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HomeMy WebLinkAbout129-85 RESOLUTIONA RESOLUTION ADOPTING AN EMPLOYEE RETIREMENT PLAN AND TRUST FOR THE CITY OF FAYEITEVILLE. -taEREAS, the City of Fayetteville, Arkansas, -a governmental unit, . (hereinafter referred to as "Employer") desires to continue the qualified status of .its employee pension plan which satisfies the requirement ;.for qualification under S401(a) of the Internal Revenue Code of 1954, ;as amended, and rules and regulations promulgated thereunder. THEREFORE. FE TT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETKENUILE, ARKANSAS: Section 1. That the Board of Directors hereby authorizes .the Mayor and City Clerk to execute an Amended and Restated Money ;.Purchase Pension Plan and Trust Agreement of the City's Retirement Plan and Trust with the effective date of the restated plan to be :January 1, 1984. - A copy of the Amended and .Restated Retirement Plan >'and Trust authorized for execution hereby are attached hereto marked ;;Exhibits "A" and "B" and made a part hereof. "Section 2. The Board of Directors hereby declares that the attached plan and trust agreement are hereby adopted in the form pre- sented. ;:Section 3. The City Clerk is hereby authorized and directed to deliver to the trustee one or more counterparts of the executed plan and trust agreement authorized hereby. Section 4. The Employer shall act as soon as possible to notify all employees of the amended and restated plan and trust. PASSED AND APPROVED this 'i' T • S i ; 9 V 'ii �%• rA $r t g •,�fis �� . t of Anasx-4,0 ,/.ta • 3rd day of APP By . �G Mayor December , 1985. • CITY OF FA ET EVILLE MONEY PURCHASE PENSION PLAN (Amended and Restated) Original Effective Date - June i, 1980 Effective Pate of this Amended and Restated Flan - January 1, 1984 (with some amendments atlective January 1, 198S) 10.03 b;t4j)° a 'I 10.04 CI;Y OF FAYET EVIT.1 F: MONEY PURCHASE PENSION PLAN (Amended and Restated) The CITY 0F' FAYET MLLE, Arkansas, (hereinafter called Employer), a governmental unit with its principal offices located in Fayetteville, -Arkansas, does hereby agree to amend their pension plan and to continue said pension plan, as amended and restated, upon the following terms and conditions. 1.0 -NAMES AND DATES 1.1 EMPLOYER AND PLAN ADMINISTRATOR: CITY OF FAYETI'EVILLE P.O. DRAWER F FAYETPEVILLE , AR 12702 1.2 TRUSTEE: McIlroy Bank and Trust, Fayetteville, AR, or any successor 'trustee appointed by the City of Fayetteville to perform as specified in the Trust Agreement with such trust being necessary to carry out the provisions of the City of Fayetteville Money Purchase Pension Plan and Trust. 1.3 PLAN NAME: City of Fayetteville Money Purchase Pension Plan (hereinafter referred to as "Plan'.'). 1.4 EFFECTIVE DATE: The effective date of this plan was June 1, 1980. The effective date of this amended and restated plan is January 1, 1984. There are some amendmentments contained herein that will become effective -January 1, 1985. 10.05 Page 2 1.5 PLAN YEAR: The plan year is the calendar year. The plan anniversary date is January 1. 2.0 DEFINITIONS - 2.1 Employee: The term PSuployee shall mean any person employed by the Employer maintaining the Plan or of any other employer aggregated under section 414(b), (c), or (in) of the internal Revenue Code (hereinafter referred to as "Code"). The definition of employee shall also include any individual deemed under section 414(n) of the Code to be an employee of any employer described in the previous sentence. 2.2 Leased Employees: Any leased employee shall be treated as an employee of the recipient employer, however, contributions or benefits provided by the leasing organization which are attributable to services performed for the recipient employer shall be treated as provided by the recipient employer. The preceding sentence shall not apply to any leased employee if such employee is covered by a money purchase pension plan providing: A. A non-integrated employer contribution rate of at least 7 1/2 percent of compensation; B. Irmnediate participation; and C. Full and immediate vesting. For puposes of this paragraph, the term "leased employee" means any person who, pursuant to an agreement between the recipient and any other person ("leasing organization") has performed services for the recipient (or for the employer and related persons determined in accordance with Section 414(n)(6) of the Code) on a substantially full time basis for a period of at least one year and such services are of a type historically performed by employees in the business field of the recipient employer. 10.06 Page S 2.3 Participant: An employee who is a participant in the Plan. 2.4 Compensation: The amount of base compensation, during a Plan Year, paid to an Employee, excluding overtime pay, bonuses, commissions, expense account allowances and excluding Employer contributions to this or any other retirement plan sponsored by the Employer. 