Resolution No. 2012-202RESOLUTION NO. 2012-202,
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON ADOPTING THE PARS TRUST, INCLUDING THE PARS
SUPPLEMENTARY RETIREMENT PLAN, AS PART OF THE
CITY'S RETIREMENT PROGRAM
WHEREAS, it is determined to be in the best interest of the
City of Vernon (the "City") and its employees to provide a retirement
incentive offer to eligible employees who wish to voluntary exercise
their option to separate from City service; and
WHEREAS, the City is eligible to be a member of the Public
Agency Retirement System (PARS) Trust, which has made available a
Supplementary Retirement Plan (SRP), supplementing the California
Public Employees' Retirement System (CalPERS) and qualifying under the
relevant sections of the Internal Revenue Code and the California
Government Code.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
adopts the PARS Trust, including the PARS Supplementary Retirement
Plan, as part of the City's Retirement Program, effective
November 6, 2012, subject to the terms and conditions stated below.
SECTION 3: In order for the City to reach stated fiscal and
operational objectives, a minimum savings must be achieved. If this
minimum is not reached, the City may, in its sole discretion, withdraw
the retirement incentive, rescind or cancel the PARS Trust and decline
to participate in the PARS Supplementary Retirement Plan. If the City
withdraws the retirement incentive, resignations submitted by
employees in anticipation of the PARS Trust and PARS Supplementary
Retirement Plan may be rescinded.
SECTION 4: The City Council of the City of Vernon hereby
appoints the City Administrator, or his/her successor or his/her
designee as the City's Plan Administrator for the PARS Supplementary
Retirement Plan; and
SECTION 5: The City's Plan Administrator is.hereby
authorized to execute the PARS legal and administrative documents on
behalf of the City, under the terms and conditions stated in this
Resolution, 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 him/her to take whatever additional actions are
required to administer the City's PARS plan(s). In addition, if the
City's Plan Administrator finds that the PARS supplemental plan benefit
must be limited under Section 415 of Internal Revenue Code, then the
Plan Administrator will implement replacement benefit programs at no
additional cost to the City. The City's Plan Administrator_ Is also
authorized to rescind or cancel the PARS Trust on behalf of the City
and to decline to participate in the PARS Supplementary Retirement
Plan.
_2_
SECTION 6: The Interim City Clerk of the City of Vernon
shall certify to the passage, approval and adoption of this resolution,
and the Interim City Clerk of the City of Vernon shall cause this
resolution and the Interim City Clerk's certification to be entered in
the File of Resolutions of the Council of this City.
APPROVED AND ADOPTED this 6th day of November, 2012.
Name: WilliardJ. Davis
Title: Mayor /�=a
ATT T:
Dana Interim Ci y Clerk
STATE OF CALIFORNIA )
ss
COUNTY OF LOS ANGELES )
I, Dana Reed, Interim City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 2012-202,
was duly passed, approved and adopted by the City Council of the City
of Vernon at a regular meeting of the City Council duly held on
Tuesday, November 6, 2012, and thereafter was duly signed by the Mayor
or Mayor Pro-Tem of the City of Vernon.
Executed this day of November, 2012, at Vernon, California.
Da Reed, Interim City Clerk
(SEAL)-
4 -
DATE: October 31, 2012
TO: Honorable Mayor and City Council
FROM: Mark C. Whitworth, City Administrator
RE: RESOLUTION ADOPTING A SUPP EMENTAL RETIREMENT
PROGRAM THROUGH THE PUBLIC AGENCY RETIREMENT
SYSTEM AND APPOINTING THE CITY ADMINISTRATOR (AND
/OR HIS DESIGNER) AS THE [INISTRATOR
Background
Current economic conditions continue to have a negative impact on the City's general
operating revenues. These revenues pay for basic municipal services such as public safety, fire,
community services, electric and water. Updated projections for the upcoming fiscal year
(2013/2014) indicate a structural budget shortfall (spending in excess of revenues) of around
$10 million, if no corrective action is taken. Consequently, as an initial step to solving this
shortfall, the Council directed the City Administrator to pursue a supplemental retirement
program (SRP) that will act as an incentive to encourage qualified employees to voluntarily
retire from the City. The goal of the program would be to accelerate the normal rate of
attrition, thus allowing the City to rapidly reduce its workforce and create budget savings that
help address the City's budget shortfall. The SRP benefit would be offered through the Public
Agency Retirement System (PARS), a private company that specializes in supplementary
retirement plans for public agencies, and -has been doing so since 1983.
To be considered for the SRP program, an employee must be (1) employed by the City
of Vernon as of November 6, 2012, (2) eligible to retire under PERS as of January 31, 2013
for miscellaneous employees and June 30, 2013 for safety employees, (3) have completed at
least five (5) years of City service as of January 31, 2013 for miscellaneous employees and
June 30, 2013 for safety employees, (4) resigned from City employment effective January 31,
2013 for miscellaneous employees and June 30, 2013 for safety employees, and (5) retired under
PERS as of February 1, 2013 for miscellaneous employees and July 1, 2013 for safety
employees.
In addition to the eligibility criteria under the program, after the plan is offered and
participants are known at the end of the window period PARS will run a fiscal analysis to
determine if there are fiscal savings from those that enrolled and the City's plans to refill
positions. The City will examine the savings and determine if they are sufficient to warrant
proceeding with implementation of the plan and permitting employees to retire with the
incentive.
As a Council requirement, City Councilmembers, the City Administrator, City
Attorney and all Department Heads are ineligible to retire under the program.
As proposed, the SRP would provide a benefit equal to 8% of the employee's f i n a 1
base pay as a supplemental monthly retirement payment each year. Final base pay is
defined as the employee's current base annual salary (CaIPERS pensionable income)
as of November 6, 2012. Employees participating in the program would retire on or before
February 1, 2013 for miscellaneous and July 1, 2013 for Safety and would receive their first
payment through the program on March 1, 2013 retroactive to February 1, 2013. Safety
employees would receive their first payment on July 1, 2013. PARS estimates that 62
employees are eligible for the program and at least 18 employees will choose to participate in
the SRP and that the City would save $1,420,016 the first year and $4.187 million over
three years if no retiring employees are replaced. If a higher rate of participation than the
PARS model is projecting occurs, then the amount of savings would be greater.
Discussion
The City Council has informally discussed the concept of using a retirement incentive
program as a means of reducing the City's workforce to help meet budget reduction goals.
Staff evaluated both the CaIPERS (California Public Employees Retirement System)
retirement incentive program and the PARS retirement incentive program. Staffs research
.determined that the PARS SRP is preferable to the CaIPERS Two Additional years of
Service Credit option because it does not add to the City's future CaIPERS employer rates,
will save more money for the City through higher employee participation rates, provides a
better benefit to participating employees, grants the participating employee more pay -out
options, is easier for the City to implement, and avoids the strict statutory requirements
imposed by the CaIPERS program:
PARS has been providing supplemental retirement programs since 1983 and their
program is used by more than 228 agencies on over 400 occasions, with over 30,000
participants in California. The PARS SRP program complements and is in addition to an
employee's CaIPERS retirement benefit.
If Council adopts the resolution establishing the SRP program at its November 6,
2012 meeting, all eligible employees will receive a packet of information within a week that
explains the program in detail, provides specific information on the benefit payment amount
based on the individual employee's base pay, invites the employee to attend an information
session with PARS staff, and includes all of the necessary application materials.It is
important to stress that this supplementary retirement program is a tool to reduce the size of
the organization in order to address the City's structural budget deficit; consequently, it will be
offered only once as it will no longer be eligible effective January 1, 2013 as a result of the
California Public Employee's Pension Reform Act of 2013.
PARS SRP Program Description
Program Eligibility: Miscellaneous, Fire and Police employees that meet the following
minimum requirements (With the exception of Councilmembers, the City Administrator, City
Attorney, and all Department Heads):
2
• Are employed by the City as of November 6, 2012; and
• Are at least fifty (50) years of age with five (5) years of City service credit as of
January 31, 2013 for miscellaneous employees or June 30, 2013 for safety employees
and are eligible to retire under PERS as of February 1, 2013 for miscellaneous and July
1, 2013 for safety; and
• Have resigned from City employment effective no later than January 31,
2013 for miscellaneous and June 30, 2013 for safety and concurrently retire under
Ca1PERS.
Participation Requirements: Qualified employees who desire to participate in the program
must submit all required PARS enrollment materials and a letter of resignation from City
employment on or before December 19, 2012.
Supplemental Retirement Benefit Payments: The monthly lifetime benefit would be equal to
one -twelfth (1/12) of 8% of an employee's annual base pay as of November 6, 2012. There
are a variety of options for how an employee may choose to receive his/her payments. All
of the options will be explained in detail to the eligible employees and are explained briefly
below.
The basic unmodified benefit offered through this SRP shall be a monthly cash income for the
lifetime of the participant equal to one -twelfth (1/12) of (8%) of the participant's base pay as
of November 6, 2012. Base pay is defined as the employee's current base annual salary,
including all PERS pensionable items, as of November 6, 2012.
Alternative monthly forms of benefit payments will also be offered. Each alternative payment
option has the equivalent present value as the basic benefit. Below is a brief description of the
alternative payment models.
• 100% joint -and -survivor payments.
• Payments made for the life of the participant, with a guaranteed 10-year minimum.
• Fixed term monthly payments ranging from five (5) to fifteen (15) years in duration.
These payments are guaranteed to the participant for the full term selected and
some are eligible for a direct IRA rollover, which may be beneficial to some
employees.
The choice of payment model and the choice of beneficiary, if choosing a joint- and -survivor
payment model, are final on December 19, 2012, the day the window period would close.
The amount of the monthly cash payment is fixed as of December 19, 2012 and shall not
increase thereafter. Benefit payments under this SRP plan commence in March 2013.
Final Decision on Implementing the Plan: The City has until January 15, 2013 to
determine if the PARS SRP meets its fiscal and operational objectives. The ,City
Council may withdraw the SRP as to some or all eligible employees if fiscal and
operational objectives are not met. If the City withdraws the SRP, all resignations will be
rescinded and automatically revoked. In addition, a decision by the City to withdraw the
Plan in its entirety will result in a one-time Five Thousand. Dollar ($5,000) cancellation
charge from PARS to the City for services rendered. There is no cancellation charge or any
other costs to the employees.
3
Funding the SRP: In order to join the SRP Program, the City will establish a plan within the
PARS Trust. The City can choose to fund the plan all at once or over time, to a maximum
time of 5 years. The City may choose to buy annuities to fund the Plan, self -fund, or use
some combination of both. The City will use salary savings to fund the plan. At this time,
staff is assuming a 5-year funding schedule with year one being self -funded because
annuity rates are exceptionally low. PARS administration fees are 5.5% of the money
invested in the Trust for the benefit of the Plan and collected by PARS only at the time the
money is placed in the Trust. Depending on the financial product or products utilized, there
may be additional financial management fees. Once the SRP is annuitized, the insurance
company assumes responsibility for all remaining benefit obligations of the program and
PARS for the administration of the program.
Administering the Plan: Under the terms of the PARS SRP Program, the City is required to
appoint a Plan Administrator who, among other things, is authorized to finalize and execute
necessary documentation pertaining to the Plan and to serve as the primary contact at the
City for communications from PARS.
It is recommended that the City Council appoint the City Administrator (and/or his designee)
as the Plan Administrator with respect to the plan and trust. Also, that the City Council
authorize the City Administrator to sign all the necessary legal documents to implement the
plan, should it be determined that it meets our fiscal and operational objectives, and in the
future is authorized to amend the plan to keep it in conformance with the Internal Revenue
Code.
Recommendation
It is recommended that the City Council adopt the Resolution to implement the Public Agency
Retirement. System (PARS) Supplemental Retirement Program, appoint the City
Administrator and/or his designee as the Plan Administrator, and delegate appropriate signatory,
authority to the City Administrator.
0
t
O TC OF THE MY CLERK
4. Fe Avenue, Van, CAhlfiDnua 90058
Te O 1
December 10, 2012
Shauna Volcan
Vice President, Plan Implementation
Public Agency Retirement Services
4350 Von Karman Avenue, Ste. 100
Newport Beach, CA 92660-2043
Re: PARS Retirement Incentive/Excess Benefit Plan
Dear Ms. Volcan:
Transmitted herewith are three partially executed original excess benefit trust agreements for
execution by the proper party and one fully executed original excess benefit plan.
Please return one fully executed trust agreement to the undersigned.
If you have any questions regarding this matter, please contact Teresa McAllister at (323) 583-
8811 ext. 239.
Very truly yours,
Deborah R. Juarez
Records Management Assistant
Enclosures
c: Teresa McAllister
Resolution No. 2012-202
Agreement No. 12-106
E'aCp&Fhw y In"s f
CITY OF VERNON
EXCESS BENEFIT PLAN
EFFECTIVE NOVEMBER 6, 2012
DEFINED BENEFIT PLAN
TABLE OF CONTENTS
ARTICLEI PURPOSE....................................................................................................... 1
ARTICLE II PARTICIPATION......................................................................................... 1
ARTICLE III
3.1
3.2
3.3
3.4
ARTICLE IV
4.1
4.2
4.3
4.4
4.5
4.6
BENEFITS; VESTING ......
Amount of Benefit ................
Payment of Benefit ...............
Vesting ..................................
Actuarial Equvalence ............
.......................................................................1
..................................................................... 1
....................................................................... 1
....................................................................... 2
....................................................................... 2
ADMINISTRATION AND AMENDMENT OF THE PLAN ................... 2
Rulesand Regulations...................................................................................... 2
Non -Alienation of Benefits.............................................................................. 2
Funding............................................................................................................ 3
Taxes................................................................................................................ 3
Amendment and Termination.......................................................................... 3
Compliancewith Laws.................................................................................... 3
ARTICLE V DEFINITIONS............................................................................................... 4
ARTICLE I
PURPOSE
The purpose of this Plan is to supplement the benefits of certain Employees under the
City of Vernon Public Agency Retirement System (PARS) Supplementary Retirement Plan (the
"Supplemental Retirement Plan") to the extent that such benefits are reduced by the limitations
on benefits imposed by Section 415 of the Internal Revenue Code of 1986 as amended (the
"Code").
ARTICLE II
PARTICIPATION
Those Employees who are participants in the Supplemental Retirement Plan and whose
benefits at the time of payment are reduced by the limitation on benefits imposed by Section 415
of the Code shall be Participants hereunder.
ARTICLE III
BENEFITS; VESTING
3.1 Amount of Benefit.
The value of the benefits which each Participant shall be entitled to receive under this
Plan shall be equal to the Actuarial Equivalent of the difference between the actual benefits of
such Participant under the Supplemental Retirement Plan and the Actuarial Equivalent of the
benefits that would have been payable to the Participant under such plan except for the
limitations on benefits imposed by Section 415 of the Code.
3.2 Payment of Benefit.
The benefits payable under this Plan shall be payable to the Participant or to any other
person who is receiving or entitled to receive benefits with respect to the Participant (the
"Distributee") under the Supplemental Retirement Plan. The benefits will be paid in the same
form, at the same times and for the same period as benefits are paid with respect to the
Distributee under the Supplemental Retirement Plan. Notwithstanding the foregoing, in the
event that the present value of the Actuarial Equivalent of the benefit to be paid under this Plan
(as determined by the Employer upon the advice of the actuary for PARS) at the commencement
1
of payment is $5,000 or less, the Employer may, in its discretion, elect to pay the benefit in a
single lump sum.
3.3 Vesting.
A Participant will be fully vested in his Retirement_ Benefit upon meeting the
requirements of Article II.
3.4 Actuarial Equivalence.
For the purpose of establishing Actuarial Equivalence, the mortality assumption shall be
1983 GAM and the interest assumption shall be 6% per annum.
ARTICLE IV
ADMINISTRATION AND AMENDMENT OF THE PLAN
4.1 Rules and Regulations.
The Employer has full discretionary authority to supervise and control the operation of
this Plan in accordance with its terms and may make rules and regulations for the administration
of this Plan that are not inconsistent with the terms and provisions hereof. The Employer shall
determine any questions arising in connection with the interpretation, application or
administration of the Plan (including any question of fact relating to age, employment,
compensation or eligibility of employees) and its decisions or actions in respect thereof shall be
conclusive and binding upon any and all persons and parties.
4.2 Non -Alienation of Benefits.
Except as otherwise provided in the Plan, no right or benefit under the Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any
attempt to anticipate, alienate, sell, assign, pledge, encumber or charge such right or benefit shall
be void. No such right or benefit shall in any manner be liable for or subject to the debts,
liabilities or torts of a Participant or other benefit recipient. In addition, no right of a Participant
or other benefit recipient under the Plan is transferable by inter vivos gift or testamentary
disposition.
