1999 Public Agency Retirement System / Retirement PlanCity of La Quinta
Public Agency Retirement System
Supplementary Retirement Plan
July 20, 1999
PLAN DOCUMENT
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc
TABLE OF CONTENTS
Article
Page
I.
Recitals
3
II.
Definitions
4
III.
Eligible Employees
9
IV.
Benefits
10
V.
Contributions
20
VI.
Investments
21
VII.
Vesting
22
VIII.
Administration
23
IX.
Miscellaneous
24
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 2
ARTICLE I
RECITALS
WHEREAS, the City of La Quinta ("Employer") has adopted the California Public
Employees Retirement System ("PERS"), a tax qualified retirement plan
maintained by the State of California for the benefit of eligible employees, and
WHEREAS, the Employer has determined it is in the best interest of the
Employer to provide supplemental retirement benefits to employees who
participate in PERS and who meet the age, service and other requirements
specified herein,
NOW THEREFORE IT IS:
RESOLVED, the provisions contained herein, hereafter called the City of La
Quinta Public Agency Retirement System Supplementary Retirement Plan
("Supplement") are adopted along with the provisions of the Public Agency
Retirement System Trust ("Trust") to provide supplemental retirement benefits to
eligible employees of the Employer. These benefits shall be in addition to the
benefits employees would otherwise receive from PERS, further,
RESOLVED, the provisions of the Supplement and Trust shall establish multiple
trusts of that single plan.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 3
ARTICLE 11
DEFINITIONS
2.1 'Plan Administrator' means the individual designated by the Employer to
act on behalf of the Employer in all matters relating to the Supplement and
the Trust.
2.2 'Beneficiary' means any person or persons, other than the Employer or the
Trustee, designated by a Participant to receive any benefits which may be
due upon the Participant's death. The Beneficiary of a married Participant
shall be the Spouse of the Participant and may not be changed unless
Spousal Consent is obtained.
2.3 'Code' means the Internal Revenue Code.
2.4 'Compensation' means all compensation for the Plan Year paid in cash by
the Employer to an Eligible Employee for personal services. This definition
of "Compensation" shall be subject to the following:
(a) Compensation shall not include any amounts paid by reason of services
performed on or after the date on which an Employee ceases to be an
Employee.
(b) Compensation shall not include, with respect to any Employee, in any
Plan Year (or such other applicable period specifically designated in this
Supplement), any compensation in excess of $200,000 as adjusted, in
Plan Years beginning before January 1, 1994 and no more than
$150,000 (as adjusted) in Plan Years beginning on or after that date.
(c) For purposes of the Highly Compensated Employee and Family member
definition:
(1) Compensation shall mean total compensation as defined herein
without regard to contributions made under Sections 125, 402(e)(3),
402(h)(1)(B) and, in the case of employer contributions made
pursuant to a salary reduction agreement, 403(b) of the Code.
(2) Compensation paid to a Participant for any Plan Year shall include all
Compensation for that Plan Year paid to any Family Member
(hereafter defined) who is a Participant in this Supplement during
such Plan Year.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 4
(3) For purposes of applying the annual compensation limit under
Section 401(a)(17) of the Code, the family unit of an Employee,
who is either a 5% owner or is both a highly compensated
employee and one of the ten most highly compensated employees,
will be treated as a single employee with one compensation, and
except for the purpose of determining Compensation below the
plan's integration level, if applicable, the annual compensation limit
will be allocated among the members of the family unit. The
allocation will be made by allocating a portion of the total amount to
be allocated to the Employee which is the same ratio to the total
amount to be allocated as the ratio that the Compensation of the
Employee bears to the total Compensation of all the Employees
who are aggregated for purposes of this section. For this purpose,
a family unit is the Employee who is a 5% owner or one of the ten
most highly compensated Employees, the Employee's Spouse, and
the Employee's lineal descendants who have not attained age 19
before the close of the year.
'Highly Compensated Employee' means any Employee who performed
service for the Employer during the Determination Year who is described in
one or more of the following groups:
(A) a 5% owner, as defined in Section 416(I)(A)(iii) of the Code at any
time during the Determination Year or in the Look Back Year, or
(B) receives compensation in excess of $75,000, (indexed in accordance
with Section 415(d) of the Code) during the Look Back Year, or
(C) received compensation from an Employer in excess of $50,000
(indexed in accordance with Section 415(d) of the Code) during the
Look Back Year and is a member of the top paid group for the Look
Back Year,
(D) is an officer, within the meaning of Section 416(i) of the Code during
the Look Back Year and who receives compensation in the Look Back
Year greater than 50% of the dollar limitation in effect under Section
415(b)(1)(A) for the calendar year in which the Look Back Year
begins, or
(E) is both described in paragraph (B), (C), or (D) above when these
paragraphs are modified to substitute the Determination Year for the
Look Back Year and one of the 100 employees who receives the
most compensation from the Employer during the Determination Year.
