Reso 1053-03/1998RESOLUTION NO. 1053
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLECITOS WATER DISTRICT
AMENDING THE DISTRICT'S DEFERRED COMPENSATION PLAN
PURSUANT TO SECTION 457 OF THE INTERNAL REVENUE CODE
WHEREAS, the Board of Directors of the Vallecitos Water District ("District") established a
Deferred Compensation Plan ("Plan") pursuant to Section 457 of the Internal Revenue Code of 1986, as
amended ("Code") effective on January 1, 1984.
WHEREAS, the Small Business Job Protection Act of 1996 ("Act") changed certain provisions of
Code Section 457.
WHEREAS, the District desires to modify its Plan to comply with the provisions of the Act.
NOW, THEREFORE, BE IT RESOLVED, that the District hereby amends its Plan, effective
March 4, 1998, as follows:
1. Sections 2.03a and 2.03b are modified by adding the following language in parenthesis after
each place in which $7,500 or $15,000 appears:
"or such larger amount as may be prescribed by the Secretary of the Treasury."
2. Section 4.02f is restated as follows:
Pursuant to procedures determined by the Committee, a Participant may request that the Employer change
the designation of the Designated Institution utilized by the Employer to measure the Plan benefits payable
to the Participant.
3. Section 5.01 is revised by deleting the phrase "which would have been" from the first
sentence of the second paragraph, replacing the first reference to Employer with "Employee", and restating
the last paragraph to state:
-the premium is equal to the Participant 's Deferred Compensation which was applied as a premium to
such annuity contract or life insurance policy within a reasonable time subsequent to the reduction in the
Participant 's Compensation as authorized and as specified in the Participant's Participation Agreement.
4. Sections 5.02 and 5.03 are deleted in their entirety, Section 5.04 is renumbered 5.03, and
the following is added as a new Section 5.02:
The Employer will purchase an Investment Product and invest amounts of Deferred Compensation therein
in order to provide a fund from which it can satisfy its obligation to make benefit payments pursuant to
this Plan. Such Investment Product, and all amounts of Compensation deferred under this Plan, all
property and rights which may be purchased by the Employer with such amounts and all income
attributable to such amounts, property or rights to property shall be held in trust (or a custodial account
or annuity contract described in Code Section 4010 for the exclusive benefit of Participants and their
Beneficiaries. All such amounts shall not be subject to the claims of the Employer's general creditors.
Resolution No. 1053
Page 2
5. The new Section 5.03 is deleted and restated as follows:
The value of any benefit shall be determined by the actual value of the Investment Product at the time of
benefit payment, unaffected by any independent or arbitrary standard of calculation with respect to such
Investment Product. The Employer shall not be responsible for the investment or performance results of
such Investment Product.
6. A second paragraph is added to Section 6.01e, as follows:
A Participant who has elected to defer his benefits pursuant to the paragraph above may, subsequent to
his initial election, and prior to the commencement of benefits, elect to further defer payment of benefits
to a later date as allowed by the Plan. A Participant is only permitted to make one such election.
7. A new Section numbered 6.01h is added, as follows:
If prior to Separation from Service, the value of a Participant's benefits under the Plan does not exceed
$3, 500, the Participant may elect at any time to receive such value in a lump sum if 1) the Participant has
not deferred any Compensation under the Plan during the two year period ending on the date of
distribution; and 2) the Participant has not previously received a distribution under this subsection.
8. Article VIII is retitled "Leave of Absence and Military Service", the existing paragraph is
numbered Section 8.01, and the following is added as Section 8.02:
This Plan will be administered in accordance with Code Section 414(u) for employees who return to work
after absences from employment due to military service. This includes make-up contributions that were
not made during the employee 's period of military service. Contributions made up will be subject to the
annual contribution limitations for the year in which they relate, rather than the year they are made.
IN WITNESS WHEREOF, the District has caused this amendment to be signed and attested to by
its duly authorized officer.
PASSED, APPROVED, AND ADOPTED at a regular meeting held on this 4th day of March,1998,
by the following roll call vote:
AYES: Cruz, Davy, Ferguson, Hannan, Mason
NOES:
ABSTAIN:
ABSENT:
ATTEST:
William W. Rucker, Secretary
Board of Directors
Vallecitos Water District
Paul A. Da v President
Board of Directors
Vallecitos Water District