Res 17-03RESOLUTION NO. 17-03
A RESOLUTION OF THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH, FLORIDA, RELATING TO
AND ADOPTING AN AMENDMENT TO THE
VANTAGE CARE RETIREMENT HEALTH SAVINGS
PLAN; PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of DelrayBeach, Florida has established a retiree health savings plan in
the form of a VantageCare Retiremem Health Savings Plan (the Plan) for its employees that serves
the City's interest by enabling k to provide reasonable security regarding employee's health needs
during retiremem, by providing increased flexibility in its personnel managemem system and by
assisting in the attraction and retention of competent personnel; and,
WHEREAS, the City of Delray Beach has determined that the continuance of the Plan
serves the above objectives.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY ODMM[SSION OF THE
CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS:
Section 1. That the City of Delray Beach hereby amends and restates the Plan as outlined in
the attached Declaration of Amendment to the VantageCare Retirement Health Savings Plan. (See
Exhibk 1, referencing Attachment C).
Section 2. That the assets of the Plan shall be held in trust with the City of Delray Beach
serving as Trustee ("Trustee") for the exclusive benefit of Plan participants and their beneficiaries,
and the assets of the Plan shall not be diverted to any other purpose prior to the satisfaction of ail
liabilities of the City of Delray Beach Integral Part Trust in the form of the model integral part trust
agreement made available bythe ICMA Retirement Corporation attached hereto as Exhibit 2.
PASSED AND ADOPTED this /~dayof ~ ,2003. /
ATi"EST:
ATTACHMENT C
DECLARATION OF AMENDMENT TO THE VANTAGECARE RETIREMENT
HEALTH SAVINGS PLAN
Plan Number: 8 0 0
Name of Employer:
2 0 7
CITY OF DELRAY BEACIt
State: FLORIDA
The Employer is amending its VantageCare Reurement Health Savings (1KHS) Plan to incorporate the
provisions selected below. Section numbers refer to the appropriate section of the VantageCare RHS
Adoption Agreement.
Part I: Addition of New Participation and Contribution Features: Complete Part I if you wish to
add the new participation and/or contribution features to your RI-IS plan.
Effective Date: APRIL 1. 2003
(insert effective date of amendment).
V. Eligible Groups and Participant Eligibility Requirements
Use this section to allow your employees to choose to participate in the 1KHS program. If you do not
select this option, parucipation will continue to be mandatory for the employee group(s) named in your
original R. HS Adoption Agreement. If you choose this option, employees that do not opt to participate
in P,.HS will not receive mandatory contributions or be allowed to choose to make elective employee
contributions (see SecuonVI).
Irrevocable Election to Participate
If this box is checked, in lieu of mandatory participation, the Employer provides for a one-time
irrevocable elect~on by eligible Employees to participate in P,.HS. Untd such time as the election
made, the Employee shall not participate in the Plan or receive contributions pursuant to sectionVI
of the i~HS Adoption Agreement.
Newly eligible Employees shall be prowded an election window of 60 days (no more
than 60 calendar days) from the date of initial eligibility during which they may make the election
to parucipate. Participation may begin no earlier than the calendar month following the end of the
election window.
If the Employee does not make the election in the year of initial eligibility, the election to partici-
pate may be made in a later year. An annual election window of 60 days (no more
than 60 calendar days) shall be provided dunng which the election may be made. The election win-
dow shall run from NOV. 1 to DEC. 31 (insert your annual time frame for the election win-
dow, e.g. October 1 to November 29). Pamcipation may begin no earlier than the calendar year fol-
lowing the year of the elecnon.
Once made, the election is arrevocable and may not be revoked while the participant is a member of
the group covered by the P, HS plan.
Plan Number:8 0 0 2 0 7
Existing RHS participants
If you have chosen to allow your employees to elect to participate in P,.HS, you must choose one option
below with respect to existing participants.
Existing P,.HS Participants shall be allowed to revoke their participation in the Plan on a one-time
irrevocable basis. Participants shall be provided a 60 calendar day window from the effective date of
the plan amendment to revoke participation. Revocation shall be made on a form provided by the
ICMA Retirement Corporation and returned to the Employer. Once participation is revoked, the
Participant may not elect to participate m the Plan at any later time. Account assets of Parncipants
that revoke participation shall remain in the Trust to be distributed under the terms of the Plan as
outlined in the Employer's VantageCare i:kHS Adoption Agreement.