The Determination Year is the Plan Year for which determination of who is
highly compensated is being made.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc CJ
'Look Back Year' is the 12 month period immediately preceding the
determination Year.
The top paid group consists of the top 20% of Employees ranked on the
basis of compensation received during the year. For purposes of
determining the number of employees in the top paid group, employees
described in Section 414(q)(8) and Q. & A. 9(b) of Section 1.414(q)-IT of
the regulations are excluded.
The number of officers is limited to 50 (or, if lesser, the greater of 3
employees or 10% of employees) excluding those employees who may be
excluded in determining the top paid group.
When no officer has compensation in excess of 50% of the Section
415(b)(1)(A) limit, the highest paid officer is treated as highly
compensated.
Compensation is compensation within the meaning of Section 415(c)(3)
including elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax-sheltered annuity.
Employers aggregated under Section 414(b), (c), (m) or (o) shall be
treated as a single employer.
'Family Member' shall mean an Employee who is, on any one day of the
Plan Year, a spouse, lineal ascendant, lineal descendant, or a spouse of
an ascendant or descendant, including a legally adopted individual, of an
individual who during the Plan Year was:
(A) an active or former Employee and a five percent (5%) owner within
the meaning of Section 416(i)(1)(B)(i) of the Code and the
regulations thereunder, or
(B) one of the ten most highly paid Highly Compensated Employees.
2.5 'Effective Date' means July 20, 1999.
2.6 'Eligible Employee' means any Employee who, pursuant to the provisions of
Article III, is eligible for benefits under this supplement.
2.7 'Employee' means an employee of the Employer.
2.8 'Employer' means the City of La Quinta, a public agency that has adopted
this Supplement subject to the terms of the Trust.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 6
2.9 'Final Pay' means the 1998-99 annual Compensation subject to PERS
deductions.
2.10 'Hour of Service' means:
(a) Each hour for which an Employee is paid, or entitled to payment, for the
performance of duties for the Employer during the applicable Plan Year.
(1) Each hour for which an Employee is paid, or entitled to payment, by
the Employer (irrespective of whether the employment relationship
has terminated) on account of a period of time during which no
duties are performed due to vacation, holiday, illness, disability,
layoff, jury duty, military duty or a paid leave of absence during the
applicable Plan Year.
(2) For purposes of paragraph (1) above a leave of absence shall
include the absence of an Employee due to pregnancy of the
Employee, birth of a child of the Employee, placement of a child with
the Employee in connection with the adoption of such child by the
Employee or the caring for such child for a period beginning
immediately following such birth or placement. If the normal number
of Hours of Service cannot be determined for an Employee who is
on sick leave or absence as described in this paragraph (2) then
eight Hours of Service for each day while the Employee is absent
shall be used.
(b) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer.
2.11 'Normal Form of Benefit' means an annuity paid in equal fixed monthly
payments over the life of the Participant.
2.12 'Normal Retirement Age' means age 55.
2.13 'Optional Form of Benefit' means an annuity paid in equal fixed monthly
payments over the life of the Participant and with equal fixed monthly
payments continued over the life of the designated Beneficiary if the
Beneficiary is living at the death of the Participant.
2.14 'PARS' means the Public Agency Retirement System.
2.15 'Participant' means an Eligible Employee who has retired under PERS.
2.16 'PERS' means the California Public Employees' Retirement System.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 7
2.17 'Plan Year' means a period of twelve (12) consecutive months
commencing July 1 and ending June 30.
2.18 'Public Agency' means a State, a political subdivision of a State, and any
agency or instrumentality of a State or political subdivision of a State.
2.19 'Spouse' means the person to whom the Participant is married as of the
earlier of the date on which the Participant's benefits commence or the
date of the Participant's death. To the extent provided in any qualified
domestic relations order a Participant's former Spouse may be treated as
the surviving Spouse for purposes of this Supplement.