FA
4.3 FundinjZ.
The Plan shall be unfunded, and benefits under the Plan shall be paid from the general or
retirement fund of the Employer through an Excess Benefit Plan Fund hereby established for
payment of administration expense and benefit payments, subject to the claims of the Employer's
general creditors. No person other than the Employer shall by virtue of the provisions of the
Plan have any interest in such amounts. Title to and beneficial ownership of any assets, whether
cash or other investments which the Employer may earmark to pay any amount under the Plan,
shall at all times remain with the Employer, and Participants and any other persons entitled to
benefits hereunder shall not have any property interest whatsoever in any specific assets of the
Employer. The obligation of the Employer to make payments pursuant to the Plan is contractual
only. No Participant or other person entitled to benefits hereunder shall have a preferred claim
or lien on any assets of the Employer.
4.4 Taxes.
The Plan Administrator shall make appropriate arrangements to deduct from all amounts
paid under the Plan any taxes required to be withheld with respect to the Plan by any government
or governmental agency.
4.5 Amendment and Termination.
The Employer shall have the right to amend the Plan (other than this section) or terminate
the Plan at any time. If the Plan is terminated, the actuarial equivalent present value of any
remaining benefits payable to a Participant or other person, increased by an amount determined
by the Employer to permit approximately the same after-tax payout over time to Participants as
would have been realized in the absence of such termination, shall be paid in a lump sum 30 days
after the termination of the Plan.
4.6 Compliance with Laws.
It is the intention that this Plan be a "qualified governmental excess benefit arrangement"
within the meaning of Section 415(m) of the Code, and may at any time be amended to comply
with the Code requirements to maintain such qualification and status.
91
ARTICLE V
DEFINITIONS
Whenever the following terms are used in the Plan, with the first letter capitalized, they
shall have the meanings first specified below.
"Code" shall mean the Internal Revenue Code of 1986 as amended.
"Employer" shall mean the City of Vernon that has adopted this Plan.
"Employee" shall mean an employee of the Employer.
"Normal Retirement Age" shall mean sixty-two (62) years of age.
"Participant" shall mean those Employees eligible for participation in the Plan.
"Plan" shall mean this City of Vernon Excess Benefit Plan, as amended.
"Retirement Benefits" shall mean the benefits payable to the Participant following
retirement, as described in Article III.
"Supplemental Retirement Plan" shall mean the City of Vernon Public Agency
Retirement System (PARS) Supplementary Retirement Plan, effective November 6, 2012, as
amended.
M
CITY OF VERNON
EXCESS BENEFIT PLAN
The City of Vernon Excess Benefit Plan is hereby adopted effective November 6, 2012.
By::�%/C
Mark r
itworth
Title: City Administrator
Date:
AT
ST:
1
DaV Reed, Interim'City Clerk
APPROV AS TO FORM:
1L((jj1•
Nicholas George Rodriguez,
City Attorney
CITY OF VERNON
EXCESS BENEFIT TRUST AGREEMENT
ACCOUNT IS ENTERED INTO BY CLIENT
AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE
This document is entered into by U.S. Bank National Association ("U.S. Bank"), as trustee. U.S. Bank
succeeded Union Bank, N.A. as the trustee on February 1, 2012. All references in this document and all
account related documents to Union Bank of California, N.A. and/or Union Bank, N.A. ("Union Bank"),
are replaced with U.S. Bank.
Section 415(m).Trust i 3/8/06
TABLE OF CONTENTS
Page
ARTICLE I ESTABLISHMENT AND GENERAL OPERATION OF TRUST
1.1
Establishment of Trust............................................................................... 2
1.2
Revocability...............................................................................................
2
1.3
Grantor Trust.............................................................................................
2
1.4
Trust Contributions....................................................................................
2
1.5
Payments to Employer............................................................................... 2
1.6
Signing Authority, Administrator.................................................................2
1.7
Acceptance of Assets; Trust Composition .................................................
3
1.8
Trust Contributions....................................................................................
3
1.9
No Duty of Trustee to Enforce Collection ..................................................
3
1.10
Plan Administration....................................................................................
3
1.11
Participant Accounts..................................................................................
3
1.12
Tax Reporting............................................................................................
3
1.13
Trust Administrator....................................................................................
4
ARTICLE II
INVESTMENTS
2.1 Employer Directs Investments................................................................... 4
2.2 Appointment of Trustee (or Other Individual or Entity) as Investment
Manager...................................................................................................4
2.3 Funding Policy and Investment Guidelines ................................................ 4
2.4 Disposition of Income................................................................................ 5
ARTICLE III
TRUSTEE'S POWERS
3.1
General Trustee's Powers......................................................................... 5
3.2
Additional Powers......................................................................................
7
3.3
Delegatee.................................................................................................. 9
3.4
Directions to Trustee.................................................................................. 9
3.5
Trust Administrator..................................................................................
10
3.6
Additional Trust Administrator Services ...................................................
11
3.7
Trust Administrator's Compensation........................................................
11
3.8
Resignation or Removal of Trust Administrator .......................................
11
ARTICLE IV
TRUSTEE AND EMPLOYER DUTIES
4.1
Legal Duties.............................................................................................
11
4.2
Payments to Participants.........................................................................
11
Section 415(m).Trust ii 3/8/06
4.3 Accounts and Records.............................................................................. 12
4.4 Reports.................................................................................................13
4.5 Follow Employer Direction....................................................................... 13
4.6 Information to be Provided to Trustee ..................................................... 13
ARTICLE V RESTRICTIONS ON TRANSFER
5.1 Persons to Receive Payment.................................................................. 14
5.2 Assignment and Alienation Prohibited..................................................... 14
ARTICLE VI
RESIGNATION, REMOVAL AND SUCCESSION
6.1
Resignation or Removal of Trustee.........................................................
15
6.2
Designation of Successor........................................................................
15
6.3
Upon Resignation....................................................................................
15
6.4
Court Appointment of Successor.............................................................
15
6.5
Successor's Powers.................................................................................
15
6.6
Successor's Duties..................................................................................
16
ARTICLE VII AMENDMENT
7.1 Power to Amend...................................................................................... 16
ARTICLE Vill LIABILITIES
8.1 Declaration of Intent................................................................................. 16
8.2 Liability of the Trustee.............................................................................. 16
8.3 Indemnification........................................................................................ 17
ARTICLE IX DURATION, TERMINATION AND REPAYMENTS TO EMPLOYER
9.1 Revocation and Termination.................................................................... 18
9.2 Duration...................................................................._............................19
ARTICLE X MISCELLANEOUS
10.1 Emergencies and Delegation................................................................... 19
10.2 Expenses and Taxes............................................................................... 19
10.3 Third Parties............................................................................................ 20
10.4 Adoption by Affiliate Employer................................................................. 20
10.5 Binding Effect; Successor Employer........................................................ 21
10.6 Relation to Plan....................................................................................... 21
10.7 Arbitration of Disputes............................................................................. 21
10.8 Attorney Fees and Costs......................................................................... 21
10.9 Partial Invalidity........................................................................................22
10.10 Construction.............................................................................................22
Section 415(m).Trust iii 3/8/06
10.11 Notices .................................. :.............................................................. 22
ARTICLE XI DISTRIBUTIONS IN THE EVENT OF INSOLVENCY OF
EMPLOYER
11.1 Trustee Responsibility............................................................................. 22
ARTICLE XII EFFECTIVE DATE
12.1 Effective Date.......................................................................................... 25
Addresses of Parties for Notice............................................................... 25
Section 415(m).Trust iv 3/8/06
TRUST UNDER THE CITY OF VERNON EXCESS BENEFIT PLAN
This Trust Agreement (the "Trust Agreement" or "Trust") is made by and
between the City of Vernon (the "Employer"), Public Agency Retirement Services
("PARS" and/or "Trust Administrator") and UNION BANK, N.A., a national banking
association (the "Trustee"), and shall be effective upon the Trustee's receipt of assets
to be held in trust hereunder.
PURPOSE
(a) WHEREAS, the Employer has adopted the plan or plans attached as
Exhibit A or which subsequently may be designated in writing by the Employer (the
"Plan") pursuant to which the Employer expects to incur unfunded liabilities with respect
to certain employees of the Employer.
(b) WHEREAS, Employer wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein, subject to the
claims of Employer's creditors in the event of Employer's Insolvency, as herein defined,
until paid to Plan participants in such manner and at such times as specified in the
Plan;
(c) WHEREAS, it is the intention of the parties that this Trust shall constitute
an unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for a select group
of employees;
(d) WHEREAS, it is the intention of Employer to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of its liabilities
under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
Section 415(m).Trust 1 3/8/06
ARTIM F 1
ESTABLISHMENT OF TRUST
1.1 Establishment of Trust. The Employer hereby deposits with Trustee in Trust
a sum of money which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in the Trust Agreement.
REVOCABILITY
1.2 Revocability. The Trust hereby established shall be revocable by Employer.
1.3 Grantor Trust. The Trust is intended to be a grantor trust, of which Employer
is the grantor, within the meaning of Subpart E, Part I, Subchapter J, Chapter
1, Subtitle A of the Internal Revenue Code of 1986, as amended, and shall
be construed accordingly.
1.4 Trust Assets. The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of Employer and shall be used
exclusively for the uses and purposes of Participants and Employer's general
creditors as herein set forth. Plan participants and beneficiaries of deceased
participants (hereinafter called "Participants") shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Participants against Employer. Any assets held by the
Trust will be subject to the claims of Employer's general creditors under
federal and state law in the event of Insolvency, as defined in Article XI
herein.
1.5 Payments to Employer. The Employer shall maintain the right and power to
direct Trustee to return to Employer or to divert to others any of the Trust
assets before all payment(s) of benefits have been made to Participants
pursuant to the terms of the Plan.
1.6 Signing Authority; Administrator. The Employer shall certify in writing to the
Trustee the names and specimen signatures of all those who are authorized
to act as or on behalf of the Employer, and those names and specimen
signatures shall be updated as necessary by a duly authorized official of the
Employer. The Employer shall promptly notify the Trustee if any person so
designated is no longer authorized to act on behalf of the Employer. Until the
Trustee receives written notice that a person is no longer authorized to act on
behalf of the Employer, the Trustee may continue to rely on the Employer's
designation of such person.
Section 415(m).Trust 2 3/8/06
1.7 Acceptance of Assets; Trust Composition. 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 received
by the Trustee, together with the income and earnings from them and any
increments to them. The Trustee shall hold, manage and administer the
Trust in accordance with this Trust Agreement without distinction between
principal and income.
1.8 Trust Contributions. Employer, in its sole discretion, may at any time, or
from time to time, make additional deposits of cash or other property in trust
with Trustee to augment the principal to be held, administered and disposed
of by Trustee as provided in this Trust Agreement. Neither Trustee nor any
Participant shall have any right to compel such additional deposits.
1.9 No Duty of Trustee to Enforce Collection. Notwithstanding anything herein to
the contrary, Trustee shall have no authority or obligation to enforce the
collection of any contribution or transfer to the Trust.
1.10 Plan Administration. The Employer and not the Trustee shall be responsible
for administering the Plan (including without limitation determining the rights
of the Employer'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. The Employer may
delegate such responsibilities to a record keeper.
1.11 Participant Accounts. If required, the Employer shall maintain in an equitable
manner a separate account for each Participant under the Plan ("Account") in
which it shall keep a record of the share of such Participant under such Plan
in the Trust. The Employer may appoint a record keeper to maintain such
Accounts. A Participant's Account under the Plan shall represent the portion
of the Trust allocated to provide such Participant benefits under such Plan. If
the Trustee is directed by the Employer to segregate the Trust into separate
Accounts for each Participant, at the time it makes a contribution to the Trust,
the Employer shall certify to the Trustee the amount of such contribution
being made in respect of each Participant under each Plan.
The Trustee may rely on information provided to the Trustee by the Employer
and the Trustee's and Employer's determination of Account values shall be
conclusive and binding on all interested parties.
1.12 Tax Reporting. The Trustee shall be responsible for individual tax reporting
and withholding as directed by the Employer. The Employer agrees to
indemnify and defend the Trustee against any liability for the payment of such
taxes, interest or penalties resulting from or related to the Trust.
Section 415(m).Trust 3 3/8/06
1.13 Trust Administrator. The Trust Administrator shall be Public Agency
Retirement Services.
ARTICLE II
INVESTMENTS
2.1 Employer Directs Investments. Except as provided in Section 2.2 below, the
Employer 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 Employer concerning those assets. The
Employer shall not issue directions in violation of the terms of the Plan and
Trust or prohibited by the laws and Constitution of the State of California and
applicable federal laws and regulations. Except to any extent required by the
laws and Constitution of the State of California and applicable federal laws
and 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 retain all such assets until
directed in writing by the Employer to dispose of them.
2.2 Appointment of Trustee (or Other Individual or Entity) as Investment
Manager. The Employer may appoint the Trustee or other appropriately
regulated individual or entity as Investment Manager, thereby delegating to
the Trustee or other individual or entity the full power, authority and duty to
direct the investment and management of all or any portion of the assets of
the Trust as specified by the Employer and to the extent provided in Article 111,
subject to the investment guidelines established by the Employer as provided
below. The Employer represents and warrants that any appointment made
pursuant to this Section 2.2 complies with the laws and Constitution of the
State of California and applicable federal laws and regulations. No
appointment and delegation made pursuant to this Section 2.2 shall be
effective unless made in writing and signed by both the Trustee and the
Employer.
2.3 Funding Policy and Investment Guidelines. The Employer shall have the
responsibility for establishing and carrying out a funding policy and method,
consistent with the objectives of the Plan and, subject to the laws and
Constitution of the State of California and applicable federal laws and
regulations, taking into consideration the Plan's short-term and long-term
financial needs. To the extent that the Trustee is appointed Investment
Manager of all or a portion of the assets of the Trust in accordance with
Section 2.2 above, the Trustee's responsibility for investment and
diversification of such portion of the assets shall be subject to, and is limited
by, the investment guidelines issued to it by the Employer in writing. It is
understood that, unless otherwise agreed in writing, the Employer, rather
than the Trustee, shall be responsible for the overall diversification of Trust
assets.
Section 415(m).Trust 4 3/8/06
2.4 Disposition of Income. During the term of this Trust, all income received by
the Trust, net of expenses and taxes, shall be accumulated and reinvested.
ARTIM F III
TRUSTEE'S POWERS
3.1 General Trustee's Powers. Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan to any
person the proceeds of any borrowing against such policy.
(a) To invest and reinvest the Trust or any part thereof in any one or more
kind, type, class, item or parcel of property, real, personal or mixed,
tangible or intangible, or in any one or more kind, type, class, item or
issue of investment or security; or in any one or more kind, type class
or item of obligation, secured or unsecured; or in any combination of
them;
(b) To acquire, sell and exercise options to buy securities ("call" options)
and to acquire, sell and exercise options to sell securities ("put"
options);
(c) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose,
including 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,
(d) 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;
(e) 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 the
Trustee's receipt of float;
(f) To borrow money for the purposes of the Trust from any source other
than a party in interest of the Plan, with or without giving security; to
pay interest; to issue promissory notes and to secure the repayment
thereof by pledging all or any part of the Trust assets;
Section 415(m).Trust 5 3/8/06
(g) To take all of the following actions: 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, 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) Subject to the limitations of 3.1, to hold term or ordinary life insurance
contracts or to acquire annuity contracts on the lives of Participants
(but in the case of conflict between any such contract and a Plan, the
terms of the Plan shall prevail); to pay from the Trust the premiums on
such contracts; to distribute, surrender or otherwise dispose of such
contracts; to pay the proceeds, if any, of such contracts to the proper
persons in the event of the death of the insured Participant; 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 pay or 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. All payments and exercise of all powers with respect
to insurance contracts shall be solely on the direction of Employer;
(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 otherwise provided in this Trust, 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.
Section 415(m).Trust 6 3/8/06
(1) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of section 301.7701-2
of the Procedure and Administrative Regulations promulgated
pursuant to the Internal Revenue Code.
3.2 Additional Powers. In addition to the other powers enumerated above, the
Trustee 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, N.A. To use other services or
facilities provided by the UnionBanCal Corporation (UNBC), its
subsidiaries or affiliates including Union Bank, N.A. (Bank), to the
extent allowed by applicable law and regulation. Such services may
include but are not limited to (1) the placing of orders for the purchase,
exchange, investment or reinvestment of securities through any
brokerage service conducted by, and (2) the purchase of units of any
registered investment company managed or advised by Bank, UNBC,
or their subsidiaries or affiliates and/or for which Bank, UNBC or their
subsidiaries or affiliates act as custodian or provide other services for
a fee, including, without limitation, the HighMark Group of mutual
funds. The parties hereby acknowledge that the Bank may receive
fees for such services in addition to the fees payable under this
Agreement. Fee schedules for additional services shall be delivered to
the appropriate party in advance of the provision of such services.
Independent fiduciary approval of compensation being paid to the
Bank will be sought in advance to the extent required under applicable
law and regulation.
