HomeMy WebLinkAboutAGENDA REPORT 2004 1006 CC REG ITEM 09GMOORPARK CITY COUNCIL
AGENDA REPORT
MP a. G.
TO: Honorable City Council
FROM: Cynthia L. Borchard, Administrative Services Director Yb
DATE: September 29, 2004 (CC Meeting of 10/6/04)
SUBJECT: Consider Adoption of Resolution Approving a Retirement
Health Savings (RHS) Program and Trust Agreement with
the ICMA Retirement Corporation
BACKGROUND
The City has contracted with International City /County
Management Association Retirement Corporation (ICMA -RC) for
participation in their 457 deferred compensation plan for all
employees since 1998. Additionally, in March 2004, Council
authorized the establishment of a 401(a) Money Purchase Plan
with ICMA -RC for the deferral of additional income for specified
employee groups (City Manager, Assistant City Manager and
Department Heads). ICMA -RC also offers a retirement health
savings plan that allows employees to accumulate assets to pay
for medical expenses on a tax -free basis that the City would
like to make available to employees.
DISCUSSION
As Council is aware, one of the challenging issues facing
employees is retiree health care. The cost of retiree health
care has been increasing dramatically, and no consensus exists
as to when double -digit inflation in health care costs and
health insurance premiums may end. Of particular concern is the
rise in prescription drug costs and in employee health insurance
programs that include such costs.
An individual retiring at age 55 with a pension benefit of
$60,000 per year will likely be paying as much as 20 percent of
that amount (after taxes) for health coverage.
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Most public sector employees will automatically be eligible for
Medicare Part A (hospital insurance) at age 65. (The exception
is those employees hired prior to April 1, 1986, in
jurisdictions not covered by FICA who are not eligible for Part
A through a spouse.) Medicare Part A coverage may be purchased
for $343 per month (2004 costs) if the retiree has up to 30
quarters of credit. If the retiree has 30 to 39 quarters of
credit, the cost is reduced to $189 per month.
Medicare Part B (medical insurance) may be purchased by
enrolling and paying a premium of $66.60 per month (2004 cost).
The combination of Medicare Part A and Medicare Part B may cover
about 50 percent of the cost of retiree health care.
Individuals who do not have retiree health coverage from a
former employer may elect to purchase Medigap insurance.
Medigap insurance policies offer different coverage, and to make
comparison among policies possible, policies are designated as
Medigap A (the least coverage) through Medigap J (the highest
level). Policies are available from insurance companies and
other organizations providing health care and range in cost from
about $80 per month for Medigap A in the least expensive area to
over $200 for Medigap J in a more expensive location. The costs
of Medigap policies in a given locale are listed on the Medicare
Web site at www.medicare.gov.
Those retirees who have better benefits often are still required
to meet co- payments, deductibles, and possibly prescription drug
costs, one of the most rapidly increasing components of medical
care. For many employees, prefunding of retiree health benefits
will become critical in the future.
Per Resolution Nos. 97 -1326 & 97 -1327 effective July 1, 1997,
the City currently contributes to CalPers for retiree medical
insurance coverage. We currently have only three retirees
receiving this monthly benefit ranging from $91.63 to $176.84
per month which provides an average of 27% of the total monthly
cost.
Consistent with the Memorandum of Agreement between the City and
Service Employees International Union AFL -CIO, CLC, Local 998,
and revised Management Benefits Resolution adopted by the City
Council on July 21, 2004, which both established a cafeteria
plan for medical insurance benefits for regular employees
effective January 1, 2005, staff will be scheduling an item on a
subsequent agenda to adopt a new resolution setting forth the
employer's contribution for each employee and annuitant with
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respect to participation under the Public Employees' Medical and
Hospital Care Act (CalPERS medical insurance). The intent is to
revise the employer's contribution to be the minimum CalPERS
medical insurance payment amount as specified in Section 22825
of the Government Code ($48.40 in calendar year 2005) . This
action will reduce the City's share of the retiree medical
insurance for future retirees.
One reason for doing so is that CalPERS requires the agency that
is the employer at the time of retirement to pay the employer
share of the retiree's medical insurance cost, regardless of how
long that person was actually employed by that agency. For
example, the City has had two (2) employees retire after less
than five (5) years of employment with the City of Moorpark, and
Moorpark will continue to pay the employer's portion of their
retiree medical insurance benefit for the remainder of their
retirement years.
The ICMA VantageCare Retirement Health Savings Plan (RHS) offers
a defined - contribution (individual account) program that is
flexible and customized to the City's and employees' needs.
Participation is elective by individuals and a number of
different funding methods are possible. Contributions are made
on a pre -tax basis, earnings are tax - deferred, and
reimbursements for eligible medical expenses are tax -free.
Contributions are in addition to the 401 (a) and 457 deferred
compensation plan limits. Some of the key features of the RHS
Plan proposed by the City at this time are: (Additional features
can be added in the future by amending the Plan)
• The plan allows for flexibility in plan design to meet
employer /employee needs and permits significant employee
choice.
• Employers can make direct contributions (including unused
employee sick and vacation leave dollars) to an employee's
account.
• Employees may make voluntary after -tax contributions.
• The plan may permit employee elective pre -tax contributions
on a one -time irrevocable election basis.
• All earnings grow tax - deferred, and as long as the account
assets are used to pay for qualified medical benefits,
withdrawals will be tax -free.
• Plan assets remaining at the time of the employee's death
are not forfeited. The account can continue to be used for
medical expenses by the employee's spouse or dependents, or
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passed on to beneficiaries, depending on the employer's
plan selections.
In summary, the cost of medical care goes up every year, while
escalating health care program costs and prescription drug
expenses are not fully covered by Medicare. The RHS Program
enables employees to save in advance for these costs. There are
several advantages to the City and employees.
• No future unfunded liability
• Low cost*
• Easy administration
• Attract and retain valued employees
• Additional security
• Flexibility
• Convenience
• Tax - deferred accumulation of savings
• Tax -free withdrawals
• Familiar investment options
* Employee Account Fee: Annual fee of 0.900 of plan assets, assessed
quarterly on account assets up to $7,000 with a minimum annual charge of $35.
Account assets between $7,001 and $23,000 will have an annual fee of 0.550 of
plan assets, assessed quarterly. Account balances exceeding $23,000 will be
charged a maximum annual fee of $150. Employer Plan Fee: None.
The recommended plan options proposed at this time and
incorporated into the attached plan document are as follows:
PLAN OPTION
RECOMMENDATION
Effective Date of the Plan
January 1, 2005
Eligible Groups
Full -Time Employees
Regular Part -Time Employees
City Council Members
Participant Eligibility
No minimum age or period of service
required
Contribution Options &
1. Irrevocable Election for Pre -tax
Amounts
Contributions from Compensation
Employees may elect (one -time
irrevocable) to contribute 1 -100 of
earnings (60 day election window upon
hire or between Nov. 1 and Dec. 30).
2. Irrevocable Election for Pre -tax
Contributions of Accrued Leave at
Separation of Employment
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The RHS Plan offers the same investment options as with the 457
and 401 (a) Plans with the primary difference being tax -free
withdrawals when account assets are used to pay for tax
qualified medical benefits, no IRS maximum contribution or
minimum required distribution. When participants leave
employment with the City prior to becoming eligible for medical
benefits, their account balance will continue to accrue tax -
deferred earnings until reaching eligibility for withdrawal.
IRS requirements do not currently allow the account to be rolled
into any other type of plan or another RHS account with a
different employer. There are no risks or costs to the City
other than the minimal administration costs for payroll
withholding and remittance to ICMA (the same as with any other
payroll deduction by employees).