2.20 'Spousal Consent' means a written election signed by the Spouse to name
someone other than the Spouse as Beneficiary and which names the non -
Spouse Beneficiary. Such written election shall be witnessed by a Plan
representative designated by the Administrator or a notary public and shall
acknowledge the effect of such election on the rights of the Spouse.
2.21 'Supplement' means the City of La Quinta Public Agency Retirement
System Supplementary Retirement Plan as adopted by the Employer on
the Effective Date, the provisions of which are contained herein.
2.22 'Trust' means the Public Agency Retirement System Trust.
2.23 'Trustee' means the trustee of the Trust.
2.24 'Year of Service' means a period of twelve (12) consecutive months
coinciding with the Plan Year.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 8
ARTICLE III
ELIGIBLE EMPLOYEES
3.1 An Employee shall be eligible to receive benefits under this Supplement if
he:
(a) is the City Clerk employed by the Employer as of July 20, 1999,
(b) is at least fifty (50) years of age;
(c) is eligible to retire under PERS;
(d) has completed at least five (5) or more years of full-time employment
with the Employer;
(e) has terminated employment with the Employer on or before September
15, 1999; and
(f) has applied for benefits under this Supplement.
3.2 An Employee shall not be eligible to receive benefits under this Supplement
if he is accruing credit for benefits under another defined benefit plan to
which the Employer contributes.
3.3 An Employee shall begin participation the first of the month following the
time he becomes eligible for benefits under this Article III.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 9
ARTICLE IV
BENEFITS
4.1 Subject to the provisions of Section 4.3, the monthly amount of benefit shall
be equal to
the Normal Form of Benefit which is equivalent to a lump -sum
contribution of $39,229.52 upon resignation from the Employer or
$8,785.80 paid annually for five years upon resignation from the
employer (hereafter, the "Supplemental Benefit").
4.2 Form of Payment
(a) The Supplemental Benefit shall be paid in the Normal Form of Benefit.
(b) At the option of the Participant, the Supplemental Benefit shall be paid in
an Optional Form of Benefit.
(c) At the option of the Participant, and with the agreement of the
Administrator, and upon completion of a form provided by the
Administrator, the Benefit shall be paid in any other form which is
actuarially equivalent to the Normal Form of Benefit.
(d) The Participant's election of a form of benefit shall become irrevocable
upon the Participant's retirement.
(e) The Participant's designation of a Beneficiary for a benefit paid in the
Optional Form of Benefit shall become irrevocable upon the Participant's
retirement.
4.3 The monthly benefit payable to a Participant under this Supplement at any
time will not exceed:
(a) $7,500 (the "Dollar Limitation") or
(b) 100% of the Participant's average monthly compensation as defined in
Section 1.415-2(d) of the Income Tax Regulations during the three
consecutive calendar years when the total compensation paid to him
was the highest (the "Compensation Limitation") subject to the following:
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document(Vemion 3).doc 10
(1) The maximum shall apply to the pension payable to the Participant
either as a joint and survivor pension or pursuant to an option where
the contingent annuitant is the Participant's spouse; but if the pension
is payable in a form other than the foregoing and other than the
single -life pension, the maximum shall apply to the single -life pension
which is the actuarial equivalent of such pension.
(2) If benefits begin prior to a Participant's Social Security Retirement
Age (as defined in Code Section 415(b)(8)), the Dollar Limitation
applicable to such pension shall be equal to the actuarial equivalent
of the Dollar Limitation where the Dollar Limitation is deemed to be a
pension commencing at the Participant's Social Security Retirement
Age.
(3) If a pension begins after age 65, the maximum Dollar Limitation shall
be the actuarial equivalent of the Dollar Limitation where the Dollar
Limitation is deemed to be a pension commencing at Social Security
Retirement Age. Solely for the purposes of this subsection (3) and
subsection (2) above, the interest rate assumption shall be equal to
5%.
(4) If the Participant has fewer than 10 years of plan participation, the
Dollar Limitation and the $10,000 minimum limitation shall be
multiplied by a fraction, the numerator of which is the number of years
(computed to fractional parts of a year) of participation, and the
denominator of which is 10. If the Participant has fewer than 10
Years of Service the Compensation Limitation shall be multiplied by a
fraction, the numerator being the Participant's Years of Service
(computed to fractional parts of a year) divided by a denominator of
10.