If Union Bank, N.A. does not have investment discretion, the services
referred to above, as well as any additional services, shall be utilized
only upon the appropriate direction of an authorized party.
(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,
including the nominee name of any depository, 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 as are available;
Section 415(m).Trust 7 3/8/06
(c) To serve as custodian with respect to the Trust assets, to hold assets
or to hold eligible assets at the Depository Trust Company or other
depository;
(d) To employ such agents and counsel as may be reasonably necessary
in administration and protection of the Trust assets and to pay them
reasonable compensation; to employ any broker -dealer covered in the
self -dealing section, and pay to such broker -dealer its standard
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 at par value to the principal of the Trust without
amortization from the Trust, regardless of any law relating thereto;
(e) 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 of the Trust;
(f) To permit such inspections of documents at the principal office of the
Trustee as are required by law, subpoena or demand by United States
or state agency during normal business hours of the Trustee;
(g) To comply with all requirements imposed by law;
(h) To seek written instructions from the Employer on any matter and
await written instructions without incurring any liability. If at any time
the Employer should fail to give directions to the Trustee, the Trustee
may act in the manner that in its discretion it deems advisable under
the circumstances for carrying out the purposes of this Trust. Such
actions shall be conclusive on the Employer and the Participants on
any matter if written notice of the proposed action is given to Employer
five (5) days prior to the action being taken, and the Trustee receives
no response;
(i) To compensate such executive, consultant, record keeper, actuarial,
accounting, investment, appraisal, administrative, clerical, secretarial,
custodial, depository and legal firms, personnel and other employees
or assistants as are engaged by the Employer in connection with the
administration of the Plan and to pay from the Trust the necessary
expenses of such firms, personnel and assistants, to the extent not
paid by the Employer;
(j) To impose a reasonable charge to cover the cost of furnishing to
Participants statements or documents;
(k) To act upon proper written directions of the Employer or any
Participant including directions given by photostatic teletransmission
Section 415(m).Trust 8 3/8/06
using facsimile signature. If oral 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 instructions
taken in Trustee's ordinary course of business shall constitute
conclusive proof of Trustee's receipt or non -receipt of the oral
instructions;
(1) To pay from the Trust the expenses reasonably incurred in the
administration of the Trust;
(m) To maintain insurance for such purposes, in such amounts and with
such companies as the Employer 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 the fiduciary in the case of a breach of a fiduciary obligation by
such fiduciary);
(n) As directed by the Employer, 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 at the times and in the manner specified by
the Plan, and to charge such payments against the Trust and
Accounts with respect to which such benefits are payable;
(o) To exercise and perform any and all of the other powers and duties
specified in this Trust Agreement or the Plan; and 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.
3.3 Delegatee. The Employer may delegate certain authority, powers and duties
to an entity to act in those matters specified in the delegation ("Delegatee").
Any such delegation must be in a writing that names and identifies the
Delegatee, states the effective date of the delegation, specifies the authority
and duties delegated, is executed by the Employer and is acknowledged in
writing by the Delegatee, the Trust Administrator (if not the Delegatee) and
the Trustee. Such delegation shall be effective until the Trustee and the
Trust Administrator are directed in writing by the Employer that the delegation
has been rescinded or modified.
3.4 Directions to Trustee. Except as otherwise provided in this Trust Agreement,
all directions to the Trustee from the Employer or Delegatee must be in
writing and must be signed by the Employer or Delegatee, as the case may
be. For all purposes of this Trust Agreement, direction shall include any
certification, notice, authorization, application or instruction of the Employer,
Delegatee or Trustee appropriately communicated. The above
Section 415(m).Trust 9 3/8/06
notwithstanding direction may be implied if the Employer or Delegatee has
knowledge of the Trustee's intentions and fails to file written objection.
The Trustee shall have the power and duty to comply promptly with all proper
direction of the Employer, or Delegatee, appointed in accordance with the
provisions of this Trust Agreement. In the case of any direction deemed by
the Trustee to be unclear or ambiguous the Trustee may seek written
instructions from the Employer, the Agency or the Delegatee on such matter
and await their written instructions without incurring any liability. If at any time
the Employer or the Delegatee should fail to give directions to the Trustee,
the Trustee may act in the manner that in its discretion seems advisable
under the circumstances for carrying out the purposes of the Trust Program
and/or any Agency Trust which may include not taking any action. The
Trustee may request directions or clarification of directions received and may
delay acting until clarification is received. In the absence of timely direction
or clarification, or if the Trustee considers any direction to be a violation of the
Trust Agreement or any applicable law, the Trustee shall in its sole discretion
take appropriate action, or refuse to act upon a direction.
3.5 Trust Administrator. The Employer has appointed PARS as the Trust
Administrator. The Trust Administrator has accepted its appointment subject
to the Employer's delegation of authority, to act as such, pursuant to Section
3.3 of this Trust Agreement. The Trust Administrator's duties involve the
performance of the following services pursuant to the provisions of this trust
agreement and the Agreement for Administrative Services:
(a) Performing periodic accounting of the Agency Trust;
(b) Directing the Trustee to make distributions from the Agency Trust to
Participants pursuant to the provisions of the Plan and liquidate assets
in order to make such distributions;
(c) Notifying the Investment Fiduciary of the amount of Assets in the
Agency Trust available for further investment and management by the
Investment Fiduciary;
(d) Allocating contributions, earnings and expenses to each Agency Trust;
(e) Directing the Trustee to pay insurance premiums, to pay the fees of
the Trust Administrator and to do such other acts as shall be
appropriate to carry out the intent of the Agency Trusts.
(f) Such other services as the Employer and the Trust Administrator may
agree.
Section 415(m).Trust 10 3/8/06
3.6 Additional Trust Administrator Services. The Employer may at any time
retain the Trust Administrator as its agent to perform any act, keep any
records or accounts and make any computations which are required of the
Employer by this Trust Agreement or by the Plan. The Trust Administrator
shall be separately compensated for such service and such services shall not
be deemed to be contrary to the Trust Agreement.
3.7 Trust Administrator's Compensation. As may be agreed upon from time to
time by the Employer and Trust Administrator, the Trust Administrator will be
paid reasonable compensation for services rendered or reimbursed for
expenses properly and actually incurred in the performance of duties.
3.8 Resignation or Removal of Trust Administrator. The Trust Administrator may
resign at any time by giving at least one hundred twenty (120) days written
notice to the Employer and the Trustee.
ARTICLE IV
TRUSTEE AND EMPLOYER DUTIES
4.1 Legal Duties. The Trustee and Employer shall exercise any of the foregoing
powers from time to time as required by law.
4.2 Payments to Participants
(a) Employer shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each
Participant, that provides a formula or other instructions acceptable to
Trustee for determining the amount so payable, the form in which such
amount is to be paid (as provided for or available under the Plan), and
the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the
Participants in accordance with such Payment Schedule. As directed
by Employer, the Trustee shall make provision for the reporting and
withholding of any federal, state or local taxes that may be required to
be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate
taxing authorities or determine that such amounts have been reported,
withheld and paid by Employer.
(b) The entitlement of a Participant to benefits under the Plan shall be
determined by Employer or such party as it shall designate under the
Plan, and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.
Section 415(m).Trust 11 3/8/06
(c) Employer may make payment of benefits directly to Participants as
they become due under the terms of the Plan. Employer shall notify
Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to Participants. In addition, if the principal
of the Trust, and earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan,
Employer shall make the balance of each such payment as it falls due.
Trustee shall notify Employer where principal and earnings are not
sufficient. Trustee shall have no duty or obligation to enforce or
compel Employer to make payments hereunder. Employer may direct
Trustee to reimburse Employer for payments made directly by
Employer to Participants, and shall provide the Trustee with such
documentation to evidence those direct payments as the Trustee may
reasonably request.
(1) In the event payments are made by Employer directly to
Participants, Employer shall have sole responsibility for the
reporting and withholding of any federal, state, or local taxes
that may be required to be withheld with respect to the payment
of benefits pursuant to the terms of the Plan and shall pay
amounts withheld to the appropriate taxing authority.
(2) Trustee shall have no duty or responsibility with respect to the
above stated reporting, withholding or payment of taxes and
shall have no responsibility to determine that Employer has
provided for such reporting, withholding or payment of such
taxes.
(3) Employer shall indemnify and hold Trustee harmless from any
and all losses, claims, penalties or damages which may occur
as a result of Trustee following in good faith the written direction
of the Employer to reimburse Employer for payments made
hereunder to Participants and arising from Employer's tax
reporting, withholding and payment obligations hereunder.
(d) Upon the satisfaction of all liabilities of the Employer under the Plan to
all Participants the Trustee shall hold or distribute the Trust in
accordance with the written instructions of the Employer. Except as
provided in (c) above, at no time prior to the Employer's Insolvency, as
defined in Article XI, or the satisfaction of all liabilities of the Employer
under the Plan in respect of all Participants having Accounts
hereunder shall any part of the Trust revert to the Employer.
4.3 Accounts and Records. The Trustee shall keep accurate and detailed
records of all investments, receipts, disbursements and ail other transactions
required to be done, including such specific records as shall be agreed upon
Section 415(m).Trust 12 3/8/06
in writing between the Employer and the Trustee. All such accounts, books
and records shall be open to inspection and audit at all reasonable times by
the Employer and by the Participants. Within sixty (60) days after the close
of each quarter and Plan year and within sixty (60) days after the resignation
or removal of the Trustee as provided in Article VI hereof, the Trustee shall
render to the Employer 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 account shall set forth the assets and liabilities of the
Trust. The Employer shall have ninety (90) days after the Trustee's mailing
of each such quarterly or final account within which to file with the Trustee
written objections to such account. Upon approval or by failure to file with the
Trustee written objections to such account within the 90-day period, the
Employer shall release and discharge the Trustee from all liability and
accountability to the Employer as to all matters and items set forth in such
account as if such account had been settled and allowed by a decree from a
court of competent jurisdiction, such settlement and allowance to be final and
binding.
Notwithstanding anything herein to the contrary, the Trustee shall have no
duty or responsibility to obtain valuations of any assets of the Trust Fund, the
value of which is not readily determinable on an established market.
Employer shall bear sole responsibility for determining said valuations and
shall be responsible for providing said valuations to Trustee in a timely
manner. Trustee may conclusively rely on such valuations provided by
Employer and shall be indemnified and held harmless by Employer with
respect to such reliance.
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 law. The Trustee shall
have no responsibility to file reports or descriptions, publish information or
make disclosures, registrations or other filings unless directed by the
Employer.
4.5 Follow Employer Direction. The Trustee shall have the power and duty to
comply promptly with all proper directions of the Employer.
4.6 Information to be Provided to Trustee. The Employer shall maintain and
furnish the Trustee with all reports, documents and information as shall be
required by the Trustee to perform its duties and discharge its responsibilities
under this Trust Agreement, including without limitation a certified copy of
each of the Plan and all amendments thereto.
The Trustee shall be entitled to rely on the most recent reports, documents
and information furnished to it by the Employer. The Employer shall be
Section 415(m).Trust 13 3/8/06
required to notify the Trustee as to the termination of employment of any
Participant by death, retirement or otherwise.
The Employer shall arrange for each Investment Manager if appointed
pursuant to Section 2.2, and each insurance company issuing contracts held
by the Trustee pursuant to Section 3.10), to furnish the Trustee with such
valuations and reports as are necessary to enable the Trustee to fulfill its
obligations under this Trust Agreement, and the Trustee shall be fully
protected in relying upon such valuations and reports.
ra_a9ra■=ILYA
5.1 Persons to Receive Payment.
(a) The Trustee shall, except as otherwise provided in section 4.2(d) and
subsection (b) hereunder, pay all amounts payable hereunder only to
the person or persons designated under the Plan or deposit such
amounts to the Participant's checking or savings account as directed
by the Employer and not to any other person or corporation, and only
to the extent of assets held in the Trust, and shall follow written
instructions by the Employer. The Employer's written instructions, to
the Trustee to make distributions or not to make distributions, and the
amount thereof, shall be conclusive on all Participants.
(b) Should any controversy 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 retain the amount in controversy pending resolution of the
controversy or the Trustee may file an action seeking declaratory relief
and/or may interplead the Trust assets in issue, and name as
necessary parties the Employer, the Participants and/or any or all
persons making conflicting demands.
(c) The Trustee shall not be liable for the payment of any interest or
income, except for that earned as a Trust investment, on any amount
withheld or interpleaded under subsection (b).
(d) The expense of the Trustee for taking any action under subsection (b)
shall be paid to the Trustee from the Trust.
5.2 Assignment and Alienation Prohibited. Benefits payable to Participants under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
Section 415(m).Trust 14 3/8/06
garnishment, levy, execution or other legal or equitable process.
Notwithstanding the foregoing, the Trust shall at all times remain subject to
the claims of creditors of the Employer in the event the Employer becomes
Insolvent as provided in Article XI.
ARTICLE VI
RESIGNATION, REMOVAL AND SUCCESSION
6.1 Resignation or Removal of Trustee. Trustee may resign at any time by
written notice to the Employer, which shall be effective thirty (30) days after
receipt of such notice unless Employer and Trustee agree otherwise. The
Employer may remove the Trustee at any time by written notice to the
Trustee, which shall be effective thirty (30) days after receipt of such notice
unless the Trustee and Employer otherwise agree.
6.2 Designation of Successor. Upon notice of the Trustee's resignation or
removal, the Employer shall promptly designate a successor Trustee who will
accept transfer of the assets of the Trust.
If no successor Trustee is designated within thirty (30) days of notice of
Trustee's resignation or removal, then the Trustee may apply to a court of
competent jurisdiction for appointment of a successor or instructions as
provided in Section 6.4 below.
6.3 Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed as soon as administratively feasible
after receipt of notice of resignation, removal or transfer and appointment of
and acceptance by successor Trustee, unless Employer extends the time
limit.
6.4 Court Appointment of Successor. If Trustee resigns or is removed, a
successor shall be appointed, in accordance with Section 6.2 hereof, by the
effective date of resignation or removal under paragraph 6.1 of this section.
If no such appointment has been made, Trustee may apply to a court of
competent jurisdiction for appointment of a successor or for instructions. All
expenses of Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust. Until a successor Trustee has
accepted its appointment and received transfer of the Trust assets, the
Trustee shall be entitled to be compensated for its services according to its
published fee schedule then in effect for acting as Trustee.
6.5 Successor's Powers. A successor Trustee shall have the same powers and
duties as those conferred upon the original Trustee hereunder. A resigning
Section 415(m).Trust 15 3/8/06
Trustee shall transfer the Trust assets and shall deliver the assets of the
Trust to the successor Trustee as soon as practicable. The resigning Trustee
is authorized, however, to reserve such amount 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 all fees
and costs, expenses or attorneys' fees or losses incurred, whether before or
after resignation, due solely to Trustee's holding title to and administration of
Trust assets.
6.6 Successor's Duties. A successor Trustee shall have no duty to audit or
otherwise inquire into the acts and transactions of its predecessor.
ARTICLE VII
AMENDMENT
7.1 Power to Amend. This Trust Agreement may be amended by a written
instrument executed by Trustee and Employer. No such amendment shall
conflict with the terms of the Plan.
ARTICLE VIII
W-1-L11111_*'
8.1 Declaration of Intent. To the full extent permitted by law, it is the intent of this
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 limitation, 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.
6.2 Liability 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 of the Trust or part thereof which is directed by the
Employer, as applicable.
(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.
Section 415(m).Trust 16 3/8/06
(c) The Trustee shall have no liability for the acts or omissions of the
Employer or Fiduciaries.
(d) The Trustee shall have no liability for following proper directions of
Employer or Employer's designated Fiduciaries, or any Participant
when such directions are made in accordance with this Trust
Agreement and the Plan.
(e) During such period or periods of time, if any, as Employer or
Investment Manager (collectively, "Fiduciary") 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 Fiduciary 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 such Fiduciary. The Trustee shall have no obligation to exercise
any such right unless it is instructed to exercise such right, in writing,
by the Fiduciary within a reasonable time prior to the expiration of such
right.
(f) During such period or periods of time, if any, as a Fiduciary is directing
the investment and management of Trust assets, if such Fiduciary
directs the Trustee 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 Fiduciary 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.
8.3 Indemnification.
(a) The Trustee shall not be liable for, and Employer shall indemnify,
defend, and hold the Trustee (including its officers, agents, employees
and attorneys) harmless from and against any claims, demands, loss,
costs, expense or liability imposed on the indemnified party, including
reasonable attorneys' fees and costs incurred by the indemnified party,
arising as a result of (1) any acts taken by the Trustee in accordance
with directions (or failure to act in the absence of directions) from the
Employer, Investment Manager or any other person or entity
authorized to act on their behalf which the Trustee reasonably believes
to have been given by them, or (2) the Employer's active or passive
Section 415(m).Trust 17 3/8/06
negligent act . or omission or willful misconduct in the execution or
performance of its duties under this Trust Agreement.
