the Trustee in writing with
respect to any laws or regulations of any foreign countries or any United States territories or possessions
which shall apply, in any manner whatsoever, to such securities, including, but not limited to, receipt of
dividends or interest by the Trustee for such securities.
(g) If the Plan and Trust cease to be subject to Sections 457 and 501 of the Code, the
Agency shall immediately notify Trustee. Agency shall indemnify the Trustee for any federal or state
income taxes, and any federal estate and state estate or inheritance taxes which the Trustee is required to
pay as a result of a distribution made at the direction of the Plan Administrator, in which event the
Agency shall be subrogated to the right ofthe Trustee to proceed against such Participant, Beneficiary,
the executor ofthe estate of a deceased Participant or any other person for reimbursement ofthe amount
paid and any taxes due.
8.4 Indemnification of Trustee.
(a) The Trustee shall not be liable for, and the Agency agrees to indemnify and hold the
Trustee harmless from and against any claims, demands, loss or liability imposed on the Trustee,
including reasonable attorneys' fees and costs incurred by the Trustee, caused by and related to (i) any
acts taken in accordance with any directions (or any failure to act in the absence of such directions) from
the Plan Administrator, or any other party to whom Plan Administrator has given authority to direct the
Trustee, which the Trustee reasonably believes to have been given by any ofthem; (ii) the negligence or
willful misconduct of the Plan Administrator, or any other person designated to act on Plan
Administrator's behalf; or (iii) the Plan Administrator's execution of its duties under this Trust
Agreement, except in the event of the Trustee's gross negligence or material breach of this Agreement
which directly causes the loss to the Trust.
(b) The Agency further agrees to indemnify the Trustee for and against any claims,
demands or liabilities imposed on the Trustee, including reasonable attorneys' fees and costs incurred by
the Trustee, which exceed amounts payable or available from the Trust, arising as a result of claims
asserted by a third person or persons, not otherwise described in (a), and whether such person or persons
are related to the Trust, for action or failure to take action with respect to Trust Assets.
8.5 Indemnification of Aeencv. The Trustee agrees to indemnify the Agency against, and hold the
Agency harmless from, all liabilities and claims (including reasonable attorney's fees and costs incurred
by the Agency) against the Agency as a result of any breach of fiduciary responsibility by the Trustee
which proximately causes loss to the Trust, and where Trustee knowingly participates in such a breach,
knowingly undertakes to conceal such breach, has actual knowledge of such breach and fails to take
reasonable action to remedy such breach or through its gross negligence in performing its duties under
this Agreement, proximately causes loss to the Trust.
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ARTICLE IX
DURATION AND TERMINATION
9.1 Termination. It is intended that this Trust shall be treated as being exempt from tax under
Section 501(a) ofthe Code and that the Plan referred to herein shall qualify under Section 457(b) ofthe
Code. However, notwithstanding any other provisions ofthe Trust, if the Internal Revenue Service is
requested to issue to the Agency a favorable written determination or ruling with respect to the initial
qualification of the Plan and exemption of the Trust from tax and such request is denied, the Trustee
shall, after receiving a written direction from the Plan Administrator, pay to each Participant that portion
of the Trust applicable to said Participant's voluntary contributions, if any, and provided the Plan so
states, pay to the Agency any part ofthe Trust attributable to Agency contributions then remaining in the
Trustee's possession, less any investment losses and Trustee's fees and costs incurred to date of
distribution. As a condition to such repayment, Agency shall be solely responsible for any tax reporting
and withholding required, and the Agency agrees to indemnify, defend, and hold the Trustee harmless
from all claims, actions, demands, or liabilities arising in connection with such repayment, and provided
further that such repayment will occur within one year after the date the request for qualified status is
denied.
9.2 Exclusive Benefit. This Trust may be terminated at any time by the Agency, and upon such
termination, the Trust Assets shall be distributed by the Trustee as and when directed by the Plan
Administrator in accordance with the provisions of this Trust Agreement and the Plan document. From
the date of termination of the Plan and until the final distribution ofthe Trust, the Trustee shall continue
to have all the powers provided under this Trust that are necessary or desirable for the orderly liquidation
and distribution of the Trust. In no instance upon any termination, or discontinuance and subsequent
distribution shall the Trust or any part of it be used for, or diverted to, purposes other than for the
exclusive benefit of Participants, their Beneficiaries, and defraying the administrative expenses of the
Plan and Trust until all Plan liabilities have been satisfied, except in the instance of the failure of the
Trust initially to qualify for tax -exempt status as set forth in Section 9.1 and in the event of a return of
assets mistakenly contributed as set forth in Section 9.3.
