Nationwide Retirement Solutions - Agreement for Employee Retirement PlanDeferred Compensation Plan
Administration Agreement
This Agreement is effective this 14th day of February 1996, by and between GREAT WESTERN
BANK, a Federal Savings Bank, its officers, employees and agents, (hereinafter collectively
referred to as "GREAT WESTERN"), and the City of Gilroy, its officers, employees and agents,
(hereinafter collectively referred to as "AGENCY").
WHEREAS, AGENCY pursuant to and in compliance with Internal Revenue Code Section 457,
has established A Deferred Compensation Plan (hereinafter referred to as "Plan "); and
WHEREAS, AGENCY desires to utilize GREAT WESTERN in connection with the
administration of the Plan; and
WHEREAS, GREAT WESTERN desires to provide such services subject to the terms and
conditions set forth herein;
Now therefore, AGENCY and GREAT WESTERN agree as follows:
DESIGNATION: AGENCY hereby designates GREAT WESTERN as a Depository
Institution and Administrator for deferred compensation funds.
2. TERM: This Agreement shall remain in effect until it is terminated by one or both parties
in accordance with the provisions of this Agreement. This Agreement may be terminated
by either party, with or without "Cause" as that term may be defined herein, and without
obligation upon the giving of one hundred twenty (120) days' written notice by party
terminating the Agreement to the other party.
DEFAULT: In the event the Agreement is terminated for "Cause" (which shall mean the
failure of either party to perform any or all of its obligations as defined herein), the non -
defaulting partys hall give the defaultiing partyw ritten otice, specifyin gthe particulars of
the default. If such default is not cured within sixty (60) days from the date on which
notice of default is given, the non - defaulting party may temrinate the Agreement effective
thirity (30) days after the end of the sixty (60) day period.
4. INVESTMENT OPTIONS: GREAT WESTERN agrees to accept deferred compensation
plan funds for investment in the following:
A. The GREAT WESTERN Bank Liquid Account ( "GWBLA ")
The rate /yield on the GWBLA account will be a variable rate, which may
change as often as daily.
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b. All participants with funds invested in the GWBLA, whether they are
active, inactive, or in distribution will have interest credited to their
account at a rate /yield which is subject to change daily.
B. The GREAT WESTERN Bank Certificate of Deposit ("GWBCD")
Certificates of Deposit for terms of three (3) years or five (5) years will be
offered.
b. The minimum Certificate of Deposit will be $2500. A participant may
purchase only one GWBCD for a given term, each quarter.
C. The interest rate will be a fixed rate during the term of the certificate. The
rate /yield for new certiicates will be set at the beginning of each clanedar
quarter.'
d. There will be an interest penalty of 180 days' simple interest for early
withdrawals. Death, hardship, and normal retirement distributions are
exempt from the interest penalty. Separation from service, plan -to -plan
transfers, transfers to alternate investments, or to other deferred
compensation providers will be subject to the early withdrawal penalty.
C. The following will apply to the foregoing Savings Products:
a. Interest earnings will accrue daily commencing on the date the funds are
op sted (as defined below) to the Participant's account by GREAT
WESTERN. Interest earnings will be credited monthly on the last day of
the month, and will be automatically reinvested to allow for monthly
compounding. The 365/360 day method will be used.
b. Each such account shall be subject to rules, regulations, and statutes to
which GREAT WESTERN is subject.
C. Plan funds invested in the GWBLA and GWBCD are backed by the full
faith and credit of the U.S. Govenrment and are also insured by the Federal
Deposit Insurance Corporation, an AGENCY of the Federal Government
up to $100,000 per participant. GREAT WESTERN will collateralize any
amounts invested in the GWBLA and the GWBCD in excess of FDIC
insurance limits, if required, in accordance with applicable law.
'Pre - existing GWBCDs (Certificates of Deposit which were entered into during a previous contract with GREAT
WESTERN will retain their original maturity date and interest rate, but will be renewed under the terms described
above.
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D. Mutual Funds
The mutual funds listed in Exhibit A will be available to Plan Participants.
b. Dividends will be automatically reinvested into the mutual fund.
C. Mutual Funds are not savings accounts, and are not insured or guaranteed
by any government AGENCY or by GREAT WESTERN.
d. Sales charges may be imposed on mutual fund investments by the mutual
fund provider. These charges will be dislcosed in the prospectus and
would be separate from any fees or charges described in this Agreement.
E. GREAT WESTERN reserves the right to add or delete investment options during
the term of this Agreement by providing 30 days' written notice of such change to
AGENCY.