(b) The Employer shall not be liable for, and Trustee shall indemnify,
defend, and hold the Employer (including its officers, agents,
employees and attorneys) harmless from and against any claims,
demands, loss, costs, expense or liability imposed on the indemnified
party, including reasonable attorneys' fees and costs incurred by the
indemnified party, arising as a result of Trustee's active or passive
negligent act or omission or willful misconduct in the execution or
performance of its duties under this Trust Agreement.
(c) Promptly after receipt by an indemnified party of notice or receipt of a
claim or the commencement of any action for which indemnification
may be sought, the indemnified party will notify the indemnifying party
in writing of the receipt or commencement thereof. When the
indemnifying party has agreed to provide a defense as set out above
that party shall assume the defense of such action (including the
employment of counsel, who shall be counsel satisfactory to such
indemnitee) and the payment of expenses, insofar as such action shall
relate to any alleged liability in respect of which indemnity may be
sought against the indemnifying party. Any indemnified party shall
have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
counsel shall not be at the expense of the indemnifying party unless (i)
the employment of such counsel has been specifically authorized by
the indemnifying party or (ii) the named parties to any such action
(including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential
differing interest between them. The indemnifying party shall not be
liable to indemnify any person for any settlement of any such action
effected without the indemnifying party's consent.
ARTICLE IX
DURATION, TERMINATION AND REPAYMENTS TO EMPLOYER
9.1 Revocation and Termination. The Trust shall not terminate until the date on
which Participants are no longer entitled to benefits pursuant to the terms of
the Plan, unless sooner revoked in accordance with Section 1.2 hereof. Upon
termination of the Trust any assets remaining in the Trust shall be returned to
Employer. In the event the Trust is terminated following the distribution of all
payments and benefits called for herein, from the date of such termination of
the Trust and until the final distribution of the remaining Trust assets, if any,
Section 415(m).Trust 18 3/8/06
the Trustee shall continue to have all the powers provided under this Trust
Agreement that are necessary or desirable for the orderly liquidation and
distribution of the Trust.
9.2 Duration. This Trust shall continue in full force and effect for the maximum
period of time 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 this Trust
Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Emergencies and Delegation.
(a) In case of an emergency, the Trustee may act in the absence of
directions from any other person having the power and duty to direct
the Trustee with respect to the matter involved and shall incur no
liability in so acting.
(b) By written notice to the Trustee, the Employer 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 Employer, or at its option, the Trust, shall quarterly 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 Trust 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 Employer
with notice of such change at least thirty (30) 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
shall be withdrawn from the Trust and may be reimbursed by the
Employer.
(b) Reasonable counsel fees, reasonable costs, expenses and charges of
the Trustee incurred or made in the performance of its duties,
Section 415(m).Trust 19 3/8/06
expenses relating to investment of the 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, and the Trustee's
charges for issuing distribution checks to Participants or their
representatives shall be paid from, and shall constitute a charge upon
the Trust.
(c) In the event any Participant is determined to be subject to federal
income tax on any amount under this Trust Agreement prior to the time
of payment hereunder, the entire amount determined to be so taxable
shall, at the Employer's direction, be distributed by the Trustee to such
Participant from the Trust. For the above purposes, a Participant shall
be determined to be subject to federal income tax with respect to the
Trust upon the earlier of: (a) a final determination by the United States
Internal Revenue Service ("IRS") addressed to the Participant which is
not appealed to the courts; (b) an opinion of legal counsel designated
in writing by the Employer, addressed to the Employer and the
Trustee, that, by reason of Treasury Regulations, amendments to the
Code, published IRS rulings, court decisions or other substantial
precedent, amounts hereunder subject the Participant to federal
income tax prior to payment. The Employer shall undertake at its
discretion and at its sole expense to defend any tax claims described
herein which are asserted by the IRS against any Participant, including
attorney fees and costs of appeal, and shall have the sole authority to
determine whether or not to appeal any determination made by the
IRS or by a lower court. The Employer also agrees to reimburse any
Participant under this Section for any interest or penalties in respect of
tax claims hereunder upon receipt of documentation thereof.
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
nor inquire as to whether the Trustee has complied with the
requirements hereof.
(b) In any judicial or administrative proceedings, only the Employer 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 Adoption by Affiliated Employer. Any affiliate of the Employer (an "Affiliated
Employer") may adopt one or more of the Employer's Plans with the approval
Section 415(m).Trust 20 3/8/06
of the Employer, and the Affiliated Employer shall concurrently become a
party to this Trust Agreement by giving written notice of its adoption of the
Plan and this Trust Agreement to the Trustee. Upon such written notice, the
Affiliated Employer shall become a signatory to this Trust Agreement.
10.5 Binding Effect; Successor Employer. This Trust Agreement shall be binding
upon and inure to the benefit of any successor to the Employer or its
business as the result of merger, consolidation, reorganization, transfer of
assets or otherwise and any subsequent successor thereto. In the event of
any such merger, consolidation, reorganization, transfer of assets or other
similar transaction, the successor to the Employer or its business or any
subsequent successor thereto shall promptly notify the Trustee in writing of
its successorship and shall promptly supply information required by the
Trustee.
10.6 Relation to Plan. All words and phrases used herein shall have the same
meaning as in the Plan, and this Trust Agreement and the Plan shall be read
and construed together. In the event of any conflict between the terms of the
Plan and this Trust Agreement with respect to the rights and duties of the
Trustee, this Trust Agreement shall control. Whenever in the Plan it is
provided 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 Employer.
10.7 Mediation and Arbitration of Disputes. If a dispute arises under this Trust
Agreement between or among the Employer and Trustee or any Participant,
except as provided in Sections 5.1(b) and 6.4, the parties agree first to try in
good faith to settle the dispute by mediation under the Commercial Mediation
Rules of the American Arbitration Association. Thereafter, any remaining
unresolved controversy or claim arising out of or relating to this Agreement, or
the performance or breach thereof, shall be decided by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and Title 9 of California Code of Civil Procedure Sections 1280 et
seq. The sole arbitrator shall be a retired or former Judge associated with the
American Arbitration Association. Judgement upon any award rendered by
the arbitrator shall be final and may be entered in any court having
jurisdiction. Each party shall bear its own costs, attorney's fees and its share
of arbitration fees. The Alternate Dispute Resolution Agreement in this
Agreement does not constitute a waiver of the parties' rights to a judicial
forum in instances where arbitration would be void under applicable law, and
does not preclude Bank from exercising its rights to interplead the funds of
the Account at the cost of the Account.
10.8 Attorney Fees and Costs. If any action is brought by the Trustee or the
Employer against the other in a court of law in order to compel arbitration
pursuant to Section 10.7 above, the prevailing party in such proceeding to
Section 415(m).Trust 21 3/8/06
compel arbitration shall be entitled to recover from the other party reasonable
attorneys' fees, court costs and necessary disbursements incurred in
connection with such proceeding, including but not limited to copying costs,
filing fees, expert costs and fees and word processing fees.
10.9 Partial Invalidity. Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof. In the event of any such holding, the
Employer and Trustee and, if applicable, Participants, will immediately amend
this Trust Agreement as necessary to remedy any such defect.
10.10 Construction. This Trust Agreement shall be governed by and construed in
accordance with the laws of California.
10.11 Notices. Any notice, report, demand or waiver required or permitted
hereunder shall be in writing, shall be deemed received upon the date of
delivery if given personally or, if given by mail, upon the receipt thereof, and
shall be given personally or by prepaid registered or certified mail, return
receipt requested, addressed to Employer and Trustee as listed below in
Article XII; if to a Participant, to the last mailing address provided to the
Trustee with respect to such individual, provided, however, that if any party or
his or its successor shall have designated a different address by written
notice to the other parties, then to the last address so designated.
ARTICLE XI
DISTRIBUTIONS IN THE EVENT OF INSOLVENCY OF EMPLOYER
11.1 Trustee and Employer Responsibility upon notice of Employer's Insolvency:
(a) Insolvency. Trustee shall cease payment of benefits to Participants if
the Employer is Insolvent. Employer shall be considered "Insolvent"
for purposes of this Trust Agreement if (i) Employer is unable to pay its
debts as they become due, or (ii) Employer is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in Section
1.4 hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Employer under federal and state law as
set forth below.
(1) The Governing Board and the Plan Administrator designated by
the Employer shall have the duty to inform Trustee in writing of
Employer's Insolvency. If a person claiming to be a creditor of
Employer alleges in writing to Trustee that Employer has
Section 415(m).Trust 22 3/8/06
become Insolvent, Trustee shall determine whether Employer.is
Insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Participants. If Trustee is
unable to obtain information sufficient to ascertain Insolvency,
Trustee may seek instructions of a court of law or submit the
matter for arbitration before the American Arbitration
Association or interplead the Trust Assets at the expense of the
Trust.
(2) Unless Trustee has actual knowledge of Employer's Insolvency,
or has received written notice from Employer or a person
claiming to be a creditor alleging that Employer is Insolvent,
Trustee shall have no duty to inquire whether Employer is
Insolvent. Trustee may in all events rely on such evidence
concerning Employer's solvency as may be furnished to Trustee
and that provides Trustee with a reasonable basis for making a
determination concerning Employer's solvency.
(3) If at any time Trustee has determined that Employer is
Insolvent, Trustee shall discontinue payments to Participants
and shall hold the assets of the Trust for the benefit of
Employer's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Participants to pursue
their rights as general creditors of Employer with respect to
benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Participants in
accordance with Section 4.2 of this Trust Agreement only after
Trustee has determined that Employer is not Insolvent (or is no
longer Insolvent).
(c) Determination of Insolvency. Upon receipt of the aforesaid written
notice of the Employer's Insolvency, the Trustee shall notify the
Employer, and the Employer, within thirty (30) days of receipt of such
notice, shall engage an arbitrator (the "Arbitrator") acceptable to
Trustee, from the American Arbitration Association to determine the
Employer's solvency or Insolvency. The Employer shall cooperate fully
and assist the Arbitrator, as may be requested by the Arbitrator, in
such determination and shall pay all costs relating to such
determination. The Arbitrator shall notify the Employer and Trustee
separately by registered mail of its findings. If the Arbitrator
determines that the Employer is solvent or if once found Insolvent the
Employer is no longer Insolvent, the Trustee shall resume holding the
Trust assets for the benefit of the Participants and may make any
distributions called for under this Trust Agreement, including any
amounts which should have been distributed during the period when
Section 415(m).Trust 23 3/8/06
the Trustee suspended distributions in response to a notice of the
Employer's Insolvency, including earnings (or losses) on such
suspended distributions. If the Arbitrator determines that the Employer
is Insolvent or is unable to make a conclusive determination of the
Employer's Insolvency, the Trustee shall continue to retain the assets
of the Trust until the Employer's status of solvency or Insolvency is
decided by a court of competent jurisdiction or it distributes all or a
portion of the Trust assets to any duly appointed receiver, trustee in
bankruptcy, custodian or to the Employer's general creditors, but only
as such distribution is ordered by a court of competent jurisdiction.
The Trustee shall have no liability for relying upon the determination of
the Arbitrator as to the Employer's solvency or Insolvency.
(d) If a court of competent jurisdiction orders distribution of only part of the
Trust assets and does not specify the manner in which Trust assets
are to be liquidated, the Trustee shall liquidate Trust assets as directed
by the Employer.
If the Employer fails to provide instructions as to the manner of
liquidation within five (5) business days prior to the date the Trustee is
required to comply with the court's order, the Trustee shall liquidate
and shall have the authority to order any Investment Manager to
liquidate the Trust assets in such manner as the Trustee shall
determine in its sole and absolute discretion. The Trustee shall not be
liable for any damages resulting from the Trustee's exercise in good
faith of its power to liquidate assets as provided in this paragraph.
(e) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to subsection (b)(3)
hereof and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate amount of
all payments due to Participants under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of any
payments made to Participants by Employer in lieu of the payments
provided for hereunder during any such period of discontinuance of
which Trustee has actual knowledge.
Section 415(m).Trust 24 3/8/06
Nothing in this Trust Agreement shall in any manner diminish any right of a Participant
to pursue his or her rights as a general creditor of the Employer with regard to
payments under the Trust or otherwise.
ARTICLE XII
EFFECTIVE DATE
This Trust Agreement shall be effective upon the Trustee's receipt of assets
to be held in trust hereunder, and is signed by the parties on the date(s) set forth below
their names.
U.S. Bank National Association
"Trustee"
(Address)
By:
(typed or printed name)
Date:
ATTE T:
jDanae InterimCity Jerk
AS TO FORM:
as George Rodriguez,
City Attorney
City of Vernon
"Employer", Sponsor of the
City of Vernon PARS Excess Benefit Plan
(Plan)
4305 Santa Fe Avenue
(Address)
Vernon. CA 90058
By:
Ma Whitworth, City Administrator
(typed or printed name)
Date:
THE TRUST ADMINISTRATOR
PUBLIC AGENCY RETIREMENT SERVICES
By:
Title:
Date:
PUBLICPARS
AGENCY
RETIREMENT
SERVICES
Making retirement work for you.
December 4, 2012
Teresa McAllister
Human Resources Director
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Subject: PARS Retirement Incentive/Excess Benefit Plan
Dear Teresa:
On September 12, 2012, the Governor enacted into law the California Public Employees' Pension Reform
Act (PEPRA) of 2013 which affects most California retirement systems.
One of the provisions of the new law prohibits public employers from implementing an excess benefit
plan, or benefit replacement plan, on or after January 1, 2013. The excess benefit plan is established
under Section 415(m) of the Internal Revenue Code and works in tandem with the qualified PARS
retirement incentive plan to pay benefits to any employees who exceed the Section 415 limits based on
the combined benefit from both CAPERS and the PARS Supplementary Retirement Plan.
We are providing you with the necessary excess benefit plan and trust documents which must be
executed by December 31, 2012, in -the event you choose to pay benefits in excess of the Section 415
limits.
If you choose to implement this benefit replacement program, please sign and date the enclosed plan and
trust documents. Please return one original plan document and all three original excess benefit trust
documents to our office no later than December 20, 2012. We will in turn forward the documents to the
trustee for signature and return a fully executed trust agreement to your attention.
If the City does not move forward with implementing the underlying PARS retirement incentive, the
excess benefit plan and trust documents will be withdrawn.
Public Agency Retirement Services is not licensed to provide and does not offer tax, accounting, legal,
investment or actuarial advice. We present these documents with the understanding that you will have
them reviewed and approved by your respective counsel.
If you have any questions about the enclosed documents, or would like additional information on PEPRA,
please feel free to contact Dennis Yu at 800.540.6369 x 104 or by email at dyu@pars.org.
Sincerely,
Shauna Volcan
Vice President, Plan Implementation
Enclosures
cc: Dennis Yu, Senior Vice President, PARS
4350 Von Karman Ave., Ste.100
Newport Beach, CA 92660-2043
800.540.6369
fax 800.660.8057
www.pars.org
PUBLIC
PARSAGENCY
RETIREMENT
SERVICES
Making retirement work for you.
January 2, 2013
Ms. Deborah R. Juarez
Records Management Assistant
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
RE: City of Vernon PARS Excess Benefit Plan
Dear Ms. Juarez:
Please find enclosed a fully executed original of the Trust Agreement to your
PARS Excess Benefit Plan for your files.
Sincerely,
aclyn N. Hinsche
Senior Implementation Coordinator
/enclosure
4350 Von Karman Ave., Ste.100
Newport Beach, CA 92660-2043
800.540.6369
fax 800.660.8057
www.pars.org
CITY OF VERNON
EXCESS BENEFIT TRUST AGREEMENT
ACCOUNT IS ENTERED INTO BY CLIENT
AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE
This document is entered into by U.S. Bank National Association ("U.S. Bank"), as trustee. U.S. Bank
succeeded Union Bank, N.A. as the trustee on February 1, 2012. All references in this document and all
account related documents to Union Bank of California, N.A. and/or Union Bank, N.A. ("Union Bank"),
are replaced with U.S. Bank.
Section 415(m).Trust i 3/8/06
ARTICLE I
ARTICLE II
TABLE OF CONTENTS
Page
ESTABLISHMENT AND GENERAL OPERATION OF TRUST
Establishment of Trust............................................................................... 2
Revocability............................................................................................... 2
GrantorTrust............................................................................................. 2
TrustContributions.................................................................................... 2
Paymentsto Employer............................................................................... 2
Signing Authority, Administrator................................................................. 2
Acceptance of Assets; Trust Composition ................................................. 3
TrustContributions................................................................................:... 3
No Duty of Trustee to Enforce Collection .................................................. 3
PlanAdministration.................................................................................... 3
Participant Accounts.................................................................................. 3
TaxReporting............................................................................................ 3
TrustAdministrator.................................................................................... 4
INVESTMENTS
2.1 Employer Directs Investments................................................................... 4
2.2 Appointment of Trustee (or Other Individual or Entity) as Investment
Manager .................................................4
..................................................