[~l Existing P,.HS Participants shall not be allowed to revoke their participation in the Plan.
By adopting the elective participation option, the Employer acknowledges that the Internal Revenue
Service has not ruled on an Irrevocable elect~on to parucipate in an integral part trust. ICMA-RC has
obtained the advice of counsel that such an election is allowable under the conditions outlined in this
Adoption Agreement. The Employer should discuss this issue with appropriate counsel.
If the Employer's underlying welfare benefit plan or funding under this VantageCare Retirement Health
Savings Plan, is in whole or part, a non-collectively bargained, self-insured plan, the nondiscrimination
requirements of Internal Revenue Code (IRC) Section 105(h) will apply. These rules may impose taxa-
uon on the benefits received by highly compensated Employees if the Plan discriminates in favor of
highly compensated Employees an terms of eligibility or benefits. The Employer should discuss these
rules with appropriate counsel.
VI. Contribution Sources and Amounts
Use sections A and/or B to define your contribution formula(s) for your lcLI'-IS plan. Section C defines
your overall plan contribution maximum (if any). Check the boxes that apply, and complete your fund-
ing formula(s).
A. Mandatory Contributions
[~ 1. Direct Employer Contributions: The Employer shall contribute on behalf of each Participant
__% of earnings or $ for the PlanYear.
Definition of earnings:
Plan Number:80 0 2 0 7
~ 2. Mandatory Leave Contributions: The Employer will make mandatory contribuuons of leave
as follows:
Accrued Sick Leave*
Accrued Vacation*
Other (describe)*
[~ Yes [~ No
[~[ Yes [~[ No
Yes ~ No
* Please provide the formula for determining the accrued leave contribution:
An Employee shall not have the right to discontinue or vary the rate of mandatory leave contribu-
tions.
3. Mandatory Employee Compensation Contributions: The Employer will make mandatory
contributions of Employee compensation as follows:
Reduction in Salary - % of earnings (as defined inVI.A. 1.) or $
be contributed for the PlanYear.
will
Decreased Merit or Pay Plan Adjustment - All or a portion of the Employees' annual merit or
pay plan adjustment will be contributed as follows:
Bo
An Employee shall not have the right to discontinue or vary the rate of mandatory contributions of
Employee compensation.
Elective Contributions: If you wish to provide for elective contributions, complete sections 1
and/or 2 as appropriate.
The Employer will permit each Employee to make the following elections to make pre-tax contri-
butions to the Plan:
a. Irrevocable Election for Pre-Tax Contributions from Compensation: A one-time, irrevocable
election of the amount of Employer contributions of compensation made on his or her behalf.
[I 9
Plan Number:80 0 2 0 7
The Employer limits the amount elected to either a fixed percentage or a range of percentages of
an Employee's earnings (as shown below):
% of earnings (as defined inVI.A.1.) or up to
defined ~nVI.A.1.) for the PlanYear.
% of earnings (as
Newly eligible Employees shall be provided an election window of .days (no more
than 60 calendar days) from the date of ehgibility during which they may make the elecnon to
contribute. Contnbutmns may begin no earlier than the calendar month following the end of
the elecuon window.
If the Employee does not make the election in the year of initial eligibility, the elecuon to con-
tribute may be made in a later year. An annual election window of days (no more
than 60 calendar days) shall be provided during which the election may be made. The election
w~ndow shall run from to (insert your annual time frame for the
elecnon window). Contributions may begin no earher than the calendar year following the year
of the election.
Once made, the election is irrevocable and may not be revoked.
[~ b. Irrevocable Election for Pre-Tax Contributions of Accrued Leave:A one-time, irrevocable
elecnon of the amount of Employer contributions of accrued
sick [~l vacation [~ other
her behalf.
(describe) leave made on his or
The Employer limits the amount elected as shown below:
MAXIMUM LIMITS AS SET FORTH IN SICK LEAVE AND VACATION LEAVE POLICIES OR UNION
AGREEMENTS. ALL CONTRIBUTIONS ARE 100% VESTED.
Newly ehgible Employees shall be provided an election window of 60 days (no more
than 60 calendar days) from the date of eligibility dunng which they may make the election to
contribute. Contributions may begin no earlier than the calendar month following the end of
the election window.
If the Employee does not make the election in the year of initial eligibility, the election to con-
tribute may be made in a later year. An annual election window of 60 days (no more
than 60 calendar days) shall be provided dumng which the election may be made. The election
window shall run from NOV. 1 to DEC. 31 (insert your annual time frame for the
election window). Contributions may begin no earlier than the calendar year following the year
of the election.