F. Participants will be permitted to change their investment options as often as they
wish, however, they shall be subject to any applicable penalty or charge imposed
for such change.
ESTABLISHMENT OF ACCOUNTS:
A. ENROLLMENT SERVICES: GREAT WESTERN agrees to process, or arrange
to have processed, the enrollment of eligible employees who elect to participate in
the Plan. GREAT WESTERN agrees to provide informational and promotional
material pursuant to the Plan for distribution to employees of AGENCY, subject to
approval of such material by AGENCY, such approval not to be unreasonably
withheld. AGENCY agrees to allow and facilitate the periodic distribution of such
material to employees.
GREAT WESTERN agrees to conduct, or arrange to have conducted, group
presentations periodically for employees of AGENCY, to explain the Plan.
AGENCY agrees to facilitate the scheduling of such presentations and to provide
facilities at which satisfactory attendance can be expected. GREAT WESTERN
agrees that qualified personnel will be made available periodically to discuss the
Plan with individual employees of AGENCY.
B. DEFERRALS: The minimum participant deferral per pay period shall be not less
than $10.00.
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C. AGENCY agrees to:
a. Cause appropriate deductions to be made from such payroll(s) as may be
applicable and send the funds representing the total participant deferrals to
GREAT WESTERN.
b. Provide to GREAT WESTERN in such electronic or magentic media
designated by GREAT WESTERN a deferral listing with respect to
participant sub - accounts to include not less than the following:
1. Name of Participant
2. Social Security number of Participant
3. Amount to be credited to participant's sub - account(s)
C. Funds may be sent by wire transfer, through an automated clearinghouse or
by check in accordance with written instructions provided by GREAT
WESTERN. Failure to follow the written instructions provided by
GREAT WESTERN may result in delay of posting to Participant accounts.
6. PARTICIPANT SERVICES:
A. GREAT WESTERN will provide a dedicated toll -free number which shall be
operative, Monday through Friday, 8a.m. - 5pm., Pacific time each business day.
Using this number participants may, via an Interactive Voice Response Unit,
effectuate exchanges of account values between Investment Options; process
changes to deferrals, and obtain information about participant accounts.
AGENCY hereby authorizes GREAT WESTERN to honor instructions which may
be submitted by participants. The functions described herein (and in B., C., and D.
below) may be effectuated by telephone, facsimile transmission or mail. If such
service is requested by telephone, Participant shall use his /her PIN. Participants
may also opt out of the Voice Response Unit to a live operator to effect the same
transactions. Telephone conversations may be recorded to provide confirmation
and verification of transactions.
B. GREAT WESTERN will provide Plan participants each business day an
opportunity to increase (within limitations of Sec. 457) or decrease deferral
amounts. All requests to increase or decrease amounts will be processed by
GREAT WESTERN within five (5) business days of receipt of the request and will
be effective as soon as administratively practical by AGENCY.
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C. GREAT WESTERN will provide Plan participants, unlimited opportunities to
redirect future deferral amounts to any other Investment Product offered by the
Plan. All requests will be processed within five (5) business days of receipt and be
effective with the next following pay period deferral.
D. GREAT WESTERN will provide participants, each business day, an opportunity
to exchange existing account balances from one investment option offered by the
Plan to another (except for the limitation described in Section 4 above). Exchange
requests for mutual funds will be processed with the fund being "sold" by the date
following the date GREAT WESTERN receives such instructions and will be
effective in the new fund not later than the day following GREAT WESTERN's
receipt of funds from the "sold" fund.
E. GREAT WESTERN will provide participants, if they request, a fund prospectus
and an annual report for each mutual fund offered by the Plan.
F. GREAT WESTERN will provide participants consolidated quarterly statements
detailing participant's year -to -date deferral amounts, account balance information
that includes changes in account value since the previous report date and any fees
or charges assessed against the Participant account. Participants shall be informed
that they must notify GREAT WESTERN within thrity (30) days of receipt of
their statements or confirmation of their investments, to report any errors in
transactions or statements. GREAT WESTERN will not be liable for any errors
not reported within this time frame.
G. GREAT WESTERN agrees to mail 90% of these statements to participants within
fifteen (15) business days after the end of each calendar quarter, and 100% of the
statements to participants within eighteen (18) business days after the end of each
calendar quarter. GREAT WESTERN will have no responsibility to report, or
account for the accuracy of information applicable to periods prior to the effective
date such Plan was administered by GREAT WESTERN.
