Fillmore Municipal Code Ch. 2.20 Employee Retirement System

The employees of the city are now covered under the provisions of the Old Age and Survivorship Insurance provisions of the Federal Social Security Program, and it is the intention of the city council that the retirement system established by this chapter be in addition to and act as a supplement to such social security coverage.

(Ord. 279 § 2, 1958)

The "City of Fillmore Employee Retirement Plan" prepared by National Associates, Inc., and based upon the "Agreement of Trust Creating a Retirement Income Trust Company," is adopted, and said document, three copies of each being on file in the office of the city clerk, are also adopted and made a part of this chapter by this reference.

(Ord. 279 4, 1958).

This plan shall become effective on October 1, 1958 at 12:01 a.m. and each July 1st thereafter shall be the "anniversary date" of this Plan.

(Ord. 287 § 1, 1959: Ord. 279 § 1.01, 1958)

This plan shall be known as the "City of Fillmore Employee Retirement Plan" and is hereinafter referred to as the "plan." Any reference in this chapter made to the plan shall include the agreement of trust creating retirement income trust.

(Ord. 279 § 1.02, 1958)

This plan provides for those eligible employees of the employer, who become participants under this chapter, certain benefits upon retirement, death or disability, as set forth in this chapter.

(Ord. 279 § 1.03, 1958)

The following words and phrases shall have the meaning stated in this section unless it appears from the context that they have a different meaning:

(1) "Basic compensation" means the annual compensation paid by the employer to a participant for services rendered as an employee during a plan year and shall be computed for the following plan year as twelve times the monthly compensation currently being paid on the effective date and each anniversary date as applicable;

(2) "Beneficiary" means the person or estate of a deceased participant becoming entitled to benefits under this chapter upon death of a participant;

(3) "Continuous service" means employment with the employer continuously without break; provided, however, that breaks in employment due to leave of absence as authorized by employer for personal reasons or for sickness or injury whether or not arising out of the course of employment with the employer for less than two years, or for lay-off on account of reduction in force for less than one year or for service in the armed forces of the United States regardless of length of service, shall not break the continuity of service. If any such absence exceeds six months, the time in excess of six months shall be deducted in computing the length of service;

(4) "Employee" means persons who are regularly employed by the employer for a minimum of thirty hours per week for not less than twenty weeks per year;

(5) "Employer" means the city of Fillmore, California;

(6) "Participant" means an eligible employee enrolled in the plan;

(7) "Plan" means the city of Fillmore employee retirement plan as set forth in this chapter;

(8) "Trustee" means the corporation which executes the trust agreement, sometimes referred to as agreement of trust, provided for in Article IV hereof, on file in the office of the city clerk, as trustee and any successor corporate trustee authorized to transact a trust business within the state of California;

(9) "Trust estate" means all cash and securities and all other assets of whatever nature deposited with or acquired by the trustee;

(10) "Year" or "plan year means the twelve-month period commencing on the anniversary date of the ordinance codified in this chapter.

(Ord. 279 § 2.01, 1958)

The plan shall be administered by an advisory board (sometimes referred to in this chapter as the "committee") consisting of five members, three of whom shall be appointed by the employer and shall hold office at the pleasure of the employer, and two of whom shall be elected by the participating employees. The members of the committee shall serve without compensation.

(Ord. 279 § 3.01, 1958)

The employer shall appoint and may remove the three members of the advisory board representing the employer. The participating employees shall elect, and may by election remove the other two members of the advisory board.

(Ord. 279 § 3.02, 1958)

Immediately upon the appointment of the members of the advisory board the employer shall call an organization meeting of the advisory board at which meeting the committee shall elect a chairman, a secretary, and such other officers as the advisory board shall deem appropriate, and the advisory board shall adopt and promulgate such rules, not inconsistent with the plan, as it shall deem advisable to carry out the purposes and intent of this plan, and for its effective administration. The advisory board may from time to time, by a majority vote, revise and amend its rules.

The committee shall have power to act by a majority of its members present at any meeting duly and regularly called pursuant to the method provided for by the advisory board. The committee may delegate to any one of its members the duty of instructing the trustee as to the purchase of all endowment and insurance policies and the conversion of insurance policies into annuity policies or contracts, the payment of premiums, and any other ministerial acts. No direction, however, to the trustee with reference to borrowing for the trust or trust estate or with reference to the investment of any part or portion of the trust estate shall be valid unless authorized by a majority of the committee at a meeting duly called therefor, and the certificate of the resolution authorizing such direction to the trustee is signed by a majority of the committee.

(Ord. 279 § 3.03, 1958)

The advisory board shall have power and authority:

(1) To perform all acts and do all things necessary to carry out this plan and the intent and purposes thereof, whether express provision therefor is stated in this chapter or not, including the duty and power to give to the trustee all instructions necessary with reference to any of the acts which the trustee is required by the provisions of this plan or the provisions of the agreement of trust to perform pursuant to directions of the advisory board including directions to the trustee with respect to any payments or distributions to be made by the trustee as provided in the plan or in the trust agreement;

(2) The advisory board shall keep reasonable records and accounts required to conduct the administration of this plan.