STAFF RECOMMENDATION
Adopt Resolution No. 2004- approving a Retirement Health
Savings (RHS) Program and Trust Agreement with the ICMA
Retirement Corporation for participation by all full -time and
regular part -time employees and City Council members and
authorize the City Manager to sign the Plan Adoption Agreement
and Administrative Services Agreement Addendum with ICMA -RC.
In the year prior to separation of
employment, employee may elect (one-
time irrevocable) to contribute
accrued leave i.e. sick, vacation,
annual leave, comp time or
administrative leave rather than
taking traditional cash -out option.
3. Voluntary After -tax Contributions
Employee may contribute up to 10% of
earnings on a voluntary after -tax
basis.
Vesting Requirement
100% vested at all times
Eligibility Requirement to
Age 55 or retirement from City (Can
start receiving benefit
start receiving benefits while still
payments
employed).
Permissible Medical Benefit
All medical expenses eligible under
Payments
IRC Section 213 (no cosmetic surgery
or long -term care expenses).
De Minimis Accounts
Upon separation from service prior to
age 55, accounts with balances $5,000
or less shall be paid to the
participant.
The RHS Plan offers the same investment options as with the 457
and 401 (a) Plans with the primary difference being tax -free
withdrawals when account assets are used to pay for tax
qualified medical benefits, no IRS maximum contribution or
minimum required distribution. When participants leave
employment with the City prior to becoming eligible for medical
benefits, their account balance will continue to accrue tax -
deferred earnings until reaching eligibility for withdrawal.
IRS requirements do not currently allow the account to be rolled
into any other type of plan or another RHS account with a
different employer. There are no risks or costs to the City
other than the minimal administration costs for payroll
withholding and remittance to ICMA (the same as with any other
payroll deduction by employees).
STAFF RECOMMENDATION
Adopt Resolution No. 2004- approving a Retirement Health
Savings (RHS) Program and Trust Agreement with the ICMA
Retirement Corporation for participation by all full -time and
regular part -time employees and City Council members and
authorize the City Manager to sign the Plan Adoption Agreement
and Administrative Services Agreement Addendum with ICMA -RC.
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Attachments:
1. Resolution No. 2004- with Attachment
2. Plan Adoption Agreement
3. Administrative Services Agreement Addendum
4. Model Welfare Benefit Plan
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RESOLUTION NO. 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, AUTHORIZING THE ESTABLISHMENT OF
A VANTAGECARE RETIREMENT HEALTH SAVINGS (RHS) PROGRAM
WITH THE ICMA RETIREMENT CORPORATION
WHEREAS, the City of Moorpark ( "CITY ") has employees
rendering valuable services; and
WHEREAS, the establishment of a retiree health savings plan
for such employees serves the interest of the Employer by
enabling it to provide reasonable security regarding such
employees' health needs during retirement, by providing
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 retiree health savings plan (the "Plan ") serves the above
objectives;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That the City Council does hereby authorize
the adoption of the Plan in the form of the ICMA Retirement
Corporation's VantageCare Retirement Health Savings program.
SECTION 2. That the Plan assets shall be held in trust,
with the City of Moorpark serving as trustee, for the exclusive
benefit of 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 executed the Declaration of Trust of the City of
Moorpark Integral Part Trust in the form of the model trust made
available by the ICMA Retirement Corporation.
SECTION 3. That the City hereby executes the
Declaration of Trust of the ICMA Retirement Trust, attached
hereto, intending this execution to be operative with respect to
any retirement or deferred compensation plan subsequently
established by the City, if the assets of the plan are to be
invested in the ICMA Retirement Trust.
SECTION 4. That the City Manager is hereby authorized
to designate the City staff member to act as coordinator and
contact for the Plan and shall receive necessary reports,
notices, etc.
Resolution No. 2004 -
Page 2
SECTION 5. The City Clerk shall certify to the adoption
of this resolution and shall cause a certified resolution to be
filed in the book of original Resolutions.
PASSED AND ADOPTED this 6th day of October, 2004.
ATTEST:
Deborah S. Traffenstedt, City Clerk
t
Attachment:
Declaration of Trust
Patrick Hunter, Mayor
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DECLARATION OF TRUST OF THE
City of Moorpark INTEGRAL PART TRUST
NAME OF EMPLOYER
VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
DECLARATION OF TRUST OF THE
City of Moorpark
NAME OF EMPLOYER
INTEGRAL PART TRUST
Declaration of Trust made as of the 6th day of
October
, 20 04 ,
by and between the City of Moorpark California a Municipality
Name of Employer State Type of Entity
(hereinafter referred to as the "Employer ") and City of Moorpark or its designee (hereinafter
Name of Trustee
referred to as the "Trustee ").
RECITALS
WHEREAS, the Employer is apolitical subdivision of the State of California
exempt from federal income tax under the Internal Revenue Code of 1986; and State
WHEREAS, the Employer provides for the security and welfare of its eligible employees (here-
inafter referred to as "Participants "), their Spouses, Dependents and Beneficiaries by the maintenance of
one or more post - retirement welfare benefit plans, programs or arrangements which provide for life,
sickness, medical, disability, severance and other similar benefits through insurance and self - funded
reimbursement plans (collectively the "Plan "); and
WHEREAS, it is an essential function and integral part of the exempt activities of the Employer
to assist Participants, their Spouses, Dependents and Beneficiaries by making contributions to and accu-
mulating assets in the trust, a segregated fund, for post - retirement welfare benefits under the Plan; and
WHEREAS, the authority to conduct the general operation and administration of the Plan is
vested in the Employer or its designee, who has the authority and shall be subject to the duties with
respect to the trust specified in this Declaration of Trust; and
WHEREAS, the Employer wishes to establish this trust to hold assets and income of the Plan
for the exclusive benefit of Plan Participants, their Spouses, Dependents and Beneficiaries;
NOW, THEREFORE, the parties hereto do hereby establish this trust, by executing the Declara-
tion of Trust of the City of Moorpark Integral Part Trust (hereinafter referred to
Name of Employer
as the "Trust "), and agree that the following constitute the Declaration of Trust (hereinafter referred to as
the "Declaration "):
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ARTICLE I
Definitions
1.1 Definitions. For the purposes of this Declaration, the following terms shall have the respective
meanings set forth below unless otherwise expressly provided.
(a) "Account" means the individual recordkeeping account maintained under the Plan to record the
interest of a Participant in the Plan in accordance with Section 7.4.
(b) "Administrator" means the Employer or the entity designated by the Employer to carry out admin-
istrative services as are necessary to implement the Plan.
(c) "Beneficiary" means the Spouse and Dependents, or the person or persons designated by the
Participant pursuant to the terms of the Plan, who will receive any benefits payable hereunder in
the event of the Participant's death. A Beneficiary may also designate a beneficiary(ies) to receive
any benefits payable hereunder in the event of the preceding Beneficiary's death, until the satisfac-
tion of all liabilities under the Plan to provide benefits. In the case where there is no designated
Beneficiary, any amount of contributions, plus accrued earnings thereon, remaining in the Account
must, under the terms of the Plan, be returned to the Trust.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time to time.
(e) "Dependent" means an individual who is a person described in Code Section 152(a).
(f) "investment Fund" means any separate investment option or vehicle selected by the Employer in
which all or a portion of the Trust assets may be separately invested as herein provided. The
Trustee shall not be required to select any Investment Fund.
(g) "Nonforfeitable Interest" means the interest of the Participant or the Participant's Spouse, Depend-
ent or Beneficiary (whichever is applicable) in the percentage of Participant's Employer's contribu-
tion which has vested pursuant to the vesting schedule specified in the Employer's Plan. A Partici-
pant shall, at all times, have a one hundred percent (100°/x) Nonforfeitable Interest in the Partici-
pant's own contributions.
(h) "Spouse" means the Participant's lawful spouse as determined under the laws of the state in
which the Participant has his primary place of residence.
(i) "Trust" means the trust established by this Declaration.
