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HomeMy WebLinkAboutReso 017-90 DependentCarePlan RESOLUTION NO. 17 - 90 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ESTABLISHING A DEPENDENT CARE PLAN WHEREAS, the City of Dublin desires, effective March 1, 1990, to adopt a cafeteria plan as defined in Section 125(c) of the Internal Revenue Code of 1986, as amended, to allow its employees to choose between cash and reimbursement for dependent care assistance (the "PLAN"); and WHEREAS, the City Council desires to have a detailed description of the Plan; and WHEREAS, current laws provide an advantage to some employees who elect to have Dependent Care Benefits paid for with pre-tax money; and WHEREAS, the support of Dependent Care Assistance is an important employee benefit which improves the City's ability to recruit and retain employees.of a high caliber. NOW, THEREFORE, BE IT RESOLVED that the City of Dublin Dependent Care Assistance Plan, in the form attached hereto as Exhibit A, be and hereby is, approved.and adopted. PASSED, APPROVED AND ADOPTED this 26th day of February, 1990. AYES: Councilmembers Hegarty, Jeffery, Snyder, Vonheeder and Mayor Moffatt NOES: None ABSENT: ABSTAIN: Non e EXHIBIT A CITY OF DUBLIN DEPENDENT CARE CAFETERIA PLAN (Effective March 1, 1990) Article I Preamble The purpose of this Plan is to permit regular City Employees receiving other City Benefits to choose Dependent Care benefits which would be reimbursed by the City of Dublin. This Plan is intended to be a cafeteria plan as defined in section 125(c) of the Internal Revenue Code. Article II Definitions Each word and phrase defined in this Article II shall have the following meaning whenever such word or phrase is capitalized and used herein unless a different meaning is clearly required by the context of the Plan. 2.01 Account: The individual account established on the books of the City under Section 12.01 in the name of each Participant for the purpose of accounting for contribu- tions allocated to and benefits paid for a Participant. 2.02 City: City of Dublin, a California Municipal Corporation. 2.03 City Manager: Shall be the City Manager of the City of Dublin. 2.04 Plan Administrator: The City Manager shall appoint a Plan Administrator, who shall be responsible for administering the Plan. 2.05 Code: The Internal Revenue Code of 1986, as amended from time to time. 2.06 Compensation: A Participant's basic pay for personal services rendered in the course of employment with the City and any contributions under Section 4.01 on a Participant'S behalf. 2.07 Employee: Any person employed by the City and regularly scheduled to work at least 20 hours per week, who is covered under the Public Employee's Retirement System and who is not classified as a temporary Employee. 2.08 Participant: Any Employee who has elected to participate in the Plan in accordance with Section 3.01 and who has not ceased to be an Employee. 2.09 Period of Coverage: The Plan Year, except that it may be a fraction of a Plan Year as provided in Section 5.04. Notwithstanding the foregoing, a Participant's Period of Coverage shall terminate when he or she ceases to be an Employee or, if earlier, when he or she ceases to be eligible under Section 3.01. 2.10 Plan: The City of Dublin Dependent Care Cafeteria Plan, as set forth herein. 2.11 Plan Year: The calendar year, provided, however, that the first Plan Year shall begin on March 1, 1990 and end December 31, 1990. 2 2.12 Reimbursement Benefits: The Dependent Care Reim- bursement Benefits in Section 6.02. 2.13 Reimbursement Contributions: Contributions made under Section 4.01 for Reimbursement Benefits. Article III Eligibility Requirement 3.01 Eligibility: Any Employee shall be eligible to become a Participant as of the later of March 1, 1990, or the date of the Employee's employment; provided, however, that an Employee who is or is treated as a "highly- compensated employee" within the meaning of Section 414(g) of the Code and regulations thereunder shall not be eligible to participate in the Plan. 3.02 Enrollment and Membership: The Plan Admini- strator shall notify in writing each eligible Employee and shall explain the rights, privileges and duties of a Participant of the Plan. Subject to Section 5.04, each Employee may elect to participate as of the date on which he or she becomes eligible in accordance with Section 3.01 by completing and delivering to the Plan Administrator a salary reduction agreement and an election of benefits form provided therefor by the Plan Administrator. Except as provided in Section 5.05, an eligible Employee who does not elect to participate during the Plan Year in which he or she becomes eligible may elect to participate only as of the first day of any following Plan Year. Article IV Contributions 4.01 Dependent Care Reimbursement Contributions: For each Plan Year, each Participant shall elect to have con- tributed to his or her Account a specified amount of Reimbursement Contributions for such Plan Year to pay for Reimbursement Benefits, up to a maximum of $5,000.00. 