Once made, the election is irrevocable and may not be revoked.
lo
Plan Number:80 0 2 0 7
c. Annual Prospective Election for Pre-Tax Contributions of Leave: An annual, irrevocable elec-
tion to have his or her [~ sick ~ vacation ~l other (describe)
leave to be accrued ~n the next calendar year, contributed to the Plan on his or her behalf.
Contributions of future leave accruals will be remitted to the Plan
[~ as earned [~l at the end of the calendar year
The election to contribute must be made in the calendar year before the year in which contribunons
are to begin. Once made, the election shall apply to succeeding calendar years unless otherwise
revised or revoked by the Employee on an annual basis.
An annual election window of days (no more than 60 calendar days) is provided
during which eligible Employees may make the election to contribute. The election window shall
run from to of the year prior to the year contnbutmns of leave will
beg~n (insert your annual time frame for the elecnon window).
The Employer limits the amount elected as shown below:
In adopting section a, b, and/or c, the Employer acknowledges that the Internal l~evenue Service has
not ruled on irrevocable election contributions in an integral part trust. ICMA-RC has obtained
the advice of counsel that such contributions are allowable under the conditions outlined ~n this
Adoption Agreement. The Employer should discuss this issue with appropriate counsel.
2. Voluntary After-Tax Contributions: Each Employee may contribute up to % of
earnings (as defined inVI.A. 1.) or $ for the PlanYear on a voluntary after-tax basis.
In no event may aggregate Employee voluntary after-tax contributions exceed 25% of total contri-
butions in any PlanYear.
An Employee shall have the right to discontinue or vary the rate of voluntary after-tax contributions
of Employee earnings.
In adopting this section, the Employer acknowledges that the Internal Revenue Service has declined
to rule on Employee after-tax contributions in an integral part trust. ICMA-i~C has obtained the
advice of counsel that such contributions are allowable in an insubstantial amount (i.e. no more than
25% of total contributions in any Plan Year) . The Employer should discuss this ~ssue with appropriate
counsel.
Limits on Contributions: Use this section to define your overall maxamum contributions for all
contribution types you selected. (Limits on individual contribution types are defined within the
appropriate sections above.)
Plan Number:80 0 2 0 7
The total contribution on behalf of each Participant (including both Mandatory and Elective
Contributions) for each Plan Year shall not exceed the following limit(s):
% of earnings (as defined inVI.A. 1.).
[~[ There is no Plan-defined limit on the percentage or dollar amount of earnings that may be
contributed, l~lAXIl~rg LII~IITS ARE SET FORTH IN SICK LEAVE AND VACATION LEAVE POLICIES
OR UNION AGREEFiENTS. ALL CONTRIBUTIONS ARE 1007~ VESTED.
Part II: Revision of Existing Distribution Features
You must complete Part II to incorporate the HRA-required changes into your existing RI-IS Plan. These changes
will be effective immediately. Affected provisions include:
er Long-term care expenses are no longer a qualifying medical expense (see X.)
er Death benefits (see XL and VIII.)
er Severance provision (see XIL )
er De minimis provision (see XIII. G.)
VIII. Forfeiture Provisions: Complete SectionVIII. if 1) you did not select a forfeature provision for
your existing plan (e.g. because vesting does not apply to your plan) or 2) you wish to change your
existing forfeiture selection.
Upon separauon from the service with the Employer, or upon reversion to the Trust of a Participant's
account assets remaaning upon the Participant's death (as outlined in Section XI.), a Participant's funds
shall:
I~emain in the Trust to be reallocated among all Plan Participants as Direct Employer
Contributions for the next and succeeding contribution cycles(s).
l~emain in the Trust to be rea]located on an equal dollar basis among all Plan
Participants.
Remain in the Trust to be reallocated among all Plan Participants based upon Participant
account balances.
R. evert to the Employer.
In the case of separation from service, the Participant's non-vested funds shall be applied as shown above.
In the case of reversion due to the Participant's death, the remaining account assets shall be applied as
shown above.
X. Permissible Medical Benefit Payments
Long Term Care Benefits are not eligible for payment under the Plan.
Plan Number:80 0 2 0 7
XI. Death Benefit
In the event of a Participant's death, the following shall apply:
Account Transfer: The surviving spouse and/or surviving eligible dependents (as defined in Section
XIII.E) of the deceased Participant are immediately ehgible to maintain the account and utilize it to
fund ehgible medical benefits specified in Section X above.
