RPVCCA_CC_SR_2013_02_05_G_Retirement_Health_SavingsCrrYOF
TO:
FROM:
DATE:
SUBJECT:
MEMORANDUM
HONORABLE MAYOR AND MEMBERS OF THE CITY
COUNCIL
SEAN ROBIN~,INTERIM HUMAN RESOURCE
MANAGER (?!:;J
DENNIS McLEAN,DIRECTOR OF FINANCE &~
INFORMATION TECHNOLOGY ~
FEBRUARY 5,2013
APPROVE AGREEMENTS WITH ICMA-RC AS THE
REPLACEMENT PLAN ADMINISTRATOR OF THE @ ~
EXISTING RETIREMENT HEALTH SAVINGS PLAN CL,..
REVIEWED BY:CAROLYN LEHR,CITY MANAGER
RECOMMENDATION
1)Authorize the Mayor to sign the attached Adoption Agreement,Trust Agreement
and Administrative Services Agreement between the City and ICMA-RC,the
proposed replacement plan administrator of the eXisting retirement health savings
plan;and
2)Approve Resolution No.2013-_,A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF RANCHO PALOS VERDES ADOPTING A RETIREE HEALTH
SAVINGS PLAN AND 115 TRUST.
EXECUTIVE SUMMARY:
OptumHealth Financial Services Company,a subsidiary of United Healthcare,has acted as
the Plan Administrator for the City's Retirement Health Savings plan ("Plan"),a "defined
contribution"type plan,since its inception in 2010.They notified the City in late 2012 of
their immediate withdrawal from the retirement health savings plan market,effective
December 31,2012 (extended to April 1,2013).Staff recommends transferring
administration of the Plan to ICMA-RC.The terms and conditions contained in the
proposed agreements with ICMA are consistent with those included in the agreements
entered into by the City with Optum several years ago.
4948185.1
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APPROVE AGREEMENTS WITH ICMA-RC AS THE REPLACEMENT
PLAN ADMINISTRATOR OF THE EXISTING RETIREMENT HEALTH
SAVINGS PLAN
February 5,2013
Page 2
BACKGROUND AND DISCUSSION
Overview
Following the recommendation of the Finance Advisory Committee,the City Council
approved the establishment of a Retirement Health Savings plan ("Plan"),a "defined
contribution"type plan,at its meeting on November 17,2009.The RHS plan is provided to
all full-time employees who have successfully completed their probationary period.The
Plan enables the City to provide a post-retirement defined contribution health care benefit,
the cost of which is split about 60/40 between the City and each covered employee.The
City Council set a fixed contribution each pay period (currently $53.63)for eligible full-time
employees with a mandatory 1%employee contribution.The establishment of a City
matching contribution based upon a flat dollar amount,rather than a percentage of
compensation,satisfies IRS discrimination testing.
All contributions are deposited into the employee's account.Employee participants direct
their own investments.Upon an employee's retirement or separation from service,the
contributions will be available to be used for medical expenses as permitted by law (i.e.
IRC Section 213(d)).The funds shall be used for the reimbursement of qualified medical
expenses of the participating employee,spouse,domestic partner,or eligible dependents.
Replacement -Plan Administration -ICMA-RC
After making inquiries with (the few)other retirement health savings plan providers,City
Staff recommends that the City engage ICMA-RC as the new plan administrator.ICMA-RC
has successfully maintained the City's IRC Section 457 deferred compensation plan for
more than 30 years.Engaging ICMA-RC provides several advantages for the City and its
employees,including among others:administrative fee and investment fee savings;
consistency of professional plan administration;and streamlined advisory services for
participating employees.In the event the City Council elects to not approve the proposed
agreements with ICMA-RC,Staff would request direction to request a further extension
from Optum to allow for the continued search for plan administration by another
organization that administrates retirement heath savings plans.
Hanson Bridgett -Plan Legal Advisor
The attached Adoption Agreement,Trust Agreement and Administrative Services
Agreement have been negotiated and reviewed by both City Staff and Hanson Bridgett,the
law firm serving as the City's advisor for the Plan,and are in the process of being finalized
with ICMA-RC.While additional minor changes may be made to the documents to reflect
the appropriate Plan provisions and terms of the agreement with ICMA-RC,the attached
versions of the documents are in substantially final form.Once in final form and approved
4948185.1
G-2
APPROVE AGREEMENTS WITH ICMA-RC AS THE REPLACEMENT
PLAN ADMINISTRATOR OF THE EXISTING RETIREMENT HEALTH
SAVINGS PLAN
February 5,2013
Page 3
by Hanson Bridgett,the agreements will be executed by the Mayor on behalf of the City.
FISCAL IMPACT
No budget adjustment is necessary.
Attachments:
Adoption Agreement
Trust Agreement
Administrative Services Agreement Between the City and ICMA-RC
RESOLUTION NO.2013-_,A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF RANCHO PALOS VERDES ADOPTING A RETIREE HEALTH SAVINGS PLAN AND
115 TRUST
4948185.1
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EMPLOYER VANTAGECARE RETIREMENT HEALTH SAVINGS (RHSj PLAN
ADOPTION AGREEMENT
Plan Number:8 803392----------Check one:III New Plan o Amendment to Existing Plan
Employer Retirement Health Savings Plan Name:
I.Employer Name:City of Rancho Palos Verdes State:California
II.The Employer hereby attests that it is a unit of a state or local government or an agency or instrumentality of one or
more units of a state or local government.
III.Effective Date of the Plan:_A...;.p_r_i1_1.:,.'_2_0_1_3 _
Iv.The Employer intends to utilize the Trust to fund only welfare benefits pursuant to the following welfare benefit
plan(s)established by the Employer:Clty of Rancho Palos Vardes Retirement Health Savings Pian
V.Eligible Groups,Participation and Participant Eligibility Requirements
A.Eligible Groups
The fol1owing group or groups of Employees are eligible to participate in the VantageCare Retirement Health Savings
Plan (check all applicable boxes):
o All Employees
o All Full·Time Employees
o Non-Union Employees
o Public Safety Employees -Police
o Public Safety Employees -Firefighters
o General Employees
o Col1ectively-Bargained Employees (SpecifY unites»~
IZI Other (specifY group(s»All full-time employees that the employer determines are eligible to participate in the Plan,including
eligible employees who separated from service on or after January 1,2010.
Ihe Employee group(s)specified must correspond ~o a group(s)of the same designation that is defined in the statutes,
ordinances,rules,regulations,personnel manuals or other documents or provisions in effect in the state or locality of
the Employer..
B.Participation
Mandatory Participation:All Employees in the covered group(s)are required to participate in
the Plan and shall receive contributions pursuant to Section VI.
If Ill<:EmpIQ)'l;c's ufldGltying w\;"lliu:e b!"l'ldif pl:.HllM flltu.i:lng uni.l~t Ih,~VllllUtgeC:ir;:.R.eth'-lilllcm rk3kh ,sllVlngll Plan iii·i.1l
whole or .part II n01k~lleWwl)'b~il'illl:d.iIiclf.iMU.~ed pln.n.the tloftdi(ll:d~~!fequil"em'enr~or Int<:mtsJn~\'l!l1ue Code
nRC)Sl!£QOCl ]O!l<h}will apply.1h~!Jt n;lll1~m)\y IIllpO¥t lIDtaUon on the bCileliure..~lved by h1.b1tly f;om~l~med lud\1l1d\lal~
if dIe Plan dlocrinllnatlll8 in f<lvOil'of hlghl}'COlllllemlitcod iudividual~i n term~ol eltglbJJily or bendJl~..The Emplllj'e[slu:'llid
diKusadlC$e w.le~With appropriate Gilun~el.
c.Participant Eligibility Requirements
1.Minimum service:The minimum period of service required for participation is see VA.(write N/A if no
minimum service is required).
