2011-09 RESOLUTION NO. 2011-09
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAND TERRACE, ADOPTING THE APPLE PLAN TO PROVIDE
RETIREMENT BENEFITS TO PART-TIME AND TEMPORARY
EMPLOYEES OF THE CITY IN LIEU OF COVERAGE UNDER
SOCIAL SECURITY
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 retirement
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
City to establish and fund a pension Plan covering its employees on a
compulsory basis; and
WHEREAS, certain part-time city and temporary city employees not covered by a
bargaining unit of the City of Grand Terrace and are not currently covered under
any other retirement program through the City or the State of California in lieu of
coverage under Social Security, as permitted by OBRA '90; and
WHEREAS, the 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 city and temporary city employees not covered by a bargaining unit of
the City in lieu of providing 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, "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 &
Associates,
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NOW, THEREFORE, BE IT RESOLVED that the Council does hereby adopt the
City of Grand Terrace APPLE Plan to provide retirement benefits to part-time
and temporary employees of the City in lieu of coverage under Social Security, to
be effective May 1, 2011.
FURTHER RESOLVED, that the Council hereby designates the City as the Plan
Administrator;
FURTHER RESOLVED, that the Council hereby designates the City as the
Trustee of the Plan;
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;
FURTHER RESOLVED, that the Council hereby authorizes MidAmerica to enter
into contracts with Keenan & Associates to provide ongoing administrative
consulting services in connection with the operation of the Plan; to arrange
funding of the Plan through a funding company; to communicate the Plan to
eligible employees of the City; and to perform related services in connection with
the APPLE Plan;
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) (2).
FURTHER RESOLVED:
I. That each participant of the Plan shall make contributions to the
Plan on a pretax basis. Such participant contributions shall be treated as
employer pick up contributions, as permitted under IRS Section 414(h)(2), 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 that is 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.
FURTHER RESOLVED, that the appropriate City officials, as designated by the
tom, 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.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Grand
Terrace at a regular meeting held on the 26t", day of April, 2011.
(Mayor of City of Grand Terrace
Attest:
ty Clerk of the City of Grand Terrace
I, BRENDA MESA, City Clerk of the City of Grand Terrace, do hereby
certify that Resolution No. 2011- 09 was introduced and adopted at a regular
meeting of the City Council of the City of Grand Terrace held on the 261" day of
April, 2011, by the following vote:
AYES: Councilmembers McNaboe, Sandoval, and Hays; Mayor Pro Ten Garcia
and Mayor Stanckiewitz
NOES: None
ABSENT: None
ABSTAIN: None
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Brenda Mesa, City Clerk
Approved as to form:
City Attorney