(j) "Trustee" means the Employer or the person or persons appointed by the Employer to serve in
that capacity.
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VANTAGECARE RETIREMENT HEALTH SAVINGS ELAN
ARTICLE 11
Establishment of Trust
2.1 The Trust is hereby established as of the date set forth above for the exclusive benefit of Partici-
pants, their Spouses, Dependents and Beneficiaries.
ARTICLE 111
Construction
3.1 This Trust and its validity, construction and effect shall be governed by the laws of the State of
California
State
3.2 Pronouns and other similar words used herein in the masculine gender shall be read as the feminine
gender where appropriate, and the singular form of words shall be read as the plural where appropriate.
3.3 If any provision of this Trust shall be held illegal or invalid for any reason, such determination shall
not affect the remaining provisions, and such provisions shall be construed to effectuate the purpose of
this Trust.
ARTICLE IV
Benefits
4.1 Benefits. This Trust may provide benefits to the Participant, the Participant's Spouse, Dependents and
Beneficiary(ies) pursuant to the terms of the Plan.
4.2 Form of Benefits. This Trust may provide benefits by cash payment. This Trust may reimburse the
Participant, his Spouse, Dependents or Beneficiary(ies) for insurance premiums or other payments ex-
pended for permissible benefits described under the Plan. This trust may reimburse the Employer, or the
Administrator for insurance premiums.
ARTICLE V
General Duties
5.1 It shall be the duty of the Trustee to hold title to assets held in respect of the Plan in the Trustee's name
as directed by the Employer or its designees in writing. The Trustee shall not be under any duty to com-
pute the amount of contributions to be paid by the Employer or to take any steps to collect such amounts
as may be due to be held in trust under the Plan. The Trustee shall not be responsible for the custody,
investment,'safekeeping or disposition of any assets comprising the Trust, to the extent such functions are
performed by the Employer or the Administrator, or both.
5.2 it shall be the duty of the Employer, subject to the provisions of the Plan, to pay over to the Adminis-
trator or other person designated hereunder from time to time the Employer's contributions and Partici-
pants' contributions under the Plan and to inform the Trustee in writing as to the identity and value of the
assets titled in the Trustee's name hereunder and to keep accurate books and records with respect to the
Participants of the Plan.
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ARTICLE VI
Investments
6.1 The Employer may appoint one or more investment managers to manage and control all or part of the
assets of the Trust and the Employer shall notify the Trustee in writing of any such appointment.
6.2 The Trustee shall not have any discretion or authority with regard to the investment of the Trust and
shall act solely as a directed Trustee of the assets of which it holds title. To the extent directed by the
Employer (or Participants, their Spouses and Dependents, or Beneficiaries to the extent provided herein)
the Trustee is authorized and empowered with the following powers, rights and duties, each of which the
Trustee shall exercise in a nondiscretionary manner:
(a) To cause stocks, bonds, securities, or other investments to be registered in its name as Trustee
or in the name of a nominee, or to take and keep the same unregistered;
(b) To employ such agents and legal counsel as it deems advisable or proper in connection with its
duties and to pay such agents and legal counsel a reasonable fee. The Trustee shall not be
liable for the acts of such agents and counsel or for the acts done in good faith and in reliance
upon the advice of such agents and legal counsel, provided it has used reasonable care in
selecting such agents and legal counsel;
(c) To exercise where applicable and appropriate any rights of ownership in any contracts of
insurance in which any part of the Trust may be invested and to pay the premiums thereon;
and
(d) At the direction of the Employer (or Participants, their Spouses, their Dependents, their Benefi-
ciaries, or the investment manager, as the case may be) to sell, write options on, convey or
transfer, invest and reinvest any part thereof in each and every kind of property, whether real,
personal or mixed, tangible or intangible, whether income or non - income producing and
wherever situated, including but not limited to, time deposits (including time deposits in the
Trustee or its affiliates, or any successor thereto, if the deposits bear a reasonable rate of
interest), shares of common and preferred stock, mortgages, bonds, leases, notes, debentures,
equipment or collateral trust certificates, rights, warrants, convertible or exchangeable securi-
ties and other corporate, individual or government securities or obligations, annuity, retire-
ment or other insurance contracts, mutual funds (including funds for which the Trustee or its
affiliates serve as investment advisor, custodian or in a similar or related capacity), or in units
of any other common, collective or commingled trust fund.
6.3 Notwithstanding anything to the contrary herein, the assets of the Plan shall be held by the Trustee as
title holder only. Persons holding custody or possession of assets titled to the Trust shall include the
Employer, the Administrator, the investment manager, and any agents and subagents, but not the Trustee.
The Trustee shall not be responsible or liable for any loss or expense which may arise from or result from
compliance with any direction from the Employer, the Administrator, the investment manager, or such
agents to take title to any assets nor shall the Trustee be responsible or liable for any loss or expense
which may result from the Trustee's refusal or failure to comply with any direction to hold title, except if
the same shall involve or result from the Trustee's negligence or intentional misconduct. The Trustee may
refuse to comply with any direction from the Employer, the Administrator, the investment manager, or
such agents in the event that the Trustee, in its sole and absolute discretion, deems such direction illegal.
6.4 The Employer hereby indemnifies and holds the Trustee harmless from any and all actions, claims,
demands, liabilities, losses, damages or reasonable expenses of whatsoever kind and nature in connection
with or arising out of (i) any action taken or omitted in good faith by the Trustee in accordance with the
directions of the Employer or its agents and subagents hereunder, or (ii) any disbursements of any part of
the Trust made by the Trustee in accordance with the directions of the Employer, or (iii) any action taken
by or omitted in good faith by the Trustee with respect to an investment managed by an investment
manager in accordance with any direction of the investment manager or any inaction with respect to any
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VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
such investment in the absence of directions from the investment manager. Notwithstanding anything to
the contrary herein, the Employer shall have no responsibility to the Trustee under the foregoing indemni-
fication if the Trustee fails negligently, intentionally or recklessly to perform any of the duties undertaken
by it under the provisions of this Trust
6.5 Notwithstanding anything to the contrary herein, the Employer or, if so designated by the Employer,
the Administrator and the investment manager or another agent of the Employer, will be responsible for
valuing all assets so acquired for all purposes of the Trust and of holding, investing, trading and disposing
of the same. The Employer will indemnify and hold the Trustee harmless against any and all claims,
actions, demands, liabilities, losses, damages, or expenses of whatsoever kind and nature, which arise
from or are related to any use of such valuation by the Trustee or holding, trading, or disposition of such
assets.
6.6 The Trustee shall and hereby does indemnify and hold harmless the Employer from any and all ac-
tions, claims, demands, liabilities, losses, damages and reasonable expenses of whatsoever kind and
nature in connection with or arising out of (a) the Trustee's failure to follow the directions of the Employer,
the Administrator, the investment manager, or agents thereof, except as permitted by the last sentence of
Section 6.3 above; (b) any disbursements made without the direction of the Employer, the Administrator,
the investment manager or agents thereof; and (c) the Trustee's negligence, willful misconduct, or reck-
lessness with respect to the Trustee's duties under this Declaration.
ARTICLE VII
Contributions
7.1 Employer Contributions. The Employer shall contribute to the Trust such amounts as specified in the
Plan or by resolution.
7.2 Participant Contributions. If specified in the Plan, each Participant may make voluntary after -tax
contributions. Under no circumstances shall Participant Contributions exceed an insubstantial amount.
These contributions shall be collected by the Employer and remitted to the Trust for deposit at such time
or times as required under the terms of the Plan.
7.3 Accrued Leave. Contributions up to an amount equal to the value of accrued sick leave, vacation
leave, or other type of accrued leave, as permitted under the Plan. The Employer's Plan must provide a
formula for determining the value of the Participant's contribution of accrued leave . The Employer's Plan
must contain a forfeiture provision that will prevent Participants from receiving the accrued leave in cash
in lieu of a contribution to the Trust.