Upon notification of a Participant's death, the Participant's account balance will be transferred into the
Vantagepmnt Money Market Fund*. The account balance may be reallocated by the surviving spouse or
dependents.
* Please read the current prospectus carefully prior to investing. An investment in this
fund is neither insured nor guaranteed and there can be no assurance that the Fund will
be able to maintain a stable net asset value of $1.00 per share. Vantagepoint Mutual
Funds are distributed by ICMA-1ZC Services, LLC, a controlled affiliate of ICMA
Retirement Corporation. Member NASD/SIPC.
If a Participant's account balance has not been fully utilized upon the death of the ehgible spouse, the
account balance may continue to be utihzed to pay benefits of eligible dependents. Upon the death of all
eligible dependents, the balance will be available for medical benefits for the designated beneficiary of
the last dependent or spouse to die. Assets remaining upon the death of a designated beneficiary shall be
available for medical benefits of the beneficiary's desagnated beneficiary. If there is no living
beneficiary0es), the account will revert to the Plan to be applied as specified in SectionVIII.
There will be no elective withholding of federal, state, or local taxes for medical benefit payments to the
Participant's spouse's or dependent's designated beneficiary(ies).
If there are no living spouse or dependents at the time of death of the Participant, the account will be
available for medical benefits for the designated beneficiary(ies) of the Participant. Assets remaining upon
the death of all designated beneficiaries shall be available for medical benefits of the beneficiary's benefi-
ciary. If there is no living beneficiary(les), the account will revert to the Plan to be applied as specified
in Section VIII.
There will be no elective withholding of federal, state, or local taxes for medical benefit payments to the
Participant's beneficiary0es) or any beneficiary's beneficiary.
XII. Termination Prior to Benefit Eligibility
This section replaces the Severance Feature previously included in Section XlI.
In the case of a Participant's termination of employment in advance of retirement (as defined in Section
VII.C.) or prior to becoming eligible for medical benefits under the plan (as defined an Section IX.), the
Plan Number:80 0 2 0 7
vested value of the Participant's account will be available for benefits:
[~[ Immediately upon termination of employment.
[~[ As outlined in Section IX.
[~[ At age
XIII.G. Upon termination of employment prior to a Participant becoming eligible for medical benefits
from a VantageCare Retirement Health Savings Plan account, Participant accounts that are considered de
minimis as specified below will be paid to the Participant.
The de minimis account value shall be $5,000 or less.
The de rninimis account value shall be $.
between $0 and $5,000) or less.
The Plan shall not allow de minirnis account distributions.
(insert dollar amount
EMPLOYER
Tide: ~ .-..oa,~t...- ,,~'~ r~.,-.....~-"~ ~
Attest:_~~~. ~ ~'
Accepted: Vantagepoint Transfer Agents, LLC
Corporate Treasurer
[lTV I:IF DELRrlV BErlCH
CITY ATTORNEY'S OFFICE
200 NW 1st AVENUE · DELRAY BEACH, FLORIDA 33444
TELEPHONE 561/243-7090 · FACSIMILE 561/278-4755
1993
DATE:
TO:
FROM:
SUBJECT:
Writer's Direct Line: 561/243-7091
MEMORANDUM
March 24, 2003
Chevelle Nubin, Executive Assistant/Agenda Coordinator
Susan A. Ruby, City Attorney
Amendment to VantaqeCare Retirement Health Savinqs Plan
Attached please find an agenda item regarding an Amendment to the
VantageCare Retirement Health Savings Plan.
I have attached a memo from Joe Safford to David Harden, outlining the changes,
to serve as the cover memo, along with a copy of the resolution and Exhibits 1 and
2.
If you have any questions, give me a call.
SAR:ci
Attachment
Cc:
David Harden, City Manager
Joe Safford, Finance Director
RESOLUTION NO. J"')-03
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH, FLORIDA, RELATING TO AND ADOPTING AN
AMENDMENT TO THE VANTAGECARE RETIREMENT HEALTH
SAVINGS PLAN; PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Delray Beach, Florida has established a retiree health savings plan
in the form of a VantageCare Retirement Health Savings Plan (the Plan) for its employees that
serves the City's interest by enabling it to provide reasonable security regarding employee's
health needs during retirement, by providing increased flexibility in its personnel management
system and by assisting in the attraction and retention of competent personnel; and,
WHEREAS, the City of Delray Beach has determined that the continuance of the Plan
serves the above objectives.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF
DELRAY BEACH, FLORIDA, AS FOLLOWS:
Section 1. That the City of Delray Beach hereby amends and restates the Plan as
outlined in the attached Declaration of Amendment to the VantageCare Retirement Health
Savings Plan. (See Exhibit 1, referencing Attachment C).