2.Minimum age:The minimum age required for eligibility to participate is N/A (write N/A if no minimum
age is required).
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VI.Contribution Sources and Amounts
A.Definition ofEarnings
The definition of Earnings will apply to all RHS Contribution Features that reference "Earnings",including Direct
Employer Contributions (Section VI.B.1.)and Mandatory Employee Compensation Contributions (Section VI.B.2.).
Definition of earnings:_P_E_R_S_a_b_IS_W_a""9_El_S _
B.Direct Employer Cont.ributions and Mandatory Contributions
1.Direct Employer Contributions
The Employer shall contribute on behalf of each Participant
o %of Earnings
o $'each Plan Year
'0 A discretionary amount to be determined each Plan Year
lZl Other (describe):$53.63,as a nonelective employer contribution,each pay period.This nonelective employer
contrlb.ution shall be adjusted annually effective July 1st using the CPt published the preceding February.
2.Mandatory Employee Compensation Contributions
'lbe Employer will make mandatory contributions of Employee compensation as follows:
o Reduction in Salary -%of Earnings or $will be contributed for the Plan Year.
o Decreased Merit or Pay Plan Adjustment -All or a portion of the Employees'annual merit
or pay plan adjustment will be contributed as follows:
An Employee shall.!lQI...have the right to discontinue or vary the rate'ofMandatory Contributions of
Employee Compensation.
3.Mandatory Employee Leave Contributions
The Employer will make mandatory contributions of accrued leave as follows (provide formula for determining
Mandatory Employee Leave contributions):
o Accrued Sick Leave _
o Accrued Vacation Leave
o Other (specify type of leave)Accrued Leave
An Employee shall.!!QLhave the right to discontinue or vary the rate of mandatory leave contributions.
C.Limits on Total Contributions (check one box)
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The total contribution by the Employer on behalf of each Participant (including Dire.ct Employer and
Mandatory Employee Contributions)for each Plan Year shall not exceed the follOWing limit(s)below.Limits
on individual contribution types are defined within the appropriate section above .
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III There is no Plan-defined limit on the percentage or dollar amount of earnings that may be contributed.
o %of earnings*
*Definition of earnings:0 Same as Section VLA..0 Other
o $for the Plan year.
See Section Y.B.for a discussion of nondiscrimination rules that may apply to non-collectively bargained self-insured Plans.
VII.Vesting for Direct Employer Contributions
A.Vesting Schedule (check one box)
III The account is 100%vested at all times.
o The following vesting schedule shall apply to Direct Employer Contributions as outlined in Seedon VI.B.l.:
Years of Service
Completed
Vesting
Percentage
--_%
--_%
--_%
--_%
--_%
--_%
--_%
--_%
--_%
--_%
B.The account will become 100%vested upon the death,disability,retirement*,or attainment of bendit
eligibility (as outlined in Section IX)by a Participant.
*Definition of retirement (check one box):
o Retirement as defined in the primary retirement plan of the Employer
o Separation from service
[;zl Other The earlier of retirement (as defined in the Employer's retirement plan)or separation from service.
C.Any period of service by a Participant prior to a rehire of the Participant by the Employer shall not count
toward the vesting schedule outlined in A above.
VIII.Forfeiture Provisions
Upon separation from the service of the Employer prior to attainment of benefit eligibility (as outlined in Secdon IX),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 non-vested funds shall (check one box):
o Remain in the Trust to be reallocated among all remaining Employees participating in the Plan as Direct Employer
Contributions for the next and succeeding contribution cycle(s).
IZI Remain in the Trust to be reallocated on an equal dollar basis among all Plan Participants.
o Remain in the Trust to be reallocated among all Plan Participants based upon Participant account balances.
o Revert to the Employer.
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(also complete section B)
IX.Eligibility Requirements to Receive Medical Benefit Payments from the VantageCare Retirement Health Savings Plan
A.A Participant is eligible to receive benefits:
D At retirement only (also complete Section B.)
Definition of retirement:
D Same as Section VII.B.
D Other _
D At separation from service with the following restrictions
D No restrictions
o Other ------_
D At age only
D.At retirement i!llii age _
Definition of retirement:
D Same as Section VILB.
D Other -"-~---__-------------
o At retirement or age _
Definition of retirement:
D Same as Section VII.B.
D Other -_----_
I!l Other,specified as follows (also complete Section B if applicable):At the earlier of retirement or separation from service.
The Participant Is only permitted to receive medicel benefit peyments for claims incurred on or after the eariler of retirement or separation from service.
B.Termination prior to general benefit eligibility:In the case where the general benefit eligibility as outlined in
Section IX.A includes a retirement component,a Participant who separates from the service of the Employer
prior to retirement will b~eligible to receive benefits:
D Immediately upon separation from service.
D At age _
C.A Participant that becomes totally and permanently disabled
IZI as defined by the Social Security Administration
D as defined by the Employer's primary retirement plan
D other _
will become immediately eligible to receive medical benefit payments from his/her VantageCare Retirement Health
Savings ,Plan account.
D.Upon the death of the Participant,benefits shall become payable as outlined in Section XI.
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X.Permissible Medical Benefit Payments
Benefits eligible for reimbursement consist of:
IZI All Medical Expenses eligible under IRC Section 213*other than (i)direct long-term care expenses,and (ii)
expenses for medicines or drugs which are not prescribed drugs (other than insulin).
o The following Medical Expenses eligible under IRC Section 213*other than (i)direct long-term care expense.~,and (ii)
expenses for medicines or drugs which are not prescribed drugs (other than insulin).Select only the expenses you wish to
cover under the VantageCare Retirement Health Savings Plan:
o Medical Insurance Premiums
o Medical Out-of-Pocket Expenses*
o Medicare Part B Insurance Premiums
o Medicare Part D Insurance Premiums
o Medicare Supplemental Insurance Premiums
q Prescription Drug Insurance Premiums
o COBRA Insurance Premiums
o Dental Insurance Premiums
o Dental Out-of-Pocket Expenses*
o Vision Insurance Premimns
o Vision Out-of-Pocket Expenses*
o Qualified Long-Term Care Insurance Premiums
o Non-Prescription meaications allowed under IRS guidance*
o Other qualifYing medical expenses (describe)*
*See Section V.A.for a disCussion o/nondiscrimination rules which may apply to non-collectively bargained,self-insured Plans.
XI.Benefits After the Death of the Participant
In the event of a Participant'sdeath.the following shall apply:
A.Surviving Spouse and/or Surviving Dependents
The surviving spouse and/or surviving eligible dependents (as defined in Section XII.D.)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 Dreyfus Cash
Management fund*(or another fund selected by the.Employer).The account balance may be reallocated by the
surviving spouse or dependents.
~n investment in the Dreyfus Cash Marlagemmt money market fund is not insured or gllaranteed by the Federal Deposit Insurance
Corporation or any other government agency.Although the fund seeks to preserve the value ofyour investment at $1.00 per share,it is
possible to lose money by investing in the fund.Investors should consider the investment objectives,risks,charges,and expenses ofthe fund
carefully before investing.You ml1J visit us at www.icmarc.orgorcatt 800-669-7400 to obtain a prospectus that contains this and other
iriformation about the fund.Read the prospectus carefully before investing.
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
account will revert to the Plan to be applied as specified in Section VIII.
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B.No Surviving Spouse or Surviving Dependents
If there are no living spouse or dependents at the time of death of the Participant,the account will revert to the Plan to
be applied as spec~fied in Section VIII.
XII.The Plan will operate according to the following provisions:
A.Employer Responsibilities
1.The Employer will submit all VantageCare Retirement Health Savings Plan contribution data via electronic submission.