2.5 Computation Period: Years of Service and Breaks in Service will be measured on the sane computation period as defined below. 2.6 Computation Period for Eligibility and Vesting: A. For purposes of determining years of service and breaks in service tor purposes of eligibility and vesting, the initial computation period is the 12 -consecutive month period beginning on the date the employee first perform; an hour of service for the employer. The succeeding 12 -consecutive month periods commence with the tirst plan year which commences prior to the first anniversary of the employee's initial computation period regardless of whether the employee is entitled to be credited with 1,000 hours of service during the initial computation period. An employee who is credited with 1,000 hours of service in both the initial computation period and the first plan year which commences prior to the first anniversary of the employee's initial computation period will be credited with two years of sevice tor purposes of eligibility to participate. B. In the case of any participant who has a 1 -year break in service, years of eligibility service before such break will not be taken into account until the employee has completed a year of service atter returning to employment. Such year of service will be measured by the 12 -consecutive month period beginning on an employee's reemployment commencement date and, it necessary, plan years beginning with the plan year which includes the first anniversary of the reemployment commencement date. The reemployment commencement date is the tirst day on which the employee is credit with an hour of service for the performance of duties after the first computation period in which the employee incurs a one year break in service. If a former participant completes a year of service in accordance with this C 10.07 Page 4 provision, his or her participation will be reinstated as of the reemployment commencement date. 2.7 Break in Service: Shall mean a 12 -consecutive month period (Computation Period) during which the participant does not complete more than S00 hours of service with the employer. 2.8 Hour of Service: A. Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. These hours shall be credited to the Employee for the computation period in which the duties are performed, and B. Each hour for which an Employee is paid, or entitled to payment, by the Employer on'account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. No more than 501 Hours ot Service shall be credited under this paragraph tor any single continuous period whether or not such period occurs in a single computation period}. Hours wider this paragraph shall be calculated and credited pursuant to Section 2530 200(b)(2) of the Department of Labor Regulations which are incorporated hereby by this reference; and C. Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours ot Service shall not be credited both under Paragraph (a) or Paragraph (b) as the case may be, and under this Paragraph (c). These hours shall be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is. made. Hours of Service will be credited for employment with other members of an affiliated service group (under Section 414(m)), a controlled group of corporations (under Section 414(b)), or a group of trades or businesses under common control (under Section 414(c)), of whichthe employer is a member. Hours of Service will also he credited for any individual considered an employee for purposes of this plan under Section 414(n). Solely for purposes.of determining whether a break in service for participation and vesting purposes has occurred in a computation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the hours of service c C 10.08 Page 5 which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day ot such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth of a child of the individual, (3) by reason of the placement ot a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. The hours of service credited under this paragraph shall be credited: (1) In the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period; or (2) in all other cases,.in the following computation period. ' Hours of service will be determined on the basis.of months worked. An employee will be credited with one -hundred -ninety (190) hours of service if, under the definition of hour of service, as provided herein, such employee -would be credited with at least one (1) hour of service during the month. 2.9 Year of Service: A Year of Service is a 12 -consecutive month period (computation period) during which the employee completes at least 1,000 hours of service. 2.10 Disability: Disability means inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted, or can be expected to be permanent. The permanence and degree of such impairment shall be supported by medical evidence. 2.11 Forfeitures: Upon the termination of a participant that is not fully vested, the non -vested portion of his account balance will be a forfeiture. 