For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
ACCOUNT. The account maintained for each participant reflecting the cumulative amount of each participant’s deferred compensation, including any income, gains, losses, or increases or decreases in market value attributable to the investment of the participant’s deferred compensation, and further reflecting any distributions to the participant or the beneficiary and any fees or expenses charged against the participant’s deferred compensation.
ANNUITY CONTRACT. If selected by the employer as an investment option, one or more group fixed, variable, or combination fixed and variable annuity contracts issued by the Variable Annuity Life Insurance Company (VALIC) and approved for sale in the employer’s state, or by another insurance company qualified to do business in the employer’s state, which provide for periodic payments at regular intervals, whether for a period certain or during one or more lives, and which are non-transferable.
BENEFICIARY or BENEFICIARIES. The person or persons designated by the participant in his or her deferred compensation agreement who shall receive any benefits payable hereunder in the event of the participant’s death. If more than one designated BENEFICIARY survives the participant, payments shall be made equally to the surviving BENEFICIARIES, unless otherwise provided in the deferred compensation agreement, if no BENEFICIARY is designated in the deferred compensation agreement or if no designated BENEFICIARY survives the participant, then the estate of the participant shall be the BENEFICIARY. However, a participant may designate a contingent BENEFICIARY (or beneficiaries) who shall become the primary beneficiary (or beneficiaries) under this Plan in the event that no primary beneficiary survives the participant.
CODE. The Internal Revenue Code of 1986, as amended, and regulations thereunder.
DEFERRED COMPENSATION. The amount of Normal Compensation otherwise payable to the participant that the participant and the employer mutually agree to defer hereunder, any amount credited to a participant’s account by reason of a transfer under § 1-9-9(A), or any other amount that the employer agrees to credit to a participant’s account and that does not exceed the maximum limitation.
DEFERRED COMPENSATION AGREEMENT. An agreement entered into between a participant and the employer and any amendments or modifications thereof, which agreement shall fix the amount of deferred compensation; specify the participant’s investment selection with respect to his or her deferred compensation; designate the participant’s beneficiary or beneficiaries and incorporate the terms, conditions, and provisions of this Plan by reference.
ELIGIBLE RETIREMENT PLAN. A plan described in Code § 402(c)(8)(B) to which an eligible rollover distribution may be transferred pursuant to Code § 457(e)(16).
ELIGIBLE ROLLOVER DISTRIBUTION. A qualifying distribution to a participant, or to a spousal beneficiary of a deceased participant, that is described in Code § 402(c)(4).
EMPLOYEE. Any individual, whether appointed, elected, or under contract, providing services for the employer for which compensation is paid.
EMPLOYER. The entity identified in Article I, which entity is a state, political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state.
INCLUDIBLE COMPENSATION. For a taxable year, the participant’s compensation, as defined in Code § 415(c)(3), for services performed for the employer. The amount of INCLUDIBLE COMPENSATION shall be determined without regard to any community property laws.
MAXIMUM LIMITATION. The maximum amount that may be deferred under this Plan (other than rollover amounts described in § 1-9-9
(B) for the taxable year of a participant). Such amount shall be either the normal limitation or catch-up limitation, whichever is applicable.
(1) NORMAL LIMITATION. The maximum amount deferred shall not exceed the lesser of the applicable dollar amount (as described in division (3) below) or 100% of the participant’s includible compensation, as adjusted by division (2) below. Notwithstanding the preceding provisions of this division (1), for calendar years prior to 2002, the maximum amount deferred shall not exceed such limit or limits in effect for the applicable year pursuant to § 457 of the Code.
(2) CATCH-UP LIMITATION.
(a) For each one of the last three taxable years of a participant ending before the participant’s attainment of normal retirement age, the maximum amount deferred for each such year shall be the lesser of:
1. Twice the applicable dollar amount (as described in division (3) below); or
2. The sum of the normal limitation, plus that portion of the normal limitation not used in each of the prior taxable years of the participant commencing after 1978 in which the participant was eligible to participate in this Plan or another eligible plan of the employer, and compensation deferred under this Plan (or such other plan) was subject to the deferral limitations set forth in this section.
(b) A participant may utilize the catch-up limitation only if the participant has not previously utilized it with respect to a different normal retirement age under this plan or any other plan.
(c) For years prior to 2002, the limit under this division (2) for any year shall not exceed $15,000.
(3) APPLICABLE DOLLAR AMOUNT.
(a) For contributions in 2002 and in subsequent years, the applicable dollar amount shall be the amount determined in accordance with the following table.