2.The Employer will submit all VantageCare Retirement Health Savings Plan Participant status updates or personal
information updates via electronic submission.This includes but is not limited to termination notification and
benefit eligibility notification.
B.Participant account administration and asset-based fees will be paid through the redemption of Participant account
shares,unless agreed upon otherwise in the Administrative Services Agreement ..
C.Assignment of benefits is not permitted.Benefits will be paid only to the Participant,his/her Survivors,the
Employer,or an insurance provider (as allowed by the claims administrator).Payments to an third-party payee
(e.g.,medical service provider)are not permitted with the exception of reimbursement to the Employer or insurance
provider (as allowed by the claims administrator)..
D.An eligible dependent is (a)the Participant's lawful spouse,(b)the Participant's child under the age of 27,as defined
by IRC Section 152(£)(1)and Internal Revenue Service Notice 2010-38,or (c)any oth~r individual who is a person
described in IRC Section 152(a),as clarified by Internal Revenue Service Notice 2004-79.
E.The Employer will be responsible for withholding,reporting and remitting any applicable taxes for payments which
are deemed to be discriminatory under IRC Section 105(h),as outlined in the VantageCare Retirement Health
Savings Plan Employer Manual.
XIII.Employer Acknowledgements
A.The Employer hereby acknowledges it understands that failure to properly fill out this Employer VamageCare
Retirement Health Savings Plan Adoption Agreement may result in the loss of tax exemption of the Trust and/or loss
of tax-deferred status for Employer contributions.
B.0 Check this box if you are including supporting documents that include plan prOVisions.
EMPLOYER SIGNATURE
By:,-C.-__
Title:_
Attest:_
Title:_
Accepted:VANTAGEPOINT TRANSFER AGENTS,LLC
Assistant Secretary,ICMA-RC
•
Date:_
Date:_
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DECLARATION OF TRUST OF TME
NAME OF EMPLOYER
INTEGRAL PART TRUST
Declaration of Trust made as of the 1st day of April ,20 ~,by and between
h City of Rancho Palos Verdes California Governmental Agency
t e ,a -:=_-;-::--:--:-_
(Name of EmplDyer)'R 0'(Slale)(Type Df Entily)
(h f ed h "E I ")d Interim H Irector 'd'(h'fed h "T ")ereina ter rererre to as temp oyer an or Its eSlgnee erema ter rererre to as t e rustee,
(Name Dr Title Df Trustee)
RECITALS
CaliforniaWHEREAS,the Employer is a political subdivision of the State of .......,::-..,..,...,_-----exempt from
(State)
federal income tax under the Internal Revenue Code of 1986;and
WHEREAS,the Employer provides for the security and welfare of its eligible employees (hereinafter referred to as
"Participants"),their Spouses and Dependents by the maintenance of one or more post-retirement welfare benefit plans,
programs or arrangements which provide for life,sickness,medical,disability,severance and other similar benefits through
insurance and self-funded reimbursement plans (collectively the "Plan");and
WHEREAS,it is an essential function and integral part of the exempt activities of the Employer to assist Participants,
their Spouses and Dependents by making contributions to and accumulating assets in the trust,a segregated fund,for post-
retirement welfate benefits under the Plan;and
WHEREAS,the authority to conduct the general operation and administration ofthe Plan is vested in the Employer or its designee,
who has the authority and shall be subject to the duties with respect to the trust specified in this Declaration ofTrust;and
WHEREAS,the Employer wishes to establish this trust to hold assets and income of the Plan for the exclusive benefit of Plan
Participants,their Spouses and Dependents;
NOW,THEREFORE,the parties hereto do hereby establish this trust,by executing the
D I 'fT f h City of Rancho Palos Verdes I IP T (h fed hecaratlon0rust0t e ntegra art rust ereina ter referre to as t e
(Name Df EmplDyer)
"Trust"),and agree that the following constitute the Declaration ofTrust (hereinafter referred to as the "Declaration"):
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ARTICLI:I
Definitions
1.1 Definitions.For the purposes of this Declaration.the following terms shall have the respective meanings set forth below
unless otherwise expressly provided:
(a)"Account"means t~e individual recordkeeping aCCQunt maintained under the Plan to record the interest of a
Participant in the Plan in accordance with Section 7.3.
(b)''Administrator''means the Employer or the entity designated by the Employer to carry out administrative services
as are necessary to implement the Plan.
(c)"Beneficiary"means the Spouse and Dependents,who will receive any benefits payable hereunder in the event
of the Participant's death.In the case where there is no Spouse or Dependents.any amount of contributions,plus
accrued earnings thereon,remaining in the Account must,under the terms of the Plan,be returned to the Trust.
(d)"Code"means the Internal Revenue Code of 1986,as amended from time to time.
(e)"Dependent"means (a)the Participant's lawful spouse,(b)the Participant's child under the age of27,as defined
by IRC Section 152(f)(1)and Internal Revenue Service Notice 2010-38,or (c)any other individual who is a person
described in IRC Section 152(a),as clarified by Internal Revenue Setvice Notice 2004-79.
(f)"Investment Fund"means any separate investment option or vehicle selected by the Employer in which all or a
portion of the Trust assets may be separately invested as herein provided.The Trustee shall not be required to select
any Investment Fund.
(g)"Nonforfeitable Interest"means the interest of the Participant or the Participant's Spouse and Dependent
(whichever is applicable)in the percentage of Participant's Employer's contribution which has vested pursuant to
the vesting schedule specified in the Employer's Plan.A Participant shall,at all times.have a one hundred percent
(100%)Nonforfeitable Interest in the Participant's own contributions.
(h)"Spouse"means the Participant's lawful spouse as determined under the laws of the state in which the Participant
has his primary place of residence.
(i)"Trust"means the trust established by this Declaration.
0)"Trustee"means the Employer or the person or persons appointed by the Employer to serve in that capacity.
ARTICLE .II
Establishment of Trust
2.1 The Trust is hereby established as of the date set forrh above for the exclusive benefit ofParticipants.their Spouses and Dependents .
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ARTICLE III
Construction
California
3.1 This Trust and its validity,construction and effect shall be governed by the laws of the State of __~_
3.2 Pronouns and other similar words used herein in the masculine gender shall be read as the feminine gender where
appropriate,and the singular form of words shall be read as the plural where appropriate.
3.3 If any provision of this Trust shall be held illegal or invalid for any reason,such determination shall not affect the
remaining provisions,and such provisions'shall be construed to effectuate the purpose of this Trust.
ARTICLE IV
Benefits
4.1 Benefits.This TrlL';t may provide benefits to the Participant,the Participant's Spouse and Dependents pursuant to the terms ofthe Plan.
4.2 Form ofBenents.This Trust may provide benefits by cash payment.This Trust may reimburse the Participant,his
Spouse and Dependents for insurance premiums or other payments expended for permissible benefits described under the
Plan.This trust may reimburse the Employer,or the Administrator for insurance premiums.
ARTICLE V
General Duties
5.1 It shall be the duty of the Trustee to hold title to assets held in respect of the Plan in the Trustee's name as directed by the
Employer or its designees in writing.The Trustee shall not be under any duty to compute the amount of contributions
to be paid by the Employer or to take any steps to collect such amounts as may be due to be held in trust under the Plan.
The Trustee shall not be respoiisible for the custody,investment,safekeeping or disposition of any assets comprising the
Trust,to the extent such functions are performed by the Employer or the Administrator,or both.
5.2 It shall be the duty of the Employer,subject to the provisions of the Plan,to pay over to the Administrator or other person
designated hereunder from time to time the Employer's contributions and Participants'contributions under the Plan and
to inform the Trustee in writing as to the identity and value of the assets titled in the Trustee's name hereunder and to
keep accurate books and records with respect to the Participants of the Plan.