4.02 Pay Reduction and Payroll Withholding: A Partic- ipant's Compensation for a Plan Year shall be reduced by the · amount of the Reimbursement Contributions which he or she elects for such Plan Year under Section 4.01. Such reductions shall be made only by way of payroll withholding which shall be made during a Participant'S applicable Period of Coverage. An Employee who has not elected to become a Participant shall receive his or her full pay or salary for the Plan Year. Article V Elections 5.01 In General: Elections of contributions and benefits shall be made at the time, in the manner and subject to the conditions specified by the Plan Admini- 4 strator, which shall prescribe uniform and nondiscriminatory rules for such elections. 5.02 Period of Coverage: Except as provided in Sections 5.03 and 5.05, any Participant electing contribu- tions and benefits and any Employee electing not to participate must make an irrevocable election for an entire Period of Coverage or Plan Year. 5.03 Fractional Periods: Employees who become eligible to participate during a Plan Year and terminated Employees who are rehired as eligible Employees may elect to participate for a period lasting until the end of the current Plan Year. In such cases, the interval commencing on the day after their elections are effective and ending on the last day of the current Plan Year shall be deemed to be their Period of Coverage. Such Employees must elect to participate no later than 30 days after becoming eligible to do so or within such other time limit as the Plan Administrator may prescribe. 5.04 Timing of Elections: Elections of contributions and benefits for a Period of Coverage shall be made prior to the beginning of such Period of Coverage, including a Par- ticipant's Period of Coverage that commences or recommences during a Plan Year. 5.05 Changes of Elections: Elections of contributions and/or benefits for a period of coverage, or an election not to participate for a Plan Year may be changed during that Period of Coverage or Plan Year only on account of and 5 consistent with a change in family status because of marriage, divorce, death of a spouse or dependent or other decrease in the number of a Participant'S dependents, birth or adoption of a child or other increase in the number of a Participant'S dependents, change in the employment status of a spouse or change in the employment status or location of a Participant or such other changes as may be permitted by regulations under Section 125 of the Code. Changes in elections shall only be effective as to contributions and benefits following the effective date of such changes. Article VI Benefits 6.01 Benefits Available: A Participant may receive Reimbursement Benefits for a period of Coverage equal to the Reimbursement Contributions made to his or her Account for such period. An Employee who has elected not to participate for a Plan Year shall receive his or her unreduced pay or salary for that Year. 6.02 Dependent Care Reimbursement Benefits: The CITY has adopted a Dependent Care Reimbursement Program set forth in Article VIII designed to qualify as a nontaxable employee benefit under Code section 129(a). Participants' receipt of benefits under such Program shall be subject to all of the requirements and restrictions contained in that Program and in Article VII. 6 Article VII Limitations on Benefits 7.01 Coverage: Reimbursement Benefits may only be paid for expenses incurred during the Period of Coverage for which such Benefit was elected and only from Reimbursement Contributions made for such Benefit during such Period of Coverage. Expenses shall be considered incurred when the dependent care is provided and not when the Participant is formally billed, charged for or pays the expenses. 7.02 Amount of Benefits: The maximum amount of Reimbursement Benefits payable for a Plan Year shall be $5,000.00. In addition, amounts payable for a particular claim may not exceed the balance of the Participant's Account less amounts necessary to pay such Participant's accrued claims for Reimbursement Benefits. If claims for amounts in excess of such balance are made at any time, such claims may be paid when and if further Reimbursement Contributions are made during the applicable Period of Coverage. 7.03 Forfeitures: Amounts remaining in a Reimburse- ment Benefit Account shall be forfeited after payment of all timely presented claims for expenses incurred during the applicable Period of Coverage. Article VIII Dependent Care Reimbursement Program 8.01 In General: Participants covered by this Program may submit claims for the reimbursement of a Participant's covered Dependent Care E~penses from contributions allocated to the Participant's Account for Dependent Care Reimburse- ment Benefits. 