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RES-11055 Retirement Health Savings ProgramRESOLUTION NO. 11055 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORANGE ESTABLISHING A RETIREMENT HEALTH SAVINGS PROGRAM FOR THE ORANGE MANAGEMENT ASSOCIATION. WHEREAS, the City of Orange, hereinafter referred to as "City," has employees rendering valuable services; and WHEREAS, the establishment of a retiree health savings plan for such employees serves the interests of the City by enabling it to provide reasonable security regarding such employees' health needs during retirement, by providing increased flexibility in its personnel management system and by assisting in the attraction and retention of competent personnel; and WHEREAS, the City has determined that the establishment of the retirement health savings plan (the Plan) serves the above objectives and should be of no cost to the City. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Orange adopts the Plan in the form of ICMA Retirement Corporation's VantageCare Retirement Health Savings program which includes the Employer VantageCare Retirement Health Savings Plan Adoption Agreement which is attached hereto as Exhibit "A." BE IT FURTHER RESOLVED that the assets of the Plan shall be held in trust, with the City serving as a trustee, for the exclusive benefit of the Orange Management Association Plan Participants and their beneficiaries, and the assets of the plan shall not be diverted to any other purpose prior to the satisfaction of all liabilities of the Plan. The City has authorized the Mayor to execute the Declaration of Trust of the City of Orange Integral Part Trust in the form of the model trust made available by the ICMA Retirement Corporation. The City shall have no tax liability to Plan Participants if any future determination is made that the Plan or any Plan Participant is not exempt from federal or state taxes. BE IT FURTHER RESOLVED that the Human Resources and Personnel Relations Director shall be the coordinator and contact for the Plan and shall receive necessary reports, notices, etc. BE IT FURTHER RESOLVED that the Mayor is authorized to execute all documents necessary to implement the Plan. ADOPTED this 12th day of December 2017. Teresa . Smith, Vayor, City of Orange ATTEST: Mary E. Murphy, City Clerk, City of Orange I, MARY E. MURPHY, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the 12th day of December 2017, by the following vote: AYES:COUNCILMEMBERS:Alvarez, Whitaker, Smith, Murphy, Nichols NOES:COUNCILMEMBERS:None ABSENT:COUNCILMEMBERS:None ABSTAIN:COUNCILMEMBERS:None Mary E. Murphy, City Clerk, City of Orange Resolution No. 11055 2 EXHIBIT "A" EMPLOYER VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN ADOPTION AGREEMENT Behind this sheet.] Resolution No. 11055 VANTAGECARE RETIREMENT HEALTH SAVINGS (RHS) ADOPTION AGREEMENT Plan Number. 8 03741 Select as applicable: Standalone RHS Integrated RHS []Amendment to Existing Plan © New Plan I. Employer Name City of Orange State: CA II. The Employer hereby attests that it is a unit of a state or local government or an agency or instrumentality of one or more units of a state or local government. III. Plan Dates: A. Plan Effective Date 12/12/2017 B. Plan Year. Enter the annual accounting period for the RHS program 1 11 to 12/31 IV. The Employer intends to utilize the Trust to fund only welfare benefits pursuant to the following welfare benefit plan(s) established by the Employer: Model Welfare Plan V. Eligible Groups, Participation and Participant Eligibility Requirements A. Eligible Groups I D The following group or groups of Employees are eligible to participate in the Employer's welfare benefits plan identified in Section IV. (check all applicable boxes): All Employees All Full-Time Employees Non -Union Employees Public Safety Employees — Police Public Safety Employees — Firefighters General Employees Collectively-Bargained Employees (Specify unit(s)) Other (specify group( Orange Mana gement AssoClailon The Employee group(s) specified must correspond to a group(s) of the same designation that is defined in the statutes, ordinances, rules, regulations, personnel manuals or other documents or provisions in effect in the state or locality of the Employer. B. Participation Mandatory Partieipation: All Employees in the covered group(s) are required to participate in the Plan and shall receive contributions pursuant to Section VI. If the Employer's underlying welfare benefit plan is in whole or part a non- collcctively bargained plan that allows reimbursement for medical expenses other than insurance premiums, the nondiscrimination requirements of Internal Revenue Code (IRC) Section 105(h) will apply. These rules may impose taxation on the benefits received by highly compensated individuals if the Plan discriminates in favor of highly compensated individuals in terms of eligibility or benefits. The Employer should discuss these rules with appropriate counsel. C. Participant Eligibility Requirements 1. Minimum service: The minimum period of service required for participation is -M (write N/A if no minimum service is required). Minimum age: The minimum age required for eligibility to participate is -M (write N/A if no minimum age is required). VI. Contribution Sources and Amounts A. Definition of Earnings The definition of Earnings will apply to all RHS Contribution Features that reference "Earnings " including Direct Employer Contributions (Section VI.B.1.) and Mandatory Employee Compensation Contributions (Section VI.B.2.). Definition