ARTICLE VI
Investments
6.1 The Employer may appOint one or more investment managers to manage and comrol all or parr of thc assets of the Trust
and the Employer shall notify the Trustee in writing of any such appointment.
6.2 The Trustee shall not have any discretion or authority with regard to the investment of the Trust and shall act solely as
a directed Trustee of the assets of which it holds title.To the extent directed by the Employer (or Participants or their
Spouses and Dependents to the extent provided herein)the Trustee is authorized and empowered with the following
powers,rights and duties,each of which the Trustee shall exercise in a nondiscretionary manner:
II
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(a)To cause stocks.bonds,securities,or other investments to be registered in its name as Trustee or irr the name of a
nominee,or to take and keep the same unregistered;
(b)To employ such agents and legal counsel as it deems advisable or proper in connection with its duties and to pay such
agents and legal counsel a reasonable fee.The Trustee shall not be liable for the acts of su<;h agents and counsel or
fo~the acts done in good faith and in reliance upon the advice of such agents and legal counsel,provided it has used
reasonable care in selecting such agents and legal counsel;
(c)To exercise where applicable and appropriate any rights of ownership in any contracts of insurance in which any part
of the Trust may be invested and to pay the premiums thereon;and
(d)At the direction of the Employer (or Participants.their Spouses,their Dependents,or the investment manager,as the
case may be)to sell,write options on,conveyor transfer,invest and reinvest any part thereof in each and every kind of
property,whether real,personal or mixed,tangible or intangible,whether income or non-income producing and wherever
situated,including but not limited to,time deposits (including time deposits in the Trustee or its affiliates,or any successor
thereto,if the deposits bear a reasonable rate ofinterest),shares of common and preferred stock,mortgages,bonds.leases,
n(){es,debentures.equipment or collateral trust certificates,rights,warrants,convertible or exchangeable securities and
other corporate,individual or government securities or obligations,annuity,retirement or other insurance contracts,
mutual funds (including funds for which the Trustee or its affiliates serve as investment advisor,custodian or in a similar
or related capacity),or in units ofany other common.collective or commingled trust fund.
6.3 Notwithstanding anything to the contrary herein,the assets of the Plan shall be held by the Trustee as title holder only.
Persons holding custody or possession ofassets titled to the Trust shall include the Employer,the Administrator,the
investment manager,and any agents and subagents,but not the Trustee.The Trustee shall not be responsible or liable
for any loss or expense which may arise from Ot result from compliance with any direction from the Employer,the
Administrator,the investment manager,or such agents to take title to any assets nor shall the Trustee be responsible or
liable for any loss or expense which may result from the Trustee's refusal or failure to comply with any direction to hold
tide,except if the same shall involve or result from the Trustee's negligence or intentional misconduct.The Trustee may
refuse to comply with any direction from the Employer,the Administrator,the investment manager,or such agents in the
event that the Trustee,in its sole and absolute discretion,deems such direction illegal.
6.4 The Employe~hereby indemnifies and holds the Trustee harmless from any and all actions.claims,demands,liabilities,
losses,damages or reasonable expenses of whatsoever kind and nature in connection with ~r arising out of (i)any
action taken or omitted in good faith by the Trustee in accordance with the directions of the Employer or its agents
and subagents hereunder,01:(ii)any disbursements of any part of the Trust made by the Trustee in accordance with
the directions of the Employer,or (iii)any action taken by or omitted in good faith by the Trustee with respect to an
investment managed by an investment manager in accordance with any direction of the investment manager or any
inaction with respect to any such investment in the absence of directions from the investment manager.Notwithstanding
anything to the contrary herein,the Employer shall have no responsibility to the Trustee under the foregoing
indemnification if the Trustee fails negligently,intentionally or recklessly to perform any of the duties undertaken by it
under the provisions of this Trust.
6.5 Notwithstanding anything to the contrary herein,the Employer or,if so designated by the Employer,the Administrator
and the investment manager or another agent of the Employer,will be responsible for valuing all assets so acquired for
all purposes of the Trust and of holding,investing.trading and disposing of the same.1be Employer will indemnify
and hold the Trustee harmless against any and all claims,actions,demands,liabilities,losses,damages,or expenses
of whatsoever kind and nature,which arise from or are related to any use ofsuch valuation by the Trustee or holding,
trading,or disposition of such assets .
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6.6 The Trustee shall and hereby does indemnify and hold harmless the Employer from any and all actions,claims,demands,
liabilities,losses,damages and reasonable expenses ofwhatsoever kind and nature in connection with or arising out of
(a)the Trustee's failure to follow the directions of the Employer,the Administrator,the investment manager,or agents
thereof,except as permitted by the last sentence ofSection 6.3 above;(b)any disbursements made without the direction
of the Employer,the Administrator,the investment manager or agents thereof;and (c)the Trustee's negligence,willful
misconduct,or recklessness with respect to the Trustee's duties under rhis Declaration.'
ARTICLE VII
Contributions
7.1 Employer Contributions.The Employer shall contribute to the Trust such amounts as specified in the Plan or by resolution.
7.2 Accrued Leave.Contributions up to an amount equal to the value of accrued sick leave,vacation leave,or other type
of accrued leave,as permitted under the Plan.The Employer's Plan must provide a formula for determining the value of
the Participant's contribution of accrued leave.The Employer's Plan must contain a forfeiture provision that will prevent
Participants from receiving the accrued leave in cash in lieu of a contribution to the Trust.
7.3 Accounts.Employer contributions,including mandatory Participant contributions,and contributions of accrued leave,
all investment income and realized and unrealized gains and losses,and forfeitures allocable thereto will be deposited
into an Account in the name of the Participant for the exclusive benefit of the Participant,his Spouse and Dependents.
The assets in each Participant's Account may be invested in Investment Funds as directed by the Participant (or,after
the Participant's death,by the Spouse or Dependents)or the Employer,as required under the Plan,from among the
Investment Funds selected by the Employer.
7.4 Receipt of Contributions.The Employer or.if so designated by the Employer,the Administrator or investment manager
or another agent of the Employer,shall receive all contributions paid or delivered to it hereunder and shall hold,invest,
reinvest and administer such contributions pursuant to this Declaration,without distinction between principal and
income.The Trustee shall not be responsible for the calculation or collec~ion of any contribution under the Plan,but shall
hold title to property received in respect of the Plan in the Trustee's name as directed by the Employer or its designee
pursuant to this Declaration.
7.5 No amount in any Account maintained under this Trust shall be subject to transfer,assignment,or alienation,whether voluI!tary or
involuntary,in favor ofany creditor,transferee.or assignee ofthe Employer,the Trustee,any Participant,his Spouse,or Dependent.
7.6 Upon the satisfaction of all liabilities under the Plan to provide such benefits.any amount of Employer contributions,plus
accrued earnings thereon,remaining in such separate Accounts must,under the terms of the Plan,be returned to the Employer.
ARTICLE VIII
Other PI,ans
If the Employer hereafter adopts one or more other plans providing life,sickness,accident,medical,disability,severance,
or other benefits and designates the Trust hereby created as part of such other plan,the Employer or,if so designated by the
Employer,the Administrator or an investment manager or an-other agent of the Employer shall;subject to 'the terms of this
Declaration,accept and hold hereunder contributions to such other plans.In that event (a)the Employer or,if so designated
by the Employer,the Administrator or an investment manager or another agent of the Employer,may commingle for
investment purposes the contributions received under such other plan or plans with the contributions previously received by
the Trust,but the books and records of the Employer or,if so designated by the Employer,the Administrator or an investment
manager or another agent of the Employer,shall at all times show the portion of the Trust Fund allocable to each plan;(b)the
III
G-14
term "Plan"as used herein shall be deemed to refer separately to each other plan;and (c).the term "Employer"as used herein
shall be deemed to refer to the person or group of persons which have been designated by the terms of such other plans as
having the authority to control and manage the operation and administration of such other plan.