(Ord. 279 § 3.04, 1958)

No member of the advisory board shall be liable to any participant or beneficiary, or to the employer, for any of his acts or omissions in connection with the maintenance or administration of this plan, provided he acts in good faith. All directions of the advisory board to the trustee, as provided in this chapter, shall be binding and conclusive upon all parties for the benefits provided therein, or in, to or under the trust or trust estate. All decisions of the advisory board as to the facts of any case and the meaning and intent of any of the provisions of the plan or of the rules and regulations made pursuant thereto, and of their application to any case, shall be final and conclusive and the trustee may conclusively rely upon any direction given it by the committee or any member thereof designated for that purpose as to ministerial acts as provided in Section 2.20.045.

(Ord. 279 § 3.05, 1958)

In any matter affecting only one of the members of the advisory board as a participant under the plan, separate and apart from his interest in common with all other participants or his status as a member of the advisory board, such interested member shall have no authority or vote in the determination of such matter as a member of the advisory board, but the other members of the advisory board shall determine such matter, provided, however, that this shall not be deemed to take from the interested member any of his rights under this chapter as a participant. If the other members of the advisory board are unable to agree to a decision affecting the rights of the disqualified member or members, then the employer shall appoint a substitute member of the advisory board who shall act as a member of the advisory board only upon the question affecting the rights of the disqualified member and who shall thereafter be removed as a member of the committee.

(Ord. 279 § 3.06, 1958)

Any member of the advisory board may resign effective upon delivery of written notice to the chairman, the trustee and the employer.

(Ord. 279 § 3.07, 1958)

The committee, in addition to the powers heretofore granted, shall have the right to employ and consult such attorneys, investment counsel, actuaries, and consultants as it deems advisable, and to incur any reasonable administrative expense, such as for clerical or other services, as is reasonably necessary to enable the committee properly to function and carry out its duties and powers.

The committee shall advise the employer in writing of all expenses so incurred. Not less than fifteen days thereafter the committee shall authorize the trustee to pay such expenses out of the trust estate; provided, however, that the employer, before expiration of the fifteen days, may order the trustee to withhold payment of all or part of such expenses as the employer regards as unnecessary or unreasonable, which order shall govern the trustee's actions. Thereafter the trustee shall only pay the expenses so protested upon the order of court or upon further instructions from the employer.

(Ord. 279 § 3.08, 1958)

The trust shall be created by an agreement of trust creating retirement income trust entered into between the employer and, as trustee, such bank, trust company or corporation qualified under the laws of the state of California to act as trustee as shall be selected by the employer. A copy of the agreement of trust is in file in the office of the city clerk and by reference incorporated in this chapter and made a part hereof.

(Ord. 279 § 4.01, 1958)

Neither the establishment of the plan nor the trust nor any modification thereof nor the creation of any fund or account nor the payment of any benefits shall be construed as giving any participant or any person whatsoever any legal or equitable rights against the employer, the trustee or the committee, except as expressly granted to them by the plan, and shall not be construed as giving any participant the right to be retained in the service of the employer, and all participants shall be subject to discharge to the same extent as though this plan and the trust were not in existence. Neither the employer, the advisory board nor the trustee guarantees the trust or trust estate against loss or depreciation, nor shall they or any of them be responsible for the validity of any retirement income, insurance, annuity or life insurance policy nor for the act of any person or persons which shall render such policies null or void for the failure on the part of any insurance company to pay the profits and avails and benefits of any such policy if and when the same become due and payable. Neither the employer nor the advisory board shall be liable in any manner to any participant, retired employee, beneficiary or other person for any act or omission of the trustee. Moreover, the trustee shall not be liable in any manner to any participant, retired employee, beneficiary or any person, for any act or omission of the employer or the advisory board.

(Ord. 279 § 4.02, 1958)

Subject to the provisions of subsection (a) of Section 2.20.100 each plan year the employer shall pay to the trustee the estimated total annual cost of the plan for such plan year either in one lump sum or in such installments as it may desire.

(Ord. 279 § 4.03, 1958)

From the moneys received by the trustee and upon written direction of the advisory board, the trustee shall:

(1) Purchase such policies of insurance and pay the premiums thereon as may be directed by the committee. The power granted by the advisory board to pay a premium shall be the authority to the trustee to continue the payment of such premium until notified otherwise. It shall be the duty of the trustee promptly upon receiving notice of premiums due from the insurance company to notify the committee thereof;

(2) Pay permanent disability and severance benefits;

(3) Pay the death benefits in the amounts hereinafter provided when and as the same are received from the insurance company issuing the policy upon the respective deceased participant;

(4) Pay trustee's fees, actuarial and other administrative fees and miscellaneous;

(The directions as provided for in (1), (2), and (3) may be given by a member of the advisory board duly authorized by a majority of the advisory board to give such directions);

(5) On direction of the committee, to invest the trust estate or such portions thereof as the committee may direct in any kind of property, real, personal, or mixed, and every kind of investment, specifically including, but not by way of limitation, corporate obligations of every kind, and stocks, preferred or common, whether or not such investments are authorized for trust funds under the law of California, the intent being to give the advisory board full power to direct the investment of the trust estate in such manner as it may deem advisable, exercising judgment and care, under the circumstances then prevailing, which men of prudence, discretion and intelligence, exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital.