H. GREAT WESTERN will provide certain standard reports quarterly to AGENCY
to enable them to effectively monitor all accounting and record - keeping processes.
These reports will include combined data for the Plan on all options administered
by GREAT WESTERN. (Fees and charges assessed will be disclosed in these
reports.) In addition, all services will be provided in accordance with the attached
Exhibit B.
GREAT WESTERN agrees to maintain, for a reasonable time, the records
necessary to produce the above - mentioned reports, and agrees that all records shall
be the property of AGENCY. AGENCY agrees that all related computer tapes,
disks, and programs shall remain the property of GREAT WESTERN.
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7. DISTRIBUTIONS:
A. GREAT WESTERN will assist participants in preparing the necessary forms to
select his /her distribution option.
B. Participants electing a payment of a lump sum amount will receive distribution of
their accounts within ten (10) business days of the earliest date permitted by the
Plan. However, GREAT WESTERN shall initiate the processing of all approved
emergency/hardship requests upon receipt.
C. GREAT WESTERN will provide necessary forms and process payments from the
participant's accout to the company selected by the Plan to provide annuity
options to Participants. Participant will be required to submit properly completed
forms to GREAT WESTERN in a time frame necessary to effectuate the "payment
begin date" requested by participant.
D. GREAT WESTERN shall offer to participants for distribution of their accounts a
designated amount payment option. Payments shall be made on a monthly,
quarterly, semi - annual or annual basis as specified by the participant in equal
installments (not less than $25.00 per payment) until the amount applied, adjusted
each business day for investment results is exhausted. The final installment will be
the sum remaining at the time such payment is due.
E. GREAT WESTERN shall also offer to Plan participants a designated payment
period option with a variable amount. Payments shall be made monthly, quarterly,
or annually for any specified number of years as permitted by the Plan at the
discretion of the participant. The amount of each variable payment shall be
determined by dividing the Participant's current portfolio balance by the number of
remaining payments.
F. All payment options described will be available for all investment options.
Participants selecting the Options in D or E above shall be subject to the same fees
and charges, and permitted the same exchange opportunities as an active or
inactive participant as defined by the Plan. Processing of these options will be
completed by GREAT WESTERN upon receipt of properly completed forms, in a
time frame necessary to effectuate the "payment begin date" requested by the
participant of either the first or the fifteenth of the month. All distributions wil be
made pro -rata from each of the Participant's investment options.
G. GREAT WESTERN will be responsible for preparing and filing all reports
required by federal and state taxing authorities through the effective date of the
termination of this Agreement. AGENCY shall be responsible for all reporting
requirements for periods prior to the effective date of this Agreement, or after the
termination date of this Agreement. GREAT WESTERN will be responsible for
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the annual filing of individual 1099 or W -2 forms, unless by contract between
AGENCY and an Investment Provider, the forms are prepared by the Investment
Provider. GREAT WESTERN shall withhold income taxes from the distributions
as required, and remit said taxes to appropriate regulatory atuhorities. GREAT
WESTERN shall also prepare and file periodic and annual tax returns for said
amounts withheld.
H. GREAT WESTERN agrees to provide Plan participants anticipating retirement or
other separation from service with illustrations indicating monthly benefit
payments at an assumed interest rate or an assumed rate of earnings. Such
assumed interest rate or rate of earning shall be for illustration purposes only. The
actual interest rate /yield on savings products during distribution shall change
quarterly and shall always be as described in Section 4 above. For mutual funds,
earnings wil be those acutally earned.
8. TERMINATION: Upon the effective date of termination of this Agreement the following
shall occur:
A. GREAT WESTERN will no longer accept deferrals. In addition, upon notification
of termination, GREAT WESTERN will cease opening GWBCDs.
B. GREAT WESTERN will provide AGENCY a copy of all records relating to
participant sub - accounts, in hard copy or such other form as mutually agreed upon
by GREAT WESTERN and AGENCY, within ninety (90) days after the effective
date of termination.
C. If termination is due to either party exercising the right of termination described in
Section 2 above, within 90 days of the effective date of termination, GREAT
WESTERN shall transfer savings account balances (less any early withdrawal
penalty imposed on GWB CDS) to AGENCY, or to such other entity as may be
designated in writing. GREAT WESTERN reserves the rigt to maintain GWB
CDs until maturity. Mutual funds will be transferred to AGENCY or to such other
entity as AGENCY may designate in writing.
D. Notwithstanding any provision herein to the contrary, if termination is for Cause
(as that term is herein defined), the disbursement of funds shall occur within forty -
five (45) days of the effective date of termination.