Section 2. That the assets of the Plan shall be held in trust with the City of Delray Beach
serving as Trustee ("Trustee") for the exclusive benefit of Plan participants and their
beneficiaries, and the assets of the Plan shall not be diverted to any other purpose prior to the
satisfaction of all liabilities of the City of Delray Beach Integral Part Trust in the form of'the model
integral part trust agreement made available by the ICMA Retirement Corporation attached
hereto as Exhibit 2.
PASSED AND ADOPTED this
~day of ,2003.
ATTEST:
MAYOR
City Clerk
18 oorz, /
CiTY rvlAI'IAGER '
To:
From:
Date:
David T. Harden, City Manager
Joseph M. Saffor~nce Director
March 17, 2003
Subject:
Amendment to VantageCare Retirement Health Savings Plan
We would appreciate City Commission approval of a resolution approving the
amendment to the VantageCare Retirement Health Savings Plan as more fully described
below.
In November 2002, ICMA issued a proposed amendment package to the City of Delray
Beach. Some changes to the plan were administrative, some were enhanced investment
options and some changes are to keep the plan benefits consistent with new IRS rules and
regulations so that the plan benefits remain tax-free. The plan continues to allow the
deposit of accrued sick leave and vacation time at the time of separation from
employment with the City in accordance with established personnel policies and union
agreements Employees still need to elect their option in the calendar year preceding
their separation of service. Some of the more important new changes are as follows:
· Upon the death of a retiree, the spouse or dependent must use the plan assets for
healthcare purposes. They cannot draw out the funds for any other purposes even
if they are willing to pay taxes on the withdrawal.
· Upon the death of a retiree where there is no spouse or dependent, a beneficiary
must use the plan assets for healthcare purposes and pay taxes on these
withdrawals. They cannot withdraw the funds for any other purposes even
though they are paying taxes on their withdrawals.
· Plan assets must be used by the retiree for medical expenses only. There is no
longer an option to withdraw the cash and be taxed on the distribution.
· Long-term care expenses are no longer considered qualifying medical care
expenses Long-term care insurance premiums are considered qualifying medical
care expenses.
· Existing plan participants shall be allowed to revoke their participation in the
amended plan on a one-time irrevocable basis. They would be allowed to
continue their participation under the terms of the original plan
This plan, once amended, can be used by an employee to deposit their accrued sick and
vacation leave time pre-tax and, when used for healthcare purposes, can be withdrawn
tax-free. This plan compliments our recent 457 Plan change which also allows the
deposit of sick and vacation leave time but may be withdrawn for any purpose but will
be taxed.
Please have the City Commission approve the resolution amending our VantageCare
Retirement Health Savings Plan
Encl' Attachment C Declaration of Amendment to the VantageCare Retirement Health
Savings Plan
Cc~
Susan A. Ruby, City Attorney
Nancy Jackson, Interim Human Resources Director
Glenda Rivera, Payroll Administrator
ATTACHMENT C
DECLARATION OF AMENDMENT TO THE VANTAGECARE RETIREMENT
HEALTH SAVINGS PLAN
Plan Number: 80 O __2_ 0 ?
Name of Employer: CI~ OF DELRA¥ BEACH
State: FLORIDA
The Employer is amending itsVantageCare Retirement Health Savings (PHS) Plan to incorporate the
provisions selected below. Section numbers refer to the appropriate section of the VantageCare R/qS
Adoption Agreement.
part I; Addidon of New Participation and Contribution Features: Complete Part I if you wish to
add the new participation and/or contribution features to your RI-IS plan.
F_~ective Date: kPRIL 1. 2003
(insert effective date of amendment).
V. Eligible Groups and Participant Eligibility Requirements
Use this section to allow your employees to choose to participate in the B. HS program. If you do not
select this option, participation will continue to be mandatory for the employee group(s) named in your
original RHS Adoption Agreement. If you choose this option, employees that do not opt to participate
in tkHS will not receive mandatory contributions or be allowed to choose to make elective employee
contributions (see Section VI).
