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HomeMy WebLinkAboutCity of Tamarac Resolution R-2016-1151 Temp. Reso. #12856 September 22, 2016 Page 1 CITY OF TAMARAC, FLORIDA RESOLUTION NO. R-2016- 8-C A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA, AUTHORIZING THE APPROPRIATE CITY OFFICIALS TO EXECUTE AN ADDENDUM TO THE AGREEMENT WITH VOYA RETIREMENT INSURANCE AND ANNUITY COMPANY (VRIAC) (FORMERLY KNOWN AS ING LIFE INSURANCE AND ANNUITY COMPANY) TO PROVIDE A LOAN OPTION TO THE 457 DEFERRED COMPENSATION PLAN, ADOPTING THE LOAN AMENDMENT ADDENDUM, ATTACHED HERETO AS EXHIBIT "A" AND INCORPORATED; PROVIDING FOR CONFLICTS; PROVIDING FOR SEVERABILITY, AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Tamarac ("City") approved an Agreement with ING Life Insurance and Annuity Company [now known as VOYA Retirement Insurance and Annuity Company (VRIAC)] to provide a 457 Deferred compensation Plan and a 401 (a) Retirement Plans to City employees in February, 2014; and WHEREAS, the City, at the request of employees, now wishes to add a loan option to the 457 Deferred Compensation Plan effective January 1, 2017 which will provide an option for participants to borrow limited funds from their deferred compensation accounts for general purposes; and Temp. Reso. #12856 September 22, 2016 Page 2 WHEREAS, VOYA Retirement Insurance and Annuity Company (VRIAC) has agreed to provide loan services in accordance with the Loan Amendment Addendum attached as Exhibit A; and WHEREAS, the City Manager and the Director of Human Resources recommend the approval and execution of the Loan Amendment Addendum with VOYA Retirement Insurance and Annuity Company (VRIAC); and WHEREAS, the City Commission has deemed it to be in the best interest of the citizens and residents of the City of Tamarac to approve and execute a Loan Amendment Addendum with VOYA Retirement Insurance and Annuity Company (VRIAC) to the City of Tamarac 457 Plan Retirement Services Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF TAMARAC, FLORIDA: SECTION 1: The foregoing "WHEREAS" clauses are hereby ratified and confirmed as being true and correct and are hereby made a specific part of this Resolution. All exhibits attached hereto are incorporated herein and made a specific part of this Resolution. 1 Temp. Reso. #12856 September 22, 2016 Page 3 SECTION 2: That the appropriate City officials are hereby authorized to execute the Loan Amendment Addendum with VOYA Retirement Insurance and Annuity Company (VRIAC), substantially in the form attached hereto as Exhibit A, and incorporated herein, and to undertake such acts as are necessary to implement the foregoing resolutions, subject to final review and approval by the City Manager and City Attorney. SECTION 3: All resolutions or parts of resolutions in conflict herewith are hereby repealed to the extent of such conflict. SECTION 4: If any clause, section, other part of application of this Resolution is held by any court of competent jurisdiction to be unconstitutional or invalid, in part or in application, it shall not affect the validity of the remaining portions or applications of this Resolution. SECTION 5: This Resolution shall become effective immediately upon its passage and adoption and the City's receipt of written acceptance of the changes proposed in this Resolution from representatives of the Federation of Public Employees (FPE) and the International Association of Firefighters (IAFF). Temp. Reso. #12856 September 22, 2016 Page 4 PASSED, ADOPTED AND APPROVED this cX day of kwmlf-) , 2016. 41 I�monlm"Ar /✓ DRESSLER MAYOR ATTEST: CITY CLERK RECORD OF COMMISSION VOTE: MAYOR DRESSLER DIST 1: COMM. BUSHNELL .� DIST 2: COMM. GOMEZ DIST 3: VICE MAYOR GLASSER DIST 4: COMM. PLACKO I HEREBY CERTIFY THAT I HAVE APPROVED THIS RESOLUTION AS TO FORM v )� 4N SA EL S. GOR CITY ATTORNEY 1 TH 12856 EXHIBIT A CITY OF TAMARAC 457B PLAN RETIREMENT PLAN SERVICES AGREEMENT LOAN AMENDMENT January 1, 2017 Page ;;1 Loan Program Terms of Contractor's Loan Program ("Loan Program") for City of Tamarac 457B Retirement Plan # 666950: • Types of Loans Permitted — select all that apply. ® General Purpose • Maximum number of loans that may be outstanding at any time. —1` General Purpose I Total (regardless of type of loan and assuming participant has no prior loan that has been deemed distributed, i.e. in default) • Permitted Frequency — Default is no restrictions on how often a participant may request a loan as long as the maximum number of loans is not exceeded. If Plan provides for a restriction on frequency, it is to be noted below. Leave blank if no restriction. ❑ One General Purpose loan every months. • Minimum Loan Amount - Indicate the minimum loan amount by type of loan pursuant to this Loan Program • General Purpose $ 1,000 • Maximum Loan