of earnings: B. Direct Employer Contributions and Mandatory Contributions 1. Direct Employer Contributions The Employer shall contribute on behalf of each Participant of Earnings' each Plan Year A discretionary amount to be determined each Plan Year Other (describe): 2. Mandatory Employee Compensation Contributions The Employer will make mandatory contributions of Employee compensation as follows: Reduction in Salary - -% of Earnings or $ will be contributed for the Plan Year. Decreased Merit or Pay Plan Adjustment -All or a portion of the Employees' annual merit or pay plan adjustment will be contributed as follows: An Employee shall not have the right to discontinue or vary the rate of Mandatory Contributions of Employee Compensation. I Mandatory Employee Leave Contributions The Employer will make mandatory contributions of accrued leave as follows (provide formula for determining Mandatory Employee Leave contributions): El Accrued sick Leave 100% of eligible cash out value upon retirement from City Accrued Vacation Leave Other (specify type of leave) Accrued Leave An Employee shall not have the right to discontinue or vary the rate of mandatory leave contributions. Non - collectively bargrained plans that reimburse medical expenses other than insurance premiums should consult their benefits counsel regarding welfare plan nondiscrimination rules if the employer elects to make contributions based on a percentage of earnings. II:14 C. Limits on Total Contributions (check one box) The total contribution by the Employer on behalf of each Participant (including Direct Employer and Mandatory Employee Contributions) for each Plan Year shall not exceed the following limit(s) below. Limits on individual contribution types are defined within the appropriate section above. Definition of earnings: Same as Section VI.A. Other for the Plan year. There is no Plan- defined limit on the percentage or dollar amount of earnings that may be contributed. of earnings VII. Vesting for Direct Employer Contributions A. Vesting Schedule (check one box) 0 The account is 100% vested at all titres. The following vesting schedule shall apply to Direct Employer Contributions as outlined in Section VIAL: Years of Service Vesting Completed Percentage 9 0 9 0 Yo 9'0 9 0 90 9'0 tYo aYo B. The account will become 100% vested upon the death, disability, retirement', or attainment of benefit eligibility (as outlined in Section D) by a Participant. Definition of retirement includes a separation from service component and is further defined by (check one): C. Any period of service by a Participant prior to a rehire of the Participant by the Employer shall not count toward the vesting schedule outlined in A above. VIII. Forfeiture Provisions If a Participant separates from service prior to full vesting, non vested funds in the Participant's account shall be forfeited in accordance with the box checked under this section. Upon the death of a participant, surviving spouse, and all surviving eligible dependents (as outlined in Section XI), funds remaining in the Participants account shall be revert to the Trust in accordance with the box checked under this section. The primary retirement plan of the Employer Separation from service Other I1:15 If a Participant permanently opts out and waives future reimbursements, as allowed under IRS Notice 2013-54, all funds in the Participant's account at the time of waiver shall be forfeited in accordance with the box checked under this section.* Remain in the Trust to be reallocated among all Plan Participants with a balance as Direct Employer Contributions for the nest and succeeding contribution cyde(s). ** Q Remain in the Trust to be reallocated on an equal dollar basis among all Plan Participants with a balance. ** Remain in the Trust to be reallocated among all Plan Participants based upon Participant account balances. ** Revert to the Employer via check. IX. Eligibility Requirements to Receive Medical Benefit Payments from the VantageCare Retirement Health Savings Program A. A Participant is eligible to receive benefits: At retirement only (also complete Section B.) Definition of retirement. Same as Section VII.B. Other Q At separation from service with the following restrictions QNo restrictions Other B. Termination prior to general benefit eligibility: In case where the general benefit eligibility as outlined in Section IX.A includes a retirement component, a Participant who separates from service of the Employer prior to retirement will be eligible to receive benefits: Immediately upon separation from service Other C. A Participant that becomes totally and permanently disabled as defined by the Social Security Administration as defined by the Employer's primary retirement plan other will become immediately eligible to receive medical benefit payments from his/her account under the Employer's welfare benefits plan. D. Upon the death of the Participant, benefits shall become payable as outlined in Section XI. Ifthe Employer's RHS Program does not limit eligibility to participana who have separated from service, the employer will be required to provide further direction to ICMA -RC regarding the treatment ofpossible contribution; that are required to be made following the participant's waiver. If the forfeited balance is small whereby the reallocation amount to each Plan Participant with a balance is minima4 the assets will revert to employer's forfeiture account for further direction from the employer. If there are participants without a balance who should