8.02 Definitions: For purposes of this Article, the following special definitions shall apply unless a different definition is required under the Code. (a) "Benefits" means Reimbursement Benefits for Expenses under this Program. (b) "Dependent" means: (1) a dependent (as defined in Code Section 152) of an Employee: (A) who is under the age of 13 and with respect to whom the Employee is entitled to a deduction under Code section 151(c), or (B) who is physically or mentally incapable of caring for himself or herself; or (2) the spouse of an Employee, if such spouse is physically or mentally incapable of Caring for himself or herself. (c) "Earned Income" means earned income as defined in section 32(c)(2) of the Code, excluding any amount paid or incurred by the City for dependent care assistance to a Participant. (d) "Expenses" means amounts paid or incurred by or on behalf of a Participant for household services or for the care of a Dependent, either inside or outside of the Participant's home, subject to the limitations in Section · 8.07, in order to enable the Participant to be gainfully employed for any period for which he or she has a Dependent. (e) "Program" means the dependent care reimburse- ment program set forth in this Article VIII. 8.03 Eligibility, Enrollment and Termination: All Employees who are eligible to participate under Section 3.01 of the Plan shall be eligible to receive benefits under this Program. Enrollment and termination of participation under the Plan shall constitute enrollment and termination of participation under this Program. 8.04 Limitations: The amount of Benefits for a Participant during any year shall not exceed: (a) In the case of a Participant who is not married at the close of such year, the Earned Income of such Participant for such year; or (b) In the case of a Participant who is married at the close of such year, the lesser of: 9 (1) the Earned Income of such Participant for such year; or (2) the Earned Income of the spouse of such Participant for such year. For purposes of paragraph (b)(2), if the Participant's spouse is a full-time student at an educational institution or physically or mentally incapable of caring for himself or herself, such spouse shall be deemed to be gainfully employed and to have Earned Income of $200 per month, if the Participant has only one Dependent, and $400 per month if the Participant has two or more Dependents. In the case of any husband and wife, the preceding sentence shall apply with respect to only one spouse for any one month. 8.05 Information on Dependent Care Provider: Benefits are not payable to a Participant unless the Participant has indicated in writing in such a manner specified by the Plan Administrator the name and Social Security number or tax identification number of the person or entity performing the services for which the Benefits are claimed. Notwithstand- ing the foregoing, where the entity providing the services for which the Benefits are claimed is an organization described in section 501(c)(3) of the Code and is exempt from tax under section 501(a) of the Code, Benefits are only payable to a Participant with respect to such services if the Participant has indicated in writing the name of the entity performing the services. 10 8.06 Prohibition of Certain Payments: No Benefits shall be paid to a Participant during any taxable year of such Participant for Expenses paid to an individual: (a) With respect to whom, for such taxable year, a deduction is allowable under Code section 151(c) (relating to personal exemptions for dependents) to such Participant or his or her spouse; or (b) Who is a child of such Participant (within the meaning of Code section 151(c)(3)) under the age of 19 at the close of such taxable year. 8.07 Services Outside the Household: (a) Dependent Care Centers. Benefits shall not be paid for services provided outside a Participant's house- hold by a facility that provides care for more than six individuals other than individuals who reside at the facility, and receives a fee, payment or grant for providing services for any of the individuals, unless: (1) such facility complies with all appli- cable laws and regulations of a state or unit of local government, and (2) the requirements of Section 8.08(b) are met. (b) Certain Dependents. Benefits shall not be paid for services outside a Participant's household unless the services are provided for the care of: (1) a Dependent within the meaning of Section 8.02(b)(1)(A); or (2) any 11 other Dependent who regularly spends at least eight hours each day in the Participant's household. 8.08 Information Supplied By Employee: The Plan Administrator may reasonably rely on a Participant's representations with respect to whether services for which reimbursement is claimed satisfy the requirements of Sections 8.02, 8.06 and 8.07. 8.09 Annual Report to Participants: The Plan Admini- strator shall furnish to each Participant on whose behalf Benefits are paid, on or before January 31 of each year, a written statement showing the amounts paid by the City in providing Benefits on behalf of such Participant during the previous calendar year. 8.10 Other Provisions: Other matters concerning con- tributions, elections, benefits, claims, and the like shall be governed by the general provisions of the Cafeteria Plan and shall be incorporated in this Program by reference. Article IX Claims for Benefits 9.01 Claims for Reimbursement Benefits: Claims for Reimbursement Benefits totaling at least $100.00 may be made at any time. Claims for Reimbursement Benefits totaling less than $100.00 may be made at the end of each calendar quarter, or at any other time in the event of a final claim following termination of participation. The Plan Admini- 12 strator may, in his/her discretion, waive or alter these requirements. 