2.3 Funding Policy and Investment Guidelines ................................................ 4
2.4 Disposition of Income................................................................................ 5
ARTICLE III TRUSTEE'S POWERS
3.1 General Trustee's Powers......................................................................... 5
3.2 Additional Powers...................................................................................... 7
3.3 Delegatee.................................................................................................. 9
3.4 Directions to Trustee.................................................................................. 9
3.5 Trust Administrator.................................................................................. 10
3.6 Additional Trust Administrator Services ................................................... 11
3.7 Trust Administrator's Compensation........................................................ 11
3.8 Resignation or Removal of Trust Administrator ....................................... 11
ARTICLE IV TRUSTEE AND EMPLOYER DUTIES
4.1 Legal Duties..................................._......................................................... 11
4.2 Payments to Participants......................................................................... 11
Section 415(m).Trust ii 3/8/06
4.3
Accounts and Records.............................................................................
12
4.4
Reports.................................................................................................13
4.5
Follow Employer Direction.......................................................................
13
4.6
Information to be Provided to Trustee .....................................................
13
ARTICLE V
RESTRICTIONS ON TRANSFER
5.1
Persons to Receive Payment..................................................................
14
5.2
Assignment and Alienation Prohibited.....................................................
14
ARTICLE VI
RESIGNATION, REMOVAL AND SUCCESSION
6.1
Resignation or Removal of Trustee.........................................................
15
6.2
Designation of Successor........................................................................
15
6.3
Upon Resignation....................................................................................
15
6.4
Court Appointment of Successor.............................................................
15
6.5
Successor's Powers.................................................................................
15
6.6
Successor's Duties..................................................................................
16
ARTICLE VII AMENDMENT
7.1 Power to Amend...................................................................................... 16
ARTICLE VIII LIABILITIES
8.1 Declaration of Intent................................................................................. 16
8.2 Liability of the Trustee.............................................................................. 16
8.3 Indemnification........................................................................................ 17
ARTICLE IX DURATION, TERMINATION AND REPAYMENTS TO EMPLOYER
9.1 Revocation and Termination.................................................................... 18
9.2 Duration.................................................................................................19
ARTICLE X
MISCELLANEOUS
10.1
Emergencies and Delegation................................................................... 19
10.2
Expenses and Taxes............................................................................... 19
10.3
Third Parties............................................................................................ 20
10.4
Adoption by Affiliate Employer.................................................................
20
10.5
Binding Effect; Successor Employer........................................................
21
10.6
Relation to Plan.......................................................................................
21
10.7
Arbitration of Disputes.............................................................................
21
10.8
Attorney Fees and Costs.........................................................................
21
10.9
Partial Invalidity........................................................................................22
10.10
Construction.............................................................................................22
Section 415(m).Trust iii 3/8/06
10.11 Notices.................................................................................................22
ARTICLE XI DISTRIBUTIONS IN THE EVENT OF INSOLVENCY OF
EMPLOYER
11.1 Trustee Responsibility............................................................................. 22
ARTICLE XII EFFECTIVE DATE
12.1 Effective Date.......................................................................................... 25
Addresses of Parties for Notice............................................................... 25
Section 415(m).Trust iv 3/8/06
TRUST UNDER THE CITY OF VERNON EXCESS BENEFIT PLAN
This Trust Agreement (the "Trust Agreement" or "Trust") is made by and
between the City of Vernon (the "Employer"), Public Agency Retirement Services
("PARS" and/or "Trust Administrator") and UNION BANK, N.A., a national banking
association (the "Trustee"), and shall be effective upon the Trustee's receipt of assets
to be held in trust hereunder.
PURPOSE
(a) WHEREAS, the Employer has adopted the plan or plans attached as
Exhibit A or which subsequently may be designated in writing by the Employer (the
"Plan") pursuant to which the Employer expects to incur unfunded liabilities with respect
to certain employees of the Employer.
(b) WHEREAS, Employer wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein, subject to the
claims of Employer's creditors in the event of Employer's Insolvency, as herein defined,
until paid to Plan participants in such manner and at such times as specified in the
Plan;
(c) WHEREAS, it is the intention of the parties that this Trust shall constitute
an unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for a select group
of employees;
(d) WHEREAS, it is the intention of Employer to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of its liabilities
under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
Section 415(m).Trust 1 3/8/06
ARTICLE I
ESTABLISHMENT OF TRUST
1.1 Establishment of Trust. The Employer hereby deposits with Trustee in Trust
a sum of money which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in the Trust Agreement.
REVOCABILITY
1.2 Revocability. The Trust hereby established shall be revocable by Employer.
1.3 Grantor Trust. The Trust is intended to be a grantor trust, of which Employer
is the grantor, within the meaning of Subpart E, Part I, Subchapter J, Chapter
1, Subtitle A of the Internal Revenue Code of 1986, as amended, and shall
be construed accordingly.
1.4 Trust Assets. The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of Employer and shall be used
exclusively for the uses and purposes of Participants and Employer's general
creditors as herein set forth. Plan participants and beneficiaries of deceased
participants (hereinafter called "Participants") shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Participants against Employer. Any assets held by the
Trust will be subject to the claims of Employer's general creditors under
federal and state law in the event of Insolvency, as defined in Article XI
herein.
1.5 Payments to Employer. The Employer shall maintain the right and power to
direct Trustee to return to Employer or to divert to others any of the Trust
assets before all payment(s) of benefits have been made to Participants
pursuant to the terms of the Plan.
1.6 Signing Authority; Administrator. The Employer shall certify in writing to the
Trustee the names and specimen signatures of all those who are authorized
to act as or on behalf of the Employer, and those names and specimen
signatures shall be updated as necessary by a duly authorized official of the
Employer. The Employer shall promptly notify the Trustee if any person so
designated is no longer authorized to act on behalf of the Employer. Until the
Trustee receives written notice that a person is no longer authorized to act on
behalf of the Employer, the Trustee may continue to rely on the Employer's
designation of such person.
Section 415(m).Trust 2 3/8/06
1.7 Acceptance of Assets; Trust Composition. 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 received
by the Trustee, together with the income and earnings from them and any
increments to them. The Trustee shall hold, manage and administer the
Trust in accordance with this Trust Agreement without distinction between
principal and income.
1.8 Trust Contributions. Employer, in its sole discretion, may at any time, or
from time to time, make additional deposits of cash or other property in trust
with Trustee to augment the principal to be held, administered and disposed
of by Trustee as provided in this Trust Agreement. Neither Trustee nor any
Participant shall have any right to compel such additional deposits.
1.9 No Duty of Trustee to Enforce Collection. Notwithstanding anything herein to
the contrary, Trustee shall have no authority or obligation to enforce the
collection of any contribution or transfer to the Trust.
1.10 Plan Administration. The Employer and not the Trustee shall be responsible
for administering the Plan (including without limitation determining the rights
of the Employer'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. The Employer may
delegate such responsibilities to a record keeper.
1.11 Participant Accounts. If required, the Employer shall maintain in an equitable
manner a separate account for each Participant under the Plan ("Account") in
which it shall keep a record of the share of such Participant under such Plan
in the Trust. The Employer may appoint a record keeper to maintain such
Accounts. A Participant's Account under the Plan shall represent the portion
of the Trust allocated to provide such Participant benefits under such Plan. If
the Trustee is directed by the Employer to segregate the Trust into separate
Accounts for each Participant, at the time it makes a contribution to the Trust,
the Employer shall certify to the Trustee the amount of such contribution
being made in respect of each Participant under each Plan.
The Trustee may rely on information provided to the Trustee by the Employer
and the Trustee's and Employer's determination of Account values shall be
conclusive and binding on all interested parties.
1.12 Tax Reporting. The Trustee shall be responsible for individual tax reporting
and withholding as directed by the Employer. The Employer agrees to
indemnify and defend the Trustee against any liability for the payment of such
taxes, interest or penalties resulting from or related to the Trust.
Section 415(m).Trust 3 3/8/06
1.13 Trust Administrator. The Trust Administrator shall be Public Agency
Retirement Services.
ARTICLE II
INVESTMENTS
2.1 Employer Directs Investments. Except as provided in Section 2.2 below, the
Employer 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 Employer concerning those assets. The
Employer shall not issue directions in violation of the terms of the Plan and
Trust or prohibited by the laws and Constitution of the State of California and
applicable federal laws and regulations. Except to any extent required by the
laws and Constitution of the State of California and applicable federal laws
and 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 retain all such assets until
directed in writing by the Employer to dispose of them.
2.2 Appointment of Trustee (or Other Individual or Entity) as Investment
Manager. The Employer may appoint the Trustee or other appropriately
regulated individual or entity as Investment Manager, thereby delegating to
the Trustee or other individual or entity the full power, authority and duty to
direct the investment and management of all or any portion of the assets of
the Trust as specified by the Employer and to the extent provided in Article III,
subject to the investment guidelines established by the Employer as provided
below. The Employer represents and warrants that any appointment made
pursuant to this Section 2.2 complies with the laws and Constitution of the
State of California and applicable federal laws and regulations. No
appointment and delegation made pursuant to this Section 2.2 shall be
effective unless made in writing and signed by both the Trustee and the
Employer.
2.3 Funding Policy and Investment Guidelines. The Employer shall have the
responsibility for establishing and carrying out a funding policy and method,
consistent with the objectives of the Plan and, subject to the laws and
Constitution of the State of California and applicable federal laws and
regulations, taking into consideration the Plan's short-term and long-term
financial needs. To the extent that the Trustee is appointed Investment
Manager of all or a portion of the assets of the Trust in accordance with
Section 2.2 above, the Trustee's responsibility for investment and
diversification of such portion of the assets shall be subject to, and is limited
by, the investment guidelines issued to it by the Employer in writing. It is
understood that, unless otherwise agreed in writing, the Employer, rather
than the Trustee, shall be responsible for the overall diversification of Trust
assets.
Section 415(m).Trust 4 3/8/06
2.4 Disposition of Income. During the term of this Trust, all income received by
the Trust, net of expenses and taxes, shall be accumulated and reinvested.
ARTIM F III
TRUSTEE'S POWERS
3.1 General Trustee's Powers. Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan to any
person the proceeds of any borrowing against such policy.
(a) To invest and reinvest the Trust or any part thereof in any one or more
kind, type, class, item or parcel of property, real, personal or mixed,
tangible or intangible; or in any one or more kind, type, class, item or
issue of investment or security; or in any one or more kind, type class
or item of obligation, secured or unsecured; or in any combination of
them;
(b) To acquire, sell and exercise options to buy securities ("call" options)
and to acquire, sell and exercise options to sell securities ("put"
options);
(c) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose,
including 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;
(d) 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,
(e) 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 the
Trustee's receipt of float;
(f) To borrow money for the purposes of the Trust from any source other
than a party in interest of the Plan, with or without giving security; to
pay interest; to issue promissory notes and to secure the repayment
thereof by pledging all or any part of the Trust assets;
Section 415(m).Trust 5 3/8/06
(g) To take all of the following actions: 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, 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;
0) Subject to the limitations of 3.1, to hold term or ordinary life insurance
contracts or to acquire annuity contracts on the lives of Participants
(but in the case of conflict between any such contract and a Plan, the
terms of the Plan shall prevail); to pay from the Trust the premiums on
such contracts; to distribute, surrender or otherwise dispose of such
contracts; to pay the proceeds, if any, of such contracts to the proper
persons in the event of the death of the insured Participant; 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 pay or 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. All payments and exercise of all powers with respect
to insurance contracts shall be solely on the direction of Employer;
(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 otherwise provided in this Trust, 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.
Section 415(m).Trust 6 3/8/06
(1) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of section 301.7701-2
of the Procedure and Administrative Regulations promulgated
pursuant to the Internal Revenue Code.
3.2 Additional Powers. In addition to the other powers enumerated above, the
Trustee 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, N.A. To use other services or
facilities provided by the UnionBanCal Corporation (UNBC), its
subsidiaries or affiliates including Union Bank, N.A. (Bank), to the
extent allowed by applicable law and regulation. Such services may
include but are not Limited to (1) the placing of orders for the purchase,
exchange, investment or reinvestment of securities through any
brokerage service conducted by, and (2) the purchase of units of any
registered investment company managed or advised by Bank, UNBC,
or their subsidiaries or affiliates and/or for which Bank, UNBC or their
subsidiaries or affiliates act as custodian or provide other services for
a fee, including, without limitation, the HighMark Group of mutual
funds. The parties hereby acknowledge that the Bank may receive
fees for such services in addition to the fees payable under this
Agreement. Fee schedules for additional services shall be delivered to
the appropriate party in advance of the provision of such services.
Independent fiduciary approval of compensation being paid to the
Bank will be sought in advance to the extent required under applicable
law and regulation.
If Union Bank, N.A. does not have investment discretion, the services
referred to above, as well as any additional services, shall be utilized
only upon the appropriate direction of an authorized party.
(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,
including the nominee name of any depository, 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 as are available;
Section 415(m).Trust 7 3/8/06
(c) To serve as custodian with respect to the Trust assets, to hold assets
or to hold eligible assets at the Depository Trust Company or other
depository;
(d) To employ such agents and counsel as may be reasonably necessary
in administration and protection of the Trust assets and to pay them
reasonable compensation; to employ any broker -dealer covered in the
self -dealing section, and pay to such broker -dealer its standard
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 at par value to the principal of the Trust without
amortization from the Trust, regardless of any law relating thereto;
(e) 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 of the Trust;
(f) To permit such inspections of documents at the principal office of the
Trustee as are required by law, subpoena or demand by United States
or state agency during normal business hours of the Trustee;
(g) To comply with all requirements imposed by law;
(h) To seek written instructions from the Employer on any matter and
await written instructions without incurring any liability. If at any time
the Employer should fail to give directions to the Trustee, the Trustee
may act in the manner that in its discretion it deems advisable under
the circumstances for carrying out the purposes of this Trust. Such
actions shall be conclusive on the Employer and the Participants on
any matter if written notice of the proposed action is given to Employer
five (5) days prior to the action being taken, and the Trustee receives
no response;
(i) To compensate such executive, consultant, record keeper, actuarial,
accounting, investment, appraisal, administrative, clerical, secretarial,
custodial, depository and legal firms, personnel and other employees
or assistants as are engaged by the Employer in connection with the
administration of the Plan and to pay from the Trust the necessary
expenses of such firms, personnel and assistants, to the extent not
paid by the Employer;
(j) To impose a reasonable charge to cover the cost of furnishing to
Participants statements or documents;
(k) To act upon proper written directions of the Employer or any
Participant including directions given by photostatic teletransmission
Section 415(m).Trust 8 3/8/06
using facsimile signature. If oral 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 instructions
taken in Trustee's ordinary course of business shall constitute
conclusive proof of Trustee's receipt or non -receipt of the oral
instructions;
(1) To pay from the Trust the expenses reasonably incurred in the
administration of the Trust;
(m) To maintain insurance for such purposes, in such amounts and with
such companies as the Employer 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 the fiduciary in the case of a breach of a fiduciary obligation by
such fiduciary);
(n) As directed by the Employer, 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 at the times and in the manner specified by
the Plan, and to charge such payments against the Trust and
Accounts with respect to which such benefits are payable;
(o) To exercise and perform any and all of the other powers and duties
specified in this Trust Agreement or the Plan; and 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.
3.3 Delegatee. The Employer may delegate certain authority, powers and duties
to an entity to act in those matters specified in the delegation ("Delegatee").
Any such delegation must be in a writing that names and identifies the
Delegatee, states the effective date of the delegation, specifies the authority
and duties delegated, is executed by the Employer and is acknowledged in
writing by the Delegatee, the Trust Administrator (if not the Delegatee) and
the Trustee. Such delegation shall be effective until the Trustee and the
Trust Administrator are directed in writing by the Employer that the delegation
has been rescinded or modified.
3.4 Directions to Trustee. Except as otherwise provided in this Trust Agreement,
all directions to the Trustee from the Employer or Delegatee must be in
writing and must be signed by the Employer or Delegatee, as the case may
be. For all purposes of this Trust Agreement, direction shall include any
certification, notice, authorization, application or instruction of the Employer,
Delegatee or Trustee appropriately communicated. The above
Section 415(m).Trust 9 3/8/06
notwithstanding direction may be implied if the Employer or Delegatee has
knowledge of the Trustee's intentions and fails to file written objection.