Irrevocable Election to Participate
If this box is checked, in lieu of mandatory participation, the Employer provides for a one-time
irrevocable election by eligible Employees to participate in 1KHS. Until such time as the election is
made, the Employee shall not participate in the Plan or receive contributions pursuant to section VI
of the RI-IS Adoption Agreement.
Newly eligiNe Employees shall be provided an election window of 60 days (no more
than 60 calendar days) from the date of initial eligibility during which they may make the election
to participate. Participation may begin no earlier than the calendar month following the end of the
election window.
If the Employee does not make the election in the year of initial eligibility, the election to partici-
pate may be made in a later year. An annual election window of 60 days (no more
than 60 calendar days) shall be provided during which the election may be made. The election win-
dow shall run firom NOV. 1 to DEC. 31 (insert your annual time frame for the election win-
dow, e.g. October 1 to November 29). Participation may begin no earlier than the calendar year fol-
lowing the year of the election.
Once made, the election is irrevocable and may not be revoked while the participant is a member of
the group covered by the PHS plan.
7 Exhibit
Plan Number:8 0 0 2 0 7
Existing RHS participants
If you have chosen to allow your employees to elect to participate in PHS, you must choose one option
below with respect to existing participants.
Existing RI-IS Participants shall be allowed to revoke their participation in the Plan on a one-time
irrevocable basis. Participants shall be provided a 60 calendar day window fi:om the effective date of
the plan amendment to revoke participation. Revocation shall be made on a form provided by the
ICMA Retirement Corporation and returned to the Employer. Once participation is revoked, the
Participant may not elect to participate in the Plan at any later time. Account assets of Participants
that revoke participation shall remain in the Trust to be distributed under the terms of the Plan as
outlined in the Employer's VantageCare PHS Adoption Agreement.
Existing RHS Participants shall not be allowed to revoke their participation in the Plan.
By adopting the elective participation option, the Employer acknowledges that the Internal Revenue
Service has not ruled on an irrevocable election to participate in an integral part trust. ICMA-RC has
obtained the advice of counsel that such an election is allowable under the conditions outlined in this
Adoption Agreement. The Employer should discuss this issue with appropriate counsel.
If the Employer's underlying welfare benefit plan or funding under this VantageCare Retirement Health
Savings Plan, is in whole or part, a non-collectively bargained, self-insured plan, the nondiscrimination
requirements of Internal Revenue Code (IRC) Section 105(h) will apply. These rules may impose taxa-
tion on the benefits received by highly compensated Employees if the Plan discriminates in favor of
highly compensated Employees in terms of eligibility or benefits. The Employer should discuss these
rules with appropriate counsel.
VI. Contribution Sources and Amounts
Use sections A and/or B to define your contribution formula(s) for your R_HS plan. Section C defines
your overall plan contribution maximum (if any). Check the boxes that apply, and complete your fund-
ing formula(s).
A. Mandatory Contributions
~ 1. Direct Employer Contributions: The Employer shall contribute on behalf of each Participant
% of earnings or $. for the Plan Year.
Definition of earnings:
Plan Number:80 0 2 0 7
~ 2. Mandatory Leave Contributions: The Employer will make mandatory contributions of leave
as follows:
Accrued Sick Leave*
Accrued Vacation*
Other (describe)*
Yes ~ No
[~l Yes [~l No
Yes ~ No
* Please provide the formula for determining the accrued leave contribution:
An Employee shall not have the right to discontinue or vary the rate of mandatory leave contribu-
tions.
3. Mandatory Employee Compensation Contributions: The Employer will make mandatory
contributions of Employee compensation as follows:
Reduction in Salary - % of earnings (as defined inVI.A. 1.) or $
be contributed for the PlanYear.
Decreased Merit or Pay Plan Adjustment - All or a portion of the Employees' annual merit or
pay plan adjustment will be contributed as follows:
Be
An Employee shall r~ot. have the right to discontinue or vary the rate of mandatory contributions of
Employee compensation.
Elective Contributions: If you wish to provide for elective contributions, complete sections 1
and/or 2 as appropriate.
The Employer will permit each Employee to make the following elections to make pre-tax contri-
butions to the Plan:
a. Irrevocable Election for Pre-Tax Contributions from Compensation: A one-time, irrevocable
election of the amount of Employer contributions of compensation made on his or her behalf.