E. Accounts in distribution will be transferred to AGENCY or its designee in
accordance with the time frame described above.
F. The transfer /termination fee described in 91. below.
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9. FEES AND EXPENSES: In consideration of its administrative services under the Plan:
A. A fee will be charged by GREAT WESTERN. The determination of the amount
of the fee will be based upon the Plan's total assets being serviced by GREAT
WESTERN ( "Total Plan Assets "). This fee will be applied to the value of the
Participant's non - savings investments for which GREAT WESTERN is providing
administrative services. The fee will be calculated and assessed on applicable
Participant account balances on the last day of each month. The fee categories or
"bands" are as follows:
Band Total Plan Assets Annual Fee Monthly Fee
1 $ 0-$999,000 .80% .0666%
2 $ 1,000,000 -$ 4,999,999 .45% .0375%
3 $ 5,000,000 -$ 9,999,999 .34% .0283%
4 $10,000,000- $19,999,999 .30% .0250%
5 > $20,000,000 .28% .0233%
B. The band assignment for the first quarter of this contract will be based upon the
reasonable, good faith representation AGENCY makes to GREAT WESTERN
about the dollar amount of the AGENCY's total Plan Assets (savings and non -
savings options). If services commence during the first 60 days of a calendar
quarter, AGENCY shall have until the last day of that calendar quarter to reach
the dollar level to support the band assignment. If services commence during the
last 30 days of a calendar quarter, AGENCY shall have until the last day of the
next following calendar quarter to reach the dollar level to support the band
assignment. If at the end of the stated calendar quarter, the actual dollar amounts
of Total Plan Assets are different than the amount represented by AGENCY, then
AGENCY shall be placed into the band which reflects its actual Total Plan Assets.
The fee for the first month of this contract will be prorated for the number of days
in the month for which services are provided.
C. Before AGENCY shall be subsequently placed into another band, AGENCY's
Total Plan Assets must be of a dollar amount to justify the change at the end of
two consecutive quarters.
D. AGENCY may cause its fee to be reduced by using automated transmission of
participant and deferral information. This transmission must be in a format
designated by GREAT WESTERN. Use of this option will reduce the annual fee
by .O1 %. When available, AGENCY may also reduce its fee by use of the
automated voice response system. Use of this option will reduce the annual fee by
.01 %.
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E. GREAT WESTERN will deduct the fee from each Participant sub - account at the
end of each month. Except for the first month of this contract, fees will be
assessed against the Participants sub - account commencing with the first month of
this contract.
F. There shall be a transfer /termination fee not to exceed $25.00 per participant, only
when either the individual participant or AGENCY elects a total Plan transfer or
termination from the GREAT WESTERN Plan. In any other situation, no fee shall
be assessed. In addition, this fee shall not be assessed if this contract is terminated
by AGENCY for cause.
10. CONFIDENTIALITY: GREAT WESTERN agrees that all information supplied to and all
work processed or completed by GREAT WESTERN shall be kept confidential and will
not be disclosed except as required by law.
11. PRIVITY OF CONTRACT: GREAT WESTERN and Plan Participants shall have no
privity of contract with each other.
12. TITLE AND OWNERSHIP: In accordance with the provisions of Internal Revenue Code
Section 457, all account(s) established under this Agreement shall be held in the name of
AGENCY or in such other manner as required by law.
13. CIRCUMSTANCES EXCUSING PERFORMANCE: Neither party to this contract shall
be in default by reason of failure to perform in accordance with its terms if such failure
arises out of causes beyond reasonable control and without fault or negligence on their
part. Such causes may include, but are not limited to, acts of God or public enemy, acts of
the government in either its sovereign or contractual capacity, fires, floods, epidemics,
quarantine or restrictions, freight embargoes, or unusually severe weather.
14. INDEMNIFICATION: GREAT WESTERN agrees to be solely responsible to AGENCY
for any and all services performed by GREAT WESTERN, its agents or its employees
under this Agreement. GREAT WESTERN shall be responsible for any error or
negligence committed by GREAT WESTERN, its agents, or its employees. AGENCY
shall be responsible for any error or negligence committed by AGENCY, its agents or its
employees.
15. ASSIGNABILITY: No party to this Agreement shall assign the same without the express
written consent of the other party, which consent shall not be unreasonably withheld.
Unless agreed to by the parties, no such assignment shall relieve any party to this
Agreement of any duties or responsibilities herein.
