Fort Walton Beach Resolution — 2009-45 - Establish Defined Plan after 1/10 — reading text

1) Any Mandatory Participant Contributions that are not " picked up" by the Employer or Voluntary Participant Contributions, to the extent they would reduce the Excess Amount, will be returned to the Participant; 2) If after the application of paragraph (1) an Excess Amount still exists, and the Participant is covered by the Plan at the end of the Limitation Year, the Excess Amount in the Partici- pant's Account will be used to reduce Employer Contributions (including any allocation of forfeitures) for such Participant in the next Limitation Year, and each succeeding Limitation Year if necessary; 3) If after the application of paragraph (1) an Excess Amount still exists, and the Participant is not covered by the Plan at the end of the Limitation Year, the Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer Contributions (including allocation of any forfeitures) for all remaining Participants in the next Limitation Year, and each succeeding Limitation Year if necessary; 4) If a suspense account is in existence at any time during a particular Limitation Year, all amounts in the suspense account must be allocated and reallocated to Participants' accounts before any Employer or any Employee contributions may be made to the Plan for that Limita- tion Year. Excess Amounts in a suspense account may not be distributed to Participants or former Participants. 5. 02 Participants in Another Defined Contribution Plan. a) Unless the Employer provides other limitations in the Adoption Agreement, this Section applies if, in addition to this Plan, the Participant is covered under another qualified defined contribution plan maintained by the Employer, or a welfare benefit fund, as defined in section 419( e) of the Code, maintained by the Employer, or an individual medical account, as defined by section 4151( )( 2) of the Code, maintained by the Employer, which provides an Annual Addition, during any Limitation Year. The Annual Additions which may be credited to a Participant's Account under this Plan for any such Limitation Year will not exceed the Maximum Permissible Amount reduced by the Annual Additions credited to a Participant's Account under the other plans and welfare benefit funds for the same Limitation Year. If the Annual Additions with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's Account under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the amount contributed or allocated will be reduced so that the Annual Additions under all such plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other defined contribu- tion plans and welfare benefit funds in the aggregate are equal to or greater than the Maximum Per- missible Amount, no amount will be contributed or allocated to the Participant's Account under this Plan for the Limitation Year. b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant in the manner described in Section 5. 01 (b). 7  c) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant' s actual Compensa- tion for the Limitation Year. d) If,pursuant to Subsection ( c) or as a result of the allocation of forfeitures, a Participant's Annual Additions under this Plan and such other plans would result in an Excess Amount for a Limitation Year, the Excess Amount will be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a welfare benefit fund or individual medical account will be deemed to have been allocated first regardless of the actual allocation date. e) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of, 1) The total Excess Amount allocated as of such date, multiplied by the ratio of: i) the Annual Additions allocated to the Participant for the Limitation Year as of such date under this Plan to ii) the total Annual Additions allocated to the Participant for the Limitation Year as of such date under this and all the other prototype qualified defined contribution plans. f) Any Excess Amount attributed to this Plan will be disposed in the manner described in Section 5. 01 (d). 5. 03 Definitions. For the purposes of this Article, the following definitions shall apply: a) Annual Additions: The sum of the following amounts credited to a Participant's account for the Limita- tion Year: 1) Employer Contributions; 2) Forfeitures; 3) Employee contributions; and 4) Allocations under a simplified employee pension. Amounts allocated, after March 31, 1984, to an individual medical account, as defined in section 4151( )( 2) of the Code, which is part of a pension or annuity plan maintained by the Employer, are treated as Annual Additions to a defined contribution plan. in the Limitation Year For this purpose, any Excess Amount applied under Sections 5. 01( d) or 5. 02( f) to reduce Employer Contributions will be considered Annual Additions for such Limitation Year. b) Compensation: A Participant's wages, salaries, and fees for professional services and other amounts received ( without regard to whether an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income ( including, but not limited to, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan ( as described in Treas. Reg. section 1.62- 2( c))), and excluding the following: 1) Employer Contributions to a plan of deferred compensation which are not includible in the Employee's gross income for the taxable year in which contributed, or Employer Contributions 8  under a simplified employee pension plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation; and 2) Other amounts which received special tax benefits, or contributions made by the Employer whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in section 403( b) of the Code ( whether or not the amounts are actually excludable from the gross income of the Employee). 3) Notwithstanding the above, Compensation shall include: i) ( of the Code), and any elective deferrals ( as defined in section 402( g) 3) ii) any amount which is contributed or deferred by the Employer at the election of the Employee and which is not includible in the gross income of the Employee by reason 4) or 457 of the Code. of sections 125, 132( f)( For purposes of applying the limitations of this Article, Compensation for a Limitation Year is the Compensation actually paid or made available during such year. c) Defined Contribution Dollar Limitation: $ 40, 000, as adjusted for increases in the cost- of-living in accordance with section 415( d) of the Code. d) Employer: The Employer that adopts this Plan. e) Excess Amount: The excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. Any Excess Amount shall include allocable income. The income allocable to an Excess Amount is equal to the sum of allocable gain or loss for the Plan Year and the allocable gain or loss for the period between the end of the Plan Year and the date of distribution ( the gap period). The Plan may use any reasonable method for computing the income allocable to an Excess Amount, provided that the method is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants' Accounts. f) Limitation fear: A calendar year, or the twelve (12) consecutive month period elected by the Employer in the Adoption Agreement. All qualified plans maintained by the Employer must use the same Limitation Year. If the Limitation Year is amended to a different twelve (12) consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amend- ment is made. g) Maximum Permissible Amount: The maximum Annual Addition that may be contributed or allocated to a Participant's Account under the Plan for any Limitation Year shall not exceed the lesser of: 1) The Defined Contribution Dollar Limitation, or 2) One hundred percent (100%) ( 0 for Limitation Years before 250/ January 1, 2002) of the Participant's Compensation for the Limitation Year. The compensation limit referred to in ( 2) shall not apply to any contribution for medical benefits after of the Code) separation from service ( within the meaning of section 401 (h) or section 419A(f)2) ( which is otherwise treated as an annual addition.