(5) For all purposes of this Plan, the maximum Dollar Limitation of $7,500
shall be automatically increased as permitted by Treasury Department
regulations to reflect cost -of -living adjustments. As a result of such an
adjustment, a pension which had been limited by the provisions of this
Section in a previous Plan Year may be increased with respect to
future payments to the lesser of the adjusted Dollar Limitation amount
or the amount of pension which would have been payable under this
plan without regard to the provisions of this Section 4.3.
Notwithstanding the foregoing, the otherwise permissible annual benefits may
be further reduced to the extent necessary, as determined by the Employer, to
prevent disqualification under Section 415 of the Internal Revenue Code
which imposes the following additional limitations on the benefits payable to
Participants who may also be participating in another tax qualified pension
plan of the Employer.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 11
If the Employer maintains, or at any time maintained, a qualified defined
contribution plan covering any Participant, the sum of the Participant's Defined
Benefit Fraction and Defined Contribution Fraction will not exceed 1.0 for any
Limitation Year (Plan Year).
For purposes of this section Compensation shall mean all of each
Participant's compensation (as that term is defined in Code 415(c)(3)).
For any Self -Employed Individual covered under the Supplement,
compensation will mean Earned Income. Compensation includes only
that compensation which is actually paid to, or included in the gross
income of, the Participant during the "applicable period". For this purpose,
except as specified to the contrary elsewhere in this document, the
applicable period will be the Plan Year unless applicable law mandates a
different period, in which case the applicable period will be such legally
required period.
The annual compensation of each Participant taken into account under
the Supplement for any year will not exceed $150,000, as adjusted by the
Treasury Secretary at the same time and in the same manner as under
Code 415(d), except that the dollar increase in effect on January 1 of any
calendar year is effective for years beginning in such calendar year. If
compensation is determined on a period of time that contains fewer than
12 calendar months, then the annual compensation limit is an amount
equal to the annual compensation limit for the calendar year in which the
compensation period begins multiplied by the ratio obtained by dividing
the number of full months in the period by 12.
In determining the compensation of a Participant for purposes of this limit,
the rules of Code 414(q)(6) will apply, except in applying these rules,
"family" will include only the Participant's spouse and any lineal
descendants of the Participant who have not attained age 19 before the
close of the year. If, as a result of the application of these rules, the
adjusted $150,000 limit is exceeded, then (except for determining the
portion of compensation up to the integration level), the limit will be
prorated among the affected individual's compensation determined under
this section before this limit is applied.
If compensation for any prior plan year is taken into account in
determining the employee's contributions or benefits for the current year,
the compensation for such year is subject to the applicable annual
compensation limit in effect for that prior year.
Defined Benefit Fraction: A fraction, the numerator of which is the sum of
the Participant's projected annual benefits under all the defined benefit
FALANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 12
plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125% of the dollar limit determined
for the Limitation Year under Code 415(b) and (d) or 140% of the highest
average compensation, including any adjustments under Code 415(b).
Notwithstanding the above, if the Participant was a Participant as of the
first day of the first Limitation Year beginning after December 31, 1986, in
one or more defined benefit plans maintained by the Employer that were
in existence on May 6, 1986, the denominator of this fraction will not be
less than 125% of the sum of the annual benefits under such plans that
the Participant had accrued as of the close of the last Limitation Year
beginning before January 1,1987, disregarding any changes in the terms
and conditions of the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied Code 415 for all Limitation Years beginning before January 1,
1987.
Defined Contribution Dollar Limitation: $30,000 or if greater, one-fourth of
the defined benefit dollar limitation of Code 415(b)(1) as in effect for the
Limitation Year.
Defined Contribution Fraction: A fraction, the numerator of which is the
sum of the Annual Additions to the Participant's account under all the
defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the
Annual Additions attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not terminated,
maintained by the Employer, and the Annual Additions attributable to all
welfare benefit funds, as defined in Code 419(e), and individual medical
accounts, as defined in Code 415(1)(2), maintained by the Employer), and
the denominator of which is the sum of the maximum aggregate amounts
for the current and all prior Limitation Years of service with the Employer
(regardless of whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any Limitation Year is the
lesser of 125% of the dollar limitation determined under Code 415(b) and
(d) in effect under Code 415(c)(1)(A) or 35% of the Participant's
compensation for such year.