(Ord. 279 § 4.04, 1958)

Each participant shall contribute annually an amount determined by the following table based upon age at the time of entry into the plan:

The contribution of each and every participant who is receiving compensation from the employer shall be deducted regularly from his compensation. Participants who are not receiving compensation because of leaves of absence, or other cause shall pay their contributions monthly to the employer.

Contributions by the participant shall terminate:

(1) At severance of employment;

(2) At death;

(3) At permanent disability as of the date permanent disability commences;

(4) At normal retirement date;

(5) Upon induction or entrance into the armed forces.

The contribution by the participant shall first be credited to the mortality charge in the policy held by the trustee for his benefit and the remainder shall be credited to the funding of his normal retirement income.

(Ord. 279 § 5.01, 1958)

(a) The contribution of the employer shall be the difference between the contributions of the participants and the amount necessary to pay the requirements of the plan. The employer's contributions shall be made on written order of the committee.

(b) It is the intent of the employer as hereinbefore recited to keep the plan actuarially sound each year, and the employer shall make contributions in an amount which will do so.

(Ord. 279 § 5.02, 1958)

For the purpose of valuating the trust estate at each anniversary date and at such other time or times as may be necessary, to determine that the trust estate is actuarially sound to provide the benefits set forth in this chapter, the trust estate shall be segregated into various divisions or accounts defined as follows:

(1) "Policy account" means the life insurance and/or annuity policy or policies held by the trustee to meet the requirements of the plan;

(2) "Supplemental conversion account" means the cash on hand and on deposit, together with such securities as may be held by the trustee and being accumulated for the conversion of the whole life or equivalent policies to annuities;

(3) "Suspense account" shall mean that portion of the trust estate, whether cash or securities, not required to fund participants' benefits and from which expenses of administration shall be paid.

(Ord. 279 § 6.01, 1958)

As of the effective date the committee shall furnish the employer and the trustee in writing with an estimate of the requirements for the first plan year as follows:

(1) The amount of the policy premiums;

(2) The administrative costs;

(3) The amount required to fund the supplemental conversion account which shall be determined in the following manner:

(A) First, the life insurance company issuing the special whole life or equivalent policy shall certify to the committee as to the conversion sum required for each age of issue for each five hundred dollars face amount of the policy,

(B) Second, the conversion sum shall be divided by the number of years under the plan to normal retirement date for each age of issue. The result is the portion of the conversion sum required to be funded each year at each age of issue for each ten dollars per month of normal retirement income,

(C) Third, the deposit required to fund the portion of the conversion sum shall equal the single pure-endowment premium without loading, but discounted for mortality and interest in accordance with the Commissioners' Standard 1941 Ordinary Table of Mortality and with three and one-half percent compound interest,

(D) Fourth, the total amount of normal monthly retirement income shall be determined for each age of issue for all participants. The number of ten dollar units shall then be determined. The total number of ten dollar units shall then be multiplied by the single pure-endowment premium required for each ten dollars at each age of issue,

(E) Fifth, the sum of all single pure-endowment premiums for all ten dollar units for all ages of issue becomes the amount required to fully fund the supplemental conversion account for the first plan year as of the effective date.

(Ord. 279 § 6.02, 1958)

As of each anniversary date the advisory board shall furnish the employer and the trustee in writing with an estimate of the requirements for the ensuing year, as follows:

(1) The amount of policy premiums due, including policies upon all participants enrolling as of the anniversary date;

(2) The administrative costs;

(3) The amount required to fund the supplemental conversion account which shall be determined to the satisfaction of the advisory board in the following manner:

(A) First, the trustee shall advise the advisory board of all of the assets in the trust estate. The advisory board shall then value all of the assets in the trust estate, other than the policies, at not to exceed the market value of each asset as of the applicable anniversary date,

(B) Second, for the participants who are enrolled as of the applicable anniversary date, the amount required to currently fund the supplemental conversion account shall be determined as provided in Section 2.20.110(3),

(C) Third, for all participants who were enrolled prior to the applicable anniversary date the applicable portion of the conversion sum shall be multiplied by the number of completed years. The result shall be multiplied by the single pure-endowment premium without loading for the attained age but discounted for mortality and interest in accordance with the Commissioners' Standard 1941 Ordinary Table of Mortality and three and one-half percent compound interest,

(D) Fourth, the liability of the supplemental conversion account shall be determined by adding the result of the calculations provided for in the foregoing subdivisions "(B) " and "(C),"

(E) Fifth, the amount required to fund the supplemental conversion account for the next plan year shall be the difference, excluding policies, between the gross liability of the supplemental conversion account and the value of the assets in the trust estate determined pursuant to the provisions of the foregoing subdivision "(A)."

(Ord. 279 § 6.03, 1958)

The trustee from time to time may have in its possession funds which under the terms of the plan and trust are not distributable to a particular participant, or his beneficiary or his estate, which funds may include policy dividends and dividend credits. All such funds, from whatever source obtained, together with the policy dividends and dividend credits, excepting post mortem dividends and final dividends payable at maturity of the policy, shall be applied by the trustee toward the payment of the policy premiums due, or next successively due, on all of the policies held by the trustee at the time of the payment of the premiums. The funds so applied shall reduce the contribution to be made by the corporation, without affecting the amount of contribution to be made by each participant.