The Trustee shall have the power and duty to comply promptly with all proper
direction of the Employer, or Delegatee, appointed in accordance with the
provisions of this Trust Agreement. In the case of any direction deemed by
the Trustee to be unclear or ambiguous the Trustee may seek written
instructions from the Employer, the Agency or the Delegatee on such matter
and await their written instructions without incurring any liability. If at any time
the Employer or the Delegatee should fail to give directions to the Trustee,
the Trustee may act in the manner that in its discretion seems advisable
under the circumstances for carrying out the purposes of the Trust Program
and/or any Agency Trust which may include not taking any action. The
Trustee may request directions or clarification of directions received and may
delay acting until clarification is received. In the absence of timely direction
or clarification, or if the Trustee considers any direction to be a violation of the
Trust Agreement or any applicable law, the Trustee shall in its sole discretion
take appropriate action, or refuse to act upon a direction.
3.5 Trust Administrator. The Employer has appointed PARS as the Trust
Administrator. The Trust Administrator has accepted its appointment subject
to the Employer's delegation of authority, to act as such, pursuant to Section
3.3 of this Trust Agreement. The Trust Administrator's duties involve the
performance of the following services pursuant to the provisions of this trust
agreement and the Agreement for Administrative Services:
(a) Performing periodic accounting of the Agency Trust;
(b) Directing the Trustee to make distributions from the Agency Trust to
Participants pursuant to the provisions of the Plan and liquidate assets
in order to make such distributions;
(c) Notifying the Investment Fiduciary of the amount of Assets in the
Agency Trust available for further investment and management by the
Investment Fiduciary;
(d) Allocating contributions, earnings and expenses to each Agency Trust;
(e) Directing the Trustee to pay insurance premiums, to pay the fees of
the Trust Administrator and to do such other acts as shall be
appropriate to carry out the intent of the Agency Trusts.
(f) Such other services as the Employer and the Trust Administrator may
agree.
Section 415(m).Trust 10 3/8/06
3.6 Additional Trust Administrator Services. The Employer may at any time
retain the Trust Administrator as its agent to perform any act, keep any
records or accounts and make any computations which are required of the
Employer by this Trust Agreement or by the Plan. The Trust Administrator
shall be separately compensated for such service and such services shall not
be deemed to be contrary to the Trust Agreement.
3.7 Trust Administrator's Compensation. As may be agreed upon from time to
time by the Employer and Trust Administrator, the Trust Administrator will be
paid reasonable compensation for services rendered or reimbursed for
expenses properly and actually incurred in the performance of duties.
3.8 Resignation or Removal of Trust Administrator. The Trust Administrator may
resign at any time by giving at least one hundred twenty (120) days written
notice to the Employer and the Trustee.
ARTICLE IV
TRUSTEE AND EMPLOYER DUTIES
4.1 Legal Duties. The Trustee and Employer shall exercise any of the foregoing
powers from time to time as required by law.
4.2 Payments to Participants
(a) Employer shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each
Participant, that provides a formula or other instructions acceptable to
Trustee for determining the amount so payable, the form in which such
amount is to be paid (as provided for or available under the Plan), and
the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the
Participants in accordance with such Payment Schedule. As directed
by Employer, the Trustee shall make provision for the reporting and
withholding of any federal, state or local taxes that may be required to
be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate
taxing authorities or determine that such amounts have been reported,
withheld and paid by Employer.
(b) The entitlement of a Participant to benefits under the Plan shall be
determined by Employer or such party as it shall designate under the
Plan, and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.
Section 415(m).Trust 11 3/8/06
(c) Employer may make payment of benefits directly to Participants as
they become due under the terms of the Plan. Employer shall notify
Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to Participants. In addition, if the principal
of the Trust, and earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan,
Employer shall make the balance of each such payment as it falls due.
Trustee shall notify Employer where principal and earnings are not
sufficient. Trustee shall have no duty or obligation to enforce or
compel Employer to make payments hereunder. Employer may direct
Trustee to reimburse Employer for payments made directly by
Employer to Participants, and shall provide the Trustee with such
documentation to evidence those direct payments as the Trustee may
reasonably request.
(1) In the event payments are made by Employer directly to
Participants, Employer shall have sole responsibility for the
reporting and withholding of any federal, state, or local taxes
that may be required to be withheld with respect to the payment
of benefits pursuant to the terms of the Plan and shall pay
amounts withheld to the appropriate taxing authority.
(2) Trustee shall have no duty or responsibility with respect to the
above stated reporting, withholding or payment of taxes and
shall have no responsibility to determine that Employer has
provided for such reporting, withholding or payment of such
taxes.
(3) Employer shall indemnify and hold Trustee harmless from any
and all losses, claims, penalties or damages which may occur
as a result of Trustee following in good faith the written direction
of the Employer to reimburse Employer for payments made
hereunder to Participants and arising from Employer's tax
reporting, withholding and payment obligations hereunder.
(d) Upon the satisfaction of all liabilities of the Employer under the Plan to
all Participants the Trustee shall hold or distribute the Trust in
accordance with the written instructions of the Employer. Except as
provided in (c) above, at no time prior to the Employer's Insolvency, as
defined in Article XI, or the satisfaction of all liabilities of the Employer
under the Plan in respect of all Participants having Accounts
hereunder shall any part of the Trust revert to the Employer.
4.3 Accounts and Records. The Trustee shall keep accurate and detailed
records of all investments, receipts, disbursements and all other transactions
required to be done, including such specific records as shall be agreed upon
Section 415(m).Trust 12 3/8/06
in writing between the Employer and the Trustee. All such accounts, books
and records shall be open to inspection and audit at all reasonable times by
the Employer and by the Participants. Within sixty (60) days after the close
of each quarter and Plan year and within sixty (60) days after the resignation
or removal of the Trustee as provided in Article VI hereof, the Trustee shall
render to the Employer 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 account shall set forth the assets and liabilities of the
Trust. The Employer shall have ninety (90) days after the Trustee's mailing
of each such quarterly or final account within which to file with the Trustee
written objections to such account. Upon approval or by failure to file with the
Trustee written objections to such account within the 90-day period, the
Employer shall release and discharge the Trustee from all liability and
accountability to the Employer as to all matters and items set forth in such
account as if such account had been settled and allowed by a decree from a
court of competent jurisdiction, such settlement and allowance to be final and
binding.
Notwithstanding anything herein to the contrary, the Trustee shall have no
duty or responsibility to obtain valuations of any assets of the Trust Fund, the
value of which is not readily determinable on an established market.
Employer shall bear sole responsibility for determining said valuations and
shall be responsible for providing said valuations to Trustee in a timely
manner. Trustee may conclusively rely on such valuations provided by
Employer and shall be indemnified and held harmless by Employer with
respect to such reliance.
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 law. The Trustee shall
have no responsibility to file reports or descriptions, publish information or
make disclosures, registrations or other filings unless directed by the
Employer.
4.5 Follow Employer Direction. The Trustee shall have the power and duty to
comply promptly with all proper directions of the Employer.
4.6 Information to be Provided to Trustee. The Employer shall maintain and
furnish the Trustee with all reports, documents and information as shall be
required by the Trustee to perform its duties and discharge its responsibilities
under this Trust Agreement, including without limitation a certified copy of
each of the Plan and all amendments thereto.
The Trustee shall be entitled to rely on the most recent reports, documents
and information furnished to it by the Employer. The Employer shall be
Section 415(m).Trust 13 3/8/06
required to notify the Trustee as to the termination of employment of any
Participant by death, retirement or otherwise.
The Employer shall arrange for each Investment Manager if appointed
pursuant to Section 2.2, and each insurance company issuing contracts held
by the Trustee pursuant to Section 3.10), to furnish the Trustee with such
valuations and reports as are necessary to enable the Trustee to fulfill its
obligations under this Trust Agreement, and the Trustee shall be fully
protected in relying upon such valuations and reports.
ARTICLE V
RESTRICTIONS ON TRANSFER
5.1 Persons to Receive Payment.
(a) The Trustee shall, except as otherwise provided in section 4.2(d) and
subsection (b) hereunder, pay all amounts payable hereunder only to
the person or persons designated under the Plan or deposit such
amounts to the Participant's checking or savings account as directed
by the Employer and not to any other person or corporation, and only
to the extent of assets held in the Trust, and shall follow written
instructions by the Employer. The Employer's written instructions, to
the Trustee to make distributions or not to make distributions, and the
amount thereof, shall be conclusive on all Participants.
(b) Should any controversy 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 retain the amount in controversy pending resolution of the
controversy or the Trustee may file an action seeking declaratory relief
and/or may interplead the Trust assets in issue, and name as
necessary parties the Employer, the Participants and/or any or all
persons making conflicting demands.
(c) The Trustee shall not be liable for the payment of any interest or
income, except for that earned as a Trust investment, on any amount
withheld or interpleaded under subsection (b).
(d) The expense of the Trustee for taking any action under subsection (b)
shall be paid to the Trustee from the Trust.
5.2 Assignment and Alienation Prohibited. Benefits payable to Participants under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
Section 415(m).Trust 14 3/8/06
garnishment, levy, execution or other legal or equitable process.
Notwithstanding the foregoing, the Trust shall at all times remain subject to
the claims of creditors of the Employer in the event the Employer becomes
Insolvent as provided in Article XI.
ARTICLE VI
RESIGNATION, REMOVAL AND SUCCESSION
6.1 Resignation or Removal of Trustee. Trustee may resign at any time by
written notice to the Employer, which shall be effective thirty (30) days after
receipt of such notice unless Employer and Trustee agree otherwise. The
Employer may remove the Trustee at any time by written notice to the
Trustee, which shall be effective thirty (30) days after receipt of such notice
unless the Trustee and Employer otherwise agree.
6.2 Designation of Successor. Upon notice of the Trustee's resignation or
removal, the Employer shall promptly designate a successor Trustee who will
accept transfer of the assets of the Trust.
If no successor Trustee is designated within thirty (30) days of notice of
Trustee's resignation or removal, then the Trustee may apply to a court of
competent jurisdiction for appointment of a successor or instructions as
provided in Section 6.4 below.
6.3 Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed as soon as administratively feasible
after receipt of notice of resignation, removal or transfer and appointment of
and acceptance by successor Trustee, unless Employer extends the time
limit.
6.4 Court Appointment of Successor. If Trustee resigns or is removed, a
successor shall be appointed, in accordance with Section 6.2 hereof, by the
effective date of resignation or removal under paragraph 6.1 of this section.
If no such appointment has been made, Trustee may apply to a court of
competent jurisdiction for appointment of a successor or for instructions. All
expenses of Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust. Until a successor Trustee has
accepted its appointment and received transfer of the Trust assets, the
Trustee shall be entitled to be compensated for its services according to its
published fee schedule then in effect for acting as Trustee.
6.5 Successor's Powers. A successor Trustee shall have the same powers and
duties as those conferred upon the original Trustee hereunder. A resigning
Section 415(m).Trust 15 3/8/06
Trustee shall transfer the Trust assets and shall deliver the assets of the
Trust to the successor Trustee as soon as practicable. The resigning Trustee
is authorized, however, to reserve such amount 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 all fees
and costs, expenses or attorneys' fees or losses incurred, whether before or
after resignation, due solely to Trustee's holding title to and administration of
Trust assets.
6.6 Successor's Duties. A successor Trustee shall have no duty to audit or
otherwise inquire into the acts and transactions of its predecessor.
ARTICLE VII
AMENDMENT
7.1 Power to Amend. This Trust Agreement may be amended by a written
instrument executed by Trustee and Employer. No such amendment shall
conflict with the terms of the Plan.
ARTICLE VIII
LIABILITIES
8.1 Declaration of Intent. To the full extent permitted by law, it is the intent of this
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 limitation, 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 Liability 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 of the Trust or part thereof which is directed by the
Employer, as applicable.
(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.
Section 415(m).Trust 16 3/8/06
EW
(c) The Trustee shall have no liability for the acts or omissions of the
Employer or Fiduciaries.
(d) The Trustee shall have no liability for following proper directions of
Employer or Employer's designated Fiduciaries, or any Participant
when such directions are made in accordance with this Trust
Agreement and the Plan.
(e) During such period or periods of time, if any, as Employer or
Investment Manager (collectively, "Fiduciary") 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 Fiduciary 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 such Fiduciary. The Trustee shall have no obligation to exercise
any such right unless it is instructed to exercise such right, in writing,
by the Fiduciary within a reasonable time prior to the expiration of such
right.
(f) During such period or periods of time, if any, as a Fiduciary is directing
the investment and management of Trust assets, if such Fiduciary
directs the Trustee 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 Fiduciary 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.
Indemnification.
(a) The Trustee shall not be liable for, and Employer shall indemnify,
defend, and hold the Trustee (including its officers, agents, employees
and attorneys) harmless from and against any claims, demands, loss,
costs, expense or liability imposed on the indemnified party, including
reasonable attorneys' fees and costs incurred by the indemnified party,
arising as a result of (1) any acts taken by the Trustee in accordance
with directions (or failure to act in the absence of directions) from the
Employer, Investment Manager or any other person or entity
authorized to act on their behalf which the Trustee reasonably believes
to have been given by them, or (2) the Employer's active or passive
Section 415(m).Trust 17 3/8/06
negligent act or omission or willful misconduct in the execution or
performance of its duties under this Trust Agreement.
(b) The Employer shall not be liable for, and Trustee shall indemnify,
defend, and hold the Employer (including its officers, agents,
employees and attorneys) harmless from and against any claims,
demands, loss, costs, expense or liability imposed on the indemnified
party, including reasonable attorneys' fees and costs incurred by the
indemnified party, arising as a result of Trustee's active or passive
negligent act or omission or willful misconduct in the execution or
performance of its duties under this Trust Agreement.
(c) Promptly after receipt by an indemnified party of notice or receipt of a
claim or the commencement of any action for which indemnification
may be sought, the indemnified party will notify the indemnifying party
in writing of the receipt or commencement thereof. When the
indemnifying party has agreed to provide a defense as set out above
that party shall assume the defense of such action (including the
employment of counsel, who shall be counsel satisfactory to such
indemnitee) and the payment of expenses, insofar as such action shall
relate to any alleged Liability in respect of which indemnity may be
sought against the indemnifying party. Any indemnified party shall
have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
counsel shall not be at the expense of the indemnifying party unless (i)
the employment of such counsel has been specifically authorized by
the indemnifying party or (ii) the named parties to any such action
(including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential
differing interest between them. The indemnifying party shall not be
liable to indemnify any person for any settlement of any such action
effected without the indemnifying party's consent.
ARTICLE IX
DURATION, TERMINATION AND REPAYMENTS TO EMPLOYER
9.1 Revocation and Termination. The Trust shall not terminate until the date on
which Participants are no longer entitled to benefits pursuant to the terms of
the Plan, unless sooner revoked in accordance with Section 1.2 hereof. Upon
termination of the Trust any assets remaining in the Trust shall be returned to
Employer. In the event the Trust is terminated following the distribution of all
payments and benefits called for herein, from the date of such termination of
the Trust and until the final distribution of the remaining Trust assets, if any,
Section 415(m).Trust 18 3/8/06
the Trustee shall continue to have all the powers provided under this. Trust
Agreement that are necessary or desirable for the orderly liquidation and
distribution of the Trust.
9.2 Duration. This Trust shall continue in full force and effect for the maximum
period of time 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 this Trust
Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Emergencies and Delegation.
(a) In case of an emergency, the Trustee may act in the absence of
directions from any other person having the power and duty to direct
the Trustee with respect to the matter involved and shall incur no
liability in so acting_
(b) By written notice to the Trustee, the Employer 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 Employer, or at its option, the Trust, shall quarterly 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 Trust 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 Employer
with notice of such change at least thirty (30) 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
shall be withdrawn from the Trust and may be reimbursed by the
Employer.
(b) Reasonable counsel fees, reasonable costs, expenses and charges of
the Trustee incurred or made in the performance of its duties,
Section 415(m).Trust 19 3/8/06
expenses relating to investment of the 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, and the Trustee's
charges for issuing distribution checks to Participants or their
representatives shall be paid from, and shall constitute a charge upon
the Trust.
(c) In the event any Participant is determined to be subject to federal
income tax on any amount under this Trust Agreement prior to the time
of payment hereunder, the entire amount determined to be so taxable
shall, at the Employer's direction, be distributed by the Trustee to such
Participant from the Trust. For the above purposes, a Participant shall
be determined to be subject to federal income tax with respect to the
Trust upon the earlier of: (a) a final determination by the United States
Internal Revenue Service ("IRS") addressed to the Participant which is
not appealed to the courts; (b) an opinion of legal counsel designated
in writing by the Employer, addressed to the Employer and the
Trustee, that, by reason of Treasury Regulations, amendments to the
Code, published IRS rulings, court decisions or other substantial
precedent, amounts hereunder subject the Participant to federal
income tax prior to payment. The Employer shall undertake at its
discretion and at its sole expense to defend any tax claims described
herein which are asserted by the IRS against any Participant, including
attorney fees and costs of appeal, and shall have the sole authority to
determine whether or not to appeal any determination made by the
IRS or by a lower court. The Employer also agrees to reimburse any
Participant under this Section for any interest or penalties in respect of
tax claims hereunder upon receipt of documentation thereof.