2.12 Fiduciary: The term Fiduciary shall mean and include the Trustee, Plan Administrator, Employer, Investment Manager, and any other person who: A. Exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets; 10.09 Page 6 B. Renders Investment advice for a fee or other compensation direct or indirect, with respect to any monies or other property of the Plan, or has any authority or responsibility to do so; C. Has any discretionary authority or discretionary responsibility in the administration of the Plan; or D. Is described as a "Fiduciary" in Section 3 (14) or (21) of ERISA or is designated to carry out fiduciary responsibilities pursuant to this Agreement to the extent permitted by Section 405(c)(B) of ERISA. 2.13 Named Fiduciary - Employer: The Employer shall be the "Named Fiduciary," with delegative authority, within the meaning of Section 402 of the Employee Retirement Income Security Act of 1974 and shall be in charge of the operation and administration of the Plan. The employer shall have the power to delegate specific fiduciary responsibilities (other than those accepted by prescribed Trustee with respect to the control of the assets of the Plan). Such delegations may be to officers or employees of the Employer, without compensation. Any such person may resign by delivering a written resignation to Employer. Vacancies created by resignation, death, or other causes may be filled by the Employer or the responsibilities may be reabsorbed or redelegated by the biployer. 2.14 Qualified Joint and Survivor Annuity: An annuity for'the life of the partcipant with a survivor annuity tor the life of the participant's spouse which is not less than one-half, nor greater than the amount of the annuity payable during the joint lives of the participant and the participant's spouse The joint and survivor annuity will be the amount of benefit which can be purchased with the participants account balance. The percentage of the survivor annuity shall 50%. 3.0 TOP HEAVY PROVISIONS If the plan is or becomes top-heavy in any plan year beginning after December 31, 1983, the provisions of the following section will supersede any conflicting provision in the plan. C C 10.10 Page 7 3.1 Top -Heavy Definitions: A. Key Employee: Any employee or former employee (and the beneficiaries of such employee) who at any time during the determination period was* 1. An officer of the Employer having annual compensation greater than $45,000 or one and one half times the dollar limitation of the maximum annual addition in effect under Code Section 415(a)(1)(A), whichever is greater; 2. One of the ten employees owning, directly or indirectly, the largest ownership interests in the Employer and having annual Compensation greater than $30,000 or the dollar limitation of the maximum annual addition in effect under Code Section 415(c)(1)(A), whichever is greater; 3. A 5% or larger owner of the Employer; or 4. A 1% or larger owner of the Employer having an annual Compensation from the Employer of more than $150,000. B. Top -Heavy Plan: For any plan year beginning after December 31, 1983, this plan is top-heavy if any of the following conditions exists: 1. If the top-heavy ratio for this plan exceeds 60 percent and this plan is not part of any required aggregation group or permissive aggregation group of plans. 2. If this plan is a part of a required aggregation group of plans but not part of a permissive aggregation group and the top-heavy ratio for the group of plans exceeds 60 percent. If this plan is apart of a required aggregation group and part of a permissive aggregation group of plans and the top-heavy ratio for the permissive aggregation group exceeds 60 percent. C. Top -Heavy Ratio: 1. If the employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the employer has never maintained any defined benefit plan which has covered or could cover a participant in this plan, the top-heavy ratio is a fraction, the numerator of which is the sum of the account balances of all key employees as of the determination date (including any part of any account balance distributed in the 5 -year period ending on the determination date), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 5 -year period ending on the determination date) of all participants as of the determination date. Both the numerator and denominator of the top-heavy ratio are adjusted to reflect any contribution which is due but unpaid as of the determination date. • 10.11 Page 8 2. If the employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the employer maintains or has maintained one or more defined benefit plans which have covered or could • cover a participant in this plan, the top-heavy ratio is a fraction, the numerator of which is the sum of account balances under the defined contribution plans for all key employees and the present value of accrued benefits under the defined benefit plans for all key employees, and