ARTICLE IX
Disbursements ond Expenses
9.1 The Employer or its designee shall make such payments from the Trust at such time to such persons and in such amounts
as shall be authorized by the provisions of the Plan provided,however,that no payment shall be made,either during the
existence of or upon the discontinuance of the Plan (subject to Section 7.6),which would cause any part of the Trust to'
be used for or diverted to purposes other than the exclusive benefit ofthe Participants,their Spouses and Dependents
pursuant to the provisions of the Plan.
9.2 All payments of benefits under the Plan shall be mad~exclusively from the assets of the Accounts of the Participants to
whom or to whose Spouse or Dependents such payments are to be made,and no person shall be entitled to look to any
other source for such payments.
9.3 The Employer,Trustee and Administrator may be reimbursed for expenses reasonably incurred by them in the administration
of the Trust.All such expenses,including,without limitation,reasonable fees ofaccountants and legal counsel to the extent not
otherwise reimbursed,shall constitute a charge against and shall be .paid from the Trust upon the direction ofthe Employer.
ARTICLE X
Accounting
10.1 'lhe Trustee shall not be required to keep accounts of the investments,receipts,disbursements,and other transactions of
the Trust,except as necessary to perform its title-holding function hereunder.All accounts,books,and records relating
thereto shall be maintained bythe Employer or its designee.
10.2 As promptly as possible following the close of each year,the Trustee shall file with t!i.e Employer a written account setting
forth assets titled to the Trust as reported to the Trustee by the Employer or its designee.
ARTICLE XI
Miscellaneous Provisions
ILl Neither the Trustee nor any affiliate thereof shall be required to give any bond or to qualify before,be appointed by,or
account to any court of law in the exercise of its powers hereunder.
11.2 No person transferring title or receiving a transfer of title from the Trustee shall be obligated to look to the propriety of
the acts of the Trustee in connection therewith.
11.3 The Employer may engage the Trustee as its agent in the performance of any duties required of the Employer under the
Plan,but such agency shall not be deemed to increase the responsibility or liability of the Trustee under this Declaration.
11.4 'lhe Employer shall have the right at all reasonable times during the term of this Declaration and for three (3)years after the
termination of this Declaration to examine,audit,inspect,review,extract information from,and copy all books,records,
accounts,and other documents ofthe Trustee relating to this Declaration and the Trustees'performance hereunder.
II
G-15
ARTICLE XII
Amendment and Terminotion
12.1 The Employer reserves the right to alter,amend,or (subject to Section 9.1)terminate this Declaration at any time for any
reason without the consenc of the Trustee or any other person,provided that no amendmenc affecting the rights,duties,
or responsibilities of the Trustee shall be adopted without the execution of the Trustee to the amendmenc.Any such
amendment shall become effective as of the date provided in the amendmenc,if requiring the Trustee's execution,or on
delivery of the amendment to the Trustee,if the Trustee's execution is not required.
12.2 Upon termination of this Declaration and upon the satisfaction of all liabilities under the Plan to provide such benefits,
any amount of Employer contributions,plus accrued earnings thereon,remaining in such separate Accounts must, under
the terms of the Plan,be returned to the Employer.
ARTICLE XIII
Successor Trustees
13.1 The Employer reserves the right to discharge the Trustee for any or no reason,at any rime by giving ninety (90)days'
advance written notice.
13.2 The Trustee reserves the right to resign at any time by giving ninety (90)days'advance written notice to the Employer.
13.3 In the event of discharge or resignation of the Trustee,the Employer may appoint a successor Trustee who shall succeed
co all rights,duties,and responsibilities of the former Trustee under this Declaration,and the terminated Trustee shall be
deemed discharged of all duties under this Declaration and responsibilities for the Trust.
ARTICLE XIV
Limited Effect of Plan and Trust
Neither the establishment of the Plan and the Trust or any modification thereof,the creation of any fund or account,nor
the payment of any benefits,shall be construed as giving to any person covered under the Plan or other person any legal
or equitable right against the Trustee,the Administrator,the Employer or any officer or employee thereof,except as may
otherwise be expressly provided in the Plan or in this Declaration.
III
G-16
ARTICLE XV
Protective Clause
Neither the Administrator.the Employer.nor the Trustee shall be responsible for the validity of any contract of insurance or
other arrangement maintained in connection with the Plan,or for the failure on the part of the insurer or provider to make
payments provided by such contract.or for the action of any per-son which may delay payment or render a contract void or
unenforceable in whole or in part.
IN WITNESS WHEREOF.the Employer and the Trustee have executed this Declaration by their respective duly authorized
officers,as of the date first hereinabove mentioned.
EMPLOYER:
By:------------------Title:_
TRUSTEE(S):
By:__--Title:_
By:Title:_
By:Title:_
•G-17
EMPLOYER VANTAGECARE RETIREMENT HEALTH SAVINGS (RHS)PLAN
ADOPTION AGREEMENT
Plan Number:8 _8_0_3_39_2_.~~_Check one:IiJ New plan D Amendment to Existing Plan
Employer Retirement Health Savings Plan Name:
I.Employer Name:City of Rancho Palos Verdes State:California
II.The Employer hereby attests that it is a unit of a state or local government or an agency or instrumentality of one or
more units of a state or local government.
III.Effective Date of the Plan:April 1,2013--'-------------
IV:The Employer intends to utilize the Trust to fund only welfare benefits pursuant to the following welfare benefit
plan(s)established by the Employer:City of Rancho Paios Verdes Retirement Haalth Savings Plan
V.Eligibl~Groups,Participation and Participant Eligibility Requirements
A.Eligible Groups
The following group or groups of Employees are eligible to participate in the VamageCare Retirement Health Savings
Plan (check all applicable boxes):
o All Employees
o All Full-Time Employees
o Non-Union Employees
o Public Safety Employees -Police
o Public Safety Employees -Firefighters
o General Employees
o Collectively-Bargained Employees (Specify unit(s»
Ii]Other (specify group(s»All full-time employees that the employer determines are eligible to participate in the Plan,Including
eligible employees who separated from service on or after January 1,2010.
'The Employee group(s)specified must correspond to a group(s)of the same designation that is defined in the statutes,
ordinances,rules,regulations,personnel manuals or other documents or provisions in effect in the state or locality of
the Employer.
B.Participation
Mtmdatory Participation:All Employees in the covered group(s)are required to participate in
the Plan and shall receive contributions putsuant to Section VI.
If dIe Elnpl~r'~Uttd~tlyingwdJ~:re bdldh phm (If fimdlog u'ldel'thi~Va:lllage{;:U1:lWclrem~t Hculrh Saving~Ill~n is III
whole or pan a it04N;otlcaivcly ~n«l.:self.lnJllU~pbm.t1u:'nondb~rlmim!itlon ~u!tllIIlent.ll oI'lrn!!j.'nnll~w:u~e Cede-
UIU:.:}Se.<:tlclll 1~1h)wina:ppl}',l1w~rul~$lllll}!lmpo~[!lucian ollllw bel1l:fhs !«:et\'¢~y ttfghJy,~muI?"'IlJiIl!Jed~ndi\'idll\ll~
ifrhePl;m dJ6l:I'lminll{4!$in F.wOJ of:'highb~Gompel\$ll'l!d individulli~:Ul llm1l5 ofdlgiblliTY Q1.'b~llefill;'file EIl'lplo~[should
di.~U:S5 dll:$e roks withapproptilltt oouIISel.
c.Participant Eligibility Requirements
1.Minimum service:The minimum period of service required for participation is see VA.(write N/A if no
minimum service is required).