(Ord. 286 § 1, 1959: Ord. 279 § 6.04, 1958)

Employees eligible to participate under the plan shall do so only as of the effective date or anniversary date of the plan and shall be those present and future employees who:

(1) Are employed by the employer on the effective date and on said date or any anniversary date are between the ages of twenty-five and sixty-five inclusive, and shall have completed six months of continuous service in the employ of the employer. For the purpose of this paragraph the age of the employee is to be determined as of his birthday nearest such effective date or such anniversary date, as the case may be.

(2) Are employed by the employer after the effective date, and on any anniversary date, are between the ages of twenty-five and sixty-five, inclusive, and have completed six months of continuous service in the employ of the employer. For the purpose of this paragraph the age of the employee is to be determined as of his birthday nearest such anniversary date.

(Ord. 279 § 7.01, 1958)

Any employee eligible to participate in the plan on the effective date, or on any anniversary date shall become a participant by signing and delivering to the employer an application for enrollment on such form as shall be furnished by the employer, such application to be signed and delivered within sixty days after the effective date, or after any anniversary date. If an application is filed after the effective date, or after any anniversary date, as the case may be, effective as of said dates, the eligible employee shall be liable for his contributions as provided in this chapter commencing as of the effective date, or any anniversary date, as the case may be; provided, however, that any and all applications by employees of the employer now eligible to enroll as of the effective date, which have been delivered to the employer prior to the adoption of this plan shall have the same force and effect as though delivered to the employer within sixty days after the effective date, as hereinbefore provided.

(Ord. 279 § 7.02, 1958)

Each participant agrees to be and shall be bound by all of the terms and conditions of this plan and the terms and conditions of any amendments hereto and by the agreement of trust, and by such rules and regulations as the advisory board may from time to time adopt or promulgate for the administration of this plan. Each participant shall be ineligible to claim from the employer any retirement or pension benefits other than provided in this chapter.

(Ord. 279 § 7.03, 1958)

If the employment of a participant is terminated after the effective date, and he has been paid his severance benefits, and he is subsequently reemployed, such employee shall be deemed a new employee of the employer.

(Ord. 279 § 7.04, 1958)

If a former participant who entered the armed forces and who did not receive his severance benefits is reemployed, such employee will not be deemed a new employee of the employer, but will be eligible to file his application for participation in the plan as of the next following anniversary date and in addition to pension benefits accrued thereafter he shall also receive credit for pension benefits accrued prior to his entry into the armed forces.

(Ord. 279 § 7.05, 1958)

This plan is based upon the purchase by the trustee on direction of the advisory board, as hereinafter specifically provided, of endowment and/or life insurance policies which may be converted into annuity policies, as hereinafter more specifically provided. The death benefits and the normal annual retirement income, as hereinafter provided, are to be paid solely by the insurance company issuing the policy or policies provided in this chapter. The severance benefits provided in this chapter are payable from the trust estate, except the percentage of the surrender value of the participant's policy of life insurance, which is payable by the insurance company and which the trustee shall be obligated to pay only if and when received from the insurance company. All benefits, as hereinafter set forth, are payable from the sources specified in this chapter, and in the manner specified and not otherwise.

(Ord. 279 § 8.01, 1958)

Each participant who continues as a participant to his normal retirement date, as defined in this chapter, will receive a normal annual retirement income payable monthly to begin as of the normal retirement date. It is assumed that the employer will retire each of its employees on his normal retirement date and the normal retirement income will commence as of the normal retirement date. For participants whose services with the employer terminate prior to the normal retirement date, a severance benefit, or early retirement benefit, as hereinafter described, will be paid which shall satisfy all claims of the participant for benefits under this chapter.

(Ord. 279 § 8.02, 1958)

The normal retirement date will be:

(1) The anniversary date nearest the sixty-fifth birthday for any participant who is sixty years of age or under on the date of his enrollment;

(2) The anniversary date nearest five years after the enrollment of participants who enrolled at ages sixty-one to sixty-five inclusive.

For the purposes of paragraphs (1) and (2) next above, the age is to be determined as of the participant's birthday nearest his enrollment.

(Ord. 279 § 8.03, 1958)

Provision is made for retirement by a participant before or after his normal retirement date, as follows:

(1) A participant who has attained the age of fifty-five and who shall have completed at least twenty years of continuous service under the plan, may retire at any time thereafter before his normal retirement date, and in the event of such earlier retirement, shall receive the actuarial equivalent of the retirement income which would have been paid had he remained employed until his normal retirement date;

(2) With the approval of the employer, a participant may remain employed by the employer after his normal retirement date, but at that date the contributions of the participant and of the employer shall cease. Such participant shall not be entitled to any benefits (except death benefits) until he leaves the employ of the employer, and his normal retirement income will not be increased because of his employment beyond the normal retirement date, except as it may be increased by the application of advanced age annuity rates, as provided by the policy or policies in trust; provided, however, such postponed retirement income shall commence not more than ten years after the normal retirement date.