16. PARTIES BOUND: This Agreement and the provisions hereof shall be binding upon and
shall inure to the benefit of the successors and assigns of the respective parties.
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17. APPLICABLE LAW: This Agreement shall be construed in accordance with the laws of
the State of California.
18. ARBITRATION: Any dispute which arises between the parties with respect to any of the
terms of this Agreement, whether such dispute arises during the term of the Agreement or
any extension period, or after the termination, shall be resolved through binding
arbitration. Arbitration shall be conducted in accordance with commercial rules of either
the American Arbitration Association ( "AAA") or the Judicial Arbitration and Mediation
Services ( "JAMS "). Each party agrees to waive its right, if any, to a jury trail and punitive
damages. Each party shall bear its own costs, including attorney fees, related to the
arbitration proceedings.
19. UNLAWFUL PROVISIONS: In the event any provisions of this Agreement shall be held
illegal or invalid for any reason, said illegality or inalidity shall not affect the remaining
parts of the Agreement, but the same shall be construed and enforced as if said illegal or
invalid provision had never been isnerted herein. Notwithstanding anything contained
herein to the contrary, no party to this Agreement will be required to perform or render
any services hereunder, the performance or rendition of which would be in violation of any
laws relating thereto.
20. MODIFICATION: This writing is intended both as the final expression of the Agreement
between the parties and as a complete statement of the terms of the Agreement pursuant
to California Code of Civil Procedure Section 1856 or its successor(s). No modification
of this Agreement shall be effective unless and until such modification is evidenced by a
writing signed by both parties.
21. NO WAIVER: The failure of either party to enforce any provision of this Agreement shall
not be construed as a waiver of that provision or of any other povision in the Agreement
and either party may, at any time, enforce the provision previously not enforced, unless a
modfiication to this Agreement has been executed.
22. SEVERABILITY: The provisions of this Agreement are severable, and, if for any reason a
clause, sentence, paragraph, or other part of this Agreement shall be determined to be
invalid by a court or a federal or state AGENCY, board, or commission having
jurisdiction over the subject matter thereof, such invalidity shall not affect other provisions
of this Agreement which can be given effect without the invalid provision.
23. NOTICES: All notices and demands to be given under this Agreement by one party to
another shall be given by certified or United States mail, addressed to the party to be
notified or upon whom a demand is being made at the respective addresse set forth in this
Agreement or such other place as either party may, from time to time, designate in writing
to the other party. Notice shall be deemed received on the earlier of, 3 days from the date
of mailing, or the day the notice is actually received by the party to whom the notice was
sent.
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If to GREAT WESTERN BANK
Deferred Compensation Department
19850 Plummer Street
Chatsworth, California 91311
Attention: Mr. Milt Bledsoe
If to AGENCY City of Gilroy
770 Chestnut Street
Gilroy, CA 95020
Attn: Mr. Art Gillespie
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on
the date first written above.
AGENCY:
BY TREASURER: ee�'
Date Signed: /r — 2 ? - !'7
BY FINANCE DIRECTOR-
.. -
Date Signed: 10 " 2-'? " f7
GREAT WESTERN BANK
M
Title:
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ASSIGNMENT OF DEFERRED COMPENSATION
PLAN ADMINISTRATION AGREEMENT
This Assignment of the Deferred Compensation Plan Administratio Agreement (the
"Assignment Agreement ") is entered into this /d_ J7 _ day of J111V , 2005, by
and among National Deferred Compensation, Inc ( "Assignor ") and Na ionwide
Retirement Solutions, Inc. (the "Assignee ") and the (�74-N
( "Agency ").
BACKGROUND
A. The Assignor is the successor party to Washington Mutual, FA ( "WaMu ") to a certain
Deferred Compensation Plan Administration Agreement dated
199, by and between Agency and WaMu.
B. By assignment from WaMu, the Assignor assumed contractual rights and obligations
to provide certain administrative, recordkeeping, reporting, enrollment, sales and
brokerage functions for the Agency's Section 457 Deferred Compensation Plan
pursuant to the terms of the Deferred Compensation Plan Administration Agreement.
The administrative, reporting, and recordkeeping functions were sub - contracted by
WaMu to Assignor pursuant to the Administrative Service Contract dated July 1,
1993 while the enrollment, sales, and brokerage functions were sub - contracted to
Assignor per the First Amendment to Administrative Service Contract dated February
24, 1997 (collectively the "Joint Sub - Servicing Agreement "). All right, title, and
interest in the Deferred Compensation Plan Administration Agreement, other than
Assignor's depository functions associated with federally insured deposit products
established prior to the date of the assignment from WaMu to Assignor, were
assigned to Assignor.
