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The DC Plans shall be maintained and operated for the exclusive purpose of providing benefits to the Participants and their beneficiaries. With the exception of the payment of reasonable expenses necessary to maintain the DC Plans, no part of the corpus or income of the Trust Funds shall be used for, or diverted to, purposes other than providing benefits to the Participants and their beneficiaries.
(Ord. 11937, § 1, 7-12-22)
The eligibility and participation provisions of all DC Plans shall be designed and administered in accordance with the employment and employee benefit provisions of the Tucson City Code. The eligibility of active and former City employees to participate in a DC Plan, and the procedures or rules regarding the enrollment of such individuals in a DC Plan, shall be determined in accordance with the applicable Plan Document.
(Ord. 11937, § 1, 7-12-22)
As soon as administratively practical following the end of each payroll period, the Finance Director shall cause the City to remit to the applicable Trust Funds the Participant deferrals owed to each DC Plan for the particular payroll period. Any employer contributions owed to a DC Plan shall be remitted by the City in accordance with applicable deadlines.
(Ord. 11937, § 1, 7-12-22)
Sec. 22-61(a). Membership. The Deferred Compensation Plan Management Board shall consist of the following seven (7) members, subject to the qualification requirements set forth in Section 22-61(b) below:
(1) A member appointed by the City Manager;
(2) The City's Finance Director;
(3) The City's Human Resources Director;
(4) Two (2) active City employees who are contributing to or holding an account in a DC Plan, nominated and elected by the active DC Plan Participants, in a manner determined by the Board; and
(5) Two (2) former City employees who hold an account in a DC Plan, nominated and elected by the inactive DC Plan Participants who hold accounts, in a manner determined by the Board.
Both the City's Finance Director and the City's Human Resources Director shall have the authority to delegate their Board position to a senior level management employee of the City with experience in the applicable area of finance or human resources and who is expected to serve as a long-term voting member of the Board.
Sec. 22-61(b). Qualifications. The Board member appointed by the City Manager shall be a resident of Pima County and may be a local citizen or an employee of the City, including the City's Pension and Benefits Administrator, as determined by the City Manager in their discretion. The candidates for the City Manager's appointee and the elected employee and former employee positions shall have relevant secondary education or employment experience in the areas of business administration, finance, accounting, human resources, investments, law, procurement, management or retirement administration.
Sec. 22-61(c). City Requirements for Boards. The Board shall be exempt from all provisions of section 10A-134 of the Tucson Code.
Sec. 22-61(d). Term of Office. The City Manager's appointee to the Board shall serve at the pleasure of the City Manager and without a specified term, subject to the Board member's ability to resign from the position with ninety (90) days' notice to the Board and the City Manager. Effective with regard to elections held after the enactment of this provision, the term of office of individual Board members who are nominated and elected by DC Plan Participants shall be four (4) years and such members shall serve no more than two (2) consecutive terms on the Board (non-consecutive terms are permitted). The Directors of Finance and Human Resources, or their delegates, shall be standing members of the Board and not subject to specified terms.
Sec. 22-61(e). Chairperson of the Board. The Board shall elect a chairperson from among the Board membership, who shall serve as chairperson for a term of three (3) years, subject to Section 22-61(d) above. The Board shall elect a successor chairperson from time to time as necessary, and it is expected that the chairperson position shall rotate among Board members.
Sec. 22-61(f). Compensation. The City Manager's appointee to the Board shall serve without compensation. Employees of the City who serve on the Board shall receive no additional compensation for their Board service. All Board members shall be reimbursed for expenses incurred by them in the performance of their Board duties.
(Ord. 11937, § 1, 7-12-22)
Sec. 22-62(a). Plan Administrator and Named Fiduciary. The Board shall serve as the Plan Administrator and named fiduciary of the DC Plans. The Board shall be responsible for, and shall have the power and authority necessary to effectuate the administration, management and operation of the DC Plans. The Board shall construe, interpret and implement the provisions of this Article and the Plan Documents, in its discretion and pursuant to uniform and non-discriminatory rules, policies and procedures. In the event of a conflict between this Article and a Plan Document, the provisions of this Article shall control unless application of this Article would negatively impact the tax advantages associated with a DC Plan.
