Delano Municipal Code Ch. 2.52 Employee Pension Plan

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Editor's note— Ord. No. 2011-1221, § 1(Exh. 1), adopted Feb. 7, 2011, amended Ch. 2.52 in its entirety to read as herein set out. Former Ch. 2.52., §§ 2.52.010—2.52.120, pertained to similar subject matter, and derived from: Ord. No. 818; Ord. No. 929, §§ 1.01—10.15, 1992; Ord. No. 938, §§ 1—6, 1992; Ord. No. 941, §§ 1—3, 1993; Ord. No. 1039, § 1, 2000; Ord. No. 1126, § 1(Exh. A), 2005; Ord. No. 1127, § 1(Exh. A), 2005; Ord. No. 2010-1213, § 1, adopted May 3, 2010; and Ord. No. 2011-1220, § 1(Exh. A), adopted Jan. 24, 2011.

A. Effective June 1, 1967, the City of Delano established this City of Delano Employee Pension Plan for the benefit of its eligible employees. Since then, the City has amended the Plan on various occasions.

B. Effective July 1, 2010, the City Council again hereby restates the Plan as set forth below, in order to conform its terms to the applicable requirements of the Internal Revenue Code of 1986, and to make certain other revisions intended to clarify the intended operation of the Plan.

C. This Plan restatement will not reduce any Participant's accrued benefits under the Plan. The restatement will apply only to Participants who are Eligible Employees anytime on or after July 1, 2010. Benefits under the Plan for any Participant who retired or terminated before that date will be determined in accordance with the Plan provisions that were in effect on the Participant's date of retirement or termination of employment.

D. The purpose of the Plan is to provide benefits to the City's eligible employees upon retirement, prior death, or disability. The Plan generally covers full-time, regular employees of the City, except excluded public safety officers. Effective June 25, 2005, unless they elected otherwise, all public safety officers then employed by the City ceased to participate in the Plan and became covered by the City under the CalPERS retirement program. In addition, all public safety officers hired on or after that date are covered under CalPERS, not under this Plan. Accordingly, the only public safety officers covered by this Plan are those who terminated City employment with a vested interest under this Plan before June 25, 2005, and those who were employed on that date but who elected to remain covered by this Plan instead of transferring to CalPERS.

E. This Plan is intended to meet the applicable requirements to be a qualified tax-exempt retirement plan under section 401(a) of the Internal Revenue Code.

F. The Plan is funded by both City and Employee contributions. All amounts contributed to the Plan, and all earnings on those amounts, are held in Trust for the benefit of Participants. All amounts distributed under the Plan are paid from the Trust.

G. The Trust was established under the terms of a trust agreement, which is hereby incorporated into, and made a part of the Plan.

H. Unless otherwise specified, capitalized terms are defined in Section 2.52.020.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011)

"Account" means the account established under the Plan for each Participant in order to record the Participant's contributions made to the Plan pursuant to Subsection 2.52.040.B (including any required Participant contributions paid by the Employer in accordance with Subsection 2.52.040.B.4). The Account balance will be credited with interest at six percent per annum, compounded annually.

"Actuarial Equivalent" means the equivalent of a given benefit under the Plan, or a given amount payable in another manner or by other means, determined conclusively by or under the direction of the Committee in accordance with actuarial principles, methods and assumptions which are found to be appropriate by the Plan's Actuary (and which may differ from those used for the purpose of Subsection 2.52.040.A). Such assumptions will include: (1) an interest rate of eight percent compounded annually; (2) the 1971 Group Annuity Mortality Table with separate mortality tables for men and women related to credited service prior to July 1, 1983; and (3) the unisex table for credited service after July 1, 1983, which is the 1971 Group Annuity Mortality Table for male lives with ages set back two years.

"Actuary" means an actuary who has been enrolled by the Joint Board for the enrollment of Actuaries and who has been employed or engaged to recommend the actuarial cost method to be used in determining the Plan's liabilities to make actuarial valuations of the liabilities under the Plan, to recommend the amount of contributions to be made, and to perform such other services deemed necessary or advisable in connection with the administration of the Plan.

"Alternate Payee" means a Spouse, former Spouse, Domestic Partner, former Domestic Partner, child or dependent of a Participant who is recognized by a Qualified Domestic Relations Order as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to the Participant.

"Annuity Starting Date" means: (i) the first day of the first period for which an amount is payable as an annuity; or (ii) in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the Participant to such benefit. In the case of a disability benefit, the first day of the first period for which a benefit is to be received by reason of disability shall be treated as the Annuity Starting Date only if such benefit is not an auxiliary benefit.

"Beneficiary" means the person or persons designated by the Participant, at the time and in the manner specified by the Committee, to receive the Participant's benefits under the Plan upon his or her death. The Participant has the right to change or revoke such designation from time to time by filing a new designation or notice of revocation with the Committee. If the Participant has a Spouse or Domestic Partner, the Participant's designation of a Beneficiary other than the Spouse or Domestic Partner will be valid only with the written consent of the Spouse or Domestic Partner; such consent must be filed at the time and in the manner specified by the Committee. If a Participant marries or enters into a registered domestic partnership, the Participant's prior designation of a Beneficiary other than the Spouse or Domestic Partner will automatically terminate. If upon his or her death, the Participant does not have a valid Beneficiary designation on file, or if the no designated Beneficiary survives the Participant, the Beneficiary will be the Participant's surviving Spouse or Domestic Partner; if there is no surviving Spouse or Domestic Partner, the Participant's benefits will be paid to his or her estate.

"Code" means the Internal Revenue Code of 1986, as amended and any successor statute thereto, and any regulations promulgated thereunder.

"Committee" means a committee of five members including two elected by General Participants, and three appointed by the Mayor of the City of Delano, with approval of the City Council in accordance with Section 2.52.080.

"Compensation" means straight time basic wages or salaries paid to an Eligible Employee by the Employer for personal services rendered, including any "elective deferrals" (within the meaning of Section 402(g)(3) of the Code) withheld from the Employee's gross income by the Employer that are not includible in the Employee's gross income by reason of Sections 125, 132(f)(4) or 457(b) of the Code, but excluding bonuses, commissions, overtime pay, bilingual pay, educational pay, incentive pay, longevity pay, expense reimbursements, and employer contributions to, and benefits from, benefit plans sponsored by the Employer.

For Plan Years beginning on or after January 1, 1989, and before January 1, 1996, in no event may a Participant's annual Compensation exceed two hundred thousand dollars, as adjusted at the same time and in the same manner as section 415(d) of the Code.

For Plan Years beginning on or after January 1, 1996, and before January 1, 2002, the annual Compensation of each Participant taken into account for determining all benefits provided under the Plan for any Plan Year must not exceed one hundred fifty thousand dollars, as adjusted for the cost-of-living increases in accordance with section 401(a)(17)(B) of the Code.

For Plan Years beginning on or after January 1, 2002, the annual Compensation of each Participant taken into account in determining all benefits under the Plan for any Plan Year must not exceed $200,000, as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Code.

In determining benefit accruals for Plan Years beginning after December 31, 2001, the annual Compensation limit in this Section for determination periods beginning before January 1, 2002 is two hundred thousand dollars if a Participant has an Hour of Service on or after January 1, 2002.

The cost-of-living adjustment in effect for a calendar year applies to annual Compensation for the Plan Year that begins with or within such calendar year.

If a determination period consists of fewer than twelve months, the annual Compensation limit is an amount equal to the otherwise applicable annual Compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve.

"Domestic Partner" means a person who has entered into a registered domestic partnership with a Participant or a former Participant in accordance with Division 2.5 of the California Family Code, as amended.

"Early Retirement Age" means age fifty-five for a General Participant or age fifty for a Safety Participant.

"Early Retirement Date" means the early retirement date elected by a Participant, which date may be the first day of any month coinciding with or next following the date the Participant's attainment of Early Retirement Age but before his or her attainment of Normal Retirement Age.

"Eligible Employee" is defined in Subsection 252.030.A.

"Employee" means each individual who is compensated by the Employer for service rendered to the Employer and who is classified by the Employer as a common law employee. The term Employee does not include any individual who is classified by the Employer as an independent contractor, consultant or a "leased employee," as defined in Code section 414(n), even if a court or administrative agency later determines that such individual is a common law employee.

"Employer" means the City of Delano.

"Final Average Compensation" means the average of a Participant's monthly Compensation in the 36 consecutive calendar months which produce the highest average. If a Participant does not have thirty-six consecutive calendar months of Compensation, Final Average Compensation will be the Participant's average monthly Compensation for the last 36 full months preceding the termination of the Participant's employment with the Employer in which the Participant had Compensation.

"Limitation Year" means the Plan Year.

"Normal Retirement Age" means age sixty for a General Participant, or age fifty-five for a Safety Participant.

"Normal Retirement Date" means the first day of the month coinciding with or following the Participant's attainment of Normal Retirement Age.

"One-Year Break in Service" means a twelve-consecutive-month period during which a Participant is not employed by the Employer.

"Participant" means a person who begins participation in the Plan under Subsection 2.52.030.B, and whose participation has not terminated under Subsection 2.52.030.C. A "Safety Participant" is a Participant who is employed by the Employer as a sworn police officer with the power to arrest or a firefighter. A "General Participant" is any Participant other than a Safety Participant.

"Plan" means this City of Delano Employee Pension Plan, as it may be amended from time to time.

"Plan Year" means the twelve-month period beginning July 1 and ending June 30.

"Qualified Domestic Relations Order" is defined in Subsection 2.52.090.M.

"Spouse" means the person who is legally married to a Participant or a former Participant.

"Total and Permanent Disability" means the condition of being totally and permanently disabled as provided herein. A Participant shall be deemed to be totally and permanently disabled when: (a) the Participant is entitled to receive Social Security disability benefits; and (b) on the basis of proof satisfactory to the Committee, the Committee determines that as a result of any physical or mental condition the Participant is totally prevented from engaging in any regular occupation or employment for wage or profit (except such employment as is found by the Committee to be for purposes of rehabilitation) and the condition will be permanent, total and continuous for the remainder of the Participant's life. For purposes of making such determination, the Committee may require a Participant to submit to a medical examination and to such reexamination as the Committee may deem necessary, and such medical examination or reexamination may be made by such competent physician or physicians or clinic or hospital as the Committee may select, at no cost to the Participant. A Participant shall not be deemed disabled for the purposes of this Section if, on the basis of proof satisfactory to it, the Committee determines that the Participant's disability arose from any intentionally self-inflicted injury or injury resulting from participation in any criminal undertaking or from service in the armed forces of any country, or consists of chronic alcoholism or addiction to narcotics or drugs (or injury or disease resulting therefrom). The Plan does not provide a disability pension other than regular retirement benefits as described under Section 2.52.050.