the denominator of which is the sum of the account balances under the defined contribution plans for all participants and the present value of accrued benefits under the defined benefit plans for all participants. Both the numerator and denominator of the top-heavy ratio are adjusted for any distribution of an account balance or an accrued benefit made in the five-year period ending on the determination date and any contribution due but unpaid as of the determination date. 3. For purposes of (1) and (2) above, the value of account balances and the present value of accrued benefits will be determined as of the most recent. valuation date that falls within or ends with the 12 -month period ending on the determination date. The account balances and accrued benefits of a participant who is not a key employee but who was a key employee in a prior year will be disregarded. The calculation of the top-heavy ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accordance with Section 416 of the Code and the regulations thereunder. Deductible employee contributions will not be taken into account for purposes of computing the top-heavy ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the determination dates that fall within the same calendar year. D . Permissive Aggregation Group. The required aggregation group of plans plus any other plan or plans of the employer which, when considered as a group with the required aggregation group, would continue to satisfy the requirements of Sections 401(a)(4) and 410 of the Code. E . Required Aggregation Group: A. Each qualified plan of the employer in which at least one key employee participates; and B. Any other qualified plan of the employer which enables a plan described in (A) to meet the requirements of Sections 401(a)(4) and 410 of the Code. F. Determination Date: For any plan year subsequent to the first plan year, the last day of the preceding plan year. For the first plan year of the plan, the last day of that year. G . Valuation Date: The plan anniversary date at the beginning of each plan year as of which account balances or accrued benefits are valued for purposes of calculating the top-heavy ratio. • 10.12 Page 9 Present Value: Present value shall be based only on the interest of 7% and mortality rates using the GAM 1971. 3.2 Minimum Allocation: A. Required: 1. Except as otherwise provided in A(3) and A(4) below, the employer contributions and forfeitures allocated on behalf of any participant who is not a key employee shall not be less than the lesser of three percent of such participant's compensation, or in the case where the employer has no • defined benefit plan, which designates this plan to satisfy Section 401 of the Code, the largestpercentage of employer contributions and forfeitures, as a percentage of the first $200,000 of the key employee's compensation, allocated on behalf of any key employee for that year. The minimum allocation is determined without regard to any Social Security Contribution. This minimum allocation shall be made even though, under other plan provisions, the participant would not otherwise be entitled to receive an allocation or would have received a lesser allocation of the year because of: a. The participants failure to complete 1,000 hours of service (or any equivalent provided in the plan); or b. The participants failure to make mandatory employee contributions to the plan; or c. Compensation less than a stated amount. 2. For purposes of computing the minimum allocation, compensation will mean compensation as defined in the definitions section. 3. The provision in (1) above shall not apply to any participant who was not employed by the employer on the last day of the plan year. 4. The provision in (1) above shall not apply to any participant to the extent the participant is covered under any other plan or plans of the employer and the employer has provided that the minimum allocation or benefit requirement applicable to top-heavy plans will be met in the other plan or plans. B. Top -Heavy - Minimum Contribution Where Paired Defined Contribution Plans are Involved - Non -Duplication of Minimum Contribution: For each plan year in which the paired plans are top-heavy,' the employer will provide a minimum contribution equal to 5% of total compensation for each non -key employee who is entitled to a minimum contribution under this Plan Said C 10.13 Page 10 minimum contribution shall not be duplicated for a participant in more than one paired plan. 3:3 Vesting Schedule: If the plan"ever becomes top heavy the following vesting schedule will YEARS OF PERCENT SERVICE VESTED Less than 2 08 2 20% 3 40% 4 60% 5 80% 6 or more 100% • 3.4 Limit on Compensation: apply: In any plan year that this plan is deemed top heavy, compensation for any participant in excess of $200,000 shall be disregarded. 