09. Resolution 4369 - ICMA - RC Trust ResolutionAgenda -October 6,1997
AGENDA ITEM 9 - RESOLUTION 4369-ICMA-RC TRUST RESOLUTION
BACKGROUND/CONSIDERATION: Available to all employees of the City, a deferred
compensation plan through the International City Manager's Association Retirement Corporation is
offered. This is the City Manager's primary source of retirement planning and funding. Previous
documents adopting this plan are now outdated in terms of new IRS rulings and federal legislation.
Previous accounts were held in the name of the employee but the funds were actually the City's. This
has caused problems with several thousands of employees when certain governmental agencies raided
these funds to pay offtheir debts or to purchase junk bonds. This led the City Manager's Association
to seek remedies to this undesirable problem.
The new document creates a trust to hold plan assets as required by the new federal legislation. This
trust is similar to dedicated trusts established by governmental units for various purposes, such as
holding pension fund assets or providing for perpetual care of cemetery plots.
In order to be eligible to participate in the Retirement Trust, each employer must adopt the
Declaration of Trust by resolution of the City Council. There are four types of resolutions for this
item but we have offered the type that is most appropriate for our employee accounts and the City.
This resolution adopts the deferred compensation plan document and appoints ICMA-RC to
administer to the plan. Through this document the City also executes the Declaration of Trust of the
ICMA Retirement Trust. The City will no longer hold title to the employee plan assets. These assets
will be for the exclusive benefits of the employee participants and beneficiaries.
Agenda -October 6, 1997
RECOMMENDATION: I highly recommend this correction and change in the administration of
funds. A change in reporting these assets will likely be forthcoming. Until that is received, all
governmental units are advised to follow the recommendations of their auditors and may be reporting
the assets as a trust account.
A RESOLUTION AMENDING THE ICMA RETIREMENT CORPORATION DEFERRED
COMPENSATION PLAN.
WHEREAS, The City of Kalispell has employees rendering
valuable services; and
WHEREAS, The City of Kalispell has established a deferred
compensation plan for such employees that serves the interest of
the City of Kalispell by enabling it to provide reasonable
retirement security for its employees, by providing increased
flexibility in its personnel management system, and by assisting in
the attraction and retention of competent personnel; and
WHEREAS, The City of Kalispell has determined that the
continuance of the deferred compensation plan will service these
objectives; and
WHEREAS, Amendments to the Internal Revenue code have been
enacted that require changes to the structure of and allow
enhancements of the benefits of the deferred compensation plan:
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL, MONTANA AS FOLLOWS:
SECTION I. That the City of Kalispell hereby amends and
restates the deferred compensation plan in the form of the
ICMA Retirement Corporation Deferred Compensation Plan and
Trust.
SECTION II. That the assets of the Plan shall be held in
trust, with the City of Kalispell serving as trustee, for the
exclusive benefit of the Plan participants and their
beneficiaries, and the assets shall not be diverted to any
other purpose.
SECTION III. That the Trustee's beneficial ownership of Plan
assets held in the ICMA Retirement Trust shall be held for the
further exclusive benefit of the Plan participants and their
beneficiaries.
SECTION IV. That the Plan will not permit loans.
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SSCTIOR V. This Resolution shall become effective
immediately following its passage by the City Council and
approval by the Mayor.
PASSED AND APPROVED BY THE CITY COUNCIL AND THE MAYOR OF THE CITY
OF KALISPELL, THIS 6th DAY OF OCTOBER, 1997.
Douglas D. Rauthe, Mayor
ATTEST
Debbie Gifford, CMC
Clerk of Council
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