Sec. 22-62(b). Employment of Professionals. The Board may employ record-keepers, investment consultants, investment managers, retirement plan consultants, and other service providers as may be necessary for the proper administration of the DC Plans. Professionals employed by the Board shall discharge their duties in accordance with and be subject to the highest prevailing industry standard of care for their respective disciplines.
Sec. 22-62(c). Payment of Expenses. The Board shall facilitate and approve the payment of expenses that are reasonably necessary for the proper administration of the DC Plans. Expense payments authorized by the Board shall be funded from the appropriate Trust Fund, unless the City has agreed to pay a particular expenses and has budgeted for such expense.
Sec. 22-62(d). Correction of errors. The Board shall correct errors that occur in the administration of the DC Plans in accordance with the rules governing the correction of errors in tax-qualified and tax-deferred retirement programs.
Sec. 22-62(e). Additional Powers and Duties. In addition to all other powers and duties, the Board shall:
(1) Keep a record of all of its proceedings, and such record shall be open to inspection by Participants and the public;
(2) Review and resolve ambiguities arising in the administration of the DC Plans, including questions of eligibility, benefits, account distributions and interpretation of Plan Documents;
(3) Manage the investment of DC Plan assets with the advice and counsel of the Board's investment consultants and pursuant to the Plan Documents governing the Trust Funds;
(4) Adopt necessary rules and regulations governing the administration of the DC Plans;
(5) Hear and resolve employee, Participant and beneficiary claims relating to the DC Plans;
(6) Delegate fiduciary decision-making, administrative functions and ministerial duties to the City's Pension and Benefits Administrator, in its discretion;
(7) Contract with service providers to perform administration, investment, recordkeeping and custodial services with regard to the DC Plans; and
(8) Do all other things necessary for the proper administration of the provisions of the DC Plans.
Sec. 22-62(f). Prohibited Acts. No member of the Board shall have any interest, direct or indirect, in the gains or profits of an investment made by the Board or an investment option approved by the Board, except as a Participant or beneficiary of a DC Plan. No member of the Board shall, directly or indirectly, for himself or as an agent, in any manner use the moneys or other assets of any DC Plan, except to make such payments from the DC Plan Trust Funds as are authorized by the Board.
Sec. 22-62(g). Due Diligence. When managing the DC Plan investments, the Board shall exercise the judgment and care of a prudent retirement plan fiduciary. The Board shall structure an investment array for Participants that allows for appropriate diversification, minimizes the risk of large losses and avoids conflicts of interest.
(Ord. 11937, § 1, 7-12-22)
To the extent permitted by law, the Board, the individual members of the Board and the City's personnel who engage in the administration of the DC Plans shall be indemnified and held harmless against any and all liabilities (including defense costs and expenses) arising by reason of an act or failure to act in their fiduciary and administrative capacities to the DC Plans, and for liability and costs resulting from the acts and omissions of their duly appointed agents, except for those acts, omissions, or conduct resulting from their own willful misconduct, willful failure to act, or gross negligence. The City may procure fiduciary liability insurance designed to fund the indemnification provided by this section, and may charge the cost of such insurance to the DC Plans as a reasonable expense of administration. The City shall be liable for indemnification under this section only to the extent that the liability exceeds the amount available through the DC Plans' fiduciary liability insurance.
(Ord. 11937, § 1, 7-12-22)
The DC Plans shall be construed and enforced under the laws of the State of Arizona and any federal law, rule or regulation applicable to a tax-qualified governmental retirement plan or a tax-deferred IRC Section 457 deferred compensation plan. The DC Plans are intended to be structured and operated as IRC Section 414(d) governmental plans or eligible IRC Section 457 deferred compensation plans, and both the DC Plans and this Article shall be administered in accordance therewith.
(Ord. 11937, § 1, 7-12-22)
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