If the Employee was a Participant as of the end of the first day of the first
Limitation Year beginning after December 31,1986 in one or more defined
contribution plans maintained by' the Employer that were in existence on
May 6, 1986, the numerator of this fraction will be adjusted if the sum of
this fraction and the Defined Benefit Fraction would otherwise exceed 1.0
under the terms of this plan. Under the adjustment, an amount equal to
the product of (i) the excess of the sum of the fractions over 1.0 times (ii)
the denominator of this fraction, will be permanently subtracted from the
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 13
numerator of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last Limitation
Year beginning before January 1, 1987, and is regarding any changes in
terms and conditions made after May 5, 1986, but using the 415 limitation
applicable to the first Limitation Year beginning on or after January 1,
1987.
Employer: For purposes of this Article, Employer will mean the employer
named herein and all members of a controlled group of corporations (as
defined in Code 414(b) as modified by 415(h), all commonly controlled
trades or businesses (as defined in 414(c) as modified by 415(h) or
affiliated service groups (as defined in 414(m) of which the Employer is a
part, and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
For purposes of the above limitation, all defined benefit plans of the Employer,
whether or not terminated, are to be treated as one defined benefit plan and
all defined contribution plans of the Employer, whether or not terminated, are
to be treated as one defined contribution plan.
(c) The annual benefit to which any Participant may be entitled to receive
in the form of a straight life annuity, shall not exceed the lesser of
$90,000 or 100% of the participant's highest three consecutive years
average compensation (or fewer, if the participant does not have three
consecutive years).
(d) If a retirement benefit in any form other than a straight life annuity is
offered, or if the Participant contributes or makes rollover contributions,
then this benefit must be adjusted to a straight life annuity, beginning at
the same age, which is the actuarial equivalent of such benefit. In
order to determine actuarial equivalence of different forms of benefit
payments, the interest rate assumption may not be less than the
greater of 5 percent of the rate specified in the plan for determining
actuarial equivalent for the particular form of retirement benefit.
(e) If a retirement benefit is provided at or after age 62 but prior to the
Participant's Social Security retirement age ("SSRA") then the benefit
may not exceed an annual benefit of $90,000 reduced by (i) in the case
of a participant whose SSRA is 65 , 5/9 of 1 % for each month by which
benefits commence before the month in which the participant attains
age 65, or (ii) in the case of a Participant whose SSRA is greater than
65, 5/9 of 1 % for each of the first 36 months and 5/12 of 1 % for each
additional month (up to 24) by which benefits commence before the
month in which the Participant attains SSRA. If the benefit began
before age 62, the benefit must be limited to the actuarial equivalence
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 14
of the Participant's limitation for benefits commencing at age 62, with
the reduced dollar limitation for such benefits further reduced for each
month by which benefits commence before the month in which the
Participant attains age 62. In order to determine actuarial equivalence
for this purpose, the interest rate assumption used may not be less than
the greater of 5% or the rate specified herein for determining actuarial
equivalence for early retirement. SSRA is age 65 if the Participant was
born before 1 /1 /38, age 66 if born before 1 /1 /55, and age 67 if born
after 12/31 /54.
(f) If benefits commence after Social Security retirement age ("SSRA"), the
maximum dollar limitation on such benefit may be increased to an
amount that is actuarially equivalent to the maximum dollar limitation on
a benefit commencing at SSRA. The increased maximum benefit,
however, must not exceed 100 percent of the Participant's high 3 year
average compensation. The interest rate assumption used to
determine actuarial equivalence for this purpose must be the lesser of
5% of the rate specified for determining actuarial equivalence herein for
retirement after SSRA, and mortality may not be taken into account if
there is no forfeiture upon death.
(g) The limitations on benefits of Section 415(b) of the Code shall not apply
where the total annual benefits payable to a Participant under this
defined benefit plan and all other defined benefit plans of the Employer
do not exceed $10,000 in the aggregate. Where a plan provides the
$10,000 minimum limitation, the plan must provide that the minimum
limitation is not applicable for a Participant whose employer maintains
or has maintained a defined contribution plan in which such Employee
participated. For purposes of the $10,000 minimum limitations the
limitations shall be divided by a fraction which shall be: years of service
with the employer as of and including the current limitation year divided
by 10 and for purposes of the maximum dollar limitation the amount
shall be multiplied by a fraction which shall be: years of participation
with the employer as of, and including the current limitation year divided
by 10.
