HomeMy WebLinkAboutResolution 1988-003
RESOLUTION NO. R-88-3
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS,
TEXAS, THAT:
(1) The Plan titled" City of North Richland Hills Flexible
Compensation Plan", a copy of which has been presented to the Council at
this meeting, is hereby approved and adopted, effective as of February 1 ,
1988..
(2) The proper officers of this organization be and they are hereby
authorized to do all acts and things necessary and proper to carry out the
purpose of said Plan and to make such amendments and changes, if any, as
may be necessary to comply with the applicable sections of the Internal
Revenue Code of 1986;
(3) Announcement shall be made to all employees covered by the Plan
concerning the adoption of said Plan and the provisions thereof.
ARTICLE 1
Purpose and Definition
1.1 Purpose: The purpose of this legal instrument. is to set forth
the Flexible Compensation Plan of the Employer, which will provide
Employees the option of electing benefits as herein described.
1. 2 Legal Status: This Plan is a "cafeteria plan" under Section 125
of the Code and the Employer will take whatever steps are necessary to
maintain the Plan as "nondiscriminatory" under said Section 125. The steps
the Employer will take may include, but are not limited to, a change in the
method of determining the Participant's Pre-Tax Dollars created by the Plan
and/or the method of allocating the Pre-Tax Dollars to individual
Participants.
1.3 Definitions:
have the meanings set
otherwise:
The following words when appearing in this plan
forth below unless the context clearly denotes
(a) City Council:
Richland Hills, Texas.
The City Council on the City of North
(b) Code: The Internal Revenue Code of 1986, as amended from
time to time.
(c) Compensation: For any pay period, an Employee's cash
remuneration for personal services, received from the Employer, prior
to any conversion to Pre-Tax Dollars, and prior to any deferrals under
Code Section 401(k).
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(d) Corporation: City of North Richland Hills, Texas , a
municipal corporation organized and existing under the laws of the
State of Texas , or its successor or successors.
(e) Effective Date:
February 1· , 1988.
(f) Employee: Any person who, on or after the Effective Date,
is receiving remuneration from the Employer for regular, personal
services rendered to an Employer, other than a person covered under a
collective bargaining agreement that does not provide for
participation in this Plan.
(g) Employer: The Municipal Corporation and any organization
which has adopted this Plan with the consent of the Employer, or its
successor or successors.
(h) Participant: An Employee of the Employer who is eligible to
participate in this Plan in accordance with Article II hereof, and
elects to so participate.
(i) Plan: City of North Richland Hills
Compensation Plan, as it may be amended from time to time.
Flexible
(j) Plan Administrator: The Municipal Corporation or, if
applicable, the person(s) appointed to administer the Plan in
accordance with Article II.
(k) Plan
Februarv 1
Year: The
and ending on
twelve (12)
Januarv 31
month period beginning
of each year.
on
(I) Pre-Tax Dollars: The dollar credits made available to a
Participant under this Plan by an Employer in exchange for an equal
portion of such Participant's Compensation, determined in accordance
with Article III hereof.
1.4 Construction: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender; the singular may include
the plural; and vice versa unless the context clearly indicates to the
contrary.
ARTICLE II
Eligibility for Participation
2.1 Eligibility: An Employee of an Employer shall become eligible to
be a Participant hereunder upon becoming eligible to be a participant under
the group medical plan of the Employer.
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ARTICLE III
Sources of Pre-Tax Dollars for Participants
3.1 Pre-Tax Dollars: This Article explains the source of Pre-Tax
Dollars and how this source is allocated for the Participant's use.
3.2 Salary Exchange: Each Participant shall automatically receive
Pre-Tax Dollar credits during any Plan Year in lieu of a certain amount of
the Compensation otherwise available to such Participant for such year.
The amount of Compensation that will be so exchanged for any pay period
will equal the amount of premiums being paid pursuant to Article IV hereof
to cover the Participant (and dependents if applicable) for such pay
period.
The Participant will be credited with Pre-Tax Dollars equal to the
amount of Compensation so exchanged as of the end of each pay period. The
exchange of Compensation for Pre-Tax Dollars to be utilized under Article
IV hereof will be effective on a Plan Year basis and may not be changed
except as provided under Section 3.3 hereof.
3.3 Change of Contributions: In general, the amount of contributions
made pursuant to Section 3.2 hereof may not be changed during the Plan
Year. However, a change in amount will be permitted, and a new
contribution for the remainder of the Plan Year may be made, if such change
is occasioned by, and consistent with, a change in family status.