9.3 Return of Mistaken Contributions. Notwithstanding any other provision of this Agreement,
it is specifically provided that if a contribution or any portion thereof is made by the Agency by virtue of
a mistake of fact, the Trustee shall, upon written request of the Agency, return such amounts as may be
permitted by law to the Agency.
9.4 Duration. This Trust shall continue in full force and effect for the maximum period oftime
permitted by law and in any event until the expiration of twenty-one years after the death of the last
surviving person who was living at the time of execution hereof who at any time becomes a Participant
in the Plan, unless this Trust is sooner terminated in accordance with the Plan or the terms of this Trust
Agreement.
19
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ARTICLE X
MISCELLANEOUS
10.1 Deleeation. By written notice to the Trustee, the Plan Administrator or the Agency may
authorize the Trustee to act on matters in the ordinary course of the business of the Trust or on specific
matters upon the signature of its delegate.
10.2 Expenses and Taxes.
(a) The Agency, or at its option, the Trust, shall pay the Trustee its expenses in
administering the Trust and reasonable compensation for its services as Trustee at a rate to be agreed
upon by the parties to this Agreement, based upon Trustee's published fee schedule. However, the
Trustee reserves the right to alter this rate of compensation at any time by providing the Agency with
notice of such change at least thirty days prior to its effective date. Reasonable compensation shall
include compensation for any extraordinary services or computations required, such as determination of
valuation of assets when current market values are not published and interest on funds to cover
overdrafts. The Trustee shall have a lien on the Trust for compensation and for any reasonable expenses
including counsel, appraisal, or accounting fees, and these may be withdrawn from the Trust as and when
viewed and payable, or if Agency has elected to pay expenses of the Trust, may be withdrawn from the
Trust unless paid by the Agency within thirty days after mailing ofthe written billing by the Trustee.
(b) Reasonable counsel fees, reasonable costs, expenses, and charges of the Trustee
incurred or made in the performance of its duties, including but not limited to expenses relating to
investment ofthe Trust such as broker's commissions, stamp taxes, and similar items and all taxes of any
and all kinds that may be levied or assessed under existing or future laws upon or in respect to the Trust
or the income thereof shall be paid from the Trust Assets, unless paid by the Agency.
10.3 Third Parties.
(a) No person dealing with the Trustee shall be required to follow the application of
purchase money paid or money loaned to the Trustee or inquire as to whether the Trustee has complied
with the requirements hereof.
(b) In any judicial or administrative proceedings, only the Agency and the Trustee shall be
necessary parties and no Participant or other person having or claiming any interest in the Trust shall be
entitled to any notice or service of process (except as required by law). Any judgment, decision or award
entered in any such proceeding or action shall be conclusive upon all interested persons.
10.4 Successor Aeencv. If any successor to an Agency continues the Plan adopted by the Agency,
such successor shall concurrently become a successor first party to this Trust Agreement by giving
written notice of its adoption of the Plan and this Trust Agreement to the Trustee by duly authorized
persons; such successor Agency shall become a signatory to this Trust Agreement upon its written notice
to Trustee ofthe Successor's adoption hereof.
10.5 Relation to Plan. All words and phrases used herein shall have the same meanings as in the
20
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Plan, and this Trust Agreement and the Plan shall be read and construed together. Whenever the Plan
provides that the Trustee shall act as therein prescribed, the Trustee shall be and is hereby authorized and
empowered to do so for all purposes as fully as though specifically so provided herein or so directed by
the Plan Administrator. The Trustee shall furnish the Agency with copies of the Trust Agreement and all
amendments thereto.