Plan Number: 80 O 2 0 7
The Employer limits the amount elected to either a fixed percentage or a range of percentages of
an Employee's earnings (as shown below):
,% of earnings (as defined inVI.A.1.) or up to,
defined inVI.A.1.) for the PlanYear.
% of earnings (as
Newly eligible Employees shall be provided an election window of days (no more
than 60 calendar days) from the date of eligibility during which they may make the election to
contribute. Contributions may begin no earlier than the calendar month following the end of
the election window.
If the Employee does not make the election in the year of initial eligibility, the election to con-
tribute may be made in a later year. An annual election window of days (no more
than 60 calendar days) shall be provided during which the election may be made. The election
window shall run from to (insert your annual time frame for the
election window). Contributions may begin no earlier than the calendar year following the year
of the election.
Once made, the election is irrevocable and may not be revoked.
b. Irrevocable Election for Pre-Tax Contributiom of Accrued Leave: A one-time, irrevocable
election of the amount of Employer contributions of accrued
sick [~ vacation [~ other
her behalf.
(describe) leave made on his or
The Employer limits the amount elected as shown below:
MAXIMIJM LIMITS AS SET FORTH IN SICK LEAVE AND VACATION LEAVE POLICIES OR UNION
AGREEMENTS. ALL CONTRIBUTIONS ARE 100% VESTED.
Newly eligible Employees shall be provided an election window of 60 days (no more
than 60 calendar days) from the date of eligibility during which they may make the election to
contribute. Contributions may begin no earlier than the calendar month following the end of
the election window.
If the Employee does not make the election in the year of initial eligibility, the election to con-
tribute may be made in a later year. An annual election window of 60 days (no more
than 60 calendar days) shall be provided during which the election may be made. The election
window shall run from NOV. 1 to DEC. 31 (insert your annual time frame for the
election window). Contributions may begin no earlier than the calendar year following the year
of the election.
Once made, the election is irrevocable and may not be revoked.
10
Plan Number: 8 0 0 2 0 7
c. Annual prospective Election for Pre-Tax Contributions of Leave:An annual, irrevocable elec-
tion to have his or her [~1 sick [~[ vacation [~ other (describe)
leave to be accrued in the next calendar year, contributed to the Plan on his or her behalf.
Contributions of future leave accruals will be remitted to the Plan
[~ as earned ~ at the end of the calendar year
The election to contribute must be made in the calendar year before the year in which contributions
are to begin. Once made, the election shall apply to succeeding calendar years unless otherwise
revised or revoked by the Employee on an annual basis.
An annual election window of days (no more than 60 calendar days) is provided
during which eligible Employees may make the election to contribute. The election window shall
run from to of the year prior to the year contributions of leave will
begin (insert your annual time frame for the election window).
The Employer limits the amount elected as shown below:
In adopting section a, b, and/or c, the Employer acknowledges that the Internal Revenue Service has
not ruled on irrevocable election contributions in an integral part trust. ICMA-RC has obtained
the advice of counsel that such contributions are allowable under the conditions outlined in this
Adoption Agreement. The Employer should discuss this issue with appropriate counsel.
2. Voluntary After-Tax Contributions: Each Employee may contribute up to .% of
earnings (as defined inVI.A. 1 .) or $. for the PlanYear on a voluntary after-tax basis.
In no event may aggregate Employee voluntary after-tax contributions exceed 25% of total contri-
butions in any PlanYear.
An Employee shall have the right to discontinue or vary the rate of voluntary atier-tax contributions
of Employee earnings.
In adopting this section, the Employer acknowledges that the Internal Revenue Service has declined
to rule on Employee atier-tax contributions in an integral part trust. ICMA-RC has obtained the
advice of counsel that such contributions are allowable in an insubstantial amount (i.e. no more than
25% of total contributions in any PlanYear).The Employer should discuss this issue with appropriate
counsel.
Ce
Limits on Contributions: Use this section to define your overall maximum contributions for all
contribution types you selected. (Limits on individual contribution types are defined within the
appropriate sections above.)
Plan Number:80 0 2 0 7
The total contribution on behalf, of each Participant (including both Mandatory and Elective
Contributions) for each Plan Year shall not exceed the following limit(s):
% of earnings (as defined inVI.A.1.).
~ There is no Plan-defined limit on the percentage or dollar amount of earnings that may be
contributed, l~t,XIm~ LIMITS ARE SET FORTH IN SICK LEAVE AND VACATION LEAVE POLICIES
OR UNION AGREEMENTS. ALL CONTRIBUTIONS ARE 100% VESTED.