4.0 PLAN ADMINISTRATOR 4.1 Appointment: Plan shall be administered by a Plan Administrator (or Administrators) appointed by Employer. In the event Employer does not appoint a Plan Administrator, Employer shall serve as Plan Administrator. A Plan Administrator may resign at any time upon delivery of a written resignation to Employer. 4.2 Authority: The Plan Administrator may make rules and regulations for the administration of the Plan and shall have the necessary or appropriate authority to enable it to discharge its • duties under the Plan. • 10.14 Page 11 4.3 Interpretation: Plan Administrator may construe or interpret the Plan whenever necessary to carry out its intention and purpose. 4.4 Records• Plan Administrator shall keep accurate and detailed records of its administration of Plan and shall make available to each Participant for examination at reasonable times during business hours such of its records as pertain to him and such other information and records as prescribed by ERISA and the Regulations. 4.5 Operation of Plan: Plan Administrator shall supervise and control the operation of the Plan as specified herein: A. Be responsible for keeping accurate books and records with respect to Participants, -their compensation and allocations of contributions to Participants Accounts. B . Determine eligibility of any Participant:' C. Determine the manner in which the funds of the Plan shall be disbursed in accordance with the provisions of the Plan and Trust, including vested interests. D . Notify each Participant annually following receipt from the Trustee annual accounting and after notification by Employer of the current contribution, of the value of each Participant's account, including allocation to his accounts of Employer contributions if applicable. of its the E . Shall have the right to direct the Trustee in writing as to investment policy. Trustee shall be under no liability for any loss arising from any action taken or omitted to be taken by the Trustee at the direction of the Plan Administrator F. The Trustee may request instructions in writing from the Plan Administrator on any matters affecting the Trust and may rely and act thereon. G . Hire a service provider to assist the Plan Administrator in recordkeeping and other administrative duties: • t 10.15 Page 12 4.6 Designation: The Plan Administrator shall serve until his resignation or dismissal by the Board of Directors of the Employer and a vacancy shall be filled in the same manner as the original appointment. The Plan Administrator shall keep a permanent record of his actions with respect to the Plan which shall be available for inspection by appropriate parties as provided in the Code and ERISA. 4.7 Rules and Regulations: Subject to the limitations of the Plan, the Plan Administrator shall, from time to time, establish rules for the administration of the Plan and transaction of its business. The records of the employer, as certified to the Plan Administrator, shall be conclusive with respect to any and all factual matters dealing with the employment of a Participant. The Plan Administrator shall interpret the Plan and shall determine all questions arising in the administration, interpretation and application of the Plan, and all such determinations by the Plan Administrator shall be conclusive and binding on all persons subject, however, to the provisions of the Code and ERISA. 5.0 PARTICIPATION 5.1 Eligibility Requirements - A. All full time employees of the Employer are eligible to participate in the plan if: i. They complete 1,000 -hours or more in a plan year: ii. Are at least age 20; iii. Have completed at least two (2) years of service; and iv. Agree to make the mandatory contributions of 3% of base compensation. B. A Participant whose employment is terminated before the end of a Plan Year shall not share in Employer Contributions for such Plan Year. A participant whose employment is terminated by reason of reaching normal retirement age, death, or disability, shall share in Employer Contributions for such plan year. C. Employees who reach their Normal Retirment Age and are still in the employ of the Employer will continue to participate in the plan and receive contributions, forfeitures, and gains and losses just as any other participant who has not reached thier normal retirement age. IU.Id Page 13 D. Once an employee agrees to participate, he or she will not be allowed to rescind the decision or change the rate of contribution until any anniversary date of the plan (Jan.1), except for termination of employment, retirement, death or disability. E. An employee who ceases to participate, shall not be able to participate again until the anniversary date one year later. During that time, the employer will make no contributions of Employer matching contributions, nor will the year(s) of non -participation count toward vesting. 5.2 -Entry Date: Employees shall enter the plan on the January 1 Anniversary Date following completion of the eligibility requirements. The first allocation to a participant account shall be at the end of their first year of participation. 