Situations resulting in a change in family status will include, but are not
limited to, (i) marriage or divorce of the Participant. or deatI:t of the
spouse or any covered dependent, (ii) birth or adoption of a child, and
(iii) termination or initiation of employment of the spouse of any covered
dependent.
..
ARTICLE IV
Spending Pre-Tax Dollars
4.1 Benefit Areas Where Pre-Tax Dollars Can Be Applied: Available
Pre-Tax Dollars will be used to pay for all of the Participant's coverage
premiums for himself and any covered dependents falling due on and after
February I, 1988 and during the Plan Year of participation, under the
group medical plan of the Employer.
4.2 How Pre-Tax Dollars Are Maintained Hereunder: No actual funds or
assets shall be maintained under this Plan. However, a record of a
Participant's Pre-Tax Dollar credits shall be maintained.
ARTICLE V
Administration
5.1 Administration: The Plan Administrator shall be the Municipal
Corporation and shall have the sole responsibility of control and
management of the operation of the Plan as described herein. However, the
Corporation may delegate its duties and responsibilities hereunder as Plan
Administrator to a Committee appointed by the City Council of the City.
5.2 Powers and Duties of the Plan Administrator: The Plan
Administrator shall have such powers and duties as may be necessary to
discharge its duties hereunder, including, but not by way of limitation,
the following:
(a) to construe and interpret the Plan and decide all
questions of eligibility;
(b) to prescribe procedures to be followed by Participants;
(c) to prepare and distribute, in such manner as is
determined to be appropriate, information explaining the Plan;
(d) to receive from Participants such information as shall
be necessary for the proper administration of the Plan;
(e) to exercise such authority and responsibility as it
deems appropriate in order to comply with the terms of the Plan
relating to the records of the Participants; and
(f) to appoint individuals to assist in the administration
of the Plan and any other agents it deems advisable, including
legal and actuarial counsel.
The Plan Administrator may rely upon any reasonable direction, or
information from a Participant relating to such Participant's participation
hereunder as being proper under this Plan, and is not required under this
Plan in inquire into the propriety of any such direction or information.
The Plan Administrator does not make any guarantee to any employee in any
manner for any loss or other event because of the Employee's participation
in the Plan.
5.3 Availability of Plan Details: The Plan Administrator has made
and may continue to make available descriptive materials to Participants
concerning how the Plan operates.
5.4 Rules and Decisions: The Plan Administrator may adopt such rules
and procedures as it deems necessary, desirable or appropriate. All rules
and decisions of the Plan Administrator shall be uniformly and consistently
applied to all Participants in similar circumstances. When making a
determination or calculation, the Plan Administrator shall be entitled to
rely upon information furnished by either a Participant or the legal
counsel of the Plan Administrator.
ARTICLE VI
Miscellaneous
6.1 Nonguarantee of Employment: Nothing contained in the Plan shall
be construed as a contract of employment between the Employer and any
Employee, or as a right of any Employee to be continued in the employment
of the Employer, or as a limitation of the right of the Employer to
discharge any of its Employees, with or without cause.
6.2 Rights to Employer's Assets: No employee or beneficiary shall
have any right to, or interest in, any assets of the Employer upon
termination of employment or otherwise, except as provided from time to
time under this Plan. All payments of benefits as provided for in the Plan
shall be made solely out of the assets of the Employer and the Employer
shall not be liable therefore in any manner.
ARTICLE VII
Amendments and Action by Corporation
7.1 Amendments: The City reserves the right to make from time to
time any amendment or amendments to this Plan without the assent of any
other party; however, no amendment shall have any retroactive adverse
effect on a Participant unless the City determines such amendment is
necessary or desirable to comply with applicable law.
7.2 Action by City: Any action by the City under this Plan may be by
resolution of its Board or by any person or persons duly authorized by
resolution of said City Council to take such action.
ARTICLE III
Plan Termination
8.1 Right to Terminate: The Plan may be terminated by resolution of
the City. Such resolution shall be delivered to the Plan Administrator and
to the Employer. Such termination may be so made without the consent being
obtained from the Plan Administrator, the Participants or their
beneficiaries, Employees or any other person interested.
8.2 Plan Termination: Upon the termination of the Plan, the rights
of all Participants affected thereby shall become payable as the Plan
Administrator may direct. Such direction may include (a) a continuation of
the Plan in order to apply remaining Pre-Tax Dollar credits in accordance
with Article IV, or (b) a distribution of the balance remaining to the
Participant's credit after payment of any expenses properly chargeable
thereto.
Passed and approved this
25th day of
January
, 1988.
ATTEST:
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APPROVED AS TO FORM AND
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Mayor
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