"Trust" means the trust established by a trust agreement with the Trustee, under which all assets under the Plan are held. All contributions under the Plan must be deposited in the Trust. The Trust will be credited for contributions and earnings, and will be debited for losses, distributions, and reasonable expenses. The Trust is maintained for the exclusive purpose of providing benefits to Participants and their Beneficiaries.

"Trustee" means the individual or individuals, trust company, bank, insurance company or savings and loan association who are so designated in accordance with the terms of the trust agreement.

"Vested" means a Participant has a nonforfeitable interest to a retirement benefit under the Plan. A Participant's vested interest is determined under Subsection 2.52.050.D.2. A Participant is not Vested for purposes of the Plan unless and until he or she attains a nonforfeitable interest under Subsection 2.52.050.D.2.

"Year of Service" means each successive twelve-consecutive-month period beginning with a Participant's commencement or recommencement of employment with the Employer as an Eligible Employee and each anniversary of that date ("Anniversary Year") through which the Participant remains continuously employed as an Eligible Employee. For this purpose, only Years of Service on or after the Participant's eighteenth birthday will be credited. A Participant who completes fewer than twelve consecutive months of continuous employment as an Eligible Employee in an Anniversary Year will be credited with a partial Year of Service equal to the number of months of employment during the Anniversary Year during which the Participant is continuously employed as an Eligible Employee divided by twelve. For purposes of determining Years of Service, a Participant will be treated as being employed as an Eligible Employee during a leave of absence only to the extent provided in Subsection 2.52.030.E.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011)

A. Eligible Employee. "Eligible Employee" means an Employee whom the Employer classifies as regular, active, and full-time, excluding public safety officers except those who were employed with the Employer on June 20, 2005, and who elected by that date to remain covered by the Plan. Eligible Employee will not include any Employees who are classified by the Employer as part-time, temporary, or seasonal.

B. Commencement of Participation. Each Participant in the Plan as in effect immediately before July 1, 2010, will remain a Participant. On and after that date, each Eligible Employee becomes a Participant on the date he or she becomes an Eligible Employee.

C. Termination of Participation. A Participant's participation in the Plan terminates upon the earlier of:

1. The Participant's termination of employment with the Employer if, upon such termination, the Participant is not Vested in any retirement benefit under the Plan and the Participant's Account balance is zero;

2. The payment of the Participant's entire nonforfeitable interest under the Plan; or

3. The Participant's death.

D. Reemployment. A Participant whose employment with the Employer terminates will, upon his or her reemployment as an Eligible Employee, immediately resume active participation in the Plan.

E. Leaves of Absence.

1. A Participant who is on a leave of absence of not more than twelve months' duration, with or without pay, authorized in writing by the Employer or on a military leave of absence required by applicable Federal law to be credited to him for service in the Armed Forces shall be considered to be in employment as an Eligible Employee during such absence, but only if:

a. In the case of such an Employer-approved leave of absence, the Participant returns to work or retires under the Plan prior to or at the expiration of such leave of absence or any extension thereof; and

b. In the case of a military leave of absence, the Participant returns to work within ninety days (or such longer period as may be established by the laws of the United States for the retention of reemployment rights of veterans) following the Participant's discharge from the Armed Forces. For this purpose, "military leave" means any period of continuous service in the Armed Forces of the United States or any of its allies during a period of declared war or national emergency, or in the military service of the United States at any other time. "Armed Forces" and "military service" of the United States shall include the United States Public Health Service.

2. Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with section 414(u) of the Code. If a Participant dies on or after January 1, 2007, while performing qualified military service (as defined in section 414(u) of the Code), the Participant's surviving Spouse or Beneficiaries are entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan had the Participant resumed and then terminated employment on account of death.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011)

A. Funding. The cost of benefits under the Plan will be provided by the Employer in such amounts as the Employer in its sole discretion shall determine to be necessary to fund such benefits; provided, however, that the Employer shall contribute at least such amounts as are deemed necessary by an actuary to fund the benefits provided by the Plan on an actuarially sound basis. The Employer will pay its contributions directly to the Trust at the time required by California law

B. Participant Contributions.

1. Each Participant must contribute a percentage of his or her Compensation to the Plan. The contribution rates are subject to provision of certain union contracts and agreements. (The current rates are given in Appendix A.) Since the enrollment in the Plan by a Participant is mandatory, the Participant is not permitted to withdraw the Participant's contributions while the Participant is employed by the Employer.

2. All Participant contributions will be deducted from the Participants' Compensation by payroll deduction and will be paid by the Employer to the Plan on behalf of Participants. Contributions under this Section must be transmitted to the Trustee and credited to Participants' Accounts by the last business day of the month after the month in which the contribution is deducted.

3. Effective February 1, 2011, although designated as employee contributions, Participant contributions will be picked up by the Employer for tax purposes in accordance with Section 414(h)(2) of the Code and will be treated as pre-tax Employer contributions. Participants will not have the option of receiving the contributed amounts instead of having them paid by the Employer to the Plan.

4. Notwithstanding any provision of the Plan to the contrary, the Employer may pay all or any portion of the contributions required to be paid by a Participant under this Subsection B. (The portion of Participant contributions currently paid by the Employer is shown in Appendix A.) The payments will be accounted for under the Plan as Participant contributions and, as such, will be credited to the Participant's Accounts. Nothing in this paragraph will be construed to limit the authority of Employer to periodically increase, reduce, or eliminate the payment by the Employer of all or a portion of the contributions required to be paid by Participants.

C. Application of Forfeitures. Forfeitures will not be applied to increase the benefits any Participant would otherwise receive under the Plan, but will be applied to pay the Plan's reasonable expenses, reduce the Employer's contributions for normal costs in the current year or allocated to a reserve to reduce normal costs, or reduce unfunded past service liability, if any.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011)

A. Normal Retirement Benefit.

1. To receive retirement benefits under the Plan, a Participant must retire and apply for retirement benefits at the time and in the manner specified by the Committee. Only Participants who are Vested are entitled to retirement benefits under the Plan. In addition, retirement benefits will be paid only after the Participant's employment with the Employer has terminated. A Vested Participant may elect to retire effective upon his or her Early Retirement Date, his or her Normal Retirement Date, or the first day of any month after the Participant's Normal Retirement Date, but in no event later than the latest date permitted under Appendix B. For all purposes under the Plan, "retire," "retires," "retirement," or other any derivation of "retire," refers to the Participant's receipt, after termination of his or her employment with the Employer, of a normal retirement benefit, early retirement benefit, or late retirement benefit under Subsections A., B. or C. of this section, respectively. As described in Subsection E. of this section, a Participant may receive, after termination of his or her employment with the Employer, a distribution of his or her Account without actually retiring under the Plan or without being eligible to retire.

2. A Participant who retires on his or her Normal Retirement Date is entitled to receive a monthly "normal retirement benefit" equal to: (2.0 pecent times first eight hundred thirty-three dollars and thirty-three cents of Final Average Compensation plus 2.4 percent times Final Average Compensation in excess of eight hundred thirty-three dollars and thirty-three cents) multiplied by the number of Years of Service completed by the Participant.

3. The normal retirement benefit will be payable to the Participant in the form of a life annuity with period certain of sixty months. Under this normal form of benefit, if the Participant dies before sixty monthly payments have been paid, the monthly payments continue to the Participant's Beneficiary until the balance of the sixty monthly payments have been paid. In lieu of this form of benefit, the Participant may elect one of the Actuarially Equivalent optional forms of benefit described in Subsection G. below.

B. Early Retirement Benefit.

1. A Participant who retires on his or her Early Retirement Date is entitled to receive a monthly "early retirement benefit" equal to the Participant's normal retirement benefit (as calculated according to Subsection A.2 of this section, reduced to an Actuarially Equivalent amount to reflect the Participant's age as of the Early Retirement Date.

2. The early retirement benefit will be payable to the Participant in the normal form of benefit described in Subsection A.3 of this section. In lieu of that form, the Participant may elect one of the Actuarially Equivalent optional forms of benefit described in Subsection G of this section.

C. Late Retirement Benefit.

1. A Participant who retires after his or her Normal Retirement Date will be entitled to receive a monthly "late retirement benefit" equal to the Participant's monthly normal retirement benefit (as calculated according to Subsection A.2. above, payable as of the Participant's Normal Retirement Date, plus, for each full or partial Plan Year from the Participant's Normal Retirement Date to the Participant's actual retirement date, the greater of subsections a. or b. as follows:

a. Benefit Accrual. The change in the Participant's normal retirement benefit for the full or partial Plan Year, taking into account the Participant's additional Compensation and Years of Service credited to the Participant during the full or partial Plan Year.

b. Actuarial Increase. The amount under this subsection will be zero dollars on or before the Participant's Normal Retirement Date. For full and partial Plan Years after the Normal Retirement Date, the amount under this subsection will be the actuarial increase (determined using the factors for Actuarial Equivalent) in the amount determined under this subsection as of the end of the prior full or partial Plan Year to the end of the current full or partial Plan Year. This subsection will apply only to periods preceding commencement of benefits to the Participant from the Plan.

2. The late retirement benefit will be payable to the Participant in the normal form of benefit described in Subsection A.3 of this section. In lieu of that form, the Participant may elect one of the Actuarially Equivalent optional forms of benefit described in Subsection G. of this section.

D. Vesting.

1. Nonforfeitable Interest in Account. A Participant's Account balance, including amounts attributable to Employer-paid Participant contributions described in Subsection 2.52.040.B.4, is nonforfeitable at all times, and will not at any time be subject to the vesting schedule under Subsection D.2, below or any other vesting requirements.

2. Vesting schedule.

a. A Participant's Vested interest under the Plan is determined based on the Participant's Years of Service as follows:

b. A Participant becomes one hundred percent Vested under the Plan upon termination of employment with the Employer on or after the Participant's Normal Retirement Age. For this purpose, Normal Retirement Age for a General Participant hired by the Employer on or after January 1, 2011, means the later of: (i) attainment of age sixty; or (ii) the completion of seven Years of Service.