5.3 Leaves of Absence: Leaves of absence may be granted by Employer on a uniform non-discriminatory manner to Participants for reasons of illness, vacation, vocational training or military service, provided that leaves of absence for military service shall not be for more than two years. The Participant shall be considered to be an Employee during such leave of absence and Employer shall continue to make contributions on his behalf (based on his compensation, if any) to Trustee. If a Participant fails to return to the employ of Employer at the expiration of such leave of absence, he shall be deemed to have terminated employment as of such expiration. 5.4 Rights and Privileges: All Participants shall be bound by the terms of the Plan, including all amendments hereto made in the manner authorized herein. Participants shall also be entitled to all the rights and privileges afforded thereby including those granted specifically by the Code and ERISA which are hereby adopted by references as part of said Plan. 5.5 Eligibility Computation Period: A. For purposes of determining years of service and breaks in service for purposes of eligibility, the initial eligibility computation period is the 12 -consecutive month period beginning on the date the employee first performs an hour of service for the employer. The succeeding 12 -consecutive month • 10.17 rage 14 periods commence with the first plan year which commences prior to the first aniversary of the employee's initial eligibility computation period regardless of whether the employee is entitled to be credited with 1,000 hours of service during the initial eligibility computation period. An employee who is credited with 1,000 hours of service in both the initial eligibility computation period and the first plan year which commences prior to the first anniversary of the employee's initial eligibility computation period will be credited with two years of service for purposes of eligibility to participate. B. In the case of any participant who has a 1 -year break in service, years of eligibility service before such break will not be taken into account until the employee has completed a year of service after returning to employment. Such year of service will be measured by the 12 -consecutive month period beginning on an employee's -reemployment connnencement date and, if necessary, plan years beginning with the plan year which includes the first anniversary of the reemployment commencement date. The reemployment commencement date is the first day on which the employee is credited with an hour of service for the performance of duties after the first eligibility computation period in which the employee incurs a one year break in service. If a former participant completes a year of service in accordance with this provision, his or her participation will be reinstated as of the reemployment commencement date. C. All years of service with the employer are counted toward eligibility except the following: 1. A former participant will become a participant immediately upon returning to the employ of the employer if such former participant has a nonforfeitable right to all or a portion of the account balance derived from employer contributions at the time of termination. 2. A former participant who did not have a nonforfeitable right to any portion of the account balance derived from employer contributions at the time of termination will be considered a new employee, for eligibility purposes, if the number of consecutive one year breaks in service equals or exceeds the aggregate number of years of service equal or exceed the greater of: 1. Five years; or 2. The aggregate number of years of service before the consecutive one year breaks in service. If such former participant's number of consecutive one year breaks in service are less than the greater of: 1. Five years; or 10.18 Page 15 2. The aggregate number of years of service before the consecutive one year breaks in service. Such participant shall participate immediately. 3. The year during which an Employee was eligible to participate but elected to not participate, shall not count toward vesting purposes. 4. If the employer maintains the plan of a predecessor employer, service with such employer will be treated as service for the employer. 6.0 CONTRIBUTIONS AND FORFEITURES 6.1 Employer Contributions: For each plan year, the employer will contribute an amount equal to 6% of each participant's compensation when the participant contributes the 3% mandatory contribution. For any plan year an otherwise eligible participant elects to not make the 3% mandatory contribution, the Employer will not make the 6% contribution. 6.2 Forfeitures: Forfeitures shall be held in a suspense account until the terminated participant has incurred a break in service at which time they will be used to reduce the employer's required contribution. 