2.Minimum age:The minimum age required for eligibility to participate is.N/A (write N/A if no minimum
age is required).
11II
G-18
Ii]There is no Plan-defined limit on the percentage or dollar amount of earnings that may be contributed.
o %of earnings*
*Definition of earnings:0 Same as Section VI.A..0 Other
o $for the Plan year.
See Section Y.B.for a discussion of nondiscrimination rules that may apply to non-collectively bargained self-insured Plans.
VII.Vesting for Direct Employer Contributions
A.Vesting Schedule (check one box)
III The account is 100%vested at all times.
o The following vesting schedule shall apply to Direcr Employer Contributions as outlined in Section VI.B.I.:
Years of Service
Completed
Vesting
Percentage
--_%
--_%
---.--%
--_%
-.--_%
--_%
--_%
--_%
--_%
--_%
B.The account will become 100%vested upon the death,disability,retirement*,or attainment of benefit
eligibility (as oudined in Section IX)by a Participant.
"Definition of retirement (check one box):
o Retirement as defined in the primary retirement plan of the Employer
o Separation from service
121 Other The earlier of retirement (as defined in the Employer's retirement plan)or separation from service.
C.Any period ofservice by a Participant prior to a rehire of the Participant by the Employer shall not count
toward the vesting schedule outlined in A above.
VIII.Forfeiture Provisions
Upon separation from the service of the Employer prior to attainment of benefit eligibility (as outlined in Section IX),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 non-vested funds shall (check one box):
o Remain in the Trust to be reallocated among all remaining Employees participating in the Plan as Direct Employer
Contributions for the next and succeeding contribution cycle(s).
III Remain in the Trust to be reallocated pn an equal dollar basis among all Plan Participants.
o Remain in the Trust to be reallocated among all Plan Participants based upon Participant account balances.
o Revert to the Employer.
II
G-19
X.Permissible Medical Benefit Payments
Benefits eligible for reimbursement consist of:
III All Medical Expenses eligible under IRC Section 213*other than (i)direct long-term care expenses,and (ii)
expenses for medicines.or drugs which are not prescribed drugs (other than insulin).
o The following Medical Expenses eligible under IRC Section 213*other than (i)direct long-term care expenses,and (ii)
expenses for medicines or drugs which are not presc~ibed drugs (other than insulin).Select only the expenses you wish to
cover under the VantageCare Retirement Health Savings Plan:
o Medical Insurance Premiums
o Medical Out-of-Pocket Expenses*
o Medicare Part B Insurance Premiums
o Medicare Part D Insurance Premiums
o Medicare Supplemental Insurance Premiums
[J Prescription Drug Insurance Premiums
o COBRA Insurance Premiums
o Dental Insurance Premiums
o Dental Out-of-Pocket Expenses*
o Vision Insurance Premiums
o Vision Out-of-Pocket Expenses*
o Qualified Long-Term Care Insurance Premiums
o Non-Prescription medications allowed under IRS guidance*
o Other qualifying medical expenses (describe)*
*See Section V.A.fir a discussion ofnondiscrimination rules which may apply to non-collectively bargained,self-insured Plans.
XI.Benefits After the Death of the Participant
In the event of a Participant'sdeath,the following shall apply:
A.Surviving Spouse and/or Surviving Dependents
The surviving spouse and/or surviving eligible dependents (as defined in Section XII.D.)of the deceased Participant are
immediately eligible to maintain the account and utilize ino 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 Dreyfus Cash
Management fund*(or another fund selected by the Employer).The account balance may be reallocated by the
surviving spouse or dependents.
~n investment in the Dreyfus Cash Management money market fund is not insured or gtlaranteed by the Federal Deposit Insurance
Corporation or any other government agency.Although the fund seeks to preserve the value ofyour investment at $1.00 per share,it is
possible to lose money by investing in the fund.Investors should consider the investment objectives,risks,charges,and expenses ofthe fund
carefully before investing.You may visit us at www.icmarc,orgorcaIl800-669-7400to obtain a prospectus that contains this and other
information about the fund,Read the prospectus carefully before investing.
If a P.articipant's account balance has not been fully utilized upon the death of the eligible spouse,the account balance
may contin~e to be utilized to pay benefits of eligible dependents.Upon the death of all eligible dependents,the
account will revert to the Plan to be applied as specified in Section VIII.
III
G-20
ADMINISTRATIVE SERVICES AGREEMENT
Type:VantageCare RHS
Account Number:803392
G-21
Plan #803392
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement,made as of the day of ,20__(herein referred
.to as the nlnception Daten),between The International City Management Association Retirement
Corporation (nICMA-RC n),a nonprofit corporation organized and existing under the laws of the
State of Delaware;and the City of Rancho Palos Verdes ("Employer")a local governmental
instrumentality organized and existing under the laws of the State of California with an office at
30940 Hawthorne Boulevard,Rancho Palos Verdes,California 90275.
RECITALS
Employer acts as a public plan sponsor for a retiree health plan with responsibility to obtain
investment alternatives and services for employees participating in that plan;
Employer desires to make the VantageCare Retirement Health Savings Plan ("RHS Plan"or
"Plan")provided by ICMA-RC available to its employees;
ICMA-RC makes available the Vantagepoint Funds,a no-load,diversified mutual fund,for
investment of public employer plan assets,including RHS Plan assets;
ICMA-RC provides a complete offering of services to public employers for the operation of
employee retirement and retiree health savings plans including,but not limited to,
communications concerning investment alternatives,account ma.intenance,account record-
keeping,investment and tax reporting,form processing,benefit disbursement and asset
management.
AGREEMENTS
1.Acceptance of RHS Plan
Employer agrees to make the RHS Plan provided by ICMA-RC available to its employees.The
details of the RHS Plan shall be as mutually agreed between the Employer and ICMA-RC,and
in general shall be as set forth in the RHS Plan materials developed by ICMA-RC and provided
to Employer.The RHS Plan materials are hereby incorporated by reference and made a part of
this Agreement,except that Employer and ICMA-RC may from time to time mutually agree in
writing to terms that vary from the RHS Plan materials.RHS plan materials shall include the
Vantage Care RHS Employer Manual,available electronically through the EZ Link System upon
plan adoption.
The functions to be performed by ICMA-RC and its agents include:
(a)allocation of contributions and individual account balances in accordance with participant
direction of individual accounts to investment funds ("Funds")made available to Plan
participants;
(b)maintenance of indiv,idual accounts for participants reflecting amounts contributed,
transfers,income,gain,or loss credited, and amounts disbursed as benefits;
(c)provision of periodic reports to the Employer and participants of the status of Plan
investments and individual accounts Additional information provided to Employer will
-2-
4949795.1
G-22
Plan #803392
include,but not limited to,reports on claims processing.reconciliation of participant
accounts,benefits paid and forfeitures;
(d)communication to participants.and responding to inquiries from participants and
spouses and dependents,regarding their benefits.rights,responsibilities and elections
under the Plan;
(e)conducting annual employee participant meetings.including an overview of the Plan,a
review of Plan changes (if any)and presentation of any other relevant information;
(f)processing of participant claims and appeals for benefits and disbursement of benefits
as agent for the Employer in accordance with terms of the Plan;and
(g)performance of tax withholding and reporting in conjunction with the Employer for each
RHS account.