4.4 Actuarial Equivalence
(a) For the purpose of establishing actuarial equivalence between the
Normal and Optional Form of benefit, the monthly amount of benefit
payable under an Optional Form of Benefit shall be a fixed percentage
of the monthly amount of benefit payable under the Normal Form of
Benefit, as determined by the following table:
F \LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 15
55
56
57
58
59
60
61
Participant naming a Beneficiary under Optional Form of Benefit
(percentage payable)
Age of Beneficiary
35 40 45 50 55 60 65 70
83.76%
82.71 %
81.60%
80.45%
79.23%
77.96%
76.63%
62
75.22%
Age of
Participant 63
73.76%
64
72.20%
65
70.63%
66
68.98%
67
67.27%
68
65.50%
69
63.69%
70
61.84%
84.87%
83.83%
82.74%
81.60%
80.39%
79.13%
77.80%
76.40%
74.93%
73.40%
71.80%
70.13%
68.41 %
66.63%
64.80%
62.93%
86.24%
85.23%
84.17%
83.05%
81.87%
80.63%
79.31 %
77.92%
76.46%
74.93%
73.33%
71.66%
69.93%
68.14%
66.29%
64.40 %
87.85%
86.90%
85.89%
84.82%
83.68%
82.48%
81.19%
79.83%
78.40%
76.89%
75.30%
73.63%
71.90%
70.11 %
68.25%
66.35%
89.66%
88.80%
87.87%
86.87%
85.90%
84.67%
83.45%
82.15%
80.77%
79.30%
77.75%
76.12%
74.41 %
72.62%
70.77%
68.86%
91.58%
93.48%
95.22%
90.83%
92.86%
94.75%
90.01 %
92.18%
94.23%
89.13%
91.44%
93.65%
88.17%
90.64%
93.02%
87.14%
89.76%
92.31 %
86.03%
88.30%
91.53%
84.83%
83.54%
82.16%
80.69%
79.13%
77.48%
75.75%
73.94%
72.06%
87.74%
86.60%
85.36%
84.02%
82.59%
81.06%
79.43%
77.72%
75.92%
90.67%
89.72%
88.68%
87.54%
86.30%
84.95%
83.51 %
81.97%
80.33%
Percentages
shall be
determined by
month of age
using straight-line
interpolation
between the
figures provided
therein.
(b) For the purposes of establishing actuarial equivalence between the
Normal Form of Benefit and other forms of benefit, as determined
under 4.2(c), the mortality assumption shall be 1983 GAM with 6.00%
interest per annum and 6.00% load, and the interest assumption shall
be 6.00% per annum. The present value of benefits shall be equal
based on these assumptions.
4.5 An employee who is a Participant will have his entire interest distributed in
accordance with Section 401(a)(9) of the Code. A Participant's entire
interest will be:
(a) Distributed commencing not later than the required beginning date (in
accordance with Internal Revenue Service regulations) and must be
made over one of the following periods (or a combination thereof):
(1) the life of the Participant,
(2) the lives of the Participant and a designated Beneficiary,
F:\LANCE\PARS_SRP\CLIENTS\Laduinta\Plan Document (Version 3).doc 16
(3) a period not extending beyond the life expectancy of the Participant,
or
(4) a period not extending beyond the life expectancy of the Participant
and a designated Beneficiary.
(b) The required beginning date for purposes of this Section shall be the
April 1 st of the calendar year following the later of:
(1) the calendar year in which the Participant attains age 701/2, or
(2) the calendar year in which the Participant retires.
(c) For purposes of this Article, life expectancy of the Participant and life
expectancy of the Participant and designated Beneficiary will be
computed using the return multiples contained in Section 1.72-9 of the
Income Tax Regulations. A Participant's life expectancy (and his
Spouse's life expectancy) may not be recalculated.
(d) Distribution of a Participant's interest will be made in accordance with
Section 401(a)(9) of the Code and the provisions of such Code section
will supersede any provision which may be inconsistent with such Code
section.
(e) If distribution is considered to have commenced in accordance with the
Regulations before the Participant's death, the remaining interest will be
distributed as least as rapidly as under the method of distribution being
used as of the date of the Participant's death. If the Participant dies
before the time when distribution is considered to have commenced in
accordance with the Regulations, the method of distribution shall satisfy
the following requirements: (a) any remaining portion of the Participant's
interest that is not payable to a beneficiary designated by the Participant
will be distributed within five years after the Participant's death; and (b)
any portion of the Participant's interest that is payable to a beneficiary
designated by the Participant will be distributed either (i) within five
years after the Participant's death, or (ii) over the life of the beneficiary
or over a period certain not to extend beyond the life expectancy of the
beneficiary, commencing not later than the end of the calendar year
following the calendar year in which the Participant died (or, if the
designated beneficiary is the Participant's surviving spouse,
commencing not later than the end of the calendar year following the
calendar year in which the Participant would have attained age 701/2).