7.4 Accounts. Employer contributions, Participant contributions, and contributions of accrued leave , all
investment income and realized and unrealized gains and losses, and forfeitures allocable thereto will be
deposited into an Account in the name of the Participant for the exclusive benefit of the Participant, his
Spouse, Dependents and Beneficiaries. The assets in each Participant's Account may be invested in
Investment Funds as directed by the Participant (or, after the Participant's death, by the Spouse,
Dependents or Beneficiaries) from among the Investment Funds selected by the Employer.
7.5 Receipt of Contributions. The Employer or, if so designated by the Employer, the Administrator or
investment manager or another agent of the Employer, shall receive all contributions paid or delivered to
it hereunder and shall hold, invest, reinvest and administer such contributions pursuant to this Declara-
tion, without distinction between principal and income. The Trustee shall not be responsible for the
calculation or collection of any contribution under the Plan, but shall hold title to property received in
respect of the Plan in the Trustee's name as directed by the Employer or its designee pursuant to this
Declaration.
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7.6 No amount in any Account maintained under this Trust shall be subject to transfer, assignment, or
alienation, whether voluntary or involuntary, in favor of any creditor, transferee, or assignee of the Em-
ployer, the Trustee, any Participant, his Spouse, Dependent, or Beneficiaries.
7.7 Upon the satisfaction of all liabilities under the Plan to provide such benefits, any amount of Employer
contributions, plus accrued earnings thereon, remaining in such separate Accounts must, under the terms
of the Plan, be returned to the Employer.
ARTICLE VIII
Other Plans
If the Employer hereafter adopts one or more other plans providing life, sickness, accident, medical,
disability, severance, or other benefits and designates the Trust hereby created as part of such other plan,
the Employer or, if so designated by the Employer, the Administrator or an investment manager or an-
other agent of the Employer shall, subject to the terms of this Declaration, accept and hold hereunder
contributions to such other plans. In that event (a) the Employer or, if so designated by the Employer, the
Administrator or an investment manager or another agent of the Employer, may commingle for invest-
ment purposes the contributions received under such other plan or plans with the contributions previously
received by the Trust, but the books and records of the Employer or, if so designated by the Employer, the
Administrator or an investment manager or another agent of the Employer, shall at all times show the
portion of the Trust Fund allocable to each plan; (b) the term "Plan" as used herein shall be deemed to
refer separately to each other plan; and (c) the term "Employer" as used herein shall be deemed to refer to
the person or group of persons which have been designated by the terms of such other plans as having
the authority to control and manage the operation and administration of such other plan.
ARTICLE iX
Disbursements and Expenses
9.1 The Employer or its designee shall make such payments from the Trust at such time to such persons
and in such amounts as shall be authorized by the provisions of the Plan provided, however, that no
payment shall be made, either during the existence of or upon the discontinuance of the Plan (subject to
Section 7.7), which would cause any part of the Trust to be used for or diverted to purposes other than the
exclusive benefit of the Participants, their Spouses and Dependents, and Beneficiaries pursuant to the
provisions of the Plan.
9.2 All payments of benefits under the Plan shall be made exclusively from the assets of the Accounts of
the Participants to whom or to whose Spouse, Dependents, or Beneficiaries such payments are to be
made, and no person shall be entitled to look to any other source for such payments.
9.3 The Employer, Trustee and Administrator may be reimbursed for expenses reasonably incurred by
them in the administration of the Trust. All such expenses, including, without limitation, reasonable fees
of accountants and legal counsel to the extent not otherwise reimbursed, shall constitute a charge against
and shall be paid from the Trust upon the direction of the Employer.
ARTICLE X
Accounting
10.1 The Trustee shall not be required to keep accounts of the investments, receipts, disbursements, and
other transactions of the Trust, except as necessary to perform its title - holding function hereunder. All
accounts, books, and records relating thereto shall be maintained by the Employer or its designee.
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VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
10.2 As promptly as possible following the close of each year, the Trustee shall file with the Employer a
written account setting forth assets titled to the Trust as reported to the Trustee by the Employer or its
designee.
ARTICLE XI
Miscellaneous Provisions
11.1 Neither the Trustee nor any affiliate thereof shall be required to give any bond or to qualify before, be
appointed by, or account to any court of law in the exercise of its powers hereunder.
11.2 No person transferring title or receiving a transfer of title from the Trustee shall be obligated to look
to the propriety of the acts of the Trustee in connection therewith.
11.3 The Employer may engage the Trustee as its agent in the performance of any duties required of the
Employer under the Plan, but such agency shall not be deemed to increase the responsibility or liability of
the Trustee under this Declaration.
11.4 The Employer shall have the right at all reasonable times during the term of this Declaration and for
three (3) years after the termination of this Declaration to examine, audit, inspect, review, extract informa-
tion from, and copy all books, records, accounts, and other documents of the Trustee relating to this
Declaration and the Trustees' performance hereunder.
ARTICLE X11
Amendment and Termination
12.1 The Employer reserves the right to alter, amend, or (subject to Section 9.1) terminate this Declaration
at any time for any reason without the consent of the Trustee or any other person, provided that no
amendment affecting the rights, duties, or responsibilities of the Trustee shall be adopted without the
execution of the Trustee to the amendment. Any such amendment shall become effective as of the date
provided in the amendment, if requiring the Trustee's execution, or on delivery of the amendment to the
Trustee, if the Trustee's execution is not required.
12.2 Upon termination of this Declaration and upon the satisfaction of all liabilities under the Plan to
provide such benefits, any amount of Employer contributions, plus accrued earnings thereon, remaining
in such separate Accounts must, under the terms of the Plan, be returned to the Employer.
ARTICLE XIII
Successor Trustees
13.1 The Employer reserves the right to discharge the Trustee for any or no reason, at any time by giving
ninety (90) days' advance written notice.
13.2 The Trustee reserves the right to resign at any time by giving ninety (90) days' advance written notice
to the Employer.
13.3 In the event of discharge or resignation of the Trustee, the Employer may appoint a successor Trus-
tee who shall succeed to all rights, duties, and responsibilities of the former Trustee under this Declara-
tion, and the terminated Trustee shall be deemed discharged of all duties under this Declaration and
responsibilities for the Trust.
10 0 G0223
RETAIN BOOKLET
ARTICLE XIV
Limited Effect of Plan and Trust
{Neither the establishment of the Plan and the Trust or any modification thereof, the creation of any fund or
account, nor the payment of any benefits, shall be construed as giving to any person covered under the
Plan or other person any legal or equitable right against the Trustee, the Administrator, the Employer or
any officer or employee thereof, except as may otherwise be expressly provided in the Plan or in this
Declaration.
ARTICLE XV
Protective Clause
Neither the Administrator, the Employer, nor the Trustee shall be responsible for the validity of any con-
tract of insurance or other arrangement maintained in connection with the Plan, or for the failure on the
part of the insurer or provider to make payments provided by such contract, or for the action of any per-
son which may delay payment or render a contract void or unenforceable in whole or in part.
11 0 60224
VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
IN WITNESS WHEREOF, the Employer and the Trustee have executed this Declaration by their respective
duly authorized officers, as of the date first hereinabove mentioned.
EMPLOYER:
By: Title. Administrative Services Director
TRUSTEES:
By: Title:
By: Title:
By: Title:
12
Plan Number: 8 0 0 870
City of Moorpark
Employer Retirement Health Savings Plan Name: Retirement T-Tealth gavincfs, Plan
i Emmp8oym D8ammm: City of Moorpark
State: CA
111. 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.