Amount - the maximum amount of a loan made pursuant to this Loan Program shall be an amount which, when added to the outstanding balance of any other loans to the participant from the Plan and any other qualified plan of the Employer, does not exceed the lesser of- (i) $50,000 reduced by the excess (if any) of a) the highest outstanding balance of loans from the Plan to the participant during the one year period ending on the day before the date on which such loan is made, less b) the outstanding balance of loans from the Plan to the participant on the date on which such loan was made, or (ii) one-half (I/2) of the present value of the non -forfeitable accrued benefit of the participant under the Plan. • For purposes of this limit, all plans of the Employer shall be considered one plan, to the extent required by Section 72 of the Internal Revenue Code, and the balance of all loans under any plan of the Employer under which the individual participates must be aggregated in determining the maximum loan available from the Plan. The Employer will be responsible for confirming the accuracy of the loan amount available for participant and has an outstanding loan balance with an Employer sponsored plan that is not administered by the Contractor. • All assets under the participant's Account with the Contractor will be considered in determining the maximum loan amount available. • Loan fee shall be deducted from the participant's total account balance before determining the maximum loan amount available. • Plan has a maximum loan amount of 15MQ Page 12 • Loan Interest Rate — the interest rate used for loans from your Plan must be commensurate with interest rates currently charged by persons in the business of lending money for loans which would be made under similar circumstances. The Contractor will set the loan interest rate on the first business day of each calendar month following the month in which a change in the loan interest rate index occurs, Changes to the loan rate will be applicable to loans issued on or after the first business day of the month following the month in which the rate is changed. The index for establishing the loan interest rate for the Plan is as follows. Select one of the following options: ® The Prime Interest Rate published in the Wall Street Journal on the last business day of each month (Default Option). ❑ Moody's Corporate Bond Yield. Average — Monthly Average Corporates, as published by Moody's Investors Service, Inc. on the last business day of each month. The following adjustment factor is to be added to the indexed interest rate for loans issued under the Plan. Select one of the following options. ® No adjustment ❑ 0.5% (one-half percent) ❑ 1.0% (one percent) ❑ 1.5% (one and one-half percent) ❑ 2% (two percent) ❑ 2.5% (two and one-half percent) ❑ Other (specify)* * Subject to the Contractor's underwriting review and approval. • Loan Repayment Frequency - The loan repayment frequency will be used to amortize the loan and calculate loan repayments. The loan repayment frequency will be determined by the payroll frequency. Check all that apply. If more than one frequency is checked, indicate the payroll location name or number to which the frequency applies. Frequency Location Name or Number (list all that apply) ❑ Weekly ❑ Bi-weekly ❑ Semi -Monthly = Monthly ❑ Annually • Loan Repayment Method —Select one of the following options. ® Payroll deduction, subject to the Loan Repayment Following Separation from Service option shown below. ❑ ACH debit to the participant's bank account Page 13 • Loan Repayment Following Separation from Service — Are participants that have se arated from service permitted to continue loan repayments? Yes — Plan Sponsor understands and agrees to the conditions noted below. ❑ No Conditions: l . Must be permitted under the Plan document. 2. Plan Sponsor is responsible for providing the Contractor with any and all participant termination data in a mutually agreed upon electronic format. 3. Loan repayments for participants that have separated from service will be made via ACH Debit to the participant's bank account. 