6.3 Mandatory Employee Contributions: As a requirement of participantion, an employee must contribute 3% of their compensation each plan year. 6.4 Voluntary Employee Contributions: A. Employee Contributions made hereunder and earnings thereon will be nonforfeitable at all times. No forfeitures :•rill occur solely as a result of an employees withdrawal of employee contributions. • io.is raye iv C. Non -Deductible Voluntary Contributions: The participant may make non- deductible contributions up to 10% of an employees compensation. D. Deductible Voluntary Employee Contributions: The participant may make deductible contributions, and the following provisions will apply: In any taxable year, a participant may make deductible cash contributions to the trust not to exceed the lesser of: 1. $2,000; or 2. The participant's compensation for the taxble year for which the contribution is made. Compensation for this purpose means all wages, salaries, earned income and other amounts received or derived from personal sesrvices actually rendered and includible in gross income, but does not include amounts derived from or received as earnings or profits from property or amounts received as a pension or annuity or as deferred compensation. This limitation applies to all deductible employee contributions made for any taxable year to all qualified retirement plans maintained by the employer. A separate account will be established for such contributions which will be nonforfeitable at all times. This account will share in the gains and losses of the trust E. The following conditions also apply to such deductible contributions: 1. A deductible voluntary contribution will be considered contributed forthe calendar year in which it is actually made. However, if the participant makes the contribution on or before April 1Sth, he or she may notify the plan administrator at the time the contribution is made that it is made for the preceding calendar year. A deductible voluntary contribution may only be made for a calendar year in which the participant was employed by the emloyer. 2. The plan administrator will not accept deductible employee contributions which exceed the limitation described above. 3. Any voluntary contribution made by the participant will be treated as a deductible employee contribution unless the participant has designated (by notifying the Plan Administrator) by the earlier of: (a) April 15 of the calendar year following the year for which the contribution is made; or (b) the date prescribed by the Plan Administrator that it is nondeductible. 4. No contributions will be accepted for the deductible voluntary contribution account if the employee will have attained age 70 1/2 by the end of the taxable year for which the contribution is made, and for later tax years. 5. No part of the deductible voluntary contributions account will be used to purchase life insurance. In the event said contributions are used to purchase life Insurance, such purchase will be counted as a distribution. 10.20 Page 17 6. The plan will accept accumulated deductible employee contributions (as defined in Section 72(o)(5) of the Internal Revenue Code) that were distributed from a qualified retirement plan and rolled over pursuant to Sections 402(a)(5), 402(x)(7), 403(a)(4), or 408(d)(3) of the Code. The rolled over amount will be added to the deductible voluntary contributions account but will not be taken into account in applying the limitations on deductible voluntary contributions to this plan. The plan will not accept rollovers of accumulated deductible employee contributions from a plan under which the employee was covered as a self-employed individual as described in Section 401(c)(1) of the Code. The participant may withdraw any part of the deductible voluntary contributions account by making a written application to the plan administrator. However, if at the time the distribution is received the participant has not attained age 59 1/2 and is not disabled, the participant will be subject to a federal income tax penalty unless the distribution is rolled over to a qualified plan or individual retirement plan within 60 days of the date of distribution. F. The Plan Administrator shall maintain separate accounts for employee contributions and earnings thereon. G. Administrative Matters: 1. Withdrawal of voluntary contributions, either deductible or nondeductible, requires that the participant give the Plan Administrator 30 days prior written notice. 2. Voluntary Contributions may be withdrawn, but any earnings or gains on such contributions can not be withdrawn until termination, death, disability, or retirement. - 3. Participants shall have the right to discontinue or change the amount of their voluntary contributions only on any January 1, except that, following any such discontinuance or change, a participant may not resume voluntary contributions or make another change for three (3) years. 7.0 ALLOCATIONS 7.1 Timing: Allocations will be performed as of the last day of the plan year.