2.Employer Duty to Furnish Information
Employer agrees to furnish to ICMA-RC on a timely basis such information as is necessary for
ICMA-RC to carry out its responsibilities with respect to the Plan,including information needed
to allocate individual participant accounts to Funds.and information as to the benefit eligibility
and employment status of participants.and participant ages,addresses,beneficiaries and other
identifying information (including tax identification numbers).ICMA-RC shall be entitled to rely
upon the accuracy of any information that is furnished to it by a responsible official of the
Employer or any information relating to an individual participant,dependent.or beneficiary that
is furnished by such participant,dependent,or beneficiary.and ICMA-RC shall not be
responsible for any error arising from its reliance on such information.ICMA-RC will provide
account information in reports,statements or accountings.
3.Certain Representations and Warranties
ICMA-RC represents and warrants to Employer that:
(a)ICMA-RC is a non-profit corporation with full power and authority to enter into this
Agreement and to perform its obligations under this Agreement.
(b)ICMA-RC is an investment adviser registered as such with the Securities and Exchange
Commission under the Investment Advisers Act of 1940.as amended.ICMA-RC
Services.LLC (a wholly owned subsidiary of ICMA-RC)is registered as a broker-dealer
with the Securities and Exchange Commission (SEC)and is a member in good standing
of the Financial Industry Regulatory Authority (FINRA).
Employer represents and warrants to ICMA-RC that:
(c)Employer is organized in the form and manner recited in the opening paragraph of this
Agreement with full power and authority to enter into and perform its obligations under
this Agreement and to act for the Plan and participants in the manner contemplated in
this Agreement.Execution,delivery.and performance of this Agreement will not conflict
with any law,rule.regulation or contract by which the Employer is bound or to which it is
a party.
-3-
4949795.1
G-23
Plan #803392
(d)Information required to be retained by the Employer shall be set forth in the RHS plan
materials developed by ICMA-RC and provided to the Employer.
(e)Employer is responsible for determining that there are no state or local laws that would
prohibit it from establishing ICMA-RC's VantageCare RHS program.Employer is also
responsible for determining that the investments selected for the RHS plan fall within
statellocal requirements.ICMA-RC shall not be responsible for monitoring state or local
law or for administering the Plan in compliance with local or state requirements unless
Employer notifies ICMA-RC of any such local or state requirements.
(f)Employer acknowledges that the RHS plan may be treated as a "health plan"for Health
Insurance Portability and Accountability Act ("HIPAA")purposes and therefore may be
subject to HIPAA privacy rules.If it is determined that the RHS plan is considered a
"health plan",an employer sponsoring RHS would be responsible for complying with the
HIPAA privacy and security rules regarding protected health information of RHS plan
participants.
ICMA-RC has procedures in place to safeguard the protected health information of RHS
plan participants.
4.Participation in Certain Proceedings
The Employer hereby authorizes ICMA-RC to act as agent,to appear on its behalf,and to join
the Employer as a necessary party in all legal proceedings involving the garnishment of benefits
or the transfer of benefits pursuant to a medical child support order.Unless Employer notifies
ICMA-RC otherwise,Employer authorizes ICMA-RC to determine whether disbursement of
benefits to a spouse or child pursuant to a medical child support order is appropriate.
5.Compensation and Payment
(a)Absent an explicit agreement to the contrary between ICMA-RC and Employer,
participant fees and expenses shall be payable from RHS'assets,in accordance with the
requirements of the RHS Plan as set forth below.
(i)An annual asset fee of 0.30%(30 basis points)will be charged on a quarterly
basis,based on the balance in the account on the last day of the previous
quarter.
In addition to the annual asset fee,a $25 annual account fee will be charged
quarterly to each Accountholder's account.
(ii)Account administration fees are subject to change,after the expiration of the
initial contract term as set forth in Section 9,with appropriate prior notification as
provided in Section 11.
(b)Compensation for Advisory and other Services to the Vantagepoint Funds.Employer
acknowledges that certain wholly-owned subsidiaries of ICMA-RC receive compensation
from the Vantagepoint Funds for advisory and other services furnished to the
Vantagepoint Funds.The fees referred to in this subsection are disclosed in the
Vantagepoint Funds Prospectus and Statement of Additional Information.
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4949795.1
G-24
Plan #803392
Employer acknowledges and agrees that ICMA-RC does not assume any responsibility
with respect to the selection or retention of the Plan's investment options.
6.Custody
Employer understands that amounts contributed to the RHS plan are to be remitted directly to
Vantagepoint Transfer Agents in accordance with instructions prOVided to Employer in the RHS
plan materials and are not to be remitted to the ICMA Retirement Trust or ICMA-RC.In the
event that any check or wire transfer is incorrectly labeled or transferred,ICMA-RC will return it
to Employer with proper instructions.
7.Responsibility;Audit
(a)ICMA-RC shall not be responsible for any acts or omissions of any person other than
ICMA-RC,its employees,contractors and agents in connection with the administration or
operation of the Plan.
(b)The Employer understands that,as a general matter,the Internal Revenue Service
("IRS")may decline to rule on certain design features or provisions that the Employer
may request to have added to the RHS plan materials.The Employer agrees to hold
ICMA-RC harmless in connection with the addition and administration of any RHS plan
feature or provision requested by the Employer for which the IRS will not provide
express interpretive guidance.
(c)AIIICMA-RC costs incurred in the performance of this Agreement will be subject to audit.
ICMA-RC shall permit the Employer or its authorized representatives to inspect,
examine,make excepts from,transcribe,and copy any records maintained by ICMA-RC
in the administration of the Employer's RHS Plan and this Agreement,including any
books;transaction processing work,documents,papers,or other materials,all of which
specifically relate to the Plan's contribution history,fees charged,investment experience,
and distribution history.In addition,ICMA-RC shall provide such materials at any
reasonable time,and permit Employer and its agents to audit and verify statements,
invoices or bills submitted by ICMA-RC under this Agreement.ICMA-RC shall provide
such reasonable assistance as may be reqUired in the course of such audit.lCMA-RC
shall retain the records specified above for a period of seven years from creation thereof,
and shall make any records retained in accordance with such policy available for
inspection hereunder for a period of four years after expiration or termination of the
Agreement.
(d)If,as a result of the audit,it is reasonably determined by the Employer's auditor or staff
that fees charged by ICMA-RC were in excess of the amounts set forth under this
Agreement respecting compensation,ICMA-RC agrees to reimburse the Employer for
any fee overage within 60 days of written notification by the Employer.·
(e)The Employer shall bear the cost associated with any such audit,including with respect
to any expenses such as copying expenses.
8.Performance Standard and Indemnification
ICMA-RC warrants that it has the experience and ability in the fields and disciplines related to
the services described herein as may be necessary to perform all required services with a high
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4949795.1
G-25
Plan #803392
standard of quality.In addition,for all purposes under this Agreement,ICMA-RC shall use due
care and reasonable diligence in accordance with applicable professional standards of practice
for like services in the employee benefit plan service provider industry,as such standards apply
(and develop from time to time)in providing comparable services for employers of like size to
the Employer and plans of comparable size and complexity to the Plan.
ICMA-RC agrees to indemnify,defend and hold harmless the Employer against all actual and
direct losses (and only actual and direct losses)or liabilities to third parties suffered by the
Employer which arise from or in connection with any breach of this Agreement by ICMA-RC or
from any negligence or intentionally wrongful acts or omissions,including failure to perform its
obligations under this Agreement,by ICMA-RC or its employees,agents,directors and affiliates
(such losses and liabilities,"Indemnified Losses").Accordingly,on demand,ICMA-RC shall
reimburse the Employer for any and all such actual and direct losses,liabilities,lost profits,
fines,penalties,costs or expenses (including reasonable attorneys'fees),which may for any
reason be imposed upon the Employer by reason of any suit,claim,action,proceeding or
reasonable and substantiated demand by any third party which results from Indemnified Losses.
This paragraph shall survive the expiration and termination of this Agreement for any reason.