C. The Assignor was acquired by a wholly -owned subsidiary of Nationwide Financial
Services, Inc. (NFS) in 1998. The Assignor now desires to assign and transfer to
Assignee all of Assignor's right, title, and interest in and to the Deferred
Compensation Plan Administration Agreement, other than WaMu's despository
functions associated with federally insured deposit products established prior to the
date of the assignment from WaMu to Assignor, and Assignee, an indirect subsidiary
of NFS, desires to accept such assignment.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the terms and
conditions hereinafter set forth and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties, intending to be
legally bound, do hereby agree as follows:
01102005 ahc Page 1 of 3
1. Assignment
Assignor does hereby grant, assign, transfer, convey and deliver to Assignee, all of
Assignor's right, title and interest in and to the Deferred Compensation Plan
Administration Agreement accruing on or after the date of this Assignment Agreement,
other than those depository functions described in Section 4.A. and 4.13. of such Deferred
Compensation Plan Administration Agreement entitled "Investment Options ", which will
continue to be performed by WaMu on or after the date of this Assignment.
2. Acceptance of Assignment
Assignee does hereby accept the assignment set forth in Section 1 herein and expressly
assumes and agrees to keep, perform and fulfill the terms, covenants, conditions and
obligations required to be provided by Assignor under the Deferred Compensation Plan
Administration Agreement.
3. Indemnification
Assignee, its successors and assigns, hereby covenant and agree that they shall defend,
indemnify and hold harmless Assignor from and against any and all claims, liabilities,
damages, losses, suits, costs and expenses of every kind, nature and type asserted by any
person, entity or party attributable to events arising out of or under the Deferred
Compensation Plan Administration Agreement on or after the date of this Assignment.
All indemnity rights existing under the Joint Sub - Servicing Agreement between WaMu
and Assignor are not superseded by this Assignment Agreement and shall remain in full
force and effect.
4. Consent to Assignment
The Agency hereby consents to the assignment set forth in this Assignment Agreement
and hereby acknowledges that all rights, obligations or liabilities under the Deferred
Compensation Plan Administration Agreement accruing on or after the effective date of
this assignment will be the responsibility of Assignee and Assignor is expressly released
from such obligations and liabilities assigned hereunder.
5. Miscellaneous
The Assignment Agreement sets forth the entire understanding of the parties hereto with
respect to the assignment of the Deferred Compensation Plan Administration Agreement
and shall supersede all prior contracts, agreements, arrangements, communications,
discussions, representations and warranties, whether oral or written, among the parties
related to said assignment. The parties hereto expressly agree that the Joint Sub -
Servicing Agreement between WaMu and Assignor is in full force and effect; provided,
however, any rights, liabilities and obligations thereunder relating to Agency that accrue
on or after the date hereof are terminated. This Assignment Agreement shall be binding
upon and inure to the benefit of successors and assigns of each of the parties hereto. The
01102005 ahc Page 2 of 3
rights, obligations or liabilities under this Assignment Agreement shall not be assignable
by any party without the prior written consent of each of the parties hereto. This
Assignment Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and legally binding for contractual purposes. The
failure on the part of the parties hereto to enforce any provision of this Assignment
Agreement shall not be construed to be a waiver of such provision or of the right
thereafter to enforce same, and no waiver of any breach shall be construed as an
agreement to waive any subsequent breach of the same or any other provision.
In all other respects, the Deferred Compensation Plan Administration Agreement shall
remain the same.
IN WITNESS WHEREOF, the parties to the Assignment Agreement have
executed this instrument to be effective on the date set forth above.
National Deferred ompensation, Inc.
By:
Lance V. Kesterson
Its: Vice President, General Manager
oiiozoos ahc
Nationwide Retirement Solutions, Inc.
obert A. Bilo
Its: Regional Vice President
Page 3 of 3
Nationwide® -' i wl
Retirement Solutions
On Your Side'
Here is your new Plan Document
As your partner in the Deferred Compensation Program, Nationwide is pleased to present you with
the Amended and Restated 457(b) Governmental Plan Document (Plan Document). Effective
January 1, 2006, we will administer your deferred compensation program in accordance with this
Plan Document.
We ask that you:
1. Review the enclosed Plan Document and contact us if you have questions. To help you
understand what is new or different, we have prepared an Explanation of Substantive Changes,
beginning on page 2 of this letter.
