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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). 1 (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. 1 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: /) I U¿··~ . ty ./ APPROVED AS TO FORM AND ~ c;J¿ Mayor 1