3. Reemployment.

a. If a Participant's employment with the Employer terminates before the Participant is Vested, the Participant's retirement benefits under the Plan shall be forfeited and cancelled. If the Participant is subsequently reemployed and resumes participation in the Plan in accordance with Subsection 2.52.030.D, the Participant's Years of Service before the break in service will be considered for purposes of determining the Participant's Vested interest and retirement benefit under the Plan, but only if the Participant had fewer than five consecutive One-Year Breaks in Service before the reemployment date. In addition, the extent to which such prior Years of Service are counted is subject to Subsection E.3, below.

b. If a Participant is Vested when his or her employment with the Employer terminates, and the Participant is subsequently reemployed and resumes participation in the Plan in accordance with Subsection 2.52.030.D, the Participant's Years of Service before the break in service will be considered for purposes of determining the Participant's Vested interest and retirement benefit under the Plan; however, the extent to which such prior Years of Service are counted is subject to Subsection E.3, below.

E. Termination Before Retirement.

1. If a Vested Participant's employment with the Employer terminates for any reason other than death or retirement, the Participant may elect to receive all or any portion of his or her Account balance. In addition, the Participant will subsequently be eligible to retire under the Plan and receive a retirement benefit on or after the Participant's Early Retirement Date. Such retirement benefit will be equal in value to the excess of (1) the actuarial value of the Accrued Benefit related to future service credits multiplied by vesting percentage, over (2) the amount distributed to the Participant from his or her Account. "Accrued Benefit" means (1) a Participant's projected normal retirement benefit described in Section 4.01 (as adjusted using the Actuarial Equivalent factors if the retirement date is before or after the Normal Retirement Age), without projection for future salary increases, multiplied by (2) a fraction, the numerator of which is the number of years and fractions thereof of participation in the Plan as of the date the determination is being made, and the denominator of which is the number of years and fractions thereof of participation the Participant would have had if the Participant had remained in service until the Participant's retirement date.

2. If a non-Vested Participant's employment with the Employer terminates for reasons other than death or retirement, the Participant may elect to receive a lump-sum distribution of the Participant's Account balance.

3. This Subsection applies to any Participant who receives one or more distributions of any portion of his or her Account after termination of employment with the Employer, and who is subsequently rehired by the Employer and recommences active participation under Subsection 2.52.030.D within five years after the termination date. Such Participant will receive credit for all Years of Service before the break, but only if the Participant repurchases such service by redepositing in the Trust an amount equal to the Participant's total Account distributions, plus interest of six percent per annum, compounded annually. If the Participant does not redeposit that amount in the time and manner required by the Committee, he or she will not receive credit for Years of Service attributable to those distributions. Payment of the redeposit must be made in lump sum, at the time and in the manner determined by the Committee. In addition, the redeposit will be made either: (1) on an after-tax basis; (2) by direct rollover of an eligible rollover distribution from an eligible retirement plan described in sections 401(a), 403(b), 408(a) and 457(b) of the Code; or (3) by transfer from the Employer's "eligible deferred compensation plan" within the meaning of section 457(b) of the Code.

F. Disability Benefit. A Participant who terminates employment with the Employer due to a Total and Permanent Disability is entitled to the same benefits described in Subsection E. above, that the Participant would be entitled to if the Participant had terminated employment for reasons other than death, disability or retirement.

G. Optional Forms of Payment. In lieu of the normal form of payment, a Participant may elect in writing at the time and in the manner specified by the Committee, to receive the Participant's retirement benefit under Subsections A., B. or C. above, as applicable, in the form of one of the following Actuarially Equivalent optional forms of payment:

1. Straight Life Annuity. A monthly retirement benefit payable for the Participant's lifetime only with no payments to any person after the Participant's death.

2. Joint and Survivor Annuity. An actuarially reduced monthly retirement benefit payable for the Participant's lifetime with the provision that after the Participant's death a monthly benefit equal to a specified percentage (one hundred percent, sixty-six and two-thirds percent, or fifty percent) of the reduced monthly benefit payable during the Participant's life shall be paid to the Participant's joint annuitant during for the joint annuitant's lifetime through the month in which the joint annuitant dies.

3. Social Security Level Income. An adjusted monthly life annuity payable commencing before the Participant's Social Security retirement age pursuant to which the adjusted monthly payment payable before Social Security retirement age is reduced after the commencement of the Social Security payments by the approximate amount of such Social Security payments so as to produce to the greatest extent possible level retirement income throughout the remainder of the Participant's life.

H. Time of Payment of Retirement Benefits.

1. The payment of benefits under the Plan to the Participant, or the Participant's Beneficiary shall begin not later than the 60th day after the latest of the close of the Plan Year in which:

a. The Participant attains Normal Retirement Age;

b. Occurs the tenth anniversary of the year in which the Participant commenced participation in the Plan; or

c. The Participant terminates employment with the Employer.

2. The distributions to a Participant shall commence not later than April 1 of the calendar year following the later of:

a. The calendar year in which the Participant attains age seventy and one-half;; or

b. The calendar year in which the Participant retires.

3. Regardless of any Plan provision to the contrary, all distributions under the Plan will meet the requirements of Code section 401(a)(9) and Appendix B. relating to required minimum distributions.

4. Notwithstanding the foregoing, the failure by the Participant or the Participant's Beneficiary to consent to an immediate distribution is deemed to be an election to defer the commencement of payment of any benefit sufficient to satisfy this Section.

I. Distribution of Small Amounts.

1. If upon termination of a Participant's employment with the Employer, the sum of the present value of a Participant's Vested benefits under the Plan and the Participant's Account balance is one thousand dollars or less, the Committee will direct that the entire amount be distributed to the Participant or Beneficiary in one lump sum, and the Participant's or Beneficiary's consent will not be required. Any such distribution will be made in lieu of the payment of a monthly benefit under the Plan.

2. If such present value exceeds one thousand dollars, distribution of the Participant's benefits may not be made without the Participant's or Beneficiary's consent.

3. Present value will be determined using the factors specified in the definition of Actuarial Equivalent.

J. Suspension of Benefits Upon Reemployment.

1. If a Participant is reemployed by the Employer as an Eligible Employee after payment of retirement benefits have commenced, the payment of retirement benefits will be suspended until the Participant subsequently terminates employment with the Employer. Upon subsequent termination, the benefits will be recalculated so that any additional Years of Service credited to the Participant during the reemployment period will be taken into account.

2. If the Participant is reemployed by the Employer as an Employee but not an Eligible Employee, payment of retirement benefits will be suspended, unless continued payment is permitted by the Code.

3. If payment of a Participant's benefits is suspended due to reemployment with the Employer, payments will recommence after the subsequent termination of the Participant's employment with the Employer (or earlier to the extent permitted by the Code).

K. Preretirement Survivor Benefit.

1. If a Vested Participant dies before retiring, his or her Beneficiary will be entitled to receive:

a. If the Participant dies before attaining Early Retirement Age, a monthly annuity for the Beneficiary's life commencing on the date the Participant would have attained Early Retirement Age that is Actuarially Equivalent to the Participant's Vested benefit at the Participant's death. In addition, the Beneficiary may elect to receive a partial or full distribution of the Participant's Account before the date the Participant would have attained Early Retirement Age, in which case any survivor benefit payable to the Beneficiary will be reduced in the same manner as described in Subsection E.1 of this section.

b. If the Participant dies on or after attaining Early Retirement Age, but before attaining Normal Retirement Age, a monthly annuity for the Beneficiary's life commencing on the Participant's death that is Actuarially Equivalent to the Participant's Vested benefit at the Participant's death.

c. If the Participant dies on or after attaining Normal Retirement Age, sixty monthly payments which are Actuarially Equivalent to the Participant's Vested benefit at the Participant's death.

2. The Participant's Beneficiary may elect in writing, at the time and in the manner specified by the Committee, to commence payments under this Subsection K., within a reasonable time after the Participant's death.

3. If a Participant who separates from service on or after Normal Retirement Date, thereafter dies before beginning to receive the Participant's retirement benefits, the distribution of the Participant's benefit shall be made to the Participant's Beneficiary in the same manner and form as described under Subsection A. of this section, as if the pension payments had commenced on the date of the Participant's death.

4. The benefits paid to a Participant who dies on or after the Participant's Normal Retirement Date while still in active service of the Employer, will be distributed to the Participant's Beneficiary in the same manner and form as provided in Subsection A. of this section, as if the Participant had retired on the date of the Participant's death.

L. Death Before Vesting. If a Participant dies before becoming Vested under the plan, his or her entire Account balance, if any, will be distributed to the Beneficiary in lump sum upon the Beneficiary's consent.

M. Cost-of-Living Benefit. Commencing July 1, 1985, and each July 1 thereafter, annual adjustments are made in the monthly benefit amount following the date of retirement for Participants and their Beneficiaries, excluding existing retirees and their Beneficiaries as of July 1, 1985. The annual adjustment is an increase of two percent of the monthly benefit amount that was payable in the preceding month of June.

N. Eligible Rollover Distributions. If payment under the Plan is ever permitted in a form which qualifies as an Eligible Rollover Distribution, the Distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of such Eligible Rollover Distribution rolled directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. For purposes of this Subsection N., the following terms have the following meanings:

1. "Direct Rollover" means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

2. "Distributee" means a Participant, a Participant's surviving Spouse, or a Participant's Spouse or former Spouse who is the Alternate Payee under a domestic relations order which is treated as a qualified domestic relations order to the extent provided in section 414(p)(11) of the Code, and such other persons as come within the meaning of the term as used in section 401(a)(31)(A) of the Code. Effective for Plan Years beginning on or after July 1, 2010, a Distributee also includes the Participant's non-Spouse Beneficiary. In the case of a non-Spouse Beneficiary, the direct rollover may be made only to an individual retirement account or annuity described in section 408(a) or 408(b) of the Code ("IRA") that is established on behalf of the designated Beneficiary and that will be treated as an inherited IRA pursuant to the provisions of section 402(c)(11) of the Code. Also, in this case, the determination of any required minimum distribution under section 401(a)(9) of the Code that is ineligible for rollover will be made in accordance with Notice 2007-7, Q&A-17 and 18, 2007-5 I.R.B. 395 (or its successor).

