HomeMy WebLinkAboutResolution 2004-119 changes to the loan provisions of ICMA-RC 401(a) and 457 plansMARANA RESOLUTION NO. 2004-119
RELATING TO PERSONNEL; ADOPTING AND AUTHORIZING THE EXECUTION OF
CHANGES TO THE LOAN PROVISIONS OF ICMA-RC 401 (a) DEFINED CONTRIBUTION
PLAN AND THE 457 DEFERRED COMPENSATION SAVINGS PLAN.
WHEREAS, the Town of Marana has employees rending valuable service; and
WHEREAS, the Town of Marana has established a deferred compensation plan for such
employees that serves the interest of the Town of Marana 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 Town of Marana has determined that permitting participants in the defmed
compensation plan to take loans from the Plan does not serve these objectives; and
WHEREAS, the Town of Marana has determined that permitting participants in the deferred
compensation plan to take loans from the Plan will serve these objectives;
NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of
Marana, Arizona, that loans from the defined contribution plan will no longer be permitted;
BE IT FURTHER RESOLVED, loans from the deferred compensation plan will be
permitted.
ATTEST:
'~Tt-'J~celyn ~. Bronson Town Clerk
PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this
3rd day of August, 2004.
Page 1
Marana, Arizon~ Re~olufion No. 2004-119
LOAN GUIDELINES
457 DEFERRED COMPENSATION PLAN
Page 2
Marana, Arizona Resolution No. 2004-119
LOAN GUIDELINES
LOAN GUIDELINES
L PURPOSE
lca'~s t° PJn~ciPamX. T'ais is tbe onl7 o~cinl Loan Pro,~-a..~ ~ o~ ~be above name~ pina.
IL ELIGIBILITY
~ a~ av,,t,~,!e to all acute eraplo:/ee~. Lo~s wVJ not be ~"a~ ~d to panicipaots who hate
in delaulr. .
~ a.~ available from ~he followiag soun:~s: [select one or both]
~ .r:.mplo),e~-Com~b~oa Accotmt ("~s~ be]aac~ craig) '
~' Pank~paot C~m"be~oa A~om~ts (p~. a~l po~-zax, it'applicable, ioclud, ing .Empiore~ Mao&~zo~,
E,mplo, yee ¥o]u~mT, .~aploye~' Rc~llo,~,~, aad Pot',able Beaefit. s Accotmt.s, bot exchd~g
~e EmpioTee C.o~tn-o~o~ Voluotar~ Eu~plo.v~ Conu~bu~on
Loa~s are ava/leble for [be following purposes: [select o~]
~J~ All pmpores
Loaz~s shnll only be ~.mued in the evemt of a imzlic/pam:,s berdship or for the imrpos~ of eaabliag
t° relieve the fmaacinl aced. For tiffs propose, ~-,,,,,,~nl ueeti shnll iaclmle, btu mx be limited m:
~ r'"'ai~i expmaes of ~ paniclpa~ or members of
embllebi~ or subsum~inliy mhabilimiag ~e prlm:ipal msideac~ of ~be paninlpaat, or paying
colleje ed~ioa Cmcludi~g ~adua~ studies) for ~be participant er bin/act
IlL FREQUENCY OF LOANS
'~ P'arficipanls may rtc~ite o~e loan per calendar year. Moreover. panicipaots may bate only
oumaaoing lean aI a time.
FaniSpams n~.v l,~ite oae loan per caleaclar year. Moreover. ao panicipan! may have mot~
five (5) loans outslal~ding az one time.
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EXHIBIT A (continued)
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IV. LOAN AMOUNT
Tt~ m~imtrm Joan amount is $],000.
~ mar, imam loan amount is:
tim l~ser of:
(1) ~,50.000. mdut~ by tl~ ~r.~ (if ~y) o~
V. ~ OF LOAN
A 1~ ~ ~ h ~y ~ ~ of~ ~ ~ 1~ m~y. ov~a ~~
VL LO~ ~AYM~ PR~S ~
V1L LOAN I~ RATE '
The r, ue of h~re~;: fc~ loans of five (5) ycats or lc~ w~ be based oa p,:jme plus 0.5%.
T'~.-ate ofhue:m~ for loans for a p~c~pa.! ~stdc~ce WL~ be based on thc FI-IA/VA ram.
~ rate~ are ~nined on the l~t busin~ day of the month pmmding th~ month the loan i~ disbut~&
The 'nu'~t tal~ ~s ]°ck~l m ~t tb~ nme a ]°an ~ aPProval and r~amm ~°n'~ant thmu~ ~ 1~ °f ~ 1~
'frae l:~n~ iaua~ rate i~ detcnnined on the la~ b,~.,~ day of each month using i~e Wall Su~ j~ ~ ~e
~.u'ce. 'fine FbLa~A intet~ rote i~ also ~ on ~he b.~ bu~e~ day of each mcat3 using the Tel~
EXHIBI1 A (continued)
Loan interest ~tez for new Ioaas may flucmam upward or downward monthly, depending on :he movc~ncnt of thc
prime and FHA/VA inte~ct razes.
Employer may modify the manner ~n which loa~ inte~ct ra~es will be dctermined, but only u-ith respect to
fum~ loa~.