4.6 Distributions made to a Participant's designated Beneficiary under this Plan
shall be incidental to the primary purpose of providing benefits to
FALANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 17
Participants and such distributions will be made in accordance with Section
401(a)(9) of the Code.
4.7 In no event shall the annuity commencement date of a Participant who
becomes entitled to benefits under this Supplement be later than the 60th
day after the close of the Plan Year in which the latest of the following
events occurs:
(a) The Participant reaches his normal retirement date;
(b) The Participant qualifies for permanent and total disability;
(c) The Participant terminates employment with the Employer.
Notwithstanding the above, a Participant may make written application to
the Administrator for a deferred annuity commencement date which may be
the first day of any month subsequent to the latest date specified in (a), (b)
or (c) above but in no event will such date be later than the required
beginning date specified in this Article.
4.8 Direct Rollovers
(a) This section applies to all distributions made on or after January 1,
1993. Notwithstanding any provision of the plan to the contrary that
would otherwise limit a distributee's election under this plan, a
distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) Definitions
(i.) Eligible rollover distribution: An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section
401(a)(9) of the Internal Revenue Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
F:\LANCE\PARS_SRP\CLIENTS\LaOuinta\Plan Document (Version 3).cloc 18
(ii.) Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, or
a qualified trust described in Section 401(a) of the Code that
accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse,
an eligible retirement plan is an individual retirement account or an
individual retirement annuity.
(iii.) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or the former Employee's
surviving spouse and the Employee's or former Employee's spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(iv.) Direct Rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
4.9 All defined contribution plans (including voluntary employee contribution
accounts in a defined benefit plan) and key employee accounts under a
welfare benefit plan described in Section 419 of the Internal Revenue Code,
as well as employer contributions allocated to an IRA of Employee, whether
or not terminated, will be treated as one defined contribution plan for
purposes of the limitations under Section 415(c) of the Code.
If the Employer is a member of a controlled group of corporations or
commonly controlled trades or businesses, or a member of an affiliated
service group, within the meaning of Sections 414(b), (c), or (m) and 415(g)
and (h) of the Code, all such employers shall be treated as a single
employer for purposes of the Plan's application of the Code Section 415
limitations.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).Wc 19
ARTICLE V
CONTRIBUTIONS
5.1 Forfeitures arising under the Supplement shall be applied to reduce
Employer contributions.
5.2 All assets shall be held and used for the exclusive benefit of Eligible
Employees and their Beneficiaries.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 20
ARTICLE VI
INVESTMENTS
6.1 Investment of Trust assets shall be governed by the following provisions as
indicated by the initials of the Plan Administrator:
(a) Yes ` -' No Pursuant to Section 4.1(a)(2) of the Trust, the
Administrator hereby appoints the Trustee as the fiduciary with respect to
the authority and duty to direct the investment and management of all Trust
assets.
(b) Yes No�� Pursuant to Section 4.1(a)(2) of the Trust, and subject to
the acceptance of the Trustee, the Administrator hereby appoints
as the fiduciary with respect to the authority and duty to direct the
investment and management of all Trust assets. The following statement of
investment policy shall govern the investment of the Trust assets, subject to
the acceptance of such assets by the Trustee:
(c) Yes Now'`--/ Pursuant to Section 4.1(a)(2) of the Trust, the
Administrator shall remain the fiduciary with respect to the authority and duty
to direct the investment and management of all Trust assets. The following
statement of investment policy shall govern the investment of the Trust
assets, subject to the acceptance of such assets by the Trustee:
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc L1
ARTICLE VII
VESTING
7.1 Each Participant shall have a nonforfeitable right to his benefit under this
Supplement upon meeting the requirements of Article III.
7.2 If the Plan's vesting schedule is amended or the Plan is amended in any
way that directly or indirectly affects the computation of a Participant's
nonforfeitable percentage, or if the Plan is deemed amended by an
automatic change to or from a top heavy vesting schedule, each Participant
with at least three years of service with the Employer may elect within a
reasonable period after the adoption of the amendment or change to have
his nonforfeitable percentage computed under the Plan without regard to
such amendment or change Election Period. The period during which the
election may be made will begin with the date the amendment is adopted or
deemed to be made and will end on the latest of:
i.) 60 days after the amendment is adopted;
ii.) 60 days after the amendment becomes effective; or
iii.) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
7.3 A top heavy vesting schedule shall mean: A vesting schedule under which
an employee who has completed 3 years of service with the Employer has
a nonforfeitable right to 100% of his accrued benefit.