3. "Eligible Rollover Distribution" means a distribution from the Plan which constitutes an eligible rollover distribution within the meaning of section 401(a)(31)(D) of the Code, i.e., any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include:

a. Any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made: (i) for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's designated Beneficiary; or (ii) for a specified period of ten years or more;

b. Any distribution to the extent such distribution is required under section 401(a)(9) of the Code; or

c. The portion of any distribution that is not includible in gross income; provided, however, that this paragraph does not apply to the distribution if the plan to which the distribution is transferred:

(A) Is an individual retirement account or annuity described in section 408(a) or (b) of the Code;

(B) For taxable years beginning after December 31, 2001, and before January 1, 2007, is a qualified trust which is part of a defined contribution plan that agrees to separately account for the amounts so transferred, including separately accounting for the portion of the distribution which is includible in gross income and the portion of the distribution that is not so includible; or

(C) For taxable years beginning on or after December 31, 2006, is a qualified trust or an annuity contract described in section 403(b) of the Code, if such trust or contract provides for separate accounting for amounts so transferred (including interest thereon), including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

4. "Eligible Retirement Plan" means a plan which constitutes an eligible retirement plan within the meaning of section 401(a)(31)(E) of the Code, including an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, an annuity plan described in section 403(a) of the Code, or a qualified trust described in section 401(a) of the Code that is a defined contribution plan, the terms of which permit the acceptance of rollover distributions. In the case of an Eligible Rollover Distribution to a surviving Spouse or a surviving former Spouse, an Eligible Retirement Plan means only an individual retirement account or individual retirement annuity. Effective for distributions after December 31, 2001, the definition of Eligible Retirement Plan applies without regard to the preceding sentence in the case of a distribution to a surviving Spouse, or to a Spouse or former Spouse who is the Alternate Payee under a qualified domestic relations order, as defined in section 414(p) of the Code. Effective for distributions after December 31, 2001, the term "Eligible Retirement Plan" also includes an annuity contract described in section 403(b) of the Code or an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. Effective for distributions after December 31, 2007, an Eligible Retirement Plan also includes a Roth IRA described in section 408A of the Code.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011)

A. Effective Date. The limitations of this Section apply in Limitation Years beginning on or after July 1, 2007, except as otherwise provided herein.

B. Annual Additions Limit. The total Annual Additions allocated to a Participant's Account under the Plan, when added to the Annual Additions allocated to the Participant's accounts under all other qualified defined contribution plans maintained by the Employer or an Affiliate for any Limitation Year, must not exceed the lesser of:

1. Forty thousand dollars, as adjusted for increases in the cost-of-living under section 415(d) of the Code; or

2. One hundred percent of the Participant's Total Compensation for the Limitation Year.

C. Annual Benefit Limit. Unless the alternative limitation of Subsection G. of this section applies, effective for Limitation Years ending after December 31, 2001, the Annual Benefit payable to a Participant under the Plan at any time must not exceed one hundred sixty thousand dollars, adjusted as described in this Subsection C. (the "Annual Benefit Limit").

D. Cost-of-living Limitation Adjustment. The Annual Benefit Limit is automatically adjusted under section 415(d) of the Code, effective January 1 of the calendar year for which the adjustment is determined by the Treasury Department. Any adjustment to the Annual Benefit Limit will be effective for Limitation Years ending with or within the calendar year with respect to which the adjustment is made, but a Participant's benefits may not reflect the adjustment prior to January 1 of that calendar year. The adjusted Annual Benefit Limit is applied at the time the Participant's benefits commence.

E. Participation in Other Defined Benefit Plans. If the Participant is, or ever has been, a Participant in another qualified defined benefit plan maintained by the Employer or an Affiliate, the sum of the Participant's Annual Benefits from all such defined benefit plans must not exceed the Annual Benefit Limit. Where the Participant's employer-provided benefits under all such defined benefit plans (determined as of the same age) would exceed the Annual Benefit Limit applicable at that age, benefits accrued under the Plan and all such other plans shall be reduced in proportion to the total benefits accrued under each such plan but only to the extent necessary to comply with the limits on benefits set forth in this Section. For purposes of this Section:

1. The termination of any plan shall be disregarded; and

2. The total benefits accrued under each plan for calculating the proportional reduction shall be determined without regard to the limits of this Section.

F. Participation in Other Defined Contribution Plans. If a Participant participates in another defined contribution plan of the Employer or of an Affiliate that is a tax-qualified defined contribution plan, contributions or allocations that would otherwise be made on behalf of the Participant to the other plan shall first be reduced to the extent necessary to avoid exceeding the limitations of this regulation.

G. Adjustment for Less Than ten Years of Participation.

1. General Rule. If the Participant has less than ten Years of Participation in the Plan, the Annual Benefit Limit shall be multiplied by a fraction:

a. The numerator of which is the number of Years (or part thereof, but not less than one year) of Participation in the Plan, and

b. The denominator of which is ten.

2. Special Rule for Death and Disability Benefits. The reduction described in Subsection G.1. of this Section shall not apply to preretirement disability benefits or preretirement death benefits.

H. Adjustment for Benefit Commencement Before Age sixty-two or After Age sixty-five. Effective for benefits commencing in Limitation Years ending after December 31, 2001, the Annual Benefit Limit is adjusted for benefit commencement before age sixty-two or after age sixty-five as follows:

1. Adjustment for Benefit Commencement Before Age sixty-two. If the Participant's Annuity Starting Date is before the Participant attains age sixty-two, the Annual Benefit Limit is equal to:

a. If the Participant's Annuity Starting Date is before July 1, 2007, the annual benefit payable in the form of a straight life annuity commencing at the Participant's Annuity Starting Date that is the actuarial equivalent of a deferred straight life annuity commencing at age sixty-two with an annual benefit equal to the Annual Benefit Limit (adjusted under Subsection E. of this section for years of participation less than ten, if required) and with actuarial equivalence determined using:

(A) The Applicable Mortality Table; and

(B) An interest rate that is not less than the greater of:

(i) Five percent; or

(ii) The interest rate specified in Section 2.52.020 of the Plan.

b. If the Participant's Annuity Starting Date is on or after July 1, 2007, the lesser of:

(A) The amount determined under Subsection H.1.a. of this section; or

(B) The Annual Benefit Limit (adjusted under Subsection E. of this section for years of participation less than ten, if required) multiplied by the ratio of the annual amount of the immediately commencing straight life annuity under the Plan at the Participant's Annuity Starting Date to the annual amount of the immediately commencing straight life annuity under the Plan at age sixty-two, both determined without applying the limitations of this Section.

2. Adjustment for Benefit Commencement After Age sixty-five. If the Participant's Annuity Starting Date is after the Participant attains age sixty-five, the Annual Benefit Limit is equal to:

a. If the Participant's Annuity Starting Date is before July 1, 2007, the annual benefit payable in the form of a straight life annuity commencing at the Participant's Annuity Starting Date that is the actuarial equivalent of a straight life annuity commencing at age sixty-five with an annual benefit equal to the Annual Benefit Limit (adjusted under Subsection E. of this section for years of participation less than ten, if required) and with actuarial equivalence determined using:

(A) The Applicable Mortality Table; and

(B) An interest rate that is not greater than the lesser of:

(i) Five percent; or

(ii) The interest rate specified in Section 2.52.020 of the Plan.

b. If the Participant's Annuity Starting Date is on or after July 1, 2007, the lesser of:

(A) The amount determined under Subsection H.2.a. of this section; or

(B) The Annual Benefit Limit (adjusted under Subsection E. of this section for years of participation less than ten, if required) multiplied by the ratio of the annual amount of the adjusted immediately commencing straight life annuity under the Plan at the Participant's Annuity Starting Date to the annual amount of the adjusted immediately commencing straight life annuity under the Plan commencing at age sixty-five, both determined without applying the limitations of this Article. For this purpose, the adjusted immediately commencing straight life annuity under the Plan at the Participant's Annuity Starting Date is the annual amount of such annuity payable to the Participant, computed disregarding the Participant's accruals after age sixty-five but including actuarial adjustments even if those actuarial adjustments are used to offset accruals; and the adjusted immediately commencing straight life annuity under the Plan at age sixty-five is the annual amount of such annuity that would be payable under the Plan to a hypothetical Participant who is age sixty-five and has the same accrued benefit as the Participant.

3. No Mortality Adjustment Unless Benefit Forfeited at Death. No adjustment will be made to the Annual Benefit Limit to reflect the probability of the Participant's death between the Annuity Starting Date and age sixty-two or between age sixty-five and the Annuity Starting Date, unless the Participant's benefit is forfeited at death before the Annuity Starting Date.

4. Special Rule for Qualified Police or Firefighters. The adjustment described in Subsection H.1. of this Section shall not apply if the Participant's benefit is based on at least fifteen years as a full-time employee of any police or fire department or as a member of the Armed Forces of the United States.

5. Special Rule for Death and Disability Benefits. The adjustment described in Subsection H.1. of this Section shall not apply to preretirement disability benefits or preretirement death benefits.

I. Benefits Not in Excess of ten thousand dollars. The benefit payable to a Participant is treated as not exceeding the Annual Benefit Limit if:

1. The retirement benefits payable for a Limitation Year under any form of benefit with respect to the Participant under this Plan and all other defined benefit plans (without regard to whether the plan has been terminated) ever maintained by the Employer or an Affiliate do not exceed ten thousand dollars multiplied by a fraction:

a. The numerator of which is the Participant's number of Years (or part thereof, but not less than one year) of Service (not to exceed ten) with the Employer or an Affiliate; and

b. The denominator of which is ten.

2. The Participant has never participated in any in any qualified defined contribution plan ever maintained by the Employer or an Affiliate.

J. Correction of Excess Annual Additions. Any excess Annual Additions shall be corrected using the methods specified in section 6.06 and Appendix A.08 of Revenue Procedure 2008-50 or any subsequent guidance promulgated by the Secretary of the Treasury describing the procedures for correcting excess Annual Additions under the Employee Plans Compliance Resolution System ("EPCRS") or its successor.

K. Definitions. For purposes of this Section, the following terms have the following meanings:

1. "Affiliate" means all members of a controlled group of corporations (as defined in Section 414(b) of the Code, as modified by Section 415(h) of the Code), all commonly controlled trades or businesses (as defined in Section 414(c) of the Code, as modified, except in the case of a brother-sister group of trades or businesses under common control, by Section 415(h) of the Code), or affiliated service groups (as defined in Section 414(m) of the Code) of which the Employer is a part, and any other entity required to be aggregated with the Employer pursuant to Section 414(o) of the Code.