Part H: Revision of Existing Distribution Features
You must complete Part II to incorporate the HRA-required changes into your existing RHS Plan. These changes
will be effective immediately. Affected provisions include:
Long-term care expenses are no longer a qualifying medical expense (see X.)
Death benefits (see XI. and VIII.)
Severance provision (see XII.)
De minimis provision (see XIIL G.)
VIII. Forfeiture Provisions: Complete SectionVIII. if 1) you did not select a forfeiture provision for
your existing plan (e.g. because vesting does not apply to your plan) or 2) you wish to change your
existing forfeiture selection.
Upon separation from the service with the Employer, or upon reversion to the Trust of a Participant's
account assets remaining upon the Participant's death (as outlined in Section XI.), a Participant's funds
shall:
Remain in the Trust to be reallocated among all Plan Participants as Direct Employer
Contributions for the next and succeeding contribution cycles(s).
P, emain in the Trust to be reallocated on an equal dollar basis among all Plan
Participants.
Remain in the Trust to be rea]located among all Plan Participants based upon Participant
account balances.
Revert to the Employer.
In the case of separation from service, the Participant's non-vested funds shall be applied as shown above.
In the case of reversion due to the Participant's death, the remaining account assets shall be applied as
shown above.
X. Permissible Medical Benefit Payments
Long Term Care Benefits are not eligible for payment under the Plan.
Ph/n Number: 8 0 0 2 0 7
XI. Death Benefit
In the event of a Participant's death, the following shall apply:
Account Transfer: The surviving spouse and/or surviving eligible dependents (as defined in Section
XIII.F.) of the deceased Participant are immediately eligible to maintain the account and utilize it to
fund eligible medical benefits specified in Section X above.
Upon notification of a Participant's death, the Participant's account balance will be transferred into the
Vantagepoint Money Market Fund*. The account balance may be reallocated by the surviving spouse or
dependents.
* Please read the current prospectus carefully prior to investing. An investment in this
fund is neither insured nor guaranteed and there can be no assurance that the Fund will
be able to maintain a stable net asset value of $1.00 per share. Vantagepoint Mutual
Funds are distributed by ICMA-I~C Services, LLC, a controlled affiliate of ICMA
P~etirement Corporation. Member NASD/SIPC.
If a Participant's account balance has not been fully utilized upon the death of the eligible spouse, the
account balance may continue to be utilized to pay benefits of eligible dependents. Upon the death of all
eligible dependents, the balance will be available for medical benefits for the designated beneficiary of
the last dependent or spouse to die. Assets remaining upon the death of a designated beneficiary shall be
available for medical benefits of the beneficiary's designated beneficiary. If there is no living
beneficiary(les), the account will revert to the Plan to be applied as specified in Section VIII.
There will be no elective withholding of federal, state, or local taxes for medical benefit payments to the
Participant's spouse's or dependent's designated beneficiary(ies).
If there are no living spouse or dependents at the time of death of the Participant, the account will be
available for medical benefits for the designated beneficiary(les) of the Participant. Assets remaining upon
the death of all designated beneficiaries shall be available for medical benefits of the beneficiary's benefi-
ciary. If there is no living beneficiary(ies), the account will revert to the Plan to be applied as specified
in Section VIII.
There will be no elective withholding of federal, state, or local taxes for medical benefit payments to the
Participant's beneficiary(ies) or any beneficiary's beneficiary.
XH. Termination Prior to Benefit Eligibility
This section replaces the Severance Feature previously included in Section XII.
In the case of a Participant's termination of employment in advance of retirement (as defined in Section
VII.C.) or prior to becoming eligible for medical benefits under the plan (as defined in Section IX.), the
~3
Plan Number:80 0 2 0 7
vested value of the Participant's account will be available for benefits:
[~ Immediately upon termination of employment.
[~ As outlined in Section IX.
[~ At age
XIII.G. Upon termination of employment prior to a Participant becoming eligible for medical benefits
from a VantageCare Retirement Health Savings Plan account, Participant accounts that are considered de
minimis as specified below will be paid to the Participant.
[~ The de minimis account value shall be $5,000 or less.
[~ The de minimis account value shall be $. (insert dollar amount
between $0 and $5,000) or less.
[~ The Plan shall not allow de minimis account distributions.
EMPLOYER
Attest:
Accepted: Vantagepoint Transfer Agents, LLC
Corporate Treasurer
Exhibit 2