(Ord. 279 § 8.04, 1958)

For each participant who joins the plan and continues as a participant until normal retirement date, the normal monthly retirement income, payable monthly, to begin on the normal retirement date, shall be in an amount equal to the total of the following:

(1) For current and future service: An amount equal to one percent of his current average monthly compensation for the year immediately preceding the date of joining the plan multiplied by the number of years of continuous service from the time the participant first joins the plan to his normal retirement date;

(2) For past service: An amount equal to two dollars multiplied by the number of years of continuous service prior to the effective date of the plan, less six months;

(3) The minimum retirement benefit will be twenty-five dollars per month.

(Ord. 279 § 8.05, 1958)

(a) The advisory board shall instruct the trustee to purchase for each participant, upon his enrollment, an ordinary life, or equivalent, insurance policy on the life of each such participant in an amount equal to fifty times the amount of his normal monthly retirement income. Each such policy shall contain a provision substantially as follows:

"CONTROL OF POLICY

"Anything in this policy to the contrary notwithstanding, the right to receive all benefits and exercise all options and privileges described herein or allowed hereunder by the Company, shall prior to the death of the Insured, and without notice to or the consent of and to the exclusion of the Insurance and any Beneficiary, belong to the Applicant named in the application for this policy. Any benefits payable by reason of the death of the Insured, shall be paid in accordance with the Beneficiary designation in this policy.

CHANGE OF PLAN

"This policy, while premium paying, may be exchanged on any policy anniversary, without medical examination, for a policy on the Retirement Income Plan issued on the policy form and at the published premium rate in use by the Company at the issue of this policy, upon written request and upon payment of the difference at the date of such exchange, between the cash value of this policy and the cash value of the policy issued in exchange, plus a sum not in excess of 5% of such difference. The policy issued in exchange shall be for a face amount of Insurance not in excess of the amount of this policy and shall be written as of the same date of issue and age as this policy, and shall be subject to any indebtedness and assignment then outstanding against this policy."

(b) Not less than sixty days prior to each anniversary date, the advisory board shall furnish to the trustee a list of all then participants who will, on the anniversary date, reach their normal retirement date, and on direction of the advisory board, the trustee shall arrange with the insurance company or companies issuing life insurance policies on such participants to convert the policies on or as soon after the anniversary date as reasonably possible into annuity policies or contracts complying with the provisions of this plan. In the event that any such participant should die on or subsequent to the anniversary date and prior to the actual issuance of the conversion policy or contract, said conversion policy or contract shall nevertheless issue, and the sixty monthly annual installment payments shall be made to the persons entitled thereto the same as though the said conversion policy or contract has been issued prior to the death of such participant.

(c) All policies and contracts shall be held by the trustee, and title thereto shall vest in the trustee. Wherever a participant shall become entitled to normal retirement income, the trustee, on direction of the advisory board, shall either cause the policy which the trustee has purchased for the participant to be delivered to him or his beneficiary or a certificate from the insurance company issuing the policy, certifying to the benefits which the insurance company is obligated to pay to the participant, and in the event of his death to his named beneficiary or estate if there be no named beneficiary, and thereafter the participant, and in the event of his subsequent death, his beneficiary or personal representatives in the event of there being no designated beneficiary, shall look solely to the insurance company issuing the policy or the certificate for the normal retirement income payments.

(d) If the trustee does not have sufficient cash in the supplemental conversion account for the conversion of all of the policies of the participants, the trustee shall liquidate such of the assets in the account or in any other account in the trust estate as may be necessary to cause the conversion of the policies, unless the committee shall give the trustee specific directions as to what assets shall be so liquidated for the purpose, or to transfer sufficient cash from other accounts in the trust estate to the supplemental conversion account. The trustee shall make all necessary conversion payments on or before the last business day of the plan year preceding the next anniversary date.

(e) The advisory board shall arrange that all policies and contracts shall bear the same premium due date.

(f) For the purpose of maintaining sufficient funds in the supplemental conversion account, it shall be presumed that, until his death or the severance of his employment with the employer, each participant will remain a participant up to and including his normal retirement date and be entitled on and from the date to normal retirement income. The trustee, on direction of the advisory board, shall, each plan year, for each such participant deposit in or credit to the supplemental conversion account the then value of the proportionate annual amount of the sum necessary at the participant's normal retirement date to convert the life insurance policy purchased for him into an annuity policy or contract complying with the terms of this plan. In the event of any such participant dying or his employment with the employer being terminated prior to his reaching his normal retirement date, no further payments shall be made into or credited to the supplemental conversion account on his behalf.

(Ord. 286 § 2, 1959: Ord. 279 § 8.06, 1958)

As the basic compensation of a participant increases or decreases, the advisory board, on each anniversary date, shall direct the trustee to increase or decrease the normal monthly retirement income as hereinafter provided. No increase or decrease in benefits shall be made until the change in compensation produces a change in normal retirement income of ten dollars or more per month on any such anniversary date. No change shall be made in the normal annual retirement income of a participant during the last five years preceding his normal retirement date.

Such changes in benefits shall be provided as follows:

(a) Increases: For each participant entitled to an increase in benefits, the advisory board shall instruct the trustee to purchase an additional policy as of the participant's attained age on the life of the participant. The policy funding the benefits because of an increase in annual compensation since the date of the last adjustment in benefits shall provide for the additional annual retirement income, payable monthly, based on one percent of the increase in annual compensation, multiplied by the number of years from the applicable anniversary date of the increase to the participant's normal retirement date.

