RESOLUTION NO. __________

A RESOLUTION OF THE CITY COUNCIL AMENDING THE DEFERRED COMPENSATION PLAN OF THE CITY OF SUNNYVALE

WHEREAS, the City of Sunnyvale offers its employees a deferred compensation plan under section 457 of the Internal Revenue Code ("the Plan"), pursuant to Resolution No. 301-80, as amended by Resolutions Nos. 264-81, 159-90, 109-98, 114-01, 123-01, and 166-02; and

WHEREAS, California Government Code §20909, effective January 1, 2004, allows active members of the California Public Employees Retirement System (CalPERS) to purchase  up to five years of Additional Retirement Service Credit; and,

WHEREAS, CalPERS has authorized the use of plan-to-plan transfers from 457 government plans to pay for Additional Retirement Service Credit; and

WHEREAS, the City Council desires to give employees flexibility to use their funds in the Plan for the purpose of purchasing Additional Retirement Service Credit; and

WHEREAS, in addition, the Plan currently provides that employees may apply to the Personnel Board to withdraw funds from the Plan due to unforeseeable emergencies; and

WHEREAS, the City Council desires that the City Manager rather than the Personnel Board be given the authority to review requests for emergency withdrawals from the 457 Plan; and,

WHEREAS, the language in the 457 Plan concerning emergency withdrawals also needs to be amended in order to conform to current IRS regulations,

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SUNNYVALE THAT:

1.       Section 2(l) of the City's Deferred Compensation Plan is amended as follows:

"Unforeseeable Emergency" means severe financial hardship to of the Participant resulting from a sudden and unexpectedan illness or accident of the Participant, the Participant's spouse, or the Participant's or of a dependent (as defined in Section 152(a) of the Internal Revenue Code);  of the Participant, loss of the Participant's property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner's insurance, e.g., as a result of a natural disaster);, or other similar extraordinary and unforeseeable circumstances arising as a result of out of events beyond the control of the Participant.  The circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case.  Examples of an unforeseeable emergency would be the imminent foreclosure of or eviction of from the Participant's primary residence, the need to pay for medical expenses, including non-refundable deductibles, as well as the cost of prescription drug medication,  or the need to pay for the funeral expenses of a spouse or dependent (as defined in Internal Revenue Code Section 152(a).)a family member.  Examples of what are not considered to be Unforeseeable Emergencies include the purchase of a home and the payment of college tuition. the need to send a Participant's child to college or the desire to purchase a home."

2.       Section 3 of the City's Deferred Compensation Plan is amended as follows:

          (a)      [no change]

(b)      Except as otherwise provided, Eemployees may appeal to the Personnel Board the application of any rule, regulation, interpretation, or revocation of a Deferred Compensation Agreement, and the decision of the Personnel Board shall be conclusive and binding upon all interested parties.  With regard to requests for withdrawals under Section 8 of this Plan, the City Manager's decision shall be final and there shall be no appeal to the Personnel Board.

3.       Section 8 of the City's Deferred Compensation Plan is amended as follows:

(a)      Due to Unforeseeable Emergency a Participant may apply to the Personnel Board City Manager for withdrawal from the Plan of some or all of the amount credited to his or her Deferred Compensation Plan prior to Termination of Service.

(b)      [no change]

(c)      In the event a Participant is granted permission by the Personnel Board City Manager to make a withdrawal, the amount withdrawn shall be limited to that amount determined by the Personnel Board City Manager to be reasonably necessary to satisfy the emergency need (which may include any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution).

                   (d)      [no change]

          4.       Section 12 of City's Deferred Compensation Plan is amended as follows:

                   (a)      [no change]

                   (b)      [no change]

(c)      Permissive Service Credit Transfers.

(i)       If a Participant is also a participant in a tax-qualified defined benefit governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986, as amended) that provides for the acceptance of plan-to-plan transfers with respect to the Participant, then the Participant may elect to have any portion of the Participant's Account balance transferred to the defined benefit governmental plan.  A transfer under this section may be made before the Participant has a severance of employment.

(ii)      A transfer may be made under this section only if the transfer is either for the purchase of permissive service credit (as defined in section 415(n)(3)(A) of the Internal Revenue Code of 1986, as amended) under the receiving defined benefit governmental plan or a repayment to which section 415 of the Code does not apply by reason of section 415(k)(3) of the Code.

Adopted by the City Council at a regular meeting held on August _____, 2005, by the following vote:

(SEAL)

APPROVED AS TO FORM AND LEGALITY:

______________________________________

David E. Kahn, City Attorney