0l. The Effective Date mfthe Plan: 1/1/2O05
IV. The Employer intends to utilize the Trust to fund only welfare benefits pursuant to the following welfare ben-
efit plan(s) established by the Employer:
City of Moorpark Retiree Medical and Dental Pxppnse Rf-Jmbiir_-,t-mf-nt- Plan
A. The following group or groups of Employees are eligible to participate in the VantageCare Retirement Health
Savings Plan:
All Employees
All Full-Time Employees
Non-Union Employees
Pub|ioSafetyErnp|oyooa -PoUoe
Public Safety Employees - Firefighters
General Employees
Collectively-Bargained Employees (Specify unit)
Other (specify below)
X Mayor & City Council Members
X Regular Part-Time ETployees
The group specified must correspond to a group of the same designation that is defined in the statutes, ordi-
nances,
If the Employer's underlying welfare benefit plan or funding under this VantaUaCuna Retirement Health Savings
Plan is in vvho|a or part a non-collectively bargained, self-insured plan, the nondiscrimination naquinannonto of
internal Revenue Code URC) Section 105(h) will apply. These rules may impose taxation on the benefits received
by highly compensated Employees if the Plan discriminates in favor of highly compensated Employees in terms
of eligibility orbenefits. The Employer should discuss these rules with appropriate counsel.
B. Participant Eligibility
1. K4ininnurn period of service required for participation is N/A kmrho N/A if an Employee ia eligible to partici-
pate orto elect to participate immediately upon employment).
2. Minimum ago required for eligibility to participate is N/& (write N/A if no nninirnurn age is required).
VI.Contribmtimn Sources and Amounts
A. Mandatory Contributions
0 1. Direct Employer Contributions
The Employer shall contribute on behalf ofeach Participant _____% of earnings or$_______ for the Plan
Definition of earnings:
0 2. Mandatory Leave Contributions
The Employer will make mandatory contributions of leave as follows:
Accrued Sick Leave*
C3
Yes
n
No
Accrued Vacation*
71
Yes
LI
No
Other* (describe)
17) Yes I No
* Please provide the formula for determining the Accrued Leave contribution:
An Employee shall not have the right to discontinue or vary the rate of annual leave contributions.
1 3. Mandatory Employee Compensation Contributions
Reduction in Salary - _-______% of earnings (ay defined in V|^4.1.) or will be
contributed for the Plan Year.
171 Decreased Merit or Pay Plan Adjustment - All or a portion of the Employees' annual rnaht
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.
��K��������� `
12 ° ~~ �`�°� ~ `
X00 228
13
C. Limits on Total Contributions
The total contribution on behalf of each Participant (including both Mandatory and Elective
Contributions) for each Plan Year shall not exceed the following limit(s):
�~ of earnings (as defined inVl��1j.
.�
0 There is no Plan-defined limit on the percentage or dollar amount of earnings that may
Limits on individual contribution types are defined within the appropriate section above.
See Section \(A. fora discussion of nondiscrimination rules that may apply to non-collectively bargained self-
insured Plans.
f���������«�
� � ��~��~�
?4
I
VII. Vesting Schedule
A. The account is 100% vested at all times, unless specified otherwise in B. below.
B. The following vesting schedule applies to Direct Employer Contributions outlined in VI.A.1:
Years of Specified
Service Percent
Completed Vesting
%
C. The account will become 100% vested upon the death, disability, retirement, or attainment of
benefit eligibility by a Participant.
Definition of retirement:
D. 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 B. above.
VIII. Forfeiture Provisions
Upon separation from the service of the Employer or upon reversion to the Trust of a Participant's account
assets remaining upon the participant's death (as outlined in Section XI), a Participant's non - vested funds shall:
Remain in the Trust to be reallocated among all Plan Participant's as Direct Employer Contributions for
the next and succeeding contribution cycle(s).
17 Remain in the Trust to be reallocated on an equal dollar basis among all Plan Participants.
71 Remain in the Trust to be reallocated among all Plan Participants based upon Participant account bal-
ances.
0 Revert to the Employer.
In the case of separation from service, the Participant's non- vested funds shall be applied as shown above. In the
case of reversion due to the Participant's death under Section XI, the remaining account assets shall be applied
as shown above.
IX. Eligibility Requirements to Receive Medical Benefit Payments from the VantageCare Retirement Health
Savings Plan
A. A Participant is eligible to receive benefits:
At retirement only (as defined in Section VII.C.)
At separation from service with the following restrictions
At age _ — only
At retirement and age _
X At retirement or age 55
15
B. Termination prior to general benefit eligibility: A Participant who separates from the service of the Employer
prior to attaining benefit eligibility as outlined in Section N.A. or C. will be eligible to receive benefits:
Immediately upon separation from service.
At age 55
C. A Participant who dies or becomes totally and permanently disabled (as defined by the Social Security
Administration) will become immediately eligible to receive medical benefit payments from his /her VantageCare
Retirement Health Savings Plan account.
X. Permissible Medical Benefit Payments
Benefits eligible for payment consist of:
A. X All Medical Expenses eligible under IRC Section 213* other than direct long -term care
expenses, OR
B. The following Medical Expenses (select only the expenses you wish to cover under the
VantageCare Retirement Health Savings Plan):
Medical Insurance Premiums
Medical Out -of- Pocket Expenses*
Medicare Part B Insurance Premiums
Medicare Supplement Insurance Premiums
COBRA Premiums
Dental Insurance Premiums
Dental Out -of- Pocket Expenses*
Long Term Care Insurance Premiums
Other (Must be eligible under IRC Section 213)*
* See Section V.A. for a discussion of nondiscrimination rules which may apply to non - collectively bargained,
self- insured Plans.
XI. Death Benefit
In the event of a Participant's death, the following shall apply:
Account Transfer: The surviving spouse and /or surviving eligible dependents (as defined in Section XIII.F.) of the
deceased Participant are immediately eligible to maintain the account and utilize it to fund eligible medical bene-
fits specified in Section X above.
Upon notification of a Participant's death, the Participant's account balance will be transferred into the
Vantagepoint Money Market Fund *. The account balance may be reallocated by the surviving spouse or
dependents.
* Please read the current prospectus carefully prior to investing. An investment in this fund is neither insured
nor guaranteed and there can be no assurance that the Fund will be able to maintain a stable net asset value of
$1.00 per share. Vantagepoint Mutual Funds are distributed by ICMA -RC Services, LLC, a controlled affiliate of
1CMA Retirement Corporation. Member NASD /SIPC.
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 depend-
ents, the balance will be available for medical benefits for the designated beneficiary of the last dependent or
spouse to die. Assets remaining upon the death of a designated beneficiary shall be available for medical bene-
fits of the beneficiary's designated beneficiary. If there is no living beneficiary(ies), the account will revert to the
Plan to be applied as specified in Section VIII.
90031
ME
There will be no elective withholding of federal, state, or local taxes for medical benefit payments to the
Participant's spouse's or dependent's designated beneficiary(ies).
If there are no living spouse or dependents at the time of death of the Participant, the account will be available
for medical benefits for the designated beneficiary(ies) of the Participant. Assets remaining upon the death of all
designated beneficiaries shall be available for medical benefits of the beneficiary's beneficiary. If there is no liv-
ing beneficiary(ies), the account will revert to the Plan to be applied as specified in Section VIII.
There will be no elective withholding of federal, state, or local taxes for medical benefit payments to the
Participant's beneficiary(ies) or any beneficiary's beneficiary.
XII. De Minimis Accounts
Upon separation from the service of the Employer prior to a Participant becoming eligible for medical benefits
from a VantageCare Retirement Health Savings Plan account, Participant accounts that are considered de min-
imis as specified below will be paid to the Participant.
0 The de minimis account value shall be $5,000 or less.
71 The de minimis account value shall be $ (insert dollar amount between $0 and
$5,000) or less.
71 The Plan shall not allow de minimis account distributions.
XIII. 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. Participant status updates and /or changes or personal information updates and /or changes (Participants'
termination dates, Participants' benefit eligibility dates, etc.) will be provided via electronic submission.