For Taxable Years Beginning in Calendar Year | The Applicable Dollar Amount |
2002 | $11,000 |
2003 | $12,000 |
2004 | $13,000 |
2005 | $14,000 |
2006 or thereafter | $15,000 |
(b) In the case of taxable years beginning after December 31, 2006, the applicable dollar amount shall be adjusted for cost-of-living increases in accordance with Code § 457(e)(15).
(4) Coordination with other plans. For contribution years prior to 2002, the amount excludible from a participant’s gross income for any taxable year under this Plan or any other plan under § 457(b) of the Code shall not exceed $7,500 (as adjusted for cost-of-living increases in accordance with § 457(e)(15) of the Code) or such greater amount allowed under division (2) above, less any amount excluded from gross income under §§ 403(b), 402(e)(3), or 402(h)(1)(B) or (k) of the Code, or any amount with respect to which a deduction is allowable by reason of a contribution to an organization under § 501(c)(18) of the Code.
(5) Age-based catch-up contributions.
(a) In addition to any other limit set forth in this section, and subject to any limitations that may be imposed under present or future federal tax laws and rules, a participant who will attain age 50 in the calendar year may contribute an additional amount in such year or a subsequent year, according to the following schedule.
Year of Contribution | Additional Catch-Up Amount |
Prior to 2002 | $0 |
2002 | $1,000 |
2003 | $2,000 |
2004 | $3,000 |
2005 | $4,000 |
2006 and later | $5,000 |
(b) In the case of taxable years beginning after December 31, 2006, the additional catch-up amount shall be adjusted for cost-of-living increases in accordance with § 414(v)(2)(C) of the Code.
(6) Coordination of catch-up contributions. A participant may not utilize both the catch-up limitation and the age-based catch-up contribution in the same year. The age-based catch-up contribution shall not apply for any taxable year for which a higher catch-up limitation applies.
(7) Excess deferrals. Any amount deferred in excess of the maximum limitation or age-based catch-up contribution shall be distributed to the participant, with allocable net income, as soon as administratively practicable after the Plan determines that the amount is an excess deferral. An excess deferral as a result of a failure to comply with the individual limitation under Treas. Reg. § 1.457-5 for a taxable year may be distributed to the participant, with allocable net income, as soon as administratively practicable after the Plan determines that the amount is an excess deferral.
NORMAL COMPENSATION. The amount of compensation that would be payable to a participant by the employer if no deferred compensation agreement were in effect to defer compensation under this Plan.
NORMAL RETIREMENT AGE.
(1) The age that determines the period during which a participant may utilize the catch-up limitation of as defined above. A participant’s
NORMAL RETIREMENT AGE shall be age 70.5, unless the participant has elected an alternative normal retirement age by written instrument delivered to the employer prior to severance from employment.
(2) A participant’s alternative normal retirement age may not be earlier than the earliest date that the participant shall become eligible to retire and receive unreduced retirement benefits under the employer’s defined benefit plan or money purchase plan covering that participant and may not be later than the calendar year in which the participant attains age 70.5. If the participant will not be eligible to receive benefits under a defined benefit plan or money purchase plan maintained by the employer, the participant’s
NORMAL RETIREMENT AGE may not be earlier than attainment of age 65 and may not be later than the calendar year in which the participant attains age 70.5.
(3) If the participant is a qualified police officer or firefighter as defined under § 415(b)(2)(H)(ii)(l) of the Code, then such qualified police officer or firefighter may designate an alternative
NORMAL RETIREMENT AGE that is between age 40 and age 70.5.
(4) Once a participant has to any extent utilized the catch-up limitation defined above, his or her normal retirement age may not be changed.
PARTICIPANT. Any employee who has enrolled in this Plan pursuant to the requirements of § 1-9-5 or who has previously deferred compensation under this Plan and who has not received a distribution of his or her entire benefit under the Plan.
PLAN YEAR. The 12-month period commencing each January 1 and ending on the following December 31.
SERVICE PROVIDER. The Variable Annuity Life Insurance Company (VALIC), VALIC Retirement Services Company, or such other entity as the employer designates to perform administrative services under this Plan.
SEVERANCE FROM EMPLOYMENT. Termination of the participant’s employment relationship with the employer. For years prior to 2002, references in this Plan to SEVERANCE FROM EMPLOYMENT shall mean severance of the participant’s employment with the employer, within the meaning of Code § 402(e)(4)(D)(i)(lll), rather than termination of the participant’s employment relationship with the employer.
(Ord. 05-11, passed 10-18-2005)