9.02 Claim Substantiation: The Plan Administrator shall require a Participant to substantiate claims for Reim- bursement Benefits under the Plan. Claims for dependent care expenses shall be substantiated by a Participant's certification that such expenses have been properly incurred and shall include the name and Social Security number of tax identification number of the person or entity performing the services for which the claim is made (or the name of the entity performing the services where the entity is an organization described in Section 501(c)(3) of the Code and is exempt from tax under Section 501(a) of the Code). Where necessary and appropriate, the Plan Administrator may in his/her discretion waive such requirements but in so doing shall always act in a uniform and nondiscriminatory manner. 9.03 Time Limit on Claiming Benefits: Claims for Reimbursement Benefits shall only be paid if presented within time limits which shall be prescribed by the Plan Administrator and clearly noted on the Claim Form used by the Plan Administrator. The Plan Administrator shall notify all Participants in writing of any changes to the time limit. 13 Article X Post-Termination Participation 10.01 Termination: A Participant who terminates employment or otherwise ceases to be eligible under Section 3.01 may no longer have contributions made to the Plan on his or her behalf but may continue to receive benefits under the Plan for claims made for the Period of Coverage ending with such termination or cessation of eligibility. The Plan Administrator shall prescribe the time limitation within which claims must be submitted. Article XI Nondiscrimination 11.01 Prohibition of Discrimination: Any discretionary acts to be taken under the terms and provisions of this Plan by the Plan Administrator of by the City shall be uniform in their nature and application to all those similarly situat- ed, and no discretionary acts shall be taken that would be discriminatory under the provisions of the Code relating to cafeteria plans or dependent care assistance plans as such provisions now exist or may from time to time be amended. 14 Article XII Accounts 12.01 Accounts: A separate Account shall be maintained for each Participant to reflect the amount of contributions on his or her behalf under Article 4 and the cost of all benefits paid to the Participant or on the Participant's behalf under the Plan. 12.02 Contributions Made: Contributions on behalf of a Participant shall be charged to the Account and of such Participant. 12.03 Benefits Provided: The cost of benefits provided to a Participant shall be charged to the Account of such Participant. 12.04 Assignment of Benefits: Any interest in a Participant's Account may not be assigned, transferred or alienated in any manner whatsoever by any Participant or beneficiary. Article XIII Administration of the Plan 13.01 The Plan Administrator: The administration of the Plan, as provided herein, including the payment of all benefits to Participants or their beneficiaries, shall be the responsibility of the Plan Administrator, which shall be the administrator of the Plan. Reimbursement Benefit pay- ments and Reimbursement Contributions from a Participant's Compensation shall be handled in a matter consistent with 15 City Finance Department procuedures and the explicit requirements of the Plan. 13.02 Records and Reports of the Plan Administrator: The Plan Administrator shall assure that such written records as he/she shall deem necessary or proper are main- tained, which records shall be open to inspection by the City. The Plan Administrator shall have prepared and submit to the City Manager an annual report which shall include such information as the Plan Administrator deems necessary or advisable. 13.03 Administrative Powers and Duties: The Plan Administrator shall have the power to take all actions required to carry out the provisions of the Plan and shall further have the following powers and duties, which shall be exercised in a manner consistent with the provisions of the Plan: (a) To construe and interpret the provisions of the Plan, and make rules and regulations under the Plan to the extent deemed advisable; (b) To decide all questions as to eligibility to become a Participant in the Plan and as to the rights of Participants under the Plan; (c) To file or cause to be filed all such annual reports, returns, schedules, descriptions, financial state- ments and other statements as may be required by any federal or state statute, agency, or authority; 16 (d) To obtain from the Employee such information as shall be necessary to the proper administration of the Plan; (e) To determine the amount, manner, and time of payment of benefits hereunder; (f) With any required authorizations, to contract with such insurance carriers or other suppliers as may be necessary to provide for benefits; (g) To communicate to any insurer or other contract supplier of benefits under this Plan in writing all information required to carry out the provisions of the Plan; (h) To notify the Participants of the Plan in writing of any amendment or termination of the Plan, or of a change in any benefits available under the Plan; (i) To prescribe such forms as may be required for Employees to make elections under this Plan; and (j) To do such other acts as he/she deems reas- onably required to administer the Plan in accordance with its provisions, or as may be provided for or required by law. 13.04 Allocation or Delegation of Duties and Responsibilities: In furtherance of the duties and responsibilities under the Plan, the Plan Administrator may. (a) Employ agents to carry out his or her responsibilities under the Plan; 17 (b) Consult with counsel; and (c) Provide for the allocation of responsi- bilities among other City Officials and/or Employees. 