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
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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
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• 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
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• 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
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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