F:\LANCE\PARS_SRP\CLIENTS\LaQulnta\Plan Document (Version 3).doc 22
ARTICLE VIII
ADMINISTRATION
8.1 The Employer shall designate an individual to serve as the Plan
Administrator. The Plan Administrator shall act on behalf of the Employer in
all matters relating to the Supplement and Trust, and any subsequent
Supplements permitted by this Plan.
8.2 The Plan Administrator shall keep accurate books and records with respect
to Participants, their service with the Employer and their compensation and
shall certify the same to the Trustee.
8.3 The Plan Administrator, in interpreting any provision of this Supplement or
in making any judgment or determination with respect to any person
hereunder, shall apply uniform rules in a like manner to all persons under
similar conditions.
8.4 In any case where the provisions of this Supplement require the consent or
approval of the Plan Administrator of an election or request made by an
Employee, Participant or Beneficiary, the Plan Administrator shall act on
such election or request as promptly as shall be reasonable in the
circumstances.
8.5 The Trustee shall advise the Plan Administrator of any changes in
applicable law, regulations or proposed regulations which require the
Employer to amend the Supplement or otherwise take action to maintain
the qualified status of the Supplement.
F:\LANCE\PARS_SRP\CLIENTS\LaQuinta\Plan Document (Version 3).doc 23
ARTICLE IX
MISCELLANEOUS
9.1 Attachment and Assignment of Benefits
(a) To the maximum extent permitted by law, the benefits or payments
herein provided shall not in any way be liable to attachment,
garnishment or other process, or be seized, taken, appropriated or
applied by any legal or equitable process, to pay any debt or liability of
any Participant. Except as otherwise permitted by law or by an order,
decree or judgment issued pursuant to a Qualified Domestic Relations
Order, benefits or payments under this Supplement may not be
assigned. In the event of any conflict between provisions of this
Supplement and the terms of any description issued in conjunction with
the Supplement, the provisions of this Supplement shall control.
(b) For purposes of this Supplement a "Qualified Domestic Relations Order"
means a domestic relations order (as specified below) which creates or
recognizes the existence of an alternate payee's (any spouse, former
spouse, child or other dependent of a Participant) right to, or assigns to
an alternate payee the right to, receive all or a portion of the benefits
payable to a Participant. A domestic relations order means any
judgment, decree or order (including approval of a property settlement
agreement) which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child or
other dependent of a Participant and is made pursuant to a state
domestic relations order. Such order (a) must clearly specify (1) the
name and last known mailing address (if any) of the Participant and the
alternate payee covered by the order, (2) the amount or percentage of
the Participant's benefit to be paid by the Supplement to each alternate
payee, or the manner in which such amount or percentage is to be
determined, (3) the number of payments or period to which such order
applies, and (4) the name of each plan to which such order applies, and
(b) must not require (1) the Supplement to provide any type or form of
benefits, or any option, not otherwise provided under the Supplement, or
(2) provide increased benefits, and (3) the payment of benefits to an
alternate payee which are required to be paid to another alternate payee
under another previously Qualified Domestic Relations Order. The
provisions relating to the establishment of a Qualified Domestic
Relations Order and the payment of any benefits to an alternate payee
shall be applied in the method and manner which is consistent with
Section 414(p) of the Code.
F:\LANCE\PARS_SRP\CLIENTS\LaDuinta\Plan Document (Version 3).doc 24
9.2 As used herein, the masculine shall include feminine and the singular shall
include the plural, where applicable.
9.3 The Employer shall have the right to amend this Supplement. No
amendment, however, shall reduce a Participant's accrued benefit. Such
amendments shall not be effective until received and acknowledged by the
Trust and the Trust Administrator.
Executed this Ytllday of , 19 '-) 7, at California.
Signature of Plan Administrator
7-Aot ia5 19 6ena ✓-eSe
Name of Plan Administrator
G.-1y "Verna I-Cr
Title of Administrator
La 0 /IiL-/k
Name of Employer
Suture of Trustee
FyR4 MiLTMI". l''F1'.'i:�ai� ` .i 'a & IAVST 0F?9 : E f I
F:\LANCE\PARS_SRP\CLIENTS\LaDuinta\Plan Document (Version 3).doc 25