(A) Annuity contracts and other plan investments. For the purposes of satisfying its obligation to provide benefits under this Plan, the employer shall invest the amount of compensation deferred by each participant in annuity contracts and other plan investments as specified in the participants’ deferred compensation agreements. Amounts deferred under this Plan must be transferred to a trust, custodial account, or annuity contract described in division (B) below within a period that is not longer than is reasonable for the proper administration of the participant accounts. Responsibility for the selection of investment alternatives for Plan assets shall be retained by the employer, and the employer shall have the right to modify the selection of investment alternatives from time to time; however, participants and beneficiaries may allocate amounts held in their accounts or otherwise credited for their benefit under the Plan among the investment alternatives selected by the employer, and the employer shall cause such amounts to be so allocated within a reasonable time after the receipt of participant instructions, or may instruct the issuer, trustee, or custodian to accept such allocation instructions directly from participants and beneficiaries as representatives of the employer.
(B) Exclusive benefit. Notwithstanding any provision of the Plan to the contrary, all amounts held under the Plan, including amounts deferred and earnings or other accumulations attributable thereto, shall be held for the exclusive benefit of Plan participants and beneficiaries in annuity contracts, or in trust or in one or more custodial accounts pursuant to one or more separate written instruments. Any such annuity contract, trust, or custodial account must satisfy the requirements of § 457(g)(1) of the Code. The annuity contract, trust, or custodial account must make it impossible, prior to the satisfaction of all liabilities with respect to participants and their beneficiaries, for any part of the assets and income of the annuity contract, trust, or custodial account to be used for, or diverted to, purposes other than for the exclusive benefit of participants and their beneficiaries. For purposes of this section, the terms participant and beneficiary shall also include contingent beneficiaries and/or spouses, former spouses, or children of participants for whose benefit amounts are being held under the Plan pursuant to the terms of a domestic relations order which has been recognized under the terms of the Plan. Any discretionary authority reserved to the employer (or to any administrator or administrative committee) under the Plan or under any investment held under the Plan, to the extent the exercise thereof would otherwise be inconsistent with this section, shall be exercised for the exclusive benefit of Plan participants and beneficiaries. Any issuer of an annuity contract or trustee or custodian of other investments held under the Plan shall have no authority to pay any amounts from such Plan investments to any creditor of the employer, and shall have no duty to inquire into the validity of any request by the employer or by an administrator or administrative committee for distribution of amounts for the benefit of a participant or a beneficiary under the Plan.
(C) Benefits based on participant’s account value. The benefits paid to a participant or beneficiary pursuant to § 1-9-7 shall be based upon the value of the participant’s account. In no event shall the employer’s liability to pay benefits exceed the value of the participant’s account, and the employer shall not be liable for losses arising from depreciation or other decline in the value of any investments acquired under this Plan.
(D) Periodic reports. Each participant shall receive periodic reports, not less frequently than annually, showing the then-current value of his or her account.
(E) Employer-directed accounts. Notwithstanding any provision of the Plan to the contrary, the employer shall direct the issuer, trustee, or custodian with respect to the investment of any contributions that are forwarded to the issuer, trustee, or custodian prior to the date on which the participant or beneficiary completes the necessary paperwork with the issuer, trustee, or custodian (or takes such other action or actions as may be necessary) to direct the investment of such amounts. Such direction shall be communicated to the issuer, trustee, or custodian by means of a separate written agreement between the employer and issuer, trustee, or custodian, which agreement shall include a default investment option and a default beneficiary designation. This direction shall be effective only until such time as the participant or beneficiary exercises his or her right to direct the investment of such amounts and to designate a beneficiary in accordance with the terms of the Plan.
(Ord. 05-11, passed 10-18-2005)