2. "Annual Additions" means the sum of the amounts credited to a Participant's Accounts under the Plan and any other qualified defined contribution plans maintained by the Employer or an Affiliate for the Limitation Year described in subsection a. and excludes all of the amounts described in subsection b. of this subsection:

a. Annual Additions includes:

(A) Employer contributions;

(B) Employee contributions (after-tax), including mandatory contributions (as defined in section 411(c)(2)(C) of the Code and Treasury regulations issued thereunder), as well as voluntary employee contributions used to purchase permissive service credit (as Defined in Code section 415(n)(3)) if an election is made to treat those amounts as Annual Additions in the year contributed pursuant to Code section 415(n)(1).

(C) Forfeitures;

(D) Amounts allocated to the Participant's individual medical account (within the meaning of section 415(l)(2) of the Code), which is part of a pension or annuity plan maintained by the Employer or Affiliate, except that such amounts are not included in Annual Additions for purposes of applying the one hundred percent of compensation limit.

b. Annual Additions excludes:

(A) Repayments of cash-outs as described in section 415(k)(3) of the Code (for example, to purchase restoration of an accrued benefit that was lost when employee contributions were previously cashed out) for the Limitation Year in which the restoration occurs;

(B) Catch-up contributions made in accordance with Code section 414(v);

(C) Restorative payments described in Treasury regulations section 1.415(c)-1(b)(2)(ii)(C);

(D) Excess deferrals that are distributed in accordance with Treasury regulations section 1.402(g)-1(e)(2) or (3);

(E) Rollover contributions (as described in sections 401(a)(31), 402(c)(1), 403(a)(4), 403(b)(8), 408(d) and 457(e)(16) of the Code);

(F) Loan repayments;

(G) Employee contributions to a qualified cost-of-living arrangement described in Code section 415(k)(2)(B);

(H) Employee contributions picked up by the Employer under Code section 414(h)(2);

(I) Make-up contributions attributable to a period of qualified military service, as defined in Code section 414(u), with respect to the year in which the contribution is made (but not with respect to the year to which the contribution relates); and

(J) Employee contributions to purchase permissive service credit (as defined in Code section 415(n)(3)) if an election is made to treat the accrued benefit derived from all such contributions as an annual benefit subject to the limits of Code section 415(b).

3. "Annual Benefit" means a benefit that is payable annually in the form of a straight life annuity. Except as provided in Subsection 3.a. below, where a benefit is payable in a form other than a straight life annuity, the benefit shall be adjusted to an actuarially equivalent straight life annuity that begins at the same time as such other form of benefit and is payable on the first day of each month.

a. No actuarial adjustment to the benefit shall be made for:

(A) Survivor benefits payable to a surviving Spouse under a joint and survivor annuity option provided under Section 2.52.050 that would qualify as a qualified joint and survivor annuity defined in section 417(b) of the Code;

(B) Benefits that are not directly related to retirement benefits (such as pre-retirement qualified disability benefits, preretirement incidental death benefits, and postretirement medical benefits); or

(C) The inclusion in the form of benefit of automatic, periodic increases to the benefits, provided:

(i) The form of benefit is not a lump sum, installment, decreasing annuity, or term certain;

(ii) The form of benefit would otherwise satisfy the limitations of this Section; and

(iii) The amount payable under the form of benefit in any Limitation Year must not exceed the limits of this Section applicable at the Annuity Starting Date, as increased in subsequent years pursuant to section 415(d) of the Code.

b. Rules for determining Annual Benefit. The determination of the Annual Benefit shall take into account social security supplements described in section 411(a)(9) of the Code and benefits transferred from another defined benefit plan, other than transfers of distributable benefits pursuant section 1.411(d)-4, Q&A-3(c), of the Treasury regulations, but shall disregard benefits attributable to employee contributions or rollover contributions. Benefits attributable to Participant contributions do not include any benefits that are made on a pre-tax basis such as employee contributions picked up by the Employer under section 414(h)(2) of the Code or such as Participant contributions that are actually paid by the Participant's Employer. The amount of any benefits attributable to Participant contributions and to rollover contributions shall be determined in accordance with section 415 of the Code.

c. Multiple Annuity Starting Dates. For a Participant who has or will have distributions commencing at more than one Annuity Starting Date, the Annual Benefit shall be determined as of each such Annuity Starting Date (and shall satisfy the limitations of these regulations as of each such date), actuarially adjusting for past and future distributions of benefits commencing at the other Annuity Starting Dates. For this purpose, the determination of whether a new starting date has occurred shall be made in accordance with section 1.415(b)-1(b)(1)(iii)(B) and (C) of the Treasury regulations.

d. Adjustment to other forms of benefit. Effective for distributions in Plan Years beginning after December 31, 2003, except as provided in Subsection 3.a. of this subsection, if the Participant's benefit is payable in a form other than a straight life annuity, then, the actuarially equivalent straight life annuity shall be determined in accordance with Subsections (A) or (B) below, whichever is applicable.

(A) Annuities. If the Participant's benefit is payable in the form of a non-decreasing life annuity or other form of benefit described in section 1.417(e)-1(d)(6) of the Treasury regulations (e.g., other than a lump sum, installments, a decreasing annuity or a term certain), then the actuarially equivalent straight life annuity is determined as follows:

(i) Limitation Years beginning before July 1, 2007. For Limitation Years beginning before July 1, 2007, the actuarially equivalent straight life annuity is determined using:

(I) The Applicable Mortality Table; and

(II) An interest rate that is not less than the greater of:

(a) Five percent; or

(b) The interest rate specified in Section 2.52.020 of the Plan.

(ii) Limitation Years beginning on or after July 1, 2007. For Limitation Years beginning on or after July 1, 2007, the actuarially equivalent straight life annuity is equal to the greater of:

(I) The annual amount of the straight life annuity (if any) payable to the Participant under the Plan commencing at the same Annuity Starting Date as the Participant's form of benefit; or

(II) The annual amount of the straight life annuity commencing at the same Annuity Starting Date that is actuarially equivalent to the Participant's form of benefit, computed using a five percent interest rate and the Applicable Mortality Table for that Annuity Starting Date.

(B) Lump Sums and Installments. If the Participant's benefit is payable in the form of a lump sum, installments, a decreasing annuity, term certain or other form of benefit not described in section 1.417(e)-1(d)(6) of the Treasury regulations, then the actuarially equivalent straight life annuity is determined as follows:

(i) Annuity Starting Date in Plan Years Beginning After 2005. If the Participant's Annuity Starting Date is in a Plan Year beginning after 2005, the actuarially equivalent straight life annuity is equal to the greatest of:

(I) The annual amount of the straight life annuity commencing at the same Annuity Starting Date that is Actuarially Equivalent to the Participant's form of benefit, computed using the interest rate and the mortality table specified in Section 2.52.020 of the Plan for determining actuarial equivalence;

(II) The annual amount of the straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant's form of benefit, computed using a 5.5 percent interest rate and the Applicable Mortality Table; or

(III) The annual amount of the straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant's form of benefit, computed using the Applicable Interest Rate and the Applicable Mortality Table, divided by 1.05.

(ii) Annuity Starting Date in Plan Years Beginning in 2004 or 2005. If the Participant's Annuity Starting Date is in a Plan Year beginning in 2004 or 2005, the actuarially equivalent straight life annuity is equal to the annual amount of the straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant's form of benefit, computed using whichever of the following produces the greater annual amount:

(I) The interest rate and the mortality table specified in Section 2.52.020 of the Plan for determining Actuarial Equivalence; or

(II) A 5.5 percent interest rate and the Applicable Mortality Table.

If the Participant's Annuity Starting Date is after December 31, 2003, and before January 1, 2005, the application of this Section 5.11(c)(4)(B)(ii) shall not cause the amount payable under the Participant's form of benefit to be less than the benefit calculated under the Plan, taking into account the limitations of this Section had the amount been determined using the Applicable Interest Rate in effect as of the last day of the last Plan Year beginning before January 1, 2004.

4. "Applicable Interest Rate" means for distributions with Annuity Starting Dates before July 1, 2008, a rate of interest equal to the annual rate of interest on thirty-year Treasury securities for the third month preceding the stability period, which is the Plan Year containing the Annuity Starting Date and for which the Applicable Interest Rate must remain constant. Effective for distributions with Annuity Starting Dates on or after July 1, 2008, "Applicable Interest Rate" means the "applicable interest rate" defined in section 417(e)(3)(C) of the Code determined as of the third month preceding the stability period, which is the Plan Year containing the Annuity Starting Date and for which the Applicable Interest Rate must remain constant.

5. "Applicable Mortality Table" means the mortality table used for purposes of adjusting any benefit or limitation under Section 415(b) of the Code as prescribed by the Internal Revenue Service to be applicable at such time. Effective for distributions with Annuity Starting Dates on or after December 31, 2001, and before January 1, 2008, the "Applicable Mortality Table" is the table prescribed in Revenue Ruling 2001-62. Effective with respect to distributions with Annuity Starting Dates on or after January 1, 2008, the Applicable Mortality Table" is the table prescribed by the Internal Revenue Service pursuant to Section 417(e)(3)(B) of the Code as set forth in Revenue Ruling 2007-67 or subsequent guidance from the Internal Revenue Service.

6. "Severance From Employment" means the Participant ceases to be an employee of the Employer and all Affiliates. A Participant does not have a Severance From Employment if, in connection with a change of employment, the Participant's new employer maintains the Plan with respect to the Participant.

7. "Total Compensation" means all items of remuneration described in subsection a. below and excludes all items of remuneration described in Subsection b. below of this subsection.

a. Total Compensation includes all of the following items of remuneration for services:

(A) A Participant's wages, salaries, fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer and any Affiliate to the extent that the amounts are includible in gross income (or to the extent that amounts would have been includible in gross income but for an election under Code section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)). These amounts include, but are not limited to, bonuses, fringe benefits, and reimbursements, or other expense allowances under a nonaccountable plan, as described in section 1.62-2(c) of the Treasury regulations;

(B) Amounts described in section 104(a)(3), 105(a), or 105(h) of the Code, but only to the extent that these amounts are includible in the gross income of the Participant;

(C) Amounts paid or reimbursed by the Employer or an Affiliate for moving expenses incurred by a Participant, but only to the extent that at the time of the payment it is reasonable to believe that these amounts are not deductible by the Participant under section 217 of the Code;

(D) The amount includible in the gross income of a Participant upon making the election described in section 83(b) of the Code;

(E) Amounts that are includible in the gross income of a Participant under the rules of section 409A of the Code or section 457(f)(1)(A) of the Code, or because the amounts are constructively received by the Participant; and

(F) Effective for Plan Years beginning after December 31, 2008, differential wage payments (as defined in section 3401(h)(2) of the Code).

b. Total Compensation excludes each of the following items:

(A) Employer contributions (other than elective contributions described in section 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b) of the Code) to a deferred compensation plan (including a simplified employee pension described in Code section 408(k) or a simple retirement account described in section 408(p) of the Code, and whether or not qualified) to the extent such contributions are not includable in the Participant's gross income for the taxable year in which contributed, and any distributions (whether or not includible in gross income when distributed) from a deferred compensation plan (whether or not qualified) other than amounts received during the year by a Participant pursuant to a nonqualified unfunded deferred compensation plan to the extent includible in gross income;

(B) Other amounts that receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are excludible from the gross income of the Participant, and are not salary reduction amounts that are described in section 125 of the Code);

(C) Other items of remuneration that are similar to any of the items listed in Subsections (A) and (B), above.

c. Timing.