2. Please review this document with all appropriate staff and implement this Plan Document
no later than December 31, 2005.
3. Retain this document, along with any loan amendments to your previous Plan Document,
with your other important papers.
Why has the Plan Document been changed?
On July 11, 2003, the United States Department of Treasury issued final regulations for Internal
Revenue Code Section 457. The Internal Revenue Service requires that governmental 457(b) plans
conform to the final regulations as of January 1, 2006, and issued model amendments as guidance.
Most of the changes in your new Plan Document have been made to be consistent with the language
in the model amendments. Also, a few substantive changes were incorporated to provide your
participants with additional flexibility with their deferred compensation accounts, as permitted in the
final regulations.
Nationwide has made it easy for your Plan to conform to the final regulations. The enclosed
Plan Document not only complies with the final regulations, but also includes modifications that are
a result of recent IRS regulations, rulings and guidance.
What else do I need to do?
Nothing! Once you've reviewed and adopted the Plan
Document, you're all set.
We appreciate the opportunity to offer this important
benefit to your employees.
If you have questions about the new Plan Document or
any aspect of your deferred compensation program,
please contact your Nationwide representative or call
1- 877- NRS -FORU (877- 677 - 3678), option 8.
Plan Document Checklist
❑ Read the Explanation of
Substantive Changes along with
your new Plan Document.
❑ Implement the Amended and
Restated 457(b) Governmental
Plan Document by December 31,
2005.
❑ Retain the new Plan Document.
Explanation of Substantive Changes
The IRS issued model amendments incorporating the provisions of Economic Growth and Tax
Relief Reconciliation Act of 2001 (EGTRRA), the final regulations, and other pertinent IRS
rulings and related legislation. Although the model amendments are for guidance only and do
not have the effect of law, they have been incorporated into your 457(b) governmental Plan to
the extent applicable.
The following is a brief description of modifications to the Plan document consistent with the final
457(b) regulations, the 457(b) model amendments, subsequent IRS guidance, proposed regulations,
and other pertinent legislation. The specific Plan section is included so that you can refer to the Plan
document. The Plan Document will be effective January 1, 2006.
ARTICLE I
Definitions
Account Balance — Account balance is a new term adopted by the IRS in the model amendments.
The account balance is defined as the bookkeeping account maintained for each participant in the
Plan. Within the account balance are sub - accounts, such as Plan Sponsor contributions, eligible
rollover account(s), and plan -to -plan transfers into the Plan. Beneficiaries and alternate payees have
separate account balances. [Section 1.01(b)]
Alternate Payee — An alternate payee is a person entitled to receive a benefit through a Domestic
Relations Order (DRO). DROs are now a standard feature of your Plan. [Section 1.01 (c)]
Includible Compensation — This Plan adopts the model amendments' definition of includible
compensation, to determine 100% of includible compensation contribution limit. Includible
compensation is defined as W -2 compensation adjusted for elective deferrals. [Section 1.01 (j)]
Normal Retirement Age — The normal retirement age has not been modified and remains age 65,
unless otherwise designated. However, the Plan now includes the special rule for determining
normal retirement age applicable to police and firefighters. The final 457 regulations permit qualified
police and firefighters to use an earlier normal retirement age, but no earlier than age 40. [Section
1.01 (m)]
Definition of Spouse — The Plan adopts the definition of spouse under the federal Defense of
Marriage Act (DOMA), which is a person of the opposite sex who is a husband or wife. [Section
1.01 (u)]
ARTICLE II
Election to Defer Compensation
Deferrals During Leaves of Absence and Disabili ty — Participants on leave of absence and
participants who are disabled may continue to make deferrals to the extent that compensation
continues to be paid. Disability benefits do not constitute a continuation of compensation. [Section
2.07 and 2.08]
ARTICLE III
Limitations on Amounts Deferred
Aggregation with Other 457(b) Plans — The 2003 final regulations require aggregation of 457(b)
governmental plan contributions whether or not the plans are related. If the participant is
contributing to an unrelated 457(b) governmental plan as well as to your 457(b) Plan and the
contributions cause the participant to exceed the limits, the plans will not lose their tax - favored
status. The Plan places the responsibility on the participant to provide participation information to
the Plan Sponsor to monitor annual deferral limits. [Section 3.04]
Correction of Excess Deferrals — The model amendments permit the Plan to unilaterally correct
excess deferrals during the plan year. Nationwide will distribute the excess deferrals at your direction
as soon as administratively practicable. [Section 3.05]
Deferrals from Certain Sick Pay, Vacation Pay, and Back Pay —The proposed regulations
recently issued by the IRS regarding Internal Revenue Code, as amended, Section 415 include a
proposed amendment to Treasury Regulations 1.457 -4(d) regarding deferrals of sick, vacation and
back pay for former employees. Such deferrals may be made within 2 '/2 months following severance
from employment. This applies also to compensation paid to participants who are permanently and
totally disabled, and compensation paid to participants relating to qualified military service under
IRS Code section 414(u). [Section 3.06]
ARTICLE IV
Plan Sponsor Contributions
Plan Sponsor Contributions — Although not included in the model amendments, the Plan
continues to permit the Plan Sponsor to make contributions should it desire to do so. [Section 4.01]
ARTICLE V
Distribution of Benefits
Benefit Distributions under Annuity — The model amendments assume that there is a trust for an
eligible 457(b) governmental plan is a trust. However, this Plan permits the use of a trust, custodial
agreement and /or an annuity contract.