4. Should the participant take a full distribution of his or her account balance, the outstanding loan will be automatically defaulted. • Prepayment - Prepayment of the full loan amount will be allowed at any time, without penalty. Partial loan prepayments are not permitted. • Maximum loan repayment period — Internal Revenue Code section 72(p) requires a plan loan be repaid in full no later than 5 years from the date of the loan (except for a loan used to acquire a principal residence of the plan participant). Accordingly, it may be necessary to provide for a loan repayment term that is less than 60 months in order to meet the Code section 72(p) requirement (e.g., 57 or 58 months, etc.). General Purpose 36 months (maximum of 57 months.) • Investment of Loan Repayments - Loan repayments will be allocated in accordance with the participant's current contribution investment allocation instructions on the date a loan repayment is received in good order. • Loan Default Restrictions - If the participant defaults on any loan under the Plan, the participant shall not be allowed to initiate another loan of that type under the Plan until the defaulted amount is repaid. • Loan Fee - The Contractor shall charge a one-time fee to the participant at the time of loan for services rendered under this Loan Program, in the amount of $100 per loan. • Money Source Withdrawal Sequence — A withdrawal or liquidation sequence for money sources available to fund a loan from the Plan must be identified. Omit from the sequence the money-source(s) not available to fund a loan. lst Employee Elective Deferrals 2nd Rollovers from another 457 Plan • Fund Withdrawal Sequence — money will be withdrawn from participant investment options on a pro-rata basis. S ousal Consent — indicate if spousal consent is required for loans from the Plan Yes ® No Page 14 Loan Authorization — indicate who will be responsible for authorizing loan disbursements. Select one of the following options: 9 the Contractor, based on the loan provisions of the Internal Revenue Code Section 72(p), corresponding regulations and terms of the Loan Program as identified in this Schedule. ❑ Authorized Plan Sponsor representative ❑ Planwithease Authorized ❑ Other Aggregator Authorized: ❑ Other (Aggregator Firm Name) --- -__ (Firm or Individual's Name) The following section only applies to loans where spousal consent is not required. • Paperless Loan Processing — This service allows Plan participants to initiate general purpose loans online through a secure website or through a toll -free customer service line and receive a check directly from the Contractor without completing loan request paperwork. The loan provisions (Promissory Note and Truth and Lending Disclosure) are included on the check remittance. By endorsing the check, the participant accepts the terms of the loan. Paperless loan processing service is not available if the Plan requires additional qualifying criteria for loans (e.g., hardships or unforeseeable emergency) or if the Plan requires spousal consent for loan requests. This service is not available for residential loan requests. ❑ Plan Sponsor elects to utilize the Contractor's paperless loan processing service Loan Default Monitoring — Where the Contractor is recordkeeping loans under the Plan, the Contractor will perform loan default monitoring as described herein. The Ioan default process will occur on the next to last business day of each month. This schedule allows us to effectively monitor and take action on loans that risk default. The Plan Sponsor agrees that the Plan document shall identify the Grace Period as the last business day of the calendar quarter following the calendar quarter in which the loan repayment was due. You also agree to have the Contractor actively monitor and alert participants of potential loan defaults and defaulted loans. Trust Requirement - Loans extended under this Loan Program will be held in trust by Voya Institutional Trust Company, Plan Sponsor Responsibilities: • Ensure the Plan document and any applicable state/local law allows for loans to be administered in accordance with the terms of this Loan Program. For Sponsor authorized loans: • An authorized Plan Sponsor representative will determine if a requested loan may be made under the Plan, and notify the Contractor electronically through a secure website or in writing by signing and submitting the participant Loan Request form to the Contractor. Page 15 For Voya authorize loan: • The Plan Sponsor.will inform the Contractor of the any change to the provisions of the Loan Program (and thus the criteria for approving loans under the Plan) as identified in this Schedule. For loans repaid via payroll deduction: • Establish payroll deduction of loan repayment amount for each participant with an approved loan. • Remit loan repayment amounts via the payroll submission tool being utilized by the Plan Sponsor on behalf of each active participant with an approved loan. The data provided is to include the loan identifier and repayment amount. • Notify the Contractor via the payroll submission tool being utilized by the Plan Sponsor of any participant with an outstanding loan who begins a leave of absence, either bona fide (for a period of not more than one year) or due to uniformed service (military duty) and for whom suspension of loan repayments will apply. The data provided is to include the type of leave, the start date and the end date. Contractor Responsibilities: The Contractor will set the interest rate to apply to loans issued under the Plan. Such rate will be determined monthly for new loans. A Ioan will be processed using the rate in effect when the loan request package is sent to the participant. The loan request package and interest rate will be valid for a maximum of 30 days. The Contractor will reset the loan interest rate as indicated in the Loan Interest Rate section above. The rate will apply for the duration of the loan. Process loans from a participant's account in accordance with the terms of the Loan Program and the loan request package. The Contractor will rely on information provided by the Plan Sponsor or its designee to monitor regulatory limitations when issuing loans. The Contractor will not be responsible for any errors resulting from the failure of the Plan Sponsor or its designee to provide complete and accurate information. • Deduct the loan amount from the participant's account based on the Money Source Withdrawal Sequence selected above, on a pro-rata basis across all current investment options within the participants account or such other method as agreed upon between Contractor and the participant. • Generate reports, including a Loan Amortization Report, to be made available to the Plan Sponsor through a secure website. • Furnish participants with quarterly account statements, reflecting loan activity since the prior statement date. • Provide the Plan Sponsor with the loan repayment amount for each participant loan as determined by the level amortization calculation applicable to the amount of the loan, the repayment frequency, and selected repayment period. Loan repayment amounts will be provided through an automated periodic payroll feedback file as described in Appendix III to Schedule A. Page 16 Loans can be re -amortized only upon written direction from the Plan Sponsor and only if there has been a change in the borrower's payroll frequency or status. Outstanding loans cannot be refinanced. Upon notice from Plan Sponsor that a participant with an outstanding loan is on a qualifying leave of absence, loan repayments may be suspended for the maximum period permitted under IRS rules. Currently, IRS rules permit loan repayments to be suspended in the following circumstances: • A participant on a bona fide leave may suspend payments for up to one year if the pay received by the participant during this period is less than the amount of the installment payments required under the terms of the loan. However, the loan must still be repaid by the end of the loan term (i.e., the period of suspension will be less than one year if the loan was within one year of the final payment due date when the leave began). • A participant on a leave of absence due to performance of the uniformed services (as described under Internal Revenue Code Section 414(u)), may elect to suspend loan repayments for the period of uniformed service. In this situation, upon the participant's return from uniformed service, the loan repayment period will be extended by a period equal to the length of the uniformed service. • We will generate a series of loan reports as noted below to be made available to the Plan Sponsor through a secure website. 1. Missed First Loan Payment Report — reflects loans with a first payment due during the current or previous month and have not had any loan payments applied. 2. Delinquent Loans Report — reflects loans that had any missing payments during the current month. 3. Loans Past Maturity Report — reflects loans that had a loan payoff/maturity date during the current month but have an outstanding loan balance. 4. Deemed/Offset Loans Report — reflects loans that were deemed or offset due to not being paid by the grace period applicable to the Plan. On the last business day of the calendar quarter we will default any loan in which the grace period expires that day. A confirmation statement will be sent to participants for whom a loan default is processed. Compute and withhold federal and state income taxes, as required by law, for loan defaults or withdrawals from the Plan in order to repay outstanding loan amounts in full, in accordance with the Internal Revenue Code and applicable guidance. The Contractor will forward, within the applicable time limit, the appropriate information return reflecting the amount of the defaulted loan disbursement and taxes withheld to the appropriate taxing authority and to the participant. Page 17 Plan Sponsor Signature: By: Authorized Representative of Plan Sponsor Its: %--e z to e-4—V\— Print Name and 'Title Signed on _ L C Date Voya Retirement Annuity & Insurance Company Signature: fM 1QC. LC.)-- ",- Authorized Representative of Its• CrLUJrl m. ULQ-,f- PrP-S'.de4l-,�fi Print Name and Title Signed on 10 / /C-0 / C301 Cn Date Page 18