VIII. LOAN APPLICATION PROCEDURE
All lo~s m~ b~ ttque~l iu wfigng e~ an ~oplicafion appmvod by the Plan A~or. The application
nnrq be .4g~ed by the paxticlpa~L Toe F. mploye~ mttct review and appwve the applicalJon.
If the pa~icipant is manicg az the time of applkafion, and spousal consent is requirod by thc phm for the loaa.
the participant's spouse must conz~mL in wfifia&, to fl~e loa~ a~l fi~e co~ca~t muct be wi~ by a phn repre-
~"'~ave cf homy p~blic- Such c~se~t muct be give~ wi~ln the aiee~y (90) day pe~ ~ ~e ~ the i~
is ~.a. SlXms~l coee'-L if n:qui~d, mtm accomp~y ~ appllc~on in order for the application to be
co~.od complete, t
Tee Pam~Pa~t will be mqui~d to dg~ a promissory nora evidencing ~e loan and ~ dL~losu~e s~.~t wM~ .
includez an amortization -::chodule prior to re~:,';viag a loan cbcck. Loan cbecks will ge~emlly be issuod on the
mah-iv.4eac~ag mcme~ at, ce will be se~ to the .r:mpl oye~-, who wfl~i obtain the nece.~ary ~ ...~ and
deliver the cbeck m the par~dl~mt. AIl executed d, ocumema must ~ ~.~emra~ to the pla~ Adn~h~L~;w~tor vathln i 0
I]C SECUR~Y/COLLATERAL . . ~
Thai POn/on of m Pa~fidpaafs vexed acco~a~ balax~ce thaz ~ equal ~o the amotmt of the loan/s usod as collazcral
for the loan. Tbe collazcral amou~: may not e~ceod 50~ of ~be pan~ipant's ves~ed accotmt balaac~ ~ ~e ~ ~
loan is takea- Oaly th,~ po~o~ of the v~_ ~ balance that co~esponds w tbe amount of tbe outs~ggiing
X. ACCELDJATION,
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EXHIBIT .'A (continued)
XI. REAMORTIZATION
Any oumanging loan may be r~mo~,~,~ Rcamonizarlon ~s c~g ~ ~ ora I~ ~ ~ l~ of
~a~t ~ ~ ~ ~ ~um~ of ~. A 1~ ~y not ~ ~o~
V. ~
XII. REHNANCING EXISTING LOANS
Ifa panicilnnt has on~ o,a.l,a~ling loan. flaz loan may be refinanced. Ifafpt~rficipant bes mc~ ci~m c~c c~md-
ing loa~. no loans ma)' be ,-l~,,,~.ed. P,~mancing means coocurr~dy m-paying an ~ loan and bom~wing
an additional amount thwu~ a new loan.
In ord~' to mfina~:~ an exi~i~g [oa~ I parfiCil~nt must ~luest a n~w Ioa~ in writing ~ an ~g~ ~
by ~be l~am Aami~uor. Spomal txms~t must accompany tbe applic~o~ when su~ cc~.~r L~ ~ ~ ~e
~nploye~ in Se:fion m above. Tae amoun: of a new lorn ~ for fl~e propose of ~efia,uc~g h mb~:t m
XIV. LOAN D~AULT
dcfault OCCas. Therefore, g~e alno~t of Ibe c.~; ,; ...a;,g joan al gae time of fl~ clefau]L inclucU~g accrued in~
c]~ed ~ fl~t time, The dlsw,~m/oa m~y be mbje~ w m~.ez a~d po~'bly a pe~ f~ t~ty ~.
If a pard~ipanl has s~pzr,~d ~m s~rvic~ and defauhs on a loan, ~he~ cbc loan will be fon~l~ ~g ~
calendar y~ar in whir~h ~e default occurs. The amolmt of i~ out.sunding loa~. h~cluding ~ ~ ~ be
mpomxl to the II~ as a di.gn'befio~ which may ~ subj~a zo u.x~s and possibly a p~ahy for ~,'ty wi~dra~-al.
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EXHIBIT 7_ , (continued)
If thc .F. mploy~r ka~ e,l~ ia Section X. ~d ~: ~mh~ n~ ~ pwvi~, a 1o~ ~o~ due ~d ~y~le
a ~V f~ ~y ~.
If ~c~ff~ ~ h ~on ~ ~ ~ ~ a~ ~ ~d~. al~ ~ ~ ~d ~]e
w~ ~t ~ a~on of~ ~ of~ ~ ~ ~ ~t ~ ~ ~m
~ a ~m ~ ~Y ~ ~ to ~ ~ ~ly a ~ f~ ~y ~.
~. D~ MIN~ ACCOU~ ~D OD I~DING LOAN
Ifa ~ ~ ~m ~ ~d ~e ~fs ~ ~ ~t
~ I~~ ~ ~ ~ ~ ~ ~ ~ of~ I0.~ of~
~. , ,
~ ~Y ~ ~ f~ ~ ~ ~ ~& &~ ~ for ~
~U. Om~
EMPLOYER ACC.u' I ~. ICMA RETIREMENT CORPORATION
BY: BY:
A'FTF_~: ATTF.~:.
PP93F
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