B. Participant account administration fees will be paid through the redemption of Participant account shares,
unless agreed upon otherwise in the Administrative Services Agreement.
C. Employer plan fees will be paid by the Employer as outlined in the Administrative Services Agreement,
D. Assignment of benefits is not permitted.
E. Payments to an alternate payee (payee other than a Participant) are not permitted with the exception of reim-
bursement of health insurance premiums to the Employer.
F. An eligible dependent is the Participant's lawful spouse and any other individual who is a person described in
IRC Section 152(a).
G. The Employer will be responsible for withholding, reporting and remitting any applicable taxes, as outlined
in the VantageCare Retirement Health Savings Plan Employer Manual.
XIV. The Employer hereby acknowledges it understands that failure to properly fill out this Employer
VantageCare Retirement Health Savings Plan Adoption Agreement may result in the loss of tax exemption of the
Trust and /or loss of tax - deferred status for Employer contributions.
000 3 2
17
EMPLOYER
By:
Title:
Attest:
Accepted: Vantagepoint Transfer Agents, LLC
Corporate Treasurer
18
01 () () X133
ATTACHMENT
July 15, 2004
Cynthia Borchard
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Re: VantageCare Retirement Health Savings Plan No. 800870
Dear Ms. Borchard:
This letter agreement will serve to amend the existing Administrative Services Agreement
between City of Moorpark (the "Employer ") and the ICMA Retirement Corporation ( "ICMA -RC ") to
provide the City of Moorpark VantageCare Retirement Health Savings (RHS) Plan for Employer's
eligible employees ( "Accountholders ").
The existing Agreement between Employer and ICMA -RC is hereby amended as follows:
1. Employer desires to make the RHS plan administered by ICMA -RC available to its
employees. The details of the RHS plan shall be as mutually agreed between Employer and
ICMA -RC, but in general shall be as set forth in the RHS plan materials developed by ICMA -
RC and provided to Employer. RHS plan materials shall include the VantageCare RHS
Employer Manual, available electronically through the EZ Link System upon plan adoption.
2. Employer agrees that this Addendum and the terms set forth and referenced herein shall be
in effect for an initial term beginning on the date the Addendum is executed by the Employer
below and ending 5 years after that date. The Addendum will be renewed automatically for
each succeeding year unless written notice of termination is provided by either party no less
than 60 days before the end of such extension year.
3. Absent an explicit agreement to the contrary between ICMA -RC and Employer,
Accountholder fees and expenses shall be payable from RHS assets, in accordance with the
requirements of the RHS plan as set forth in paragraph 9 below.
4. Each Accountholder will receive a consolidated quarterly statement providing information for
any deferred compensation plan, qualified plan or RHS account maintained by each
Accountholder and administered by ICMA -RC.
5. Tax withholding and reporting will be provided by ICMA -RC and its agents in conjunction with
the Employer for each RHS Account administered by ICMA -RC.
6. Information required to be retained by the employer shall be set forth in the RHS plan
materials developed by ICMA -RC and provided to Employer.
7. The details of ICMA -RC's administration of the RHS plan, as well as other features of the
RHS plan, shall be as set forth in RHS plan materials. The RHS plan materials are hereby
incorporated by reference and made a part of this Agreement, except that Employer and
ICMA -RC may from time to time mutually agree in writing to terms that vary from the RHS
plan materials.
8. The Employer understands that, as a general matter, the Internal Revenue Service ( "IRS ")
may decline to rule on certain design features or provisions that the Employer may request to
have added to the RHS plan materials. The Employer agrees to hold ICMA -RC harmless in
connection with the addition and administration of any RHS plan feature or provision
requested by the Employer for which the IRS will not provide express interpretive guidance.
0002?3
9. Accountholder's account administration fees will be paid from RHS assets according to the
following schedule:
a. Employer with ICMA -RC §401 and §457 retirement plan average participant account
balances of $25,000 or more:
A $30 annual account fee will be charged to each Accountholder's account. The fee will
be charged against the account on a quarterly basis. In addition, an annual asset fee of
0.30% (30 basis points) will be charged on a quarterly basis, based on the balance in the
account on the last day of the previous quarter.
b. Employer with ICMA -RC §401 and §457 retirement plan average participant account
balances of less than $25,000, or Employer who does not currently have a retirement
plan with ICMA -RC:
A $30 annual account fee will be charged to each Accountholder's account. The fee will
be charged against the account on a quarterly basis. In addition, an annual asset fee of
0.40% (40 basis points) will be charged on a quarterly basis, based on the balance in the
account on the last day of the previous quarter.
When the average participant account balance of the Employer's §401 and §457
retirement plans with ICMA -RC totals $25,000 or more (based on the balances in the
Employer's retirement plans on the last day of the previous quarter), the pricing detailed
in paragraph 9.a. shall apply beginning in the subsequent quarter.
For De Minimis account payments (as defined in the RHS plan materials), there will be a fee
of $25 collected at the time of disbursement.
Account administration fees are subject to change with appropriate prior notification.
If City of Moorpark finds these terms agreeable, please so indicate by having the appropriate
person sign and date this letter agreement in the space indicated below.
Very truly yours,
Paul Gallagher
Corporate Secretary
Agreed:
Authorized Official Date
GY0 23-S
RETAIN BOOKLET
TTACHMENT_±
SAMPLE
RETIREE MEDICAL AND DENTAL EXPENSE REIMBURSEMENT PLAN
0
VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
Fill
Article I Preamble
1.01 Establishment of Plan
1.02 Purpose of Plan
Article 11 Definitions
2.01 "Beneficiary
2.02 "Benefits"
2.03 "Code"
2.04 "Dependent"
2.05 "Eligible Medical or Dental Expenses"
2.06 "Employer"
2.07 "Entry Date"
2.08 "Participant"
2.09 "Plan Administrator"
2.10 "Plan Year"
2.11 "Retiree"
2.12 "Spouse"
Article 111 Eligibility
3.01 General Requirements
Article IV Amount of Benefits
4.01 Annual Benefits Provided by the Plan
4.02 Cost of Coverage
Article V Payment of Benefits
5.01 Eligibility for Benefits
5.02 Claims for Benefits
Article VI Plan Administration
6.01 Allocation of Authority
6.02 Provision for Third -Party Plan Service Providers
6.03 Several Fiduciary Liability
6.04 Compensation of Plan Administrator
6.05 Bonding
6.06 Payment of Administrative Expenses
6.07 Timeliness of Payments
6.08 Annual Statements
Article VI Claims Procedure
7.01 Procedure if Benefits are Denied Under the Plan
7.02 Requirement for Written Notice of Claim Denial
7.03 Right to Request Hearing on Benefit Denial
7.04 Disposition of Disputed Claims
7.05 Preservation of Other Remedies
Article Vill Amendment or Termination of Plan
8.01 Permanency
8.02 Employer's Right to Amend
8.03 Employer's Right to Terminate
18 0 101 37
RETAIN BOOKLET
Article IX General Provisions
9.01 No Employment Rights Conferred
9.02 Payments to Beneficiary
9.03 Nonalienation of Benefits
9.04 Mental or Physical Incompetency
9.05 Inability to Locate Payee
9.06 Requirement of Proper Forms
9.07 Source of Payments
9.08 Tax Effects
9.09 Multiple Functions
9.10 Gender and Number
9.11 Pleadings
9.12 Applicable Laws
9.13 Severability
ilul
VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
Preamble
THIS INSTRUMENT made and published by City of Moorpark (hereinafter called
"Employer ") on the6th day of October . 20 04 , creates the City of Retiree Medical
and Dental Expense Reimbursement Plan, as follows: Moorpark
1.01 Establishment of Plan
The Employer named above hereby establishes a Retiree Medical and Dental Expense Reimbursement
Plan as of the 1 St day of January , 20 05.