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
nor inquire as to whether the Trustee has complied with the
requirements hereof.
(b) In any judicial or administrative proceedings, only the Employer 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 Adoption by Affiliated Employer. Any affiliate of the Employer (an "Affiliated
Employer") may adopt one or more of the Employer's Plans with the approval
Section 415(m).Trust 20 3/8/06
of the Employer, and the Affiliated Employer shall concurrently become a
party to this Trust Agreement by giving written notice of its adoption of the
Plan and this Trust Agreement to the Trustee. Upon such written notice, the
Affiliated Employer shall become a signatory to this Trust Agreement.
10.5 Binding Effect; Successor Employer. This Trust Agreement shall be binding
upon and inure to the benefit of any successor to the Employer or its
business as the result of merger, consolidation, reorganization, transfer of
assets or otherwise and any subsequent successor thereto. In the event of
any such merger, consolidation, reorganization, transfer of assets or other
similar transaction, the successor to the Employer or its business or any
subsequent successor thereto shall promptly notify the Trustee in writing of
its successorship and shall promptly supply information required by the
Trustee.
10.6 Relation to Plan. All words and phrases used herein shall have the same
meaning as in the Plan, and this Trust Agreement and the Plan shall be read
and construed together. In the event of any conflict between the terms of the
Plan and this Trust Agreement with respect to the rights and duties of the
Trustee, this Trust Agreement shall control. Whenever in the Plan it is
provided 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 Employer.
10.7 Mediation and Arbitration of Disputes. If a dispute arises under this Trust
Agreement between or among the Employer and Trustee or any Participant,
except as provided in Sections 5.1(b) and 6.4, the parties agree first to try in
good faith to settle the dispute by mediation under the Commercial Mediation
Rules of the American Arbitration Association. Thereafter, any remaining
unresolved controversy or claim arising out of or relating to this Agreement, or
the performance or breach thereof, shall be decided by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and Title 9 of California Code of Civil Procedure Sections 1280 et
seq. The sole arbitrator shall be a retired or former Judge associated with the
American Arbitration Association. Judgement upon any award rendered by
the arbitrator shall be final and may be entered in any court having
jurisdiction. Each party shall bear its own costs, attorney's fees and its share
of arbitration fees. The Alternate Dispute Resolution Agreement in this
Agreement does not constitute a waiver of the parties' rights to a judicial
forum in instances where arbitration would be void under applicable law, and
does not preclude Bank from exercising its rights to interplead the funds of
the Account at the cost of the Account.
10.8 Attorney Fees and Costs. If any action is brought by the Trustee or the
Employer against the other in a court of law in order to compel arbitration
pursuant to Section 10.7 above, the prevailing party in such proceeding to
Section 415(m).Trust 21 3/8/06
compel arbitration shall be entitled to recover from the other party reasonable
attorneys' fees, court costs and necessary disbursements incurred in
connection with such proceeding, including but not limited to copying costs,
filing fees, expert costs and fees and word processing fees.
10.9 Partial Invalidity. Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof. In the event of any such holding, the
Employer and Trustee and, if applicable, Participants, will immediately amend
this Trust Agreement as necessary to remedy any such defect.
10.10 Construction. This Trust Agreement shall be governed by and construed in
accordance with the laws of California.
10.11 Notices. Any notice, report, demand or waiver required or permitted
hereunder shall be in writing, shall be deemed received upon the date of
delivery if given personally or, if given by mail, upon the receipt thereof, and
shall be given personally or by prepaid registered or certified mail, return
receipt requested, addressed to Employer and Trustee as listed below in
Article XII; if to a Participant, to the last mailing address provided to the
Trustee with respect to such individual, provided, however, that if any party or
his or its successor shall have designated a different address by written
notice to the other parties, then to the last address so designated.
ARTICLE XI
DISTRIBUTIONS IN THE EVENT OF INSOLVENCY OF EMPLOYER
11.1 Trustee and Employer Responsibility upon notice of Employer's Insolvency:
(a) Insolvency. Trustee shall cease payment of benefits to Participants if
the Employer is Insolvent. Employer shall be considered "Insolvent"
for purposes of this Trust Agreement if (i) Employer is unable to pay its
debts as they become due, or (ii) Employer is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in Section
1.4 hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Employer under federal and state law as
set forth below.
(1) The Governing Board and the Plan Administrator designated by
the Employer shall have the duty to inform Trustee in writing of
Employer's Insolvency. If a person claiming to be a creditor of
Employer alleges in writing to Trustee that Employer has
Section 415(m).Trust 22 3/8/06
become Insolvent, Trustee shall determine whether Employer is
Insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Participants. If Trustee is
unable to obtain information sufficient to ascertain Insolvency,
Trustee may seek instructions of a court of law or submit the
matter for arbitration before the American Arbitration
Association or interplead the Trust Assets at the expense of the
Trust.
(2) Unless Trustee has actual knowledge of Employer's Insolvency,
or has received written notice from Employer or a person
claiming to be a creditor alleging that Employer is Insolvent,
Trustee shall have no duty to inquire whether Employer is
Insolvent. Trustee may in all events rely on such evidence
concerning Employer's solvency as may be furnished to Trustee
and that provides Trustee with a reasonable basis for making a
determination concerning Employer's solvency.
(3) If at any time Trustee has determined that Employer is
Insolvent, Trustee shall discontinue payments to Participants
and shall hold the assets of the Trust for the benefit of
Employer's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Participants to pursue
their rights as general creditors of Employer with respect to
benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Participants in
accordance with Section 4.2 of this Trust Agreement only after
Trustee has determined that Employer is not Insolvent (or is no
longer Insolvent).
(c) Determination of Insolvency. Upon receipt of the aforesaid written
notice of the Employer's Insolvency, the Trustee shall notify the
Employer, and the Employer, within thirty (30) days of receipt of such
notice, shall engage an arbitrator (the "Arbitrator") acceptable to
Trustee, from the American Arbitration Association to determine the
Employer's solvency or Insolvency. The Employer shall cooperate fully
and assist the Arbitrator, as may be requested by the Arbitrator, in
such determination and shall pay all costs relating to such
determination. The Arbitrator shall notify the Employer and Trustee
separately by registered mail of its findings. If the Arbitrator
determines that the Employer is solvent or if once found Insolvent the
Employer is no longer Insolvent, the Trustee shall resume holding the
Trust assets for the benefit of the Participants and may make any
distributions called for under this Trust Agreement, including any
amounts which should have been distributed during the period when
Section 415(m).Trust 23 3/8/06
the Trustee suspended distributions in response to a notice of the
Employer's Insolvency, including earnings (or losses) on such
suspended distributions. If the Arbitrator determines that the Employer
is Insolvent or is unable to make a conclusive determination of the
Employer's Insolvency, the Trustee shall continue to retain the assets
of the Trust until the Employer's status of solvency or Insolvency is
decided by a court of competent jurisdiction or it distributes all or a
portion of the Trust assets to any duly appointed receiver, trustee in
bankruptcy, custodian or to the Employer's general creditors, but only
as such distribution is ordered by a court of competent jurisdiction.
The Trustee shall have no liability for relying upon the determination of
the Arbitrator as to the Employer's solvency or Insolvency.
(d) If a court of competent jurisdiction orders distribution of only part of the
Trust assets and does not specify the manner in which Trust assets
are to be liquidated, the Trustee shall liquidate Trust assets as directed
by the Employer.
If the Employer fails to provide instructions as to the manner of
liquidation within five (5) business days prior to the date the Trustee is
required to comply with the court's order, the Trustee shall liquidate
and shall have the authority to order any Investment Manager to
liquidate the Trust assets in such manner as the Trustee shall
determine in its sole and absolute discretion. The Trustee shall not be
liable for any damages resulting from the Trustee's exercise in good
faith of its power to liquidate assets as provided in this paragraph.
(e) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to subsection (b)(3)
hereof and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate amount of
all payments due to Participants under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of any
payments made to Participants by Employer in lieu of the payments
provided for hereunder during any such period of discontinuance of
which Trustee has actual knowledge.
Section 415(m).Trust 24 3/8/06
Nothing in this Trust Agreement shall in any manner diminish any right of a Participant
to pursue his or her rights as a general creditor of the Employer with regard to
payments under the Trust or otherwise.
ARTICLE XII
EFFECTIVE DATE
This Trust Agreement shall be effective upon the Trustee's receipt of assets
to be held in trust hereunder, and is signed by the parties on the date(s) set forth below
their names.
U.S. Bank National Association
"Trustee"
'Bizi Michelson Drive) 3-fe 300
(Add ress)
Trw'JIe, CA g2to/2-
By:
(typed or printed name)
Date: /o�"b—
Dana' "d,"Interim Citk Clerk
APP 0, D AS TO FORM:
IddI"-
Ni holas George Rodriguez,
City Attorney
City of Vernon
"Employer", Sponsor of the
City of Vernon PARS Excess Benefit Plan
(Plan)
4305 Santa Fe Avenue
(Address)
Vernon CA 90058
By:
Mark Whit orth City Administrator
(typed or printed name)
Date: /C� -"!5- _/;
THE TRUST ADMINISTRATOR
PUBLIC AGENCY RETIREMENT SERVICES
By:
Title: Pyre, 2Y11C
Date: 1111--112
January 27, 2013 PACIFIC LIFE
Mr. William Fox
Finance Director
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
RE: CITY OF VERNON
PACIFIC LIFE MASTER ANNUITY CONTRACT G-27604-01-0001 & G-27604-01-0002
Dear Mr. Fox:
We are pleased that the City of Vernon has selected Pacific Life Insurance Company for their annuity purchases. This
letter confirms the terms of the annuity purchase under Master Annuity Contract G-27604-01-0001 as agreed to on
January 10, 2013 for twenty-one (21) participants and under Master Annuity Contract G-27604-01-0002 as agreed to on
January 10, 2013 for twelve (12) participants of the City of Vernon PARS Supplementary Retirement Plan 401(a).
Five premiums will be paid by the City of Vernon to Pacific Life Insurance Company through the PARS custodial account
as follows:
Premium Due Date
0-27604-01-0001
Premium Amount
February
20 2013
$432,621.40
February
20 2014
$432,621.40
February
20 2015
$432,621.40
February
19, 2016
$432,621.40
February
21, 2017
$432,621.40
Premium Due Date
G-27604-01-0002
Premium Amount
July
19
2013
$510,699.44
July
18
2014
$510,699.44
July
20
2015
$510,699.44
July
20
2016
$510,699.44
July
20
2017
$510,699.44
Interest at the Prime rate will be charged for late payment of scheduled premiums.
The armuity purchase is subject to the following specifications and/or assumptions:
1. The City of Vernon PARS Supplementary Retirement Plan 401(a) is
a "qualified" plan.
2. California state premium tax at the "qualified" plan rate of 0.5% is included in the premiums.
3. No commissions are payable.
4. The Purchase Date is January 10, 2013 for both contracts, with an effective date of March 1, 2013 for contract
G-27604-01-0001, and an effective date of August 1, 2013 for contract G-27601-01-0002. There will be a refund of
premium for any death occurring prior to the effective date. If a death benefit is to be paid by Pacific Life, the
premium refund will be subject to an adjustment.
PACIFIC LIFE INSURANCE COMPANY
700 Newport Center Drive, Newport Beach, California 92660-6397 Tel (949) 219-3011
January 27, 2013
Page 2 of 2
S. For contract G-27604-0 1-000 1, there is one retroactive benefit payment for the month of February involved in this
purchase. For contract G-27604-01-0002, there is one retroactive benefit payment for the month of July involved in
this purchase.
6. The annuities purchased are shown in the attached Illustration of Benefits.
7. Pacific Life will be responsible for tax reporting only for those months we actually issue individual checks to the
annuitants. Annuitant data for benefit payment purposes has not been received.
8. The benefits for the annuitants to be assumed by Pacific Life will be paid in the amounts and in the annuity forms as
indicated in the attached Illustration of Benefits.
9. There will be no post -retirement death benefits other than those inherent in the annuity forms/options elected,
10. There are no employee contributions.
11. There are no cost -of -living adjustments for these annuities.
12. The annuities cannot be surrendered for cash after purchase.
Any changes to the premium due to revision in the participant data or annuity specifications will be based on the same
assumptions used in the original pricing, with the exception of the interest rate applicable to the "net" difference in
premium. The rate used will be an impartially determined rate equal to the net pricing rate used for this annuity purchase,
adjusted by the change front the date of purchase (January 10, 2013 for both contracts) to the date on which revised
calculations are completed, in the yield to maturity of the 10-Year U.S. Treasury Bond.
Pacific Life has been a major provider of guaranteed annuities for many years and is pleased to count the
City of Vernon as one of its valued clients.
Enclosed is our standard disclosure information. Please complete the form and return it as soon as possible to Ms. Shauna
Volcan, Manager, PIan Implementation. Also enclosed is our Privacy Statement to Customers.
This letter must be signed by a person authorized to represent the Plan for the purchase of annuities in the spaces provided
below and returned to Pacific Life to my attention. Please retain a copy of the signed letter for your records.
Thank you for selecting Pacific Life for this annuity purchase.
Sinc ly, ---
L
Linda Balani
Sr. Business Development Coordinator
Retirement Solutions Division
Pacific Life Insurance Company
949-219-4092
Enclosures
cc: Mr. Patrick Pacheco, PARS
I HAVE, READ AND UNDERSTAND THE CONDITIONS OF SALE AS OUTLINE' D IN THIS LETTER AND
ACCI=rF
AU ED P SENTATIV OF THE PLAN DATE
p! 7-/,V TITLE
DISCLOSURE OF SALES COMMISSIONS
(INCLUDING A DESCRIPTION OF ANY
CHARGES, FEES, DISCOUNTS, PENALTIES OR ADJUSTMENTS)
(401(A)) MASTER ANNUITY CONTRACT
G-27604-01-0001 & G-27604-01-0002
SALES COMMISSIONS
No Commissions are payable under the Policy.
AGENT OF RECORD IS AFFILIATION
Not applicable.
CHARGES, FEES. DISCOUNTS, PENALTIES OR ADJUSTMENTS
Following is a brief description of the charges, fees, discounts, penalties or adjustments which may be imposed under
the recommended Policy. The actual charges, fees, discounts, penalties or adjustments made under the Policy shall
be in accordance with the actual provisions of the Policy. To the extent there is any difference between this brief
description and the actual provisions of the Policy, the actual provisions of the Policy shall prevail.
If an Annuitant's date of birth (as it appears in the information provided to Pacific Life) is incorrect, the amount of
Annuity Payment payable to such Annuitant shall be that which the portion of the gross premium paid to Pacific Life
for such Annuitant would have purchased on the effective date of the Policy, had his or her correct date of bath been
used. Any overpayment or underpayment by Pacific Life on account of any misstatement of date of birth shall, with
interest thereon at five percent (5%) per annum, be charged against or added to the current or next succeeding
payment or payments to be made by Pacific Life under this Policy.
In the event a scheduled premium is not paid, the annuity amount for the involved Annuitant shall be reduced as
follows:
1. The same rate used to purchase the original annuity shall be used to determine a new annuity amount that is
equivalent, as of the original purchase date, to the present value of premiums paid, but reflecting the annuity
amounts paid to the date of adjustment and a $300 per annuity recalculation charge.
2. The annuity amount determined in (1.) above shall be further reduced if the yield to maturity of a U.S. The
Treasury bond with a maturity closest to 10 years at the time of purchase, "T" at the time of recalculation, is
greater than the yield to maturity of the same U.S. Treasury bond, 1.91% at the time of purchase. For
contract G-27604-01-0001, the reduction percentage under this part shall equal seven (7) times the amount
by which T exceeds 1.91%, that is [7 x (T-1.91%)]. For contract G-27604-01-0002, the reduction
percentage under this part shall equal thirteen (13) times the amount by which T exceeds 1.91 %, that is [13 x
(T- 1.91%)].
ACKNOWLEDGEMENT
I aclmowledge that I have received and read a copy of this Disclosure of Sales Conmaissions and Agent of Record's
Affiliation (including a description of any charges, fees, discounts, penalties or adjustments), and that I am a
fiduciary of the above -named Plan. I hereby approve the purchase of the annuity on behalf of the Plan with Plan
assets.