13.05 Claims Procedure: The Plan Administrator shall establish a reasonable claims procedure under which his or her decisions with respect to claims for benefits under the Plan may be appealed to the City Manager. The City Manager's findings shall be final and binding on all persons and shall be given the maximum possible deference allowed by law. Article XIV Amendment and Termination 14.01 Amendment of Plan: The City may amend any or all provisions of this Plan at any time by adoption of Resolution of the City Council identified as an amendment of the Plan effective as of a specified date. 14.02 Termination of Plan: This Plan may be terminated in whole or in part at any time by the City. 14.03 Preservation of Rights: Termination or amend- ment of the Plan shall not affect the rights of any Participant in his or her Account or the right to claim reimbursement for expenses incurred prior to such termina- tion or amendment as the case may be to the extent such amount is payable under the terms of the Plan prior to the effective date of such termination or amendment. 18 Article XV Miscellaneous 15.01 Limitation of Rights; Employment Relationship: Neither the establishment of the Plan, nor the creation of any fund or Account, nor the payment of any benefits, shall be construed as giving to any Participant or other person any legal or equitable right against the City except as provided herein. In no event shall the terms of employment of any Employee or Participant, express or implied, be modified or in any way affected hereby. 15.02 Facility of Payment: If the Plan Administrator deems any person entitled to receive any amount under the provisions of this Plan incapable of receiving or disbursing the same by reason of minority, illness or infirmity, mental incompetency, or incapacity of any kind, the Plan Admini- strator may, in his/her discretion, take any one or more of the following actions: (a) Apply such amount directly for the comfort, support and maintenance of such person; (b) Reimburse any person for any such support theretofore supplied to the person entitled to receive any such payment; (c) Pay such amount to a legal representative or guardian or any other person selected by the Plan Administrator to disburse it for such comfort, support and maintenance, including without limitation, any relative who had undertaken, wholly or partially, the expense of such 19 person's comfort, care and maintenance, or any institution in whose care or custody the person entitled to the amount may be. The Plan Administrator may, in his/her, discretion, deposit any amount due to a minor to his or her credit in any savings or commercial bank of the Plan Administrator's choice. 15.03 Lost Payee: Any amount due and payable to a Participant shall be forfeited if the Plan Administrator after reasonable effort is unable to locate the Participant to whom payment is due. 15.04 NO Trust Established: Reimbursement Benefits shall be paid from the general assets of the City and shall not be funded through contributions to a trust except to the extent required by law. Nothing contained int he Plan shall give a Participant any right, title or interest in any property of the City. 15.05 Indemnification: To the extent permitted by law, the City shall indemnify and hold harmless the Plan Administrator and any Employee against any and all claims, losses, damages, expenses, and liabilities arising from any act or failure to act that constitutes or is alleged to constitute a breach of such person's responsibilities in connection with the Plan, unless the same is determined to be due to gross negligence, willful misconduct, or willful failure to act. 15.06 Expenses: The cost of the Plan shall be borne by the City. 20 15.07 Titles and Headings: The titles and headings of the Articles and Sections of this instrument are placed herein for convenience of reference only, and in the case of any conflicts, the text of this instrument, rather than the titles or headings, shall control. 15.08 Number: Wherever used herein, the singular shall include the plural and the plural shall include the singular, except where the context requires otherwise. 15.09 Applicable Law: The provisions of this Plan shall be construed according to the laws of the State of California, to the extent not superseded by federal law, and in accordance with the Code. The Plan is intended to be a cafeteria plan under section 125(c) of the Code containing dependent care assistance program under section 129 of the Code, and shall be construed accordingly. 21 IN WITNESS WHEREOF, the City Council of the City of Dublin has caused this instrument to be executed by a duly authorized officer of the City this day of , 19__, effective March 1, 1990. CITY OF DUBLIN By Mayor, Paul C. Moffatt Attest: Richard C. Ambrose, City Clerk 22