1.02 Purpose of Plan
This Plan has been established to reimburse the eligible Retirees of the Employer for medical and dental
expenses incurred by them, their Spouses, Dependents, and Beneficiaries pursuant to the Employer's
VantageCare Retirement Health Savings (RHS) Plan.
ARTICLE 11
Definitions
The following words and phrases as used herein shall have the following meanings, unless a different
meaning is plainly required by the context:
2.01 "Beneficiary" means the person or persons designated pursuant to the terms of the Plan, who will
receive any Benefits payable hereunder in the event of the Participant's death. A Beneficiary may also
designate a beneciary0es) to receive any benefits payable hereunder in the event of the preceeding Ben-
eficiary's death until the satisfaction of all liabilities under the plan to provide benefits.
2.02 "Benefits" means any amounts paid to a Participant or Beneficiary in the Plan as reimbursement for
Eligible Medical and Dental Expenses incurred by the Participant or Beneficiary during a Plan Year by him,
his Spouse, his Dependents, or his Beneficiary.
2.03 "Code" means the Internal Revenue Code of 1986, as amended.
2.04 "Dependent" means any individual who is a dependent of the Participant within the meaning of Code
Sec. 152.
2.05 "Eligible Medical or Dental Expenses" means those expenses designated by the Employer as eligible
for reimbursement in the VantageCare Retirement Health Savings Plan Adoption Agreement.
2.06 "Employer" means the unit of state or local government creating this Plan, or any affiliate or succes-
sor thereof that likewise adopts this Plan.
2.07 "Entry Date" means the first day the Participant meets the eligibility requirements of Article III as of
such Date.
2.08 "Participant" means any Retiree who has met the eligibility requirements set forth in Article Ill.
2.09 "Plan Administrator" means the Employer or other person appointed by the Employer who has the
authority and responsibility to manage and direct the operation and administration of the Plan.
20 029
RETAIN BOOKLET
2.10 "Plan Year" means the annual accounting period of the Plan, which begins on the 1 St day of
January , 20 05 , and ends on the31 St day of December , 20 05 , with respect to the first
Plan Year, and thereafter as long as this Plan remains in effect, the period that begins on 01 —01
and ends on 1 2 -31 _
2.11 "Retiree" means any individual who, while in the service of the Employer, was considered to be in a
legal employer - employee relationship with the Employer for federal withholding tax purposes, and who
was part of the classification of employees designated as covered by the Employer's VantageCare Retire-
ment Health Savings Plan.
2.12 "Spouse" means the Participant's lawful spouse as determined under the laws of the state in which
the Participant has his primary place of residence.
All other defined terms in this Plan shall have the meanings specified in the various Articles of the Plan in
which they appear.
ARTICLE 111
Eligibility
Each Retiree who meets the eligibility requirements outlined in the Employer's VantageCare Retirement
Health Savings Plan shall be eligible to participate in this Plan.
ARTICLE IV
Amount of Benefits
4.01 Annual Benefits Provided by the Plan
Each Participant shall be entitled to reimbursement for his documented, Eligible Medical or Dental Ex-
penses incurred during the Plan Year in an annual amount not to exceed the account balance of the Partici-
pant in the Employer's VantageCare Retirement Health Savings Plan.
4.02 Cost of Coverage
The expense of providing the benefits set out in Section 4.01 shall be contributed as outlined in the Em-
ployer's VantageCare Retirement Health Savings Plan.
ARTICLE V
Payment of Benefits
5.01 Eligibility for Benefits
(a) Each Participant in the Plan shall be entitled to a benefit hereunder for all Eligible Medical and
Dental Expenses incurred by the Participant on or after the Entry Date of his or her participa-
tion, (and after the effective date of the Plan) subject to the limitations contained in this Article
V, regardless whether the mental or physical condition for which the Participant makes applica-
tion for benefits under this Plan was detected, diagnosed, or treated before the Participant
became covered by the Plan.
(b) In order to be eligible for benefits, the Participant must meet the benefit eligibility criteria
outlined in the Employer's VantageCare Retirement Health Savings Plan Adoption Agreement.
21 (), 0 0 2?40
VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
(c) A Participant who becomes totally and permanently disabled (as defined by the Social Security
Administration) will become immediately eligible to receive medical benefit payments from the
Plan. Pursuant to Section 9.02 and Employer's VantageCare Retirement Health Savings Plan
Adoption Agreement, the surviving Spouse and Dependents, or Beneficiary0es) shall become
immediately eligible to receive or to continue receiving medical benefit payments from the
Plan upon the death of the Participant.
5.02 Claims for Benefits
No benefit shall be paid hereunder unless a Participant, his Spouse,Dependent or Beneficiary has first
submitted a written claim for benefits to the Plan Administrator on a form specified by the Plan Adminis-
trator, and pursuant to the procedures set out in Article VI, below. Upon receipt of a properly documented
claim, the Plan Administrator shall pay the Participant, his Spouse, Dependent or Beneficiary the benefits
provided under this Plan as soon as is administratively feasible.
ARTICLE VI
Plan Administration
6.01 Allocation of Authority
The Employer shall control and manage the operation and Administration of the Plan. The Employer shall
have the exclusive right to interpret the Plan and to decide all matters arising thereunder, including the
right to remedy possible ambiguities, inconsistencies, or omissions. All determinations of the Employer
with respect to any matter hereunder shall be conclusive and binding on all persons.
Without limiting the generality of the foregoing, the Employer shall have the following powers and duties:
(a) To decide on questions concerning the Plan and the eligibility of any Employee to participate in
the Plan, in accordance with the provisions of the Plan;
(b) To determine the amount of benefits that shall be payable to any person in accordance with the
provisions of the Plan; to inform the Plan Administrator, as appropriate, of the amount of such
Benefits; and to provide a full and fair review to any Participant whose claim for benefits has
been denied in whole or in part; and
(c) To designate other persons to carry out any duty or power which would otherwise be a fiduci-
ary responsibility of the Plan Administrator, under the terms of the Plan.
(d) To require any person to furnish such reasonable information as it may request for the purpose
of the proper administration of the Plan as a condition to receiving any benefits under the Plan;
(e) To make and enforce such rules and regulations and prescribe the use of such forms as he
shall deem necessary for the efficient administration of the Plan.
6.02 Provision for Third -Party Plan Service Providers
The Plan Administrator, subject to approval of the Employer, may employ the services of such persons as
it may deem necessary or desirable in connection with operation of the Plan. The Plan Administrator, the
Employer (and any person to whom it may delegate any duty or power in connection with the administra-
tion of the Plan), and all persons connected therewith may rely upon all tables, valuations, certificates,
reports and opinions furnished by any duly appointed actuary, accountant, (including Employees who are
actuaries or accountants), consultant, third party administration service provider, legal counsel, or other
specialist, and they shall be fully protected in respect to any action taken or permitted in good faith in
reliance thereon. All actions so taken or permitted shall be conclusive and binding as to all persons.
22 0 2 41
RETAIN BOOKLET
6.03 Several Fiduciary Liability
To the extent permitted by law, neither the Plan Administrator nor any other person shall incur any liability
for any acts or for failure to act except for his own willful misconduct or willful breach of this Plan.
6.04 Compensation of Plan Administrator
Unless otherwise agreed to by the Employer, the Plan Administrator shall serve without compensation for
services rendered in such capacity, but all reasonable expenses incurred in the performance of his duties
shall be paid by the Employer.
6.05 Bonding
Unless otherwise determined by the Employer, or unless required by any Federal or State law, the Plan
Administrator shall not be required to give any bond or other security in any jurisdiction in connection
with the administration of this Plan.