By:
Plan Vduciary
Date: l9 -13
PACIFIC LIFE
M o n o N o f- 0 �p s� I n a IN W 7 m m W
I�INmQ U)M.aO �O mO7 0?NV 0m0N1�(O W
ODNN �MMj O) O W V'a0 ..��{{('� lV
T ,N NO m W 98 ot2
a0 W 0'N NN O) W tel Om rNn
L p 1 r _ rr r N r r r r M
C m LV
* GO
w w w w w w w w w w w w w w w w w w w w w w
Z�
U y
� r r r r r r r r r r r r r r r r r r r r r
d a
as
r
r MM M M M oM M_ OM OM MMMMM pM M M M pM M_ ppM pM
.Z'f/l .rd•N� I N` 1==��V N N Nr4
_
C p O O O 0 0 O O O O
a 00oc" eQ� �MM HO00§099§g
O O O O O O O O O O O O O O O O O O P O O
W
LL
M
W F
W
ra_
za�m
ma
o5
�z
p
z
a W
LL LL
rn
o
+y
v
{`
N
o
O
'(� 0
t4S
OWIXI-
1pp�M MM ao N t`NW In mfNOm
f0
YA
�Qm
W W W W
�j�No'D f�f+SaC r f� Nt7 tea plrC�O �tD
iv
V
US 61 d
•p
f�
aa?aa1:
R: u
z
>11
mV
+�
a W
w
LLLL W M MMLLLLLLLL LL U-222U•222 �22
�wKC
mod
0 Z
m t
o -
,
.0
UZ
ro
c0.
z�v
v ° u
m°' �!=
QQQQQ000000 0 o�m��m�
W
O.
ai
E >
U,
zzz�Zmmmmmm�m�m rrr
7 10 U
7aFm-r0.
C7
=moo
I°-O
W
U-
=
J
Q
�m
FF
c2'c°�"�m vm mmmmmmmmmmm
'�.
LL.
800•"FFFFFFFpFFFFpFpFpFpF•pF•p
Q
c F
wm..pqi N o�i a9i N N N Ol m a� m
N.
�.
a
Q
�JJPpLLIs LLLL LLL IL IL IL fi LL li 'WIr IL I'SL IA.
�pp
cV
- -
000 00000000
�.
c "
—-————
LL
F
,o
m m m m m m m m m m m m
r
0'
mmmmmmmm
mmmmma>mmm%w
w
m:
ix
aattatxtra�aaaaaaawa
aaaa
Z
w
m
a
�
LL
€
p o E Q
o Tp p a "g. Q y o� 8 E
4
w
w
m
M
i7i
_
p O c Q E Q Ning
g
,�
0 Q
i g y 0
dm
�mEmcE.�tvd--Ecg
z
O
a
y
�LLza3Uc�c�'z�acnv�wFFa2v,a
rNM V In h oe W O^vtM 00 mC,
`-
a
~
O
F
OOrMOl O)lf)�[00 O O
NqMhN liNNci O 7
Aw c~oOo�tiN o n r._ 0 cOD 0 w
,C n rf�!D 00 co fD to 0 co 0 w
M N M L
m r r
H
m
HI
6969 w w 49 IA 696969 i969 w V!
rn�Nrn�rnrcc�m Lf)ccoo
rp) rn _! r 0)
C I N C N M M M M a
�Z4 u ZaZ?5Z;5 oc3
LLmnL 2m2222M
d � �
E N d m
Z av 1
,
a"��u aaggaaaaa000
zzzzzto co
o c
F
>,�.).TfnNG7Nto
0000
F. Y•a�.� a� m 0000C)� S E a
J J.JJ 00 000 X X
♦' �' LL tL IL W
d
� O N
aU m
�- 0000-----o00 E
V) Y
10 N d N N m N ID 0) N
N d N CD m N a)N m N N N N z ci
(L E
LL
ui
co
8 z
_ pp w o
N U m
Q a� ccw u> M a)E-' e x
o ,LLB oa X_' C z m
0 in
0Ey.E-cyySy��o•ofYmy03 5,a >
O
cc 3 O- oL0 r= 754
U
�OQ'F-�dOCcAS�SSs
r Nt7 sf N(O fr O�Of OrN F�
r r r Q
Our Privacy Promise
• We do not sell information about you.
• We do not share your information with anyone else for marketing purposes.
• We use your personal information only to help transact the business you have with us.
Privacy Notice to Our Customers
As our customer, you trust us to help you achieve financial success and security. We provide this
notice because you have a right to know how we protect the privacy of the personal information
you share with us. Your knowledge of our privacy principles and practices will confirm the trust
you have placed in us.
What Personal Information Do We Collect?
The type of information that we collect depends on the type of product or service you request.
This includes:
• Information you provide on an application or other form (for example, name, address, social
security number, or income).
• Information we get from other sources such as credit reporting agencies and information to
verify employment or income.
• Information about your business and history with us.
• Medical or health information you permit us to receive from doctors or other health care
providers.
Most of the personal information we collect is obtained from you. We collect personal information
needed only to service and administer your business with us.
How Do We Use and Disclose Your Information?
The main use of your information is to confirm your identity in the course of business that we
perform at your request. We also use your information to underwrite policies or contracts,
process claims, and service your accounts with us.
Information may be disclosed to other entities that provide business services to us related to our
transactions with you. This includes administrative, claims, or audit services. Examples are your
agent, broker, or a reinsurance company. Before we disclose your information, these entities
must agree to keep it private.
We may also share information within our corporate family to service your business. For
example, our business units provide administrative services, policy document preparation and
delivery, and claims processing.
If necessary, we disclose information when it is required by law. An example is a routine filing to
the Internal Revenue Service (such as a Form 1099). We may also disclose certain information
to other entities to help us report or prevent fraud. Examples are reports to a regulatory or law
enforcement agency.
What Medical and Health Information Do We Collect?
We may receive medical or health information about you. This may be on an application for
insurance or when we process a claim, as approved by you in writing. We do not share that
medical or health information among our family of companies. We do not share it with unrelated
companies, except as needed to process your transactions. This may be necessary to provide
services that you have requested related to your insurance coverage or payment.
1 of 2
How Do We Protect the Security of Your Information?
We have policies to maintain physical, electronic, and procedural safeguards to protect the
confidentiality of your personal information. Access to personal information is available only to
those people who need to know it in order to service your business.
Should your relationship with us end, we will continue to follow the privacy policies described in
this notice to the extent that we retain information about you. If we no longer need to retain that
information, we will dispose of it in a secure manner.
Do You Need to Do Anything?
It is not necessary for you to take any action. This is because we do not share your information
except to service the business you have requested from us. You do not need to "opt -out' or "opt -
in" as you may have done with other financial companies.
How Can You See And Correct Your Information?
Generally, you have the right to review the personal information we have about you. You must
request this in writing. We will not disclose information we have collected in connection with a claim
or lawsuit. If you believe that any of the information we have is in error, you may write us and
request a correction. Where justified, corrections will be made.
Please direct inquiries about accessing or correcting your information to the address below:
Pacific Life Privacy Office
700 Newport Center Drive Newport Beach, CA 92660
If you have questions regarding Pacific Life's Privacy Promise, please call toll free
(877) 722-7848
Please have a copy of your policy or contract available when you call so we may provide you with
the best service.
You may also review this privacy notice and Pacific Life's Web Site privacy notice at
www.PacificLife.com
Pacific Life will send you a copy of our privacy notice annually.
Pacific Life, as referred to in this notice, includes:
Pacific Life Insurance Company
Pacific Select Distributors, Inc.
2 of 2
/�§L
PACIFIC LIFE
April 9, 2014
Mr. William Fox
Finance Director
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
RE: CITY OF VERNON
PACIFIC LIFE MASTER ANNUITY CONTRACT G-27604-02-0001
Dear Mr. Fox:
We are pleased that the City of Vernon has selected Pacific Life Insurance Company for their additional annuity purchase.
This letter confirms the terms of the annuity purchase under Master Annuity Contract G-27604-02-0001 as agreed to on
April 3, 2014 for one (1) participant of the City of Vernon PARS Supplementary Retirement Plan 401(a).
Four premiums will be paid by the City of Vernon to Pacific Life Insurance Company through the PARS custodial
account as follows:
Premium Due Date
Premium Amount
April 18, 2014
$89,060.80
February 20 2015
$89,060.80
February 19, 2016
$89,060.80
February 20, 2017
$89,060.80
Interest at the Prime rate will be charged for late payment of scheduled premiums.
The annuity purchase is subject to the following specifications and/or assumptions:
1. The City of Vernon PARS Supplementary Retirement Plan 401(a) is a "qualified" plan.
2. California state premium tax at the "qualified" plan rate of 0.5% is included in the premiums.
3. No commissions are payable.
4. The Purchase Date is April 3, 2014, with an effective date of May 1, 2014. There will be a refund of premium for any
death occurring prior to May 1, 2014. If a death benefit is to be paid by Pacific Life, the premium refund will be
subject to an adjustment.
5. There are twelve (12) retroactive benefit payments due for the months of May 2013 through April 2014 involved in
this purchase.
6. The annuity purchased is shown in the attached Illustration of Benefits.
7. Pacific Life will be responsible for tax reporting only for those months we actually issue individual checks to the
annuitant. Annuitant data for benefit payment purposes has been received.
PACIFIC LIFE INSURANCE COMPANY
700 Newport Center Drive, Newport Beach, California 92660-6397 Tel (949) 219-3011
April 9, 2014
Page 2 of 2
8. The benefit for the annuitant to be assumed by Pacific Life will be paid in the amount and in the annuity form as
indicated in the attached Illustration of Benefits.
9. There will be no post -retirement death benefits other than those inherent in the annuity form/option elected.
10. There are no employee contributions.
11. There are no cost -of -living adjustments for this annuity.
12. The annuity cannot be surrendered for cash after purchase.
Any changes to the premium due to revision in the participant data or annuity specifications will be based on the same
assumptions used in the original pricing, with the exception of the interest rate applicable to the "net" difference in
premium. The rate used will be an impartially determined rate equal to the net pricing rate used for this annuity purchase,
adjusted by the change from the date of purchase (April 3, 2014) to the date on which revised calculations are completed,
in the yield to maturity of the 10-Year U.S. Treasury Bond.
Pacific Life has been a major provider of guaranteed annuities for many years and is pleased to count the
City of Vernon as one of its valued clients.
Enclosed is our standard disclosure information. Please complete the form and return it as soon as possible to Ms. Shauna
Volcan, Manager, Plan Implementation. Also enclosed is our Privacy Statement to Customers.
This letter must be signed by a person authorized to represent the Plan for the purchase of annuities in the spaces provided
below and returned to Pacific Life to my attention. Please retain a copy of the signed letter for your records.
Thank you for selecting Pacific Life for this annuity purchase.
Sincerely
Ez�
Sr. Business Development Coordinator
Retirement Solutions Division
Pacific Life Insurance Company
949-219-4092
Enclosures
cc: Mr. Patrick Pacheco, PARS
I HAVE READ AND UNDERSTAND THE CONDITIONS OF SALE AS OUTLINED IN THIS LETTER AND
ACCEPT,THE TERMS. �W7
AUTHORIZED REPRE NTATIVE OF THE PLAN DATE
J K6CT°', OF 5)NAN C E
TITLE
DISCLOSURE OF SALES COMMISSIONS
(INCLUDING A DESCRIPTION OF ANY
CHARGES, FEES, DISCOUNTS, PENALTIES OR ADJUSTMENTS)
(401(A)) MASTER ANNUITY CONTRACT
G-27604-02-0001
SALES COMMISSIONS
No Commissions are payable under the Policy.
AGENT OF RECORD'S AFFILIATION
Not applicable.
CHARGES, FEES, DISCOUNTS, PENALTIES OR ADJUSTMENTS
Following is a brief description of the charges, fees, discounts, penalties or adjustments which may be imposed under
the recommended Policy. The actual charges, fees, discounts, penalties or adjustments made under the Policy shall
be in accordance with the actual provisions of the Policy. To the extent there is any difference between this brief
description and the actual provisions of the Policy, the actual provisions of the Policy shall prevail.
If an Annuitant's date of birth (as it appears in the information provided to Pacific Life) is incorrect, the amount of
Annuity Payment payable to such Annuitant shall be that which the portion of the gross premium paid to Pacific Life
for such Annuitant would have purchased on the effective date of the Policy, had his or her correct date of birth been
used. Any overpayment or underpayment by Pacific Life on account of any misstatement of date of birth shall, with
interest thereon at five percent (5%) per annum, be charged against or added to the current or next succeeding
payment or payments to be made by Pacific Life under this Policy.
In the event a scheduled premium is not paid, the annuity amount for the involved Annuitant shall be reduced as
follows:
1. The same rate used to purchase the original annuity shall be used to determine a new annuity amount that is
equivalent, as of the original purchase date, to the present value of premiums paid, but reflecting the annuity
amounts paid to the date of adjustment and a $300 per annuity recalculation charge.
2. The annuity amount determined in (I.) above shall be further reduced if the yield to maturity of a U.S.
Treasury bond with a maturity closest to 10 years at the time of purchase, "T" at the time of recalculation, is
greater than the yield to maturity of the same U.S. Treasury bond, 2.80% at the time of purchase. The
reduction percentage under this part shall equal thirteen (13) times the amount by which T exceeds 2.80%,
that is (13 x (T- 2.80%)].
ACKNOWLEDGEMENT
I acknowledge that I have received and read a copy of this Disclosure of Sales Commissions and Agent of Record's
Affiliation (including a description of any charges, fees, discounts, penalties or adjustments), and that I am a
fiduciary of the above -named Plan. I hereby approve the purchase of the annuity on behalf of the Plan with Plan
assets.
By: 4j4v !2��
Plan Fiduciary 2 I
Date: "��/ 14
PACIFIC LIFE
T o 0
r
C 4. .-
iR V►
$
Ems
z m
a E z
c ~ $
z
W
N � �
LL
W
•' eo LU
3 J
� t �
C O
c � Z
13) O
E
R
r OR
Our Privacy Promise
• We do not sell information about you.
• We do not share your information with anyone else for marketing purposes.
• We use your personal information only to help transact the business you have with us.
Privacy Notice to Our Customers
As our customer, you trust us to help you achieve financial success and security. We provide this
notice because you have a right to know how we protect the privacy of the personal information
you share with us. Your knowledge of our privacy principles and practices will confirm the trust
you have placed in us.
What Personal Information Do We Collect?
The type of information that we collect depends on the type of product or service you request.
This includes:
• Information you provide on an application or other form (for example, name, address, social
security number, or income).
• Information we get from other sources such as credit reporting agencies and information to
verify employment or income.
• Information about your business and history with us.
• Medical or health information you permit us to receive from doctors or other health care
providers.
Most of the personal information we collect is obtained from you. We collect personal information
needed only to service and administer your business with us.
How Do We Use and Disclose Your Information?
The main use of your information is to confirm your identity in the course of business that we
perform at your request. We also use your information to underwrite policies or contracts,
process claims, and service your accounts with us.
Information may be disclosed to other entities that provide business services to us related to our
transactions with you. This includes administrative, claims, or audit services. Examples are your
agent, broker, or a reinsurance company. Before we disclose your information, these entities
must agree to keep it private.
We may also share information within our corporate family to service your business. For
example, our business units provide administrative services, policy document preparation and
delivery, and claims processing.
If necessary, we disclose information when it is required by law. An example is a routine filing to
the Internal Revenue Service (such as a Form 1099). We may also disclose certain information
to other entities to help us report or prevent fraud. Examples are reports to a regulatory or law
enforcement agency.
What Medical and Health Information Do We Collect?
We may receive medical or health information about you. This may be on an application for
insurance or when we process a claim, as approved by you in writing. We do not share that
medical or health information among our family of companies. We do not share it with unrelated
companies, except as needed to process your transactions. This may be necessary to provide
services that you have requested related to your insurance coverage or payment.
1 of 2
How Do We Protect the Security of Your Information?
We have policies to maintain physical, electronic, and procedural safeguards to protect the
confidentiality of your personal information. Access to personal information is available only to
those people who need to know it in order to service your business.
Should your relationship with us end, we will continue to follow the privacy policies described in
this notice to the extent that we retain information about you. If we no longer need to retain that
information, we will dispose of it in a secure manner.
Do You Need to Do Anything?
It is not necessary for you to take any action. This is because we do not share your information
except to service the business you have requested from us. You do not need to "opt -out" or "opt -
in" as you may have done with other financial companies.
How Can You See And Correct Your Information?
Generally, you have the right to review the personal information we have about you. You must
request this in writing. We will not disclose information we have collected in connection with a claim
or lawsuit. If you believe that any of the information we have is in error, you may write us and
request a correction. Where justified, corrections will be made.
Please direct inquiries about accessing or correcting your information to the address below:
Pacific Life Privacy Office
700 Newport Center Drive Newport Beach, CA 92660
If you have questions regarding Pacific Life's Privacy Promise, please call toll free
(877) 722.7848
Please have a copy of your policy or contract available when you call so we may provide you with
the best service.
You may also review this privacy notice and Pacific Life's Web Site privacy notice at
www.PacificLife.com
Pacific Life will send you a copy of our privacy notice annually.
Pacific Life, as referred to in this notice, includes:
Pacific Life Insurance Company
Pacific Select Distributors, Inc.
2of2