(A) In order to be taken into account for a Limitation Year, Total Compensation must be paid or made available (or, if earlier, includible in the gross income of the Participant) during the Limitation Year. For this purpose, compensation is treated as paid on a date if it is actually paid on that date or it would have been paid on that date but for an election under section 125, 132(f)(4), 401(k), 403(b), 408(k), 408(p)(2)(A)(i), or 457(b) of the Code.

(B) In order to be taken into account for a Limitation Year, Total Compensation must be paid or treated as paid to the Participant prior to the Participant's Severance From Employment with the Employer; provided, however, that Total Compensation includes amounts paid to the Participant by the later of two and one-half months after Severance From Employment or the end of the Limitation Year that includes the Severance From Employment date if the amounts are regular compensation for services during the Participant's regular working hours, compensation for services outside the Participant's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar compensation that absent a Severance From Employment would have been paid to the Participant while the Participant continued in employment with the Employer.

(C) Total Compensation does not include amounts paid after Severance From Employment that are severance pay, unfunded nonqualified deferred compensation, or any other payment that is not described in the preceding subsection, even if paid within two and one-half months, except for:

(i) Payments to an individual who does not currently perform services for the Employer by reason of qualified military service (as defined in section 414(u) of the Code) to the extent that these payments do not exceed the amounts that the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service; and

(ii) Payments to a Participant who is permanently and totally disabled; provided, however that salary continuation applies to all Participants who are permanently and totally disabled for a fixed or determinable period. For this purpose, a Participant is permanently and totally disabled only if the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than twelve months.

d. Limit. A Participant's Total Compensation shall not include compensation in excess of the limitation of section 401(a)(17) of the Code that is in effect for the calendar year in which such Limitation Year begins.

8. "Year of Participation" means each accrual computation period for which the following conditions are met:

a. The Participant is credited with at least the number of Hours of Service or period of service for benefit accrual purposes, required under the terms of the Plan in order to accrue a benefit for the accrual computation period; and

b. The Participant is included as a Participant under the eligibility provisions of the Plan for at least one day of the accrual computation period. If these two conditions are met, the portion of a Year of Participation credited to the Participant shall equal the portion of a year of benefit accrual service credited to the Participant for such accrual computation period.

A Participant who is permanently and totally disabled within the meaning of Section 415(c)(3)(C)(i) of the Code for an accrual computation period shall receive a Year of Participation with respect to that period. In no event shall more than one Year of Participation be credited for any twelve-month period.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011)

A. Claim for Benefits. A Plan Participant or Beneficiary must make a claim for Plan benefits by filing a written request with the Committee at the time and in the manner specified by the Committee.

B. Claim Denial. If a claim is wholly or partially denied, the Committee must furnish the Participant or Beneficiary with written notice of the denial within sixty days of the date the original claim was received. This notice of denial must provide:

1. The reason for denial;

2. Specific reference to pertinent Plan provisions on which the denial was based;

3. A description of any additional information needed to perfect the claim and an explanation of why such information is necessary; and

4. An explanation of the Plan's claim procedure.

C. Appeal of Denied Claim. The Participant or Beneficiary has sixty days from receipt of denial notice in which to make written application for review by the Committee. The Participant or Beneficiary may request that the review be in the nature of a hearing. The Participant or Beneficiary has the rights:

1. To representation;

2. To review pertinent documents; and

3. To submit comments in writing.

D. Decision on Appeal. The Committee shall issue a decision on such review within sixty days after receipt of an application for review, as provided in Subsection C. above.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011)

A. Committee Membership.

1. The City Council of the City of Delano shall appoint a Committee, hereinafter referred to as the "Committee," consisting of five members. Two of such members shall be elected by General Participants. The remaining three members shall be appointed by the Mayor of the City of Delano, with approval of the City Council. Members shall not be subject to the residency requirements as set forth in Delano City Municipal Code Chapter 2.32.

2. Two of the initial Committee members shall serve a two-year term, with one from the elected members and one from the appointed members. The remaining three members shall serve a four-year term. Upon expiration of the original term of office, a member may be re-elected or re-appointed for a four-year term and shall not be subject to term limits, as set forth in Delano City Municipal Code Chapter 2.32.

3. A member of the Committee appointed by the City Council shall serve the member's full term unless dismissed by the City Council, with or without cause, or becomes ineligible to serve. A vacancy shall be filled in the same manner as the original appointment.

B. Committee Action.

1. The Committee shall choose a Secretary, who need not be one of its members (hereinafter referred to as "Secretary") who shall keep minutes of its proceedings and all records and documents pertaining to its administration of the Plan. Any action of the Committee shall be taken pursuant to a majority vote, or to the written consent of a majority of its members and such action shall constitute the action of the Committee and be binding on the same as if all members had joined therein. A quorum of the Committee shall consist of a majority of its then acting members. The Secretary may execute any certificate or other written direction on behalf of the Committee. All directions to the Trustee shall be in writing signed by the Secretary or other person or persons duly authorized to sign by the Committee. The Trustee or any third person dealing with the Committee may conclusively rely upon any certificate or other written direction so executed.

2. A member of the Committee shall not vote or act upon any matter which relates solely to himself as a Participant. If a matter arises affecting one of the members of the Committee as a Participant and the other members of the Committee are unable to agree as to the disposition of such matter, the City Council shall appoint a substitute member to the Committee in the place and stead of the affected member, for the sole and only purpose of passing upon and deciding the particular matter.

C. Rights and Duties. The Committee, on behalf of the Participants and their Beneficiaries, shall be responsible for the control and management of the Plan, and shall enforce the Plan in accordance with its terms, and shall be charged with the general administration of the Plan. The Committee shall have all powers and duties necessary to accomplish those purposes, including but not by way of limitation, the following:

1. To interpret the provisions of the Plan and to determine all questions arising in the administration and application of the Plan;

2. To determine all questions relating to the eligibility of Employees to participate;

3. To determine, compute and certify to the Trustee the amount and kind of benefits payable to Participants and their Beneficiaries;

4. To authorize disbursements for the payment of benefits under this Plan by the Trustee from the Trust;

5. To appoint one or more investment managers to direct the Trustee with respect to the investment of Trust assets; to review periodically the performance of the Trustee or an investment manager; and to reappoint, remove or change such an investment manager;

6. To maintain all necessary records for the administration of the Plan other than those maintained by the Trustee;

7. To make and publish such rules for the regulation of the Plan which are not inconsistent with the terms hereof;

8. To engage an actuary or actuaries to make calculations required in the operation of the Plan, and such other persons as it may deem proper to render legal, accounting and other services;

9. To approve mortality tables, interest rates and other factors required to be taken into account in connection with the actuarial matters arising under the Plan;

10. To establish claims procedures consistent with regulations of the Secretary of Labor for presentation of claims by Participants and Beneficiaries for Plan benefits, consideration of such claims, review of claim denials and issuance of decisions on review;

11. To render such reports and statements to Participants, Beneficiaries and government agencies as shall be prescribed by the Code, and applicable laws and regulations;

12. To determine current and future benefit distribution requirements and to inform the Trustee or Investment Manager of such requirements.

All action of the Committee shall be conclusive on all persons interested in the Plan except to the extent otherwise specifically indicated herein.

Notwithstanding the foregoing, the Committee shall have no responsibility or authority with regard to the investment, control, or management of Plan assets (other than as specified in Subsections 3., 4., and 5. above). Such responsibility and authority shall rest entirely with the Trustee or such investment manager as may be appointed to manage the investments of the Trust.

D. Delegation. The Committee may delegate any of its responsibilities under the Plan to any other person. Such delegation shall be accomplished by a written instrument executed by the Secretary of the Committee specifying the responsibilities delegated and the fiduciary responsibilities allocated to such delegate. The allocation of such responsibilities shall be effective upon the date specified in the delegation subject to written acceptance by the delegate. Any such delegation of responsibilities under this Section shall provide for reports, no less often than annually, by such delegate to the Committee of such information necessary to fully inform the Committee of the status and operation of the Plan and of the delegate's discharge of the responsibilities delegated.

E. Transmittal of Information. In order to enable the Committee to perform its functions under the Plan, the Employer shall supply full and timely information to the Committee or its authorized representative on all matters relating to the compensation of all Participants, their employment, retirement, death, or the cause for termination of employment and such other pertinent facts as may be required.

F. Duty of Care. In the exercise of its powers and duties under the Plan, the Committee shall act solely in the interest of the Participants and Beneficiaries of Plan and shall discharge its duties hereunder with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims.

G. Compensation and Expenses. The members of the committee who are not employed by the city shall be paid five hundred dollars per meeting, not to exceed compensation for one meeting per month. All reasonable expenses of the plan, including expenses incurred by the committee in connection with the performance of its duties, will be paid from trust assets, unless paid by the employer.

H. Reliance on Reports and Certificates. The members of the Committee and any delegates of the Committee shall be entitled to rely upon all tables, valuations, certificates and reports furnished by any duly appointed actuary, and on all certificates and reports made by the Trustee or by any duly appointed accountant, and on all opinions given by any duly appointed legal counsel.