In- Service Distributions from Eligible Rollover Accounts — IRS Revenue Ruling 2004 -12
permits distributions of rollovers to the extent such rollovers are maintained in a sub - account. The
Plan maintains separate accounting for rollovers into the Plan making such rollovers eligible for in-
service distributions. [Section 5.08]
Unforeseeable Emergency Distributions — The 2003 final regulations permit participants and
beneficiaries to take unforeseeable emergency distributions. The model amendments provide that
only participants are eligible for unforeseeable emergencies. Presumably this is because beneficiaries
are entitled to take distributions at any time. For this reason, the Plan refers only to participants
being eligible for unforeseeable emergency distributions; beneficiaries are eligible for distributions at
any time. [Section 5.09]
Due to emergency legislation enacted as a result of Hurricanes Katrina, Rita, and Wilma, a provision
has been incorporated that permits the Plan to amend its criteria for unforeseeable emergency
distributions accordingly without the need to further amend the Plan document.
Voluntary In- Service Distributions — The 457(b) regulations permit distribution of smaller
accounts of $5,000 or less be distributed if there have been no prior voluntary de minimis
distributions and no deferrals made in the prior two years. The model amendments assume
mandatory de minimis in- service distributions. However, the Plan does not adopt this provision and
continues to permit de minimis in- service distributions on a voluntary basis. [Section 5.10]
ARTICLE VI
Eligible Rollovers and Plan -to -Plan Transfers
Sub - Account for Eligible Rollover Contributions — IRS Revenue Ruling 2004 -12 permits
distributions of rollovers to the extent such rollovers are maintained in a separate account. The Plan
maintains separate accounting for rollovers into the Plan and such rollovers are eligible for in- service
distributions. [Section 6.01 (b)]
Loans — The model amendments related to loans are not included in the Plan document. Loans
continue to be an available feature that may be added on to your Plan. If your Plan currently offers
loans, the loan amendment continues to be part of your Plan document and is incorporated in this
Plan document accordingly.
ARTICLE VII
Domestic Relations Orders
Domestic Relations Orders — The Plan now includes the acceptance of DROs as a standard Plan
feature. The previous DRO amendment has been incorporated into the Plan document. The
Administrator will continue to review and process DROs submitted to the Plan. [Sections 7.01 -7.05]
ARTICLE IX
Investment of Deferred Amounts
Limitations on Transfers and Exchanges — Although generally the Plan permits participants,
beneficiaries, and alternate payees to self - direct its investment selections with minimum limitations,
there are some investment options that have restrictions that will be imposed. In addition, the Plan
provides for market timing restrictions in accordance with restrictions imposed by a funding
provider, the Administrator, and /or a regulatory agency. [Section 9.04]
ARTICLE XII
Miscellaneous
Non - Assignability — 457(b) governmental plan assets remain non - assignable. With certain
exceptions, such assets cannot be transferred. However, the model amendments permit the Plan to
attach the assets of a participant, beneficiary, or alternate payee to pay a federal income tax levy.
Under the Bankruptcy Abuse Protection and Consumer Protection Act of 2005, assets in an eligible
457(b) plan may be exempted from bankruptcy proceedings. [Sections 12.01 and 12.02]
Mistake of Fact Rule — The model amendments extends and adopts the mistake -of -fact rule found
in IRS Revenue Ruling 91 -4 applicable to ERISA qualified plans. Although not subject to ERISA,
457(b) governmental plans are permitted by the IRS to refund mistaken contributions within one
year after the payment of the mistaken contribution. [Section 12.03]