receive forfeiture assets, please pro vide alternative instructions to ICMA -RC on the forfeiture reallocation notice. II:16 X. Pertnissible Medical Benefit Payments Benefits eligible for reimbursement consist of: Q All Medical Expenses eligible under IRC Section 213 other than (i) direct long -term care expenses, and (ii) expenses for medicines or drugs which are not prescribed drugs (other than insulin). The following Medici Expenses eligible under IRC Section 213 other than W direct long -term care expenses, and (ii) expenses for medicines or drugs which are not prescribed drugs (other than insulin). Select only the expenses you wish to cover under the Employer's welfare benefits plan: Medical Insurance Premiums Medical Out -of- Pocket Expenses* Medicare Part B Insurance Premiums Medicare Part D Insurance Premiums Medicare Supplemental Insurance Premiums Prescription Drug Insurance Premiums COBRA Insurance Premiums Dental Insurance Premiums Dental Out -of- Pocket Expenses* Vision Insurance Premiums Vision Out -of- Pocket Expenses* Qualified Long -Term Care Insurance Premiums Non - Prescription medications allowed under IRS guidance* Other qualifying medical expenses (describe)* Non - collectively bargained plans that reimburse medical expenses other than insurance premiums should consult their benefta counsel regarding welfare plan nondiscrimination rules ifthe employer eken to make contributions based on a percentage of earnings. X1. Benefits After the Death of the Participant In the event of a Participant's death, the following shall apply: A. Surviving Spouse and/or Surviving Dependents Upon the death of a participant, the surviving spouse and/or surviving eligible dependents (as defined in Section XII.D.) of the dccased Participant are immediately eligible to maintain the Participants RHS account and utilizing the remaining balance to fund eligible medical benefits specified in Section X above. Upon notification of a Participants death, the Participants account balance will be transferred into VT II Cash Management Fund ** (or another fund selected by the Employer). The account balance may be reallocated by the surviving spouse or dependents. Before investing in the Fund you should carefully confider your investmentgoab, tolerance for risk, investment time horizon, and personal circumstances. There is no guarantee that the Fund will meet its investment obje d ve and you can lose money. For additional information regarding the Fund including a description of the principal risks, please consult the VaniageTrust II Funds Disclosure Memorandum and fund fact shat, which is avaiGable when you log in at wwm.icmamorg or upon request by calling 800 -669 -7400. If the plan's defauk fund it not the VT II Cash Management Fund please read the disclosure materials or prospectus applicable to the defaultfund If a Participant's account balance has not been fully utilized upon the death of the eligible spouse, the account balance may continue to be utilized to pay benefits of eligible dependents. Upon the death of all eligible dependents, the account will revert in accordance with the Employer's election under Section VIII of the VantageCare RHS Adoption Agreement. 1I:17 B. No Surviving Spouse or Surviving Dependents If there are no living spouse or dependents at the time of death of the Participant, the account will revert in accordance with the Employer's election under Section VIII of the VantagrCare RHS Adoption Agreement. XII. The Plan will operate according to the following provisions: A. Employer Responsibilities 1. The Employer will submit all VantageCare Retirement Health Savings Plan contribution data via electronic submission. 2. The Employer will submit all VantageCare Retirement Health Savings Plan Participant status updates or personal information updates via electronic submission. This includes but is not limited to termination notification, benefit eligibility, and vesting notification. B. Participant account administration and asset -based fees will be paid through the redemption of Participant account shares, unless agreed upon otherwise in the Administrative Services Agreement. C. Assignment of benefits is not permitted. Benefits will be paid only to the Participant, his /her Survivors, the Employer, or an insurance provider (as allowed by the claims administrator). Payments to a third -parry payee (e.g., medical service provider) are not permitted with the exception of reimbursement to the Employer or insurance provider (as allowed by the claims administrator). D. An eligible dependent is (a) the Participant's lawful spouse, (b) the Participant's child under the age of 27, as defined by IRC Section 152(f)(1) and Internal Revenue Service Notice 2010 -38, or (c) any other individual who is a person described in IRC Section 152(a), as clarified by Internal Revenue Service Notice 2004 -79. E. The Employer will be responsible for withholding, reporting and remitting any applicable taxes for payments which are deemed to be discriminatory under IRC Section 105(h), as outlined in the VantageCare Retirement Health Savings Employer Manual. XIII. Employer Acknowledgements A. The Employer hereby acknowledges it understands that failure to properly fill out this VantageCare Retirement Health Savings Adoption Agreement may result in the loss of tax exemption of the Trust and /or loss of tax - deferred status for Employer contributions. B. Check this box if you are including supporting documents that include plan provisions. EMPLOYER SIGNATURE Date: Title. Date: Title•. rr -tA