6.06 Payment of Administrative Expenses
All reasonable expenses incurred in administering the Plan, including but not limited to administrative
fees and expenses owing to any third party administrative service provider, actuary, consultant, account-
ant, attorney, specialist, or other person or organization that may be employed by the Plan Administrator
in connection with the administration thereof, shall be paid by the Employer, provided, however that each
Participant shall bear the monthly cost (if any) charged by a third party administrator for maintenance of
his Benefit Account unless otherwise paid by the Employer.
6.07 Timeliness of Payment for Benefits
Payment for Benefits shall be made as soon as administratively feasible after the required forms and
documentation have been received by the Plan Administrator.
6.08 Annual Statements
The Plan Administrator shall furnish each Participant with an annual statement of his medical and dental
expense reimbursement account within ninety (90) days after the close of each Plan Year.
ARTICLE VII
Claims Procedure
7.01 Procedure if Benefits are Denied Under the Plan
Any Participant, Spouse, Dependent, or Beneficiary, or his duly authorized representative may file a claim
for a plan benefit to which the claimant believes that he is entitled. Such a claim must be in writing on a
form provided by the Plan Administrator and delivered to the Plan Administrator, in person or by mail,
postage paid. Within thirty (30) days after receipt of such claim, the Plan Administrator shall send to the
claimant, by mail, postage prepaid, notice of the granting or denying, in whole or in part, of such claim,
unless special circumstances require an extension of time for processing the claim. In no event may the
extension exceed ninety (90) days from the end of the initial period. If such extension is necessary, the
claimant will be given a written notice to this effect prior to the expiration of the initial 30 -day period. The
Plan Administrator shall have full discretion to deny or grant a claim in whole or in part. If notice of the
denial of a claim is not furnished in accordance with this Section, the claim shall be deemed denied and
the claimant shall be permitted to exercise his right to review pursuant to Sections 7.03 and 7.04.
23 () 40 3, `�
VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
7.02 Requirement for Written Notice of Claim Denial
The Plan Administrator shall provide, to every claimant who is denied a claim for benefits, written notice
setting forth in a manner calculated to be understood by the claimant:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent Plan provisions on which the denial is based;
(c) A description of any additional material of information necessary for the claimant to perfect the
claim and an explanation of why such material is necessary, and
(d) An explanation of the Plan's claim review procedure.
7.03 Right to Request Hearing on Benefit Denial
Within sixty (60) days after the receipt by the claimant of written notification of the denial (in whole or in
part) of his claim, the claimant or his duly authorized representative, upon written application to the Plan
Administrator, in person or by certified mail, postage prepaid, may request a review of such denial, may
review pertinent documents, and may submit issues and comments in writing.
7.04 Disposition of Disputed Claims
Upon its receipt of notice of a request for review, the Plan Administrator shall make a prompt decision on
the review. The decision on review shall be written in a manner calculated to be understood by the claim-
ant and shall include specific reasons for the decision and specific references to the pertinent plan provi-
sions on which the decision is based. The decision on review shall be made not later than sixty (60) days
after the Plan Administrator's receipt of a request for a review, unless special circumstances require an
extension of time for processing, in which case a decision shall be rendered not later than one hundred -
twenty (120) days after receipt of a request for review. If an extension is necessary, the claimant shall be
given written notice of the extension prior to the expiration of the initial sixty (60) day period. If notice of
the decision on the review is not furnished in accordance with this Section, the claim shall be deemed
denied and the claimant shall be permitted to exercise his right to legal remedy pursuant to Section 7.05.
7.05 Preservation of Other Remedies
After exhaustion of the claims procedures provided under this Plan, nothing shall prevent any person from
pursuing any other legal or equitable remedy otherwise available.
ARTICLE Vlll
Amendment or Termination of Plan
8.01 Permanency
While the Employer fully expects that this Plan will continue indefinitely, due to unforeseen, future busi-
ness contingencies, permanency of the Plan will be subject to the Employer's right to amend or terminate
the Plan, as provided in Sections 8.02 and 8.03, below.
8.02 Employer's Right to Amend
The Employer reserves the right to amend the Plan at any time and from time -to -time, and retroactively if
deemed necessary or appropriate to meet the requirements of the Code, or any similar provisions of
subsequent revenue or other laws, or the rules and regulations in effect under any of such laws or to
conform with governmental regulations or other policies, to modify or amend in whole or in part any or all
of the provisions of the Plan.
RETAIN BOOKLET
8.03 Employer's Right to Terminate
The Employer reserves the right to discontinue or terminate the Plan at any time without prejudice.
ARTICLE IX
General Provisions
9.01 No Employment Rights Conferred
Neither this Plan nor any action taken with respect to it shall confer upon any person the right to be con-
tinued in the employment of the Employer.
9.02 Payments After Death of Participant
Any benefits otherwise payable to a Participant following the date of death of such Participant shall be
paid as outlined in the Employer's VantageCare Retirement Health Savings Plan Adoption Agreement.
9.03 Nonalienation of Benefits
No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assign-
ment, pledge, encumbrance or charge, and any attempt to do so shall be void. No benefit under the Plan
shall in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any
person. If any person entitled to benefits under the Plan becomes bankrupt or attempts to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any benefit under the Plan, or if any attempt is
made to subject any such benefit to the debts, contracts, liabilities, engagements or torts of the person
entitled to any such benefit, except as specifically provided in the Plan, then such benefit shall cease and
terminate in the discretion of the Plan Administrator, and he may hold or apply the same or any part
thereof to the benefit of any dependent or beneficiary of such person, in such manner and proportion as
he may deem proper.
9.04 Mental or Physical Incompetency
If the Plan Administrator determines that any person entitled to payments under the Plan is incompetent
by reason of physical or mental disability, he may cause all payments thereafter becoming due to such
person to be made to any other person for his benefit, without responsibility to follow the application of
amounts so paid. Payments made pursuant to this Section shall completely discharge the Plan Adminis-
trator and the Employer.
9.05 Inability to Locate Payee
If the Plan Administrator is unable to make payment to any Participant or other person to whom a pay-
ment is due under the Plan because he cannot ascertain the identity or whereabouts of such Participant or
other person after reasonable efforts have been made to identify or locate such person (including a notice
of the payment so due mailed to the last known address of such Participant or other person as shown on
the records of the Employer), such payment and all subsequent payments otherwise due to such Partici-
pant or other person shall be escheated under the laws of the State of the last known address of the
Participant or other persons eligible for benefits.
9.06 Requirement of Proper Forms
All communications in connection with the Plan made by a Participant shall become effective only when
duly executed on forms provided by and filed with the Plan Administrator.
000244
25
VANTAGECARE RETIREMENT HEALTH SAVINGS PLAN
5.07 Source of Payments
The Employer shall be the sole source of benefits under the Plan. 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 the Plan, and then only to the extent of the benefits payable
under the Plan to such Employee or Beneficiary.
5.08 Tax Effects
Neither the Employer nor the Plan Administrator makes any warranty or other representation as to
whether any payments received by a Participant, his Spouse, Dependents, or Beneficiary0es) hereunder
will be treated as includible in gross income for federal or state income tax purposes.
3.03 Multiple Functions
Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan.
5.10 Gender and Number
Masculine pronouns include the feminine as well as the neuter gender, and the singular shall include the
plural, unless indicated otherwise by the context.
3.11 Headings
The Article and Section headings contained herein are for convenience of reference only, and shall not be
construed as defining or limiting the matter contained thereunder.
3.12 Applicable Laws
The provisions of the Plan shall be construed, administered and enforced according to the laws of the
State of
3.13 Severability
Should any part of this Plan subsequently be invalidated by a court of competent jurisdiction, the remain-
der thereof shall be given effect to the maximum extent possible.
IN WITNESS WHEREOF, we have executed this Plan Agreement the date and year first written above.
(Employer)
By:
ATTEST
Secretary
26 000245