I. Relationship of Fiduciaries. Each fiduciary of the Plan will be solely responsible for its own acts or omissions. Except to the extent imposed by applicable law, no fiduciary shall have the duty to question whether any other fiduciary is fulfilling any or all of the responsibilities imposed upon such other fiduciary. No fiduciary shall have any liability for a breach of fiduciary responsibility of another fiduciary with respect to the Plan or Trust unless the fiduciary knowingly participates in such breach, knowingly undertakes to conceal such breach, has actual knowledge of such breach and fails to take reasonable remedial action to remedy said breach or, through the fiduciary's negligence in performing the fiduciary's own specific fiduciary responsibilities, has enabled such other fiduciary to commit a breach of the latter's fiduciary responsibilities.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011; Ord. No. 2016-1280, § 1(Exh. A), 2-1-2016; Ord. No. 2024-1352, § 1(Exh. A), 9-16-2024)

A. Plan Continuance Not Employer Obligation. It is the expectation and intention of the Employer that this Plan will continue indefinitely, but the continuance of this Plan is not assumed as a contractual obligation by the Employer, and the right is reserved by the Employer, at any time to reduce, suspend or discontinue contributions to the Trust or terminate this Plan; provided, however, that no amendment, alteration, modification or termination of the Plan may adversely affect the accrued rights of any Participant without corresponding advantages.

B. Plan Termination Upon Dissolution. The Plan will terminate in the event:

1. The Employer is dissolved and liquidate;, or

2. The Employer is merged or consolidated with or transfers all or substantially all of the assets of the Employer to a successor or transfers to a successor all or substantially all of the assets of the Employer and such successor does not within one hundred eighty days elect to continue the Plan.

C. Effect of Plan Termination or Discontinuance of Contributions. In the event of a termination or a complete discontinuance of contributions to the Trust, the rights of all affected Participants to benefits then accrued, to the extent then funded, will thereupon become one hundred percent Vested and nonforfeitable, subject to the order of priority set forth below, and the Trustee will make a prompt determination of the fair market value of the Trust assets and it will then be applied so as to provide (to the extent not already provided) benefits in said order of priority. Benefits for each such person will be computed on the basis of credited service accrued up to the date of said termination or discontinuance.

1. Allocation of Assets. In the case of the termination of this Plan, the Committee will allocate the assets thereof (available to provide benefits) among the Participants and Beneficiaries of the Plan as follows:

a. First, in the case of benefits payable as an annuity:

(A) In the case of the benefit of a Participant or Beneficiary which was in pay status as of the beginning of the three-year period ending on the termination date of the Plan, to each such benefit, based on the provisions of the Plan (as in effect during the five-year period ending on such date) under which such benefit would be the least;

(B) In the case of a Participant's or Beneficiary's benefit (other than a benefit described in subsection (A)) which would have been in pay status as of the beginning of such three-year period if the Participant had retired prior to the beginning of the three-year period and if the Participant's benefits had commenced (in the normal form of annuity under the Plan) as of the beginning of such period, to each such benefit based on the provisions of the Plan (as in effect during the five-year period ending on such date) under which such benefit would be the least. For purposes of subsection (A), the lowest benefit in pay status during a three-year period shall be considered the benefit in pay status for such period.

b. Second:

(A) To all other benefits (if any) of individuals under the Plan that would be guaranteed under Title IV of ERISA (determined without regard to Section 4022(b)(5) of said Act) if Title IV of ERISA applied to the Plan, and

(B) To the additional benefits (if any) which would be determined under subsectiob (A) without regard to Section 4022(b)(6) of ERISA.

For purposes of this subsection, Section 4021 of said Act shall be applied without regard to subsection (c) thereof.

c. Third, to all other nonforfeitable benefits under the Plan.

d. Fourth, to all other benefits under the Plan.

2. Adjustments and Limitations. For purposes of subsection 1. above:

a. The amount allocated under any paragraph with respect to any benefit shall be properly adjusted for any allocation of assets with respect to that benefit under a prior subsection.

b. If the assets available for allocation under any paragraph (other than subsections C.1.c. and d., above) are insufficient to satisfy in full the benefits of all individuals which are described in that subsection, the assets shall be allocated pro rata among such individuals on the basis of the present value (as of the termination date) of their respective benefits described in that subsection.

c. This subsection applies if the assets available for allocation under subsection 1.c., above are not sufficient to satisfy in full the benefits of individuals described in that subsection.

(A) If this subsection applies, except as provided in subsection (B), the assets shall be allocated to the benefits of individuals described in such subsection c. on the basis of the benefits of individuals which would have been described in such subsection c. under the Plan as in effect at the beginning of the five-year period ending on the date of Plan termination.

(B) If the assets available for allocation under subsection (A), above are sufficient to satisfy in full the benefits described in such subsection (without regard to this subsection), then for purposes of subsection (A) above, benefits of individuals described in such subsection shall be determined on the basis of the Plan as amended by the most recent Plan amendment effective during such five year period under which the assets available for allocation are sufficient to satisfy in full the benefits of individuals described in subsection (A) and any assets remaining to be allocated under such subsection shall be allocated under subsection (A) on the basis of the Plan as amended by the next succeeding Plan amendment effective during such period.

3. Distribution of Residual Assets. Any residual assets of a Plan may be distributed to the Employer if:

a. All liabilities of the Plan to Participants and their Beneficiaries have been satisfied; and

b. The distribution does not contravene any provision of law.

Such allocation and provision for the retirement benefits shall be accomplished through either continuance of the Trust, the creation of a new trust, or the purchase of annuity contracts; provided, however, that the Committee upon finding that it is not practicable or desirable under the circumstances to do any of the foregoing with respect to one or more of the groups listed above, may provide some other means, including cash payments, but no change will be effected in the order or precedence and the basis of allocation established above.

D. Limitation on Rights of Participants. Nothing contained in the Plan shall give any Employee the right to be retained in the service of the Employer or to interfere with or restrict the right of the Employer, which is hereby expressly reserved, to discharge or retire any Employee or to change an Employee's rate of compensation at any time with or without cause. Inclusion under the Plan will not give any Participant any right or claim to a retirement income or any other benefit hereunder except to the extent such right has specifically become fixed under the terms of the Plan and there are funds available therefore in the hands of the Trustee. The doctrine of substantial performance shall have no application to Participants. Each condition and provision, including numerical items, has been carefully considered and constitutes the minimum limit on performance which will give rise to the applicable right.

E. Payment on Behalf of a Minor or Incompetent. In the event any amount becomes payable under the Plan to a minor or a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefor, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment to have assumed the care of such minor or incompetent. Such determination shall constitute a full release and discharge of the Trustee, the Committee, the Employer and its officers and Employees.

F. Amendments. The Employer shall have the right to amend this Plan from time to time to amend or cancel any such amendments. Such amendment shall be stated in an instrument in writing, executed by the Employer in the same manner as this Plan. Except as may be required to permit the Plan to meet the requirements for qualification and tax exemption under the Code, or any other applicable law, no amendment may be made which may:

1. Cause any of the assets of the Plan or Trust, at any time prior to the satisfaction of all liabilities with respect to Participants and their Beneficiaries, to be used for or diverted to purposes other than the exclusive benefit of Participants and their Beneficiaries and for defraying reasonable expenses of administering the Plan;

2. Have any retroactive effect so as to deprive any Participant or Beneficiary of any benefit which the Participant would be entitled to under this Plan if the Participant's employment were terminated at the time of such amendment.

G. Alienation. None of the benefits, payments, proceeds or claims of any Participant, or Beneficiary, shall be subject to any claim of any creditor and, in particular, the same shall not be subject to attachment or garnishment or other legal process by any creditor, nor shall any such Participant or Beneficiary have any right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments or proceeds which the Participant may expect to receive, contingently or otherwise, under this Plan.

H. Errors and Misstatements. In the event of any misstatement, omission of fact or error resulting in payment of benefits in an incorrect amount, the Committee shall promptly cause the amount of future payments to be corrected upon discovery of the true facts, and shall cause the Trustee to pay the Participant or the Participant's Beneficiary any underpayment, in a lump sum cash amount, or to recoup any overpayment from future payments to the Participant or the Participant's Beneficiary in such amounts as the Committee shall direct, or to proceed against the Participant or the Participant's Beneficiary for recovery of any such overpayment.

I. Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Plan.

J. Governing Law; Severability. This Plan and the Trust shall be construed, administered, and governed in all respects in accordance with the applicable laws of the State of California to the extent not preempted by applicable federal law; provided, however, that if any provision is susceptible to more than one interpretation, such interpretation shall be given thereto as is consistent with this Plan being a tax-qualified employee benefit plan within the meaning of Section 401(a) of the Code. If any provision of this instrument shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.

K. Merger or Consolidation. This Plan shall not be merged or consolidated with, nor shall its assets or liabilities be transferred to any other plan unless each Participant in this Plan (if the Plan then terminated) would receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit the Participant would have been entitled to receive immediately before the merger, consolidation, or transfer (if this Plan had been terminated). Where the foregoing requirement is satisfied this Plan may be merged or consolidated with another qualified Plan.

L. Contributions not Recoverable. It shall be impossible for any part of the contributions made under this Plan to be used for, or diverted to, purposes other than the exclusive benefit of Participants and their Beneficiaries and defraying reasonable expenses of administering the Plan; provided, however, that notwithstanding this or any other provision of this Plan, contributions made by the Employer because of a good faith mistake in fact may be returned to the Employer within one year of the date of the contribution.

M. Qualified Domestic Relations Order. This Plan must follow the terms of any qualified domestic relations order issued with respect to a Participant. A "Qualified Domestic Relations Order" is any judgment, decree or order, including the approval of a property settlement or agreement, provided that:

1. The order relates to the provision of child support, alimony or marital property rights and is made pursuant to state domestic relations or community property laws;

2. The order creates or recognizes the existence of an Alternate Payee's right to receive all or a portion of a Participant's Account balance;

3. The order specifies the name and last known mailing address of the Participant and each Alternate Payee covered by the order;

4. The order specifies the amount or percentage of the Participant's Account balance to be paid to each Alternate Payee or the manner in which the amount or percentage is to be determined;

5. The order specifies the number of payments or the period to which the order applies;

6. The order specifically names this Plan as the plan to which the order applies;

7. The order does not require this Plan to provide any type of benefits or form of benefits not otherwise provided under this Plan;

8. The order does not require the payment of benefits to an Alternate Payee which are required to be paid to another Alternate Payee under another order previously determined by the Committee to be a Qualified Domestic Relations Order; and

9. If the order requires that payments to the Alternate Payee commence before they commence with respect to the Participant, the order specifies that payments will not commence before the Participant attains or would have attained the earliest allowable retirement age under the Plan.

A Qualified Domestic Relations Order may provide that a former Spouse or Domestic Partner of the Participant is to be treated as a surviving Spouse or Domestic Partner for purposes of the death benefit provisions of this Plan. The following sets forth the procedures under which the Committee shall determine whether a domestic relations order properly qualifies.