(b) Decreases: For each participant subject to a decrease in benefits, the advisory board shall instruct the trustee to decrease the participant's normal annual retirement income. The decrease shall be in an amount equal to one percent of the decrease in compensation, multiplied by the number of years from the applicable anniversary date of the decrease to the participant's normal retirement date.

The decreased benefit shall be evidenced by a continuance of the applicable policy or policies held in trust, for the decreased amount. Any cash surrender value received by the trustee because of such decrease in policy or policies shall be retained by the trustee and applied toward the future cost of the plan in the next succeeding years.

(Ord. 279 § 8.07, 1958)

The life insurance and annuity policies referred to throughout this plan shall be purchased from a legal reserve life insurance company admitted to do business in the state of California, and the advisory board shall select the life insurance company or companies.

(Ord. 279 § 8.08, 1958)

If the permanent disability of a participant occurs prior to his normal retirement date, death, or termination of employment, he shall be entitled to the entire trust estate applicable to the participant at the time of the commencement of said permanent disability without reference to any table of severance benefits as hereinafter set forth.

The participant will be regarded as totally disabled when, by reason of accidental bodily injury or sickness, his average monthly earned income for a period of six months has not exceeded one-fourth of his former earned income (averaged monthly for the twelve months immediately preceding such six months) and such disability will be regarded as permanent while the earned monthly income of the participant, on account of such injury or sickness, does not exceed said one-fourth.

(Ord. 279 § 8.09, 1958)

(a) If the death of a participant occurs prior to his retirement date, termination of employment with the employer, or payment of permanent disability benefits, then the death benefits, in an amount which will be fifty times his normal monthly retirement income, subject to the applicable provisions of law and of the policy in trust purchased for the beneficiary, and to any restrictions contained in this chapter, will be paid to the beneficiary named in the policy, or in the absence of a designated beneficiary, to the estate of such participant. The participant at any time may change his designation of beneficiary or beneficiaries by filing such beneficiary designation in writing with the employer.

(b) Such death benefits shall be subject to the exceptions in said policy set forth and all death benefits mentioned in this section shall be specifically limited to the proceeds of the policy on his life in the trust estate.

(Ord. 279 § 8.10, 1958)

Should any retired participant die before having received the minimum of sixty monthly income payments as provided in this chapter, the remainder of the minimum monthly income payments shall be paid to the named beneficiary or, in the absence of a named beneficiary, to his estate. Within the plan year prior to normal retirement date, the participant, however, may direct the advisory board to elect such other guaranteed provision or type of annuity as may be provided by the policy, provided, however, that the alternate annuity shall be the actuarial equivalent of the "sixty months certain" annuity.

(Ord. 279 § 8.11, 1958)

If the employment of a participant is terminated for any reason other than death or permanent disability before his normal retirement date, such participant shall be entitled to, and the committee shall direct the trustee to pay, severance benefits as follows:

(1) If such termination occurs during the first five years under the plan, such severance benefits shall be the total amount of the participant's contributions to the plan;

(2) If such termination occurs after the participant's first five years under the plan, such severance benefits shall be the total amount of the participant's contributions plus three percent per year thereon;

(3) Should the employment of a participant be terminated more than five years after his enrollment or after age sixty-five, he may elect to receive, in lieu of the cash available to him under the terms of this paragraph, such an annuity as can be purchased with the cash under the terms of the policy held by the trustee for his benefit. Such election shall be given to the advisory board in writing and the advisory board shall direct the trustee accordingly;

(4) In all matters regarding severance and severance benefits, the judgment of the advisory board shall be final and conclusive and binding on all parties thereto.

(Ord. 279 § 8.12, 1958)

(a) In order to comply with regulations issued pursuant to the Internal Revenue Code, and notwithstanding anything in this plan to the contrary, if the full current costs of the plan have not been met at any time prior to ten years from the effective date of this plan, or in the event of the termination of the plan prior to ten years from the effective date, no participant or retired, discharged or resigned participant whose annual retirement benefits under the terms of the plan will exceed fifteen hundred dollars shall be entitled to benefits, including but not limited to any retirement or severance benefits available to a living participant and any death or survivor's benefits payable on behalf of a participant who dies after retirement or termination of service, if the employer's contribution to the cost of which exceeds the greater of (1) Twenty thousand dollars; or (2) An amount equal to twenty percent of the first fifty thousand dollars of the participant's average regular annual compensation while under the plan, multiplied by the number of years since establishment of the plan; provided, however, that during such time as the plan is in full effect and the employer's current costs have been met, nothing contained in this section shall restrict the full payment of any insurance, death or survivor's benefits on behalf of a participant who dies, or restrict the current payment of full retirement income benefits called for by the plan for any retired participant. Any sums retained by or reverting too the trustee by reason of the restrictions contained in this section shall be distributed upon written direction of the advisory board or used pro rata for the benefit of the then participants other than those to whom such restrictions apply, in the proportion which the cash surrender value of each participant's policy bears to the total cash surrender value of all policies then held in trust.

(b) Notwithstanding anything in this chapter to the contrary, in the event any of the restrictions contained in this paragraph become operative upon the retirement or termination of service of a participant, the trustee shall take such steps as may be authorized by the advisory board in writing to withhold benefits or amounts which would be distributable to such participant, except for the restrictions contained in this section, and subsequently to make available to such participant such benefits or amounts upon removal or elimination of such restrictions.