10.6 Use of Trust Funds. Except as provided in Section 9.2 and 9.3, under no circumstances shall
any part of the Trust be recoverable by the Agency from the Trustee or from any Participant or former
Participant, his or her Beneficiaries, or any other person or be used for or diverted to purposes other than
for the exclusive purposes of providing benefits to Participants and their Beneficiaries, provided,
however, that:
(a) An Agency's excess contribution may be returned to such Agency in accordance with
the provisions of the Plan, and
(b) The portion, if any, of the Trust attributable to an Agency not required for the
satisfaction of all liabilities to Participants and their Beneficiaries shall, upon such Agency's termination
ofthe Plan, revert to such Agency.
10.7 Location of Trust Fund Assets. Except as authorized by applicable state or federal laws or
regulations, the indicia of ownership of any assets of the Trust and Plan shall not be maintained outside
the jurisdiction of the District Courts of the United States.
10.8 Arbitration of Disputes. Any dispute under this Agreement shall be resolved by submission
of the issue to a member of the American Arbitration Association who is chosen by the Agency and the
Trustee. Ifthe Agency and the Trustee cannot agree on such a choice, each shall nominate a member of
the American Arbitration Association, and the two nominees will then select an arbitrator. Expenses of
the arbitration shall be paid as decided by the arbitrator.
10.9 Partial Invaliditv. If any provision of this Trust Agreement is held to be invalid or
unenforceable for any reason, this Agreement shall be construed and enforced as if such provisions had
not been included and such illegality or invalidity shall not affect the remaining portions of this Trust
Agreement, unless such invalidity prevents accomplishment of the objectives and purposes of this Trust
Agreement and the Plan. In the event of any such holding, the parties will immediately amend this Trust
Agreement as necessary to remedy any such defect.
10.10 Construction. This Trust Agreement shall be constructed, administered and enforced
according to the Internal Revenue Code and where state law is applicable, under applicable Statutes and
laws ofthe State of California applied fairly and equitably in accordance with the purposes ofthe Plan.
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ADOPTION
Executed this 21st day of September, 2004
CITY OF DUBLIN, Sponsor of: PARS Benefit Trust FRO City of Dublin PARS Alternative
Retirement System Effective December 25, 2004.
By:
ATTEST:
Kay Keck, City Clerk
(Signature)
Richard C. Ambrose
(typed or printed name)
City Manager
(title)
UNION BANK OF CALIFORNIA, N.A.
TRUSTEE
Accepted this _ day of
By:
(Signature)
(typed or printed name)
(title)
22
RESOLUTION NO. - 04
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A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
*********
AUTHORIZING THE CITY OF DUBLIN TO ENTER INTO AN AGREEMENT WITH THE
PUBLIC AGENCY RETIREMENT SYSTEM TO PROVIDE AN ALTERNATE RETIREMENT
SYSTEM FOR P ART-TIME EMPLOYEES
WHEREAS, it is to be determined to be in the City's best interest and its employees to provide a
Qualifying Retirement System ("Deferred Compensation FICA Alternative Plan") for all its employees not
currently eligible for such a Qualifying Retirement System, thereby meeting the requirements of Section
11332 of the Omnibus Budget Reconciliation Act (OBRA 90) and Section 3121(b)(7)(F) of the Internal
Revenue Code (IRC); and
WHEREAS, the City is eligible to be a member of the Public Agency Retirement System (PARS)
Trust, which has made such a System available to the City and its eligible employees and qualifies under
California Government Code Sections 53215-53224 and 20000, OBRA 90 Section 11332, IRC Sections
3121(b)(7)(F) and 457, and meets the meaning ofthe term "retirement system" as given by Section
218(b)(4) ofthe Federal Social Security Act.
NOW, THEREFORE, BE IT RESOLVED that the City Council ofthe City of Dublin
1. Adopts the PARS Trust, including the PARS Section 457 FICA Alternate Retirement System,
effective December 25, 2004, the Effective Date for the benefit of employees on that date and
hired thereafter; and
2. Council hereby appoints the City Manager, or his designee as the City's Plan Administrator
(Administrator) for the PARS 457 FICA Alternative Retirement System; and
3. The Administrator is hereby authorized to implement the planes), execute the PARS legal
documents on behalf of the City and to take whatever additional actions are necessary to
maintain the City's participation in PARS and to maintain PARS compliance of any relevant
regulation issued or as may be issued; therefore, authorizing the Administrator to take whatever
additional actions are required to administer the City's PARS plane s).
PASSED, APPROVED AND ADOPTED this 21 st day of September, 2004.
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
ATTACHMENT 2