The Committee shall not treat any judgment, order or decree as a Qualified Domestic Relations Order, unless it meets all of the requirements set forth above. If the order meets these requirements, the Committee shall follow the terms of the order whether or not this Plan has been joined as a party to the legal proceeding out of which the order arises. Upon receipt of a domestic relations order, the Committee shall notify the Participant and Alternate Payee of: (1) its receipt of the order; and (2) its need to determine the qualified status of the order in accordance with this section.

The Alternate Payee may designate a representative to receive copies of future notices with respect to the qualified status of the order. To the extent an order calls for benefits to be paid to an Alternate Payee before the order is determined to be qualified, the Alternate Payee's share of the benefits must be separately accounted for.

(Ord. No. 2011-1221, § 1(Exh. 1), 2-7-2011)

A. Application and Interpretation. Effective January 1, 2013, this Section 2.52.092 of Chapter 2.52 takes precedence over any conflicting provision of Chapter 2.52. To the extent unchanged by this section, the remaining provisions of the Plan remain in full force and effect. This Section 2.52.092 will be interpreted and administered in accordance with the applicable provisions of PEPRA, as amended from time to time.

B. Provisions Applicable to All Participants. This Section 2.52.092 applies to every Participant, regardless of when his or her participation in the Plan begins.

1. No Retroactive Benefit Enhancements. Any enhancement to a Participant's retirement benefit under the Plan that is adopted on or after January 1, 2013, will apply only to service performed on or after the operative date (as defined in Section 7522.44 of the Government Code) of the enhancement, and will not be applied to any service performed before that date. This preceding sentence will not apply to any increase to a Participant's annual cost-of-living adjustment under the Plan within existing statutory limits.

2. Purchases of Nonqualified Service Credit Prohibited. The purchase of nonqualified service credit, as defined by Section 415(n)(3)(C) of the Internal Revenue Code, is not permitted.

3. Reinstatement of Retired Participants. Except as provided under Subsection 2.52.092.B if a Participant who is receiving a retirement benefit under the Plan is employed by, or provides services to, the employer, then the Participant will be subject to reinstatement. For this purpose, "reinstatement" means that the Participant's benefit payments under the Plan will cease, and the Participant will resume participation in the Plan in accordance with Chapter 2.04.

4. Exception to Reinstatement. A retired Participant will not be subject to reinstatement under Subsection 2.52.092.B.3 if the following conditions are satisfied:

a. The Employer's appointing authority appoints the Participant either during an emergency to prevent stoppage of public business or because he or she has skills needed to perform work of a limited duration.

b. The appointment does not exceed a total of nine hundred sixty hours or other equivalent limit in a plan year.

c. The rate of pay for the appointment is neither less than the minimum nor more than the maximum paid by the Employer to other employees performing comparable duties, divided by 173.333 to equal an hourly rate.

d. The Participant does not earn any benefit under the Plan during the appointment.

e. Upon accepting the appointment, the Participant certifies in writing that he or she did not, during the twelve months preceding the appointment, receive any unemployment-insurance compensation arising the Participant's prior employment with the Employer. If the Participant accepts the appointment after receiving that type of compensation, the Employer must terminate the Participant's employment or service on the last day of the current pay period; and, this Subsection 2.52.092.B.4 will not apply to the Participant for twelve months after the termination date.

f. The appointment may not begin within the one hundred eighty-day period after the Participant's retirement under the Plan, unless one of the following exceptions applies: (i) the Employer certifies the nature of the employment or service and that the appointment is necessary to fill a critically needed position before one hundred eighty days has passed, and the City Council of the City of Delano approves the appointment at a public meeting (the appointment may not be placed on a consent calendar), or (ii) the Participant is a public safety officer or firefighter. Neither exception, however, will apply if the Participant accepted a retirement incentive upon retirement.

C. Provisions Applicable to Post-2012 Participants. This Subsection 2.52.092.C applies only to persons who become Participants on or after January 1, 2013.

1. Definition of Compensation. "Compensation" means the normal monthly rate of pay or base pay of the Participant paid by the Employer in cash to similarly situated employees of the same group or class of employment for services rendered on a full-time basis during normal working hours, pursuant to publicly available pay schedules. Deferred amounts will be included in "compensation" when earned rather than when paid. The following amounts are excluded from compensation:

a. Any amount that the Committee determines has been paid to increase the Participant's retirement benefits under the Plan.

b. Any amount that (i) is paid in-kind to the Participant, or was paid directly to a third-party (other than the Plan) for the Participant's benefit, and (ii) is subsequently converted to and received by the employee in cash.

c. Any one-time or ad hoc payments to the Participant.

d. Severance or any other payment that is granted or awarded to the Participant in connection with, or in anticipation of, a separation from employment, but is received by the Participant while employed.

e. Any payments for unused vacation, annual leave, personal leave, sick leave, or compensatory time off, however denominated.

f. Any payments for additional services rendered outside of normal working hours.

g. Any Employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniforms.

h. Compensation for overtime work, other than as defined in Section 207(k) of Title 29 of the United States Code.

i. Employer contributions to deferred compensation or defined contribution plans.

j. Any bonus paid in addition to the amounts described in Subsection 2.52.092.C.

k. Any other form of compensation that the Committee determines is inconsistent with the requirements of Subsection 2.52.092.C.1.

l. Any other form of compensation that the Committee determines should not be included in compensation.

m. For each calendar year, any amount in excess of the following applicable percentage of the contribution and benefit base specified in section 430(b) of Title 42 of the United States Code on January 1, 2013: (i) one hundred percent, for a Participant whose service is included under the old age, survivors, disability and health insurance provisions of the federal Social Security Act; or (ii) one hundred twenty percent, for a Participant whose service is not included under the old age, survivors, disability and health insurance provisions of the federal Social Security Act. The Committee will adjust the annual Compensation limit described in this paragraph after each actuarial valuation of the Plan based on changes to the Consumer Price Index for All Urban Consumers. The adjustment shall be effective annually on the January 1 following the annual valuation.

2. Participant Contributions.

a. Each Participant must contribute at least fifty percent of the normal cost of the Plan. The initial contribution rate will equal at least the greater of (i) fifty percent of the normal cost rate of the Plan, rounded to the nearest quarter of one percent, or (ii) the current contribution rate of similarly situated employees. The Employer may not pay any portion of this contribution for any Participant.

b. Once established, the Participant contribution rate will be adjusted to reflect a change in the normal cost rate, but only if the normal cost rate increases by more than one percent of payroll above or below the normal cost rate in effect on the later of: (i) the date the Participant contribution rate is first established, or (ii) the date of the last adjustment to the Participant contribution rate under this paragraph. For purposes of this paragraph, the term "normal cost rate" means the annual actuarially determined normal cost for the Plan expressed as a percentage of payroll.

c. The Participant contribution rate may be more than fifty percent of the normal cost rate, but only if the requirements of Section 7522.30(e) of the Government Code are satisfied.

d. To the extent the preceding provisions of this Subsection 2.52.092(C) would impair the terms of any contract or memorandum of understanding (MOU) in effect on January 1, 2013, between the Employer and its employees, those provisions will not apply to the employees covered by that contract or MOU until the earlier of (i) the contract's or MOU's expiration, or (ii) the renewal, amendment, or other extension of the contract or MOU.

3. Service Retirement Benefit.

a. Each Participant who has (i) completed at least five years of service, (ii) reached age fifty-two (i.e., "Early Retirement Age" for persons who become Participants on or after January 1, 2013), and (iii) filed a written application with the Committee stating when he or she desires to retire, may retire for service and receive a "service retirement benefit."

b. The service retirement benefit payable to a Participant upon retirement will equal the percentage of the Participant's Final Average Compensation, as determined in accordance with the following schedule based on the Participant's age at retirement, taken to the preceding quarter year, multiplied by the Participant's Years of Service.

D. Funding.

1. In any plan year, the Employer's contribution to the Plan, in combination with Participant contributions to the Plan, may not be less than the normal cost rate, as defined in Subsection 2.52.092.C.2.b.

2. The Committee may suspend contributions only when all of the following occur:

a. The Plan is funded by more than one hundred twenty percent, based on the computation by the Plan's actuary in accordance with the Governmental Accounting Standards Board requirements that is included in the annual valuation.

b. The Plan's actuary determines, based on the annual valuation, that continuing to accrue excess earnings could result in disqualification of the Plan's tax-exempt status under the Internal Revenue Code.

c. The Committee determines that the receipt of any additional contributions required by this subsection would conflict with its fiduciary responsibility set forth in Section 17 of Article XVI of the California Constitution.

E. Felony Convictions. If a Participant who is subject to Sections 7522.70, 7522.72 or 7522.74 of the California Government Code is convicted of a felony described in the applicable section or sections, he or she shall forfeit his or her accrued rights and benefits, and will not accrue further benefits, in the Plan to the extent provided in the applicable section or sections. This paragraph will be interpreted and administered in accordance with the requirements of Sections 7522.70, 7522.72 and 7522.74 of the California Government Code, including, but not limited to, any applicable rules governing return of Participant contributions, notice, and reversal of conviction, which requirements are herein incorporated by this reference.

(Ord. No. 2012-1249, § 1, 11-19-2012; Ord. No. 2012-1250, § 1, 12-3-2012)

A. Subject to the Employer's approval, a Participant may elect to purchase credit for Years of Service not otherwise credited to the Participant under the Plan, solely for purposes of determining the Participant's retirement benefit under the Plan. The amount credited need not be based on any actual service, however the years of service to be credited shall not exceed the actual years of service by more than two years.

B. The Employer will determine the amount of the contribution required to purchase the desired credit. The required contribution may not be greater than the estimated increase in the Employer's liability under the Plan resulting from the purchase, as determined by the Plan's actuary using the interest and mortality factors that were used in the Plan's most recent actuarial valuation.

C. To purchase service credit under this section, the Participant must, at the time and in the manner specified by the Employer, do the following: (1) file an executed written election with the Board under which the Participant agrees to contribute the amount required to purchase the credit; and (2) transfer an amount equal to the required contribution from the Participant's account under the Employer's "eligible deferred compensation plan" (within the meaning of section 457(b) of the Code) to this Plan, in a manner that satisfies the requirements of section 457(e)(17) of the Code.

(Ord. No. 2012-1242, § 1, 1-17-2012)

Editor's note— Ord. No. 2012-1242, § 1, adopted Jan. 17, 2012, set out provisions intended for use as § 4.15. For purposes of clarity and to preserve the style of this Code, with the city's concurrence and at the editor's discretion, these provisions have been renumbered and included as § 2.52.100.