(Ord. 279 § 8.13, 1958)

(a) The interest of any participant or his beneficiary in the income, or in any policy, or in the trust estate shall not in any event be subject to sale, assignment, hypothecation, or transfer, and each participant, or his beneficiary, is prohibited from anticipating, encumbering, assigning, or in any manner alienating his or her interest under the trust, and is without power to do so, except as may otherwise be provided for in the trust, nor shall such interest of any participant, or his beneficiary, be liable or subject to his debts, liabilities or obligations, now contracted, or which may hereafter be contracted, and such interest shall be free from all claims, liabilities, bankruptcy proceedings, or other legal process now or hereafter incurred or arising; nor shall the same, nor any part thereof, be subject to any judgment rendered against any such participant or beneficiary.

(b) No participant shall have any interest in any of the assets held by the trustee unless and until he becomes entitled thereto, upon his reaching his normal retirement date, upon termination of his employment or of his participation in the plan, upon his death, upon his permanent disability, or upon termination of the trust, all as provided in the plan.

(Ord. 279 § 8.14, 1958)

In the event that any participant is physically disabled by sickness or injury, or from other cause is unable to care for himself, and no legal guardian has been appointed for him, any and all benefits payable to such participant may, on the direction of the advisory board, in its unlimited discretion, until such time as a legal guardian of his estate may be appointed, be paid for his use and benefit to any person with whom he is living or who is caring for or tending to him. Neither the advisory board nor the trustee shall be under any obligation to have appointed a guardian of either his person or his estate. The purpose and object of this provision is the belief by the employer that in the event of a participant's being unable to care for himself, that it will normally be to the advantage of the participant to have the payments due to him paid to the person who is caring for him rather than to have the amount of such payments reduced by the costs necessary to the appointment of a guardian of either his person or his estate, and to that end that the advisory board should have the discretion herein given to it to direct the payments for such disabled participant to such person as the advisory board feels is caring for him and will apply the payments to his use and benefit.

(Ord. 279 § 8.15, 1958)

Should the trustee be unable to make any payment of a benefit or distribution of any funds or certificates of insurance policies or annuity contracts required to be paid or distributed to any person entitled thereto hereunder by reason of his being absent from his last designated address as furnished by such person to the employer, then the trustee shall notify such person by registered mail addressed to him at such last designated address that the payment or distribution or certificate is being held for such person by the trustee, and in such event if no claim or request for payment or distribution or delivery of certificate is received by the trustee from such person entitled thereto within one year from the date of mailing such registered letter, then the advisory board shall in writing instruct the trustee that such person's right to such payment, distribution or certificate has been forfeited, and the right thereupon be forfeited and terminated without further notice and the payment or distribution or proceeds of the certificate which would otherwise have gone to such person shall remain a part of the trust estate and any proceeds of any certificate which cannot be so delivered shall be paid into the suspense account of the trust estate; provided, however, that if within five years thereafter the person entitled to said payments shall contact the advisory board and advise it of his place of residence and request payment to him of the forfeited benefits, the advisory board shall direct the trustee to pay to the person the benefits that he would have been entitled to had his location and address been known to the advisory board or the trustee at the time the benefits first became due and payable to him. Should, however, no claim be made by the end of this five-year period by a former participant for his forfeited amounts so credited to the suspense account of the trust estate, then these amounts shall be transferred to the active trust estate.

(Ord. 286 § 3, 1959: Ord. 279 § 8.16, 1958)

It is expected that normally the employer will nominate as members of the advisory board, principals, officers or employees of the employer, but the members of the committee in discharging their duties or such member shall not be deemed to be acting for or as the officers, servants, agents or employees of the employer. The employer shall not be liable for any act of the advisory board or of any member thereof. The sole obligation of the employer in appointing as members of the committee is to appoint persons whom the employer believes to be competent. The employer shall not be liable for any act, whether of misfeasance or otherwise, of the trustee, or of any officer, agent or employee of the trustee. The trustee shall not be deemed or considered as an officer, agent, employee or representative of the employer or of the advisory board.

The employer shall have no duty or liability to any participant or any prospective employee other than to make the contributions to the trust estate in the manner and within the limits herein provided. If during the period this plan is in force and effect the employer pays to the trustee the contributions made by the participants and its contributions in the manner and within the limits provided in this chapter, then the employer shall not be liable for any failure or insufficiency of the trust estate in any respect. In no event shall the employer or the committee, or any member thereof, or the trustee, be the guarantor of the solvency of any insurance company from which any insurance, endowment, or annuity policy or retirement income contract may have been purchased; nor shall the employer, or committee, or any member thereof individually, of the trustee, be liable in any way for the failure of any insurance company from which any insurance, endowment or annuity policy or retirement income contract may have been purchased to comply with the obligations of such policy or contract, or for the failure, refusal or inability of any such insurance company to make the payments required of it under any insurance, endowment or annuity policy or retirement income contract issued by it. Nor shall the employer, the trustee (provided it follows the directions of the committee) the committee, or any of its members, (provided the directions of the committee as to the investments are made in good faith), be liable for the shrinkage of the trust estate or of any investment into which the assets of the trust estate have been converted.

