(a) Employee Defined. For the purpose of this section, "employee" means any person, whether appointed, elected or under contract, providing services for the City for which compensation is paid.
(b) Purpose. The purpose of the Employee's Salary Reduction-Tax Sheltered Annuity Retirement Plan is to make available to City employees, City officers and independent contractors who qualify, a salary reduction system affording a tax sheltered annuity program to augment the participant's security during retirement years.
(c) Salary Reduction Agreement. The Mayor is hereby authorized to enter into an agreement with City employees, City officers or independent contractors who qualify for this Plan, whereby the participant may designate a portion of his or her future earnings to be deducted by the City and placed in an accumulated fund calculated to provide tax sheltered annuity benefits to the participant upon his or her retirement. Such agreement shall include, but not be limited to, specifications that:
(1) No City funds shall be contributed to the Plan.
(2) The City may amend the provisions of this Plan at any time, provided, however, that no amendment shall affect the rights of participants or their beneficiaries to the receipt of payment of benefits, to the extent of any compensation deferred at the time of the amendment as adjusted for investment experience hereunder prior to and subsequent to the amendment.
(3) The City shall not be responsible for any loss due to the investment or failure of investment of funds and assets in the Plan, nor shall the City be required to replace any loss whatsoever which may result from such investments or failure to make investments.
(4) All funds and assets, together with interest, accumulations and increments thereon, in the Employee's Salary Reduction Tax-Sheltered Annuity Account, shall remain an asset of the employee and be subject to the employee's ownership until such time as the funds or assets of such Account are distributed to the participant in accordance with the provisions of the agreement.
(5) The City may elect to purchase a variable annuity contract or other asset in connection with the liabilities assumed by it hereunder.
(6) The obligation of the City to the participant for the payment of distributions and increments thereon referred to in the agreement are deemed a contractual obligation only, and the participant shall have no preferred or special interest by way of trust, escrow, annuity of otherwise, in and to the specified assets or funds in the Employee's Salary Reduction-Tax Sheltered Annuity Account.
(d) Administration. The accumulated fund of this Plan shall be administered by an insurance company doing business in the State and authorized by Council to:
(1) Oversee and administer the investment of moneys in the accumulated fund in a manner reasonably calculated to accomplish the intent and purposes of the agreement between the employer and the participant, including, but not limited to, purchase of annuity contracts on behalf of the City;
(2) Coordinate activities with the City to handle the variable annuity program to be used to implement the functioning of the Plan;
(3) Make periodic reviews and analyses at such reasonable intervals as may be required to satisfy the City that the Plan is being operated in a manner reasonably calculated to accomplish its objectives, or to recommend to the City corrective measures which may be indicated; and
(4) Assist the City in the making of judgments in the administration of the Plan wherein the City's decision shall be made in an even-handed manner, treating all persons in similar circumstances alike.
(e) Accounts.
(1) Generally. The accounting and financial records shall be maintained in accordance with generally accepted accounting principles by both the City and the insurance company.
(2) Maintenance. The Finance Director and his or her designees shall maintain the accounting records and establish such ledger accounts as are necessary and appropriate to the efficient operation of the Plan from the City's perspective.
(3) Accumulated fund. Salary reductions shall be accumulated in a fund to be known as the Employees' Salary-Reduction Tax Sheltered Annuity Plan, with such disbursements or transfer of funds in such account as may be directed by the terms of the employer-participant agreement or as authorized by the City and the insurance carrier.
(Ord. 82-11. Passed 2-15-82.)
(f) Effect Upon Other Benefits and Taxes. The deferred compensation program established by this section shall exist and serve in addition to the retirement, pension or benefits system established by the City, and no deferral of income under the deferred compensation program shall effect a reduction of any retirement, pension or other benefit provided by law. However, any sum deferred under the deferred compensation program shall not be included for the purposes of computation of any taxes withheld on behalf of any such employee. However, the tax imposed by the Municipal income tax shall also be levied upon any and all compensation since deferred under this section for the reason that, at the time of disbursement, such funds of City employees and the funds herein sheltered shall otherwise likely escape Municipal income tax entirely.
(Ord. 82-53. Passed 8-16-82.)
(g) Transferability. Neither the participant nor his or her beneficiary nor any other designee shall have any right to commute, sell, assign, transfer or otherwise convey the right to receive any payments under this Plan, which payments and rights thereto are expressly declared to be nonassignable and nontransferrable. In the event of any attempted assignment or transfer, the City shall have no further liability under the Plan, nor shall any payments be subject to attachment, garnishment or execution, or be transferrable by operation of law in the event of bankruptcy or insolvency, except to the extent otherwise provided by law. (Ord. 82-11. Passed 2-15-82.)