9.T~rm
(a)This Agreement shall be in effect for an initial term beginning on the Inception Date and
ending 5 years after the Inception Date (the "Initial Term ll
).After the Initial Term,this
Agreement will be renewed automatically at the beginning of each succeeding year for
successive terms of one year;provided,however,that the Agreement may be
terminated at any time after the expiration of the Initial Term with no less than 60 days'
notice to ICMA-RC in writing.The Employer may terminate this Agreement for cause
prior to the end of the Initial Term in the event that ICMA-RC is determined to have
materially breached the Agreement and failed to cure such breach to the satisfaction of
the Employer within 30 days following written notice of such breach and the Employer's
intention to terminate the Agreement.
(b)ICMA-RC shall provide notice to the Employer of its intent to engage a subcontractor to
provide services specific or unique to the Employer at least 60 days'prior to intended
implementation of such subcontract.In that event,the Employer may either (i)do
nothing and permit the subcontract to become effective,or (ii)the Employer shall notify
ICMA-RC that it intends to terminate this Agreement for IICause",which shall be a no
fault termination.
(c)If the Agreement is terminated,ICMA-RC must apply its best efforts to resolve and
conclude any outstanding work under the Agreement as soon as administratively
practicable.As soon as reasonably practicable following termination of this Agreement,
ICMA-RC will use reasonable efforts to transfer a copy of all Plan-related documents
held by ICMA-RC,which,in the sole judgment of ICMA-RC,are not proprietary to ICMA-
RC,to the Employer or to a successor third party administrator,as designated by the
Employer.This provision will survive termination of the agreement.
10.Amendments and Adjustments
(a)This Agreement may not be amended except by written instrument signed by the parties.
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4949795.1
G-26
Plan #803392
(b)The parties agree that an adjustment to compensation or administrative and operational
services under this Agreement may only be implemented by ICMA-RC through a
proposal to the Employer via correspondence or the Employer Bulletin.The Employer
will be given at least 60 days to review the proposal before the effective date of the
adjustment.Such adjustment shall become effective unless,within the 60 day period
before the effective date,the Employer notifies ICMA-RC in writing that it does not
accept such adjustment,in which event the parties will negotiate with respect to the
adjustment.
(c),No failure to exercise and no delay in exercising any right,remedy,power or privilege
hereunder shall operate as a waiver of such right,remedy.power or privilege.
11.Notices
All notices required to be delivered under Section 10 of this Agreement shall be delivered
personally or by registered or certified mail,postage prepaid.return receipt requested,to (i)
Legal Department,ICMA Retirement Corporation,777 North Capitol Street,N.E.,Suite 600,
Washington,D.C,20002-4240;(ii)Employer at the office set forth in the first paragraph hereof,
or to any other address designated by the party to receive the same by written notice similarly
given.
12.Complete Agreement
This Agreement shall constitute the sole agreement between ICMA-RC and Employer relating to
the object of this Agreement and correctly sets forth the complete rights,duties and obligations
of each party to the other as of its date.Any prior agreements,promises,negotiations or
representations,verbal or otherwise,not expressly set forth in this Agreement are of no force
and effect.
13.Governing Law
This agreement shall be governed by and construed in accordance with the laws of the State of
California applicable to contracts made in that jurisdiction without reference to its conflicts of
laws provisions.
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Plan #803392
In Witness Whereof,the parties hereto have executed this Agreement as of the Inception Date
first above written.
CITY OF RANCHO PALOS VERDES
By:---__
Print Name:-_
Title:--------
INTERNATIONAL CITY/COUNTY
MANAGEMENT ASSOCIATION
RETIREMENT CORPORATION
By::----:--::.-"":""':'""--:-_--_
Angela C.Montez
Assistant Corporate Secretary
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RESOLUTION NO.2013-__,
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF RANCHO PALOS VERDES
ADOPTING A RETIREE HEALTH SAVINGS PLAN AND 115 TRUST
NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of Rancho Palos
Verdes (the "City")HEREBY FINDS,RESOLVES AND ORDERS AS FOLLOWS:
Background
SECTION 1.On November 17,2009,the City Council approved the adoption of a trust and
retirement health savings plan designed by OptumHealth Financial Services (Optum)to
provide post-retirement health care benefits for eligible employees and their eligible
dependents and survivors (Optum Plan),and engaged Optum to operate and administer
the Optur.n Plan.
SECTION 2.In late 2012,Optum notified the City of its intent to terminate its agreement to
administer the Optum Plan,effective December 31,2012,explaining that Optum will no
longer provide administrative services for retirement health savings plans.Optum
subsequently extended the termination date of its agreement with the City until April 1,
2013,giving City staff sufficient time to find a new provider for these services.
SECTION 3.The City Council believes it to be in the City's best interest to adopt a new
trust and retirement health savings plan designed by ICMA-RC,and to engage ICMA-RC
to operate and administer the new plan and trust.The new plan and trust will provide
substantially the same benefits as those previously provided through the Optum Plan.
Adoption of the Retirement Health Savings Plan in the form of ICMA·RC's
Retirement Health Savings Program.
SECTION 4.Effective February 5,2013,the City Council hereby adopts the City of
Rancho Palos Verdes Retirement Health Savings Plan (RHS Plan),substantially in the
form of the ICMA-RC Retirement Health Savings Program attached hereto (with any
modifications deemed appropriate by the Interim HR Manager and the City's legal
counsel),to provide post-retirement health care benefits for eligible participants and their
eligible dependents and survivors.
Adoption of an Internal Revenue Code §115 Trust in the Form of ICMA·RC's Integral
Part Trust
SECTION 5.Effective February 5,2013,the City Council hereby adopts an Internal
Revenue Code section 115 trust ("RHS Trust"),substantially in the form of the ICMA-RC
Integral Part Trust attached hereto (with any modifications deemed appropriate by the
Interim HR Manager and the City's legal counsel),for the exclusive benefit of eligible
participants and their qualified dependents and survivors under the RHS Plan.Assets
under the RHS Trust may not be diverted for any purpose prior to satisfaction of all
liabilities of the RHS Plan.On or as soon as administratively practicable after the effective
date,all assets held in the trust under the Optum Plan will be transferred to the RHS Trust.
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The Optum Plan and trust will immediately terminate upon the transfer of all assets to the
RHS Trust.
SECTION 6.The RHS Trust will be tax-exempt to the maximum extent allowed under
section 115 of the Internal Revenue Code.
SECTION 7.All assets under RHS Plan,including all contributions to the RHS Plan and
any earnings on those amounts,will be held in the RHS Trust.
Adoption of Administrative Services Agreement with ICMA-RC
SECTION 8.The City Council hereby approves the retention of ICMA-RC to operate and
administer the RHS Plan,pursuant to the terms and conditions of the Administrative
Services Agreement between the City and ICMA-RC attached hereto (with any
modifications deemed appropriate by the Interim HR Manager and the City's legal
counsel)..
Termination of Current Plan and Trust
SECTION 9.This resolution ratifies the termination of the Optum Plan and trust,effective
upon the complete transfer of all assets under that trust to the RHS Trust..
General Authorizing Resolutions
SECTION 10.The Interim HR Manager is authorized and directed,for and on the City's
behalf,to take such further action as the Interim HR Manager deems necessary or
appropriate to carry out the foregoing resolutions.
SECTION 11.The Interim HR Manager (or any successor)is authorized on the City's
behalf to amend the RHS Plan or RHS Trust at any time as necessary or appropriate to
satisfy the applicable requirements of the law;however,any amendment that increases the
City's costs will not be effective without the City Council's prior written approval.
PASSED AND ADOPTED this _day of 2013,by the following vote:
AYES:
NOES:
ABSENT:
Mayor
ATTEST:
City Clerk
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