The trustee shall not be liable to any participant or beneficiary, or to the employer, or the advisory board, or to any other person, for any act done or performed by it in the administration of the trust which is done or performed pursuant to directions given to it by the committee or by a member of the committee authorized to give such directions.

(Ord. 279 § 9.01, 1958)

The benefits provided for in this chapter, insofar as they may be met out of funds at any time and from time to time in the trust estate, are irrevocable. Under no circumstances shall amounts of money contributed to or any part of the trust estate be recoverable by the employer from the trustee or from any participant or beneficiary or be used for or diverted to purposes other than for the exclusive benefit of the participants and their beneficiaries hereunder; provided, however, that in the event the employer should make any contribution for itself or for any participant employee in excess of the amount required of it under the provisions of this plan, due either to erroneous estimates being furnished the employer or by reason of a participant leaving the employ of the employer after his contribution or a portion thereof for a plan year had been paid in advance by the employer to the trustee, in excess of the contribution that would be due for the time he was in the employer's employ, or for other cause, then such excess contribution by the employer shall be credited to it and deducted from the next contribution due from it to the trust.

(Ord. 279 § 10.01, 1958)

Although this plan is irrevocable, as set forth in Section 2.20.235, it may at any time and from time to time be amended by the employer, and the agreement of trust may be amended by the employer and the trustee without joinder of the participants, or any of them, but no such amendment or modification shall adversely affect any rights theretofore acquired by any participant in or to or with respect to the proceeds of contributions theretofore made under the plan by the participants or by the employer, except such changes, amendments or modifications, if any, as may be required to permit the plan to meet the requirements of the Internal Revenue Code of 1954 or of any subsequent law.

(Ord. 279 § 10.02, 1958)

While the employer hopes and expects to continue the payments and contributions to be made by it under the plan until all participants retire, die, or withdraw from service, the employer expressly reserves the right to terminate the plan at any time. Termination of the plan shall be effected by the employer by serving a notice of termination upon the trustee, the board and upon each participant.

(Ord. 279 § 10.03, 1958)

Upon termination of this plan the trustee, upon direction by the advisory board, shall liquidate all assets held by the trustee other than policies of insurance, and shall thereupon pay or cause to be paid all debts and obligations of the trust estate which have then matured, and all reasonable costs and charges of the advisory board and of the trustee, and thereafter shall proceed to settle or cause to be settled or disposed of any and all claims then outstanding for or against the trust estate. The trustee upon direction of the advisory board shall transfer to each participant any policy of insurance or annuity contract covering each such participant, and shall furnish to the committee a list of the policies and contracts so transferred and the transferees. Any balance remaining in the trust estate after the payment of obligations, costs and expenses of administration and the settlement of claims for and against the trust estate, shall then be paid to the participants, each to receive that proportion of the balance which the value of his interest in the trust estate, including all cash value of policies or contracts on his life, bears to the total value thereof. Distribution having been made as above provided, the trustee, the committee, and the employer shall be fully and finally discharged from any and all obligation under this plan or the trust, and no participant shall have any further right or claim thereunder.

(Ord. 279 § 10.04, 1958)

In the event that either the trustee or the advisory board should desire any instructions from a court of competent jurisdiction with reference to the administration of this plan or of the trust, either the trustee or the advisory board may institute an action for instructions and both the trustee and the advisory board shall be parties to any such proceeding. If the action is with reference to or affects any rights or privileges of any class of participants or beneficiaries, or any duty of either the trustee or the advisory board as to any class of participants or beneficiaries, it shall not be necessary to make any of the participants or beneficiaries of the class parties to the action, it being deemed, first, because of the large number of participants and beneficiaries that it would be cumbersome, inconvenient, unduly expensive and impractical to attempt to make them or representatives of them parties to such action, and that the interests of all such participants and beneficiaries will be fully represented and protected by the trustee and the advisory board and each participant by enrollment in this plan specifically agrees for himself and his beneficiaries, that in the event of the institution of any action as herein provided, neither he nor his beneficiary need be made a party thereto; provided, however, if the said action should relate to or affect the rights of one or more participants or beneficiaries individually, as distinguished from the class to which they belong, then such participants or beneficiaries shall also be made parties to such proceeding.

If any action or proceeding should be instituted against either the trustee or the advisory board or both of them, by the state of California or the Government of the United States, or by any subdivision of either government, or by a stranger to the plan or agreement of trust, with reference to any matter connected with or arising out of the promulgation or administration of this plan or of the agreement of trust or the trust or the trust estate, notice shall be given by the person or persons named or defendants to the one not named and to the employer. No defendant to such action shall make any objection to the intervention by either the trustee, the advisory board or the employer, if either of such parties shall apply to the court in which the action is instituted for leave to intervene therein.

(Ord. 279 § 11.01, 1958)

In any action or proceeding, the reasonable costs and expenses of the trustee, the advisory board, and the employer, including reasonable counsel fees for each of the parties, shall be paid by the trustee out of the trust estate unless otherwise ordered by the court; provided, however, that in any action or proceeding instituted by the employer, the costs and counsel fees of the employer shall be paid and borne by itself.

Reasonable costs shall not be limited to taxable costs, but shall include all reasonable costs for preparation and trial.

(Ord. 279 § 11.02, 1958)