Chapter 3.34
DEFERRED COMPENSATION FOR EMPLOYEES

Sections:

3.34.010    Authority.

3.34.020    Definitions.

3.34.030    Administration.

3.34.040    Eligibility to participate.

3.34.050    Participation.

3.34.060    Deferral limitations/maximums.

3.34.065    Employer matching contributions

3.34.070    Participant Accounts

3.34.080    Report on status of plan.

3.34.090    Distribution of benefits.

3.34.100    Responsibilities of the county.

3.34.110    Rights of participants.

3.34.120    Termination or amendment.

3.34.900    Severability.

3.34.010 Authority.

Chapter 41.04 RCW authorizes public employers of the state to contract with their employees to defer a portion of the employees’ income to be deposited or invested in a credit union, savings and loan association, bank, mutual savings bank, or purchase life insurance, shares of an investment company or fixed and/or variable annuity contracts for the purpose of funding a deferred compensation program for employees. Based on the foregoing, the county executive is hereby authorized to establish an optional deferred compensation plan for county employees.

(Added Ord. 84-120, § 2, Oct. 10, 1984).

3.34.020 Definitions.

As used in this chapter, the following terms shall have the meanings set forth below:

(1) "County" means Snohomish county, state of Washington.

(2) "Plan" means the Snohomish County Deferred Compensation Plan described and established in this chapter.

(3) "Participant" means an employee who meets the eligibility requirements of SCC 3.34.040 and applies for participation in accordance with the provisions of SCC 3.34.050.

(4) "Beneficiary" means an alternate payee of the participant and the person or entity designated by the participant to receive the unpaid benefit to which the participant is entitled under the plan and the terms of the investment(s) in the event of the participant’s death.

(5) "Separation from service" means the employee has resigned, been laid off or terminated. If there is a reasonable anticipation or reasonable cause to believe the employee will be returned to work for the county within two months, the cessation from work will not be a separation from service.

(6) "Compensation" means all payments made by the employer to an employee as renumeration for services rendered to the employer, including salaries and fees.

(7) "Normal retirement age" means any age of which a participant has the right to retire under any one of the state of Washington retirement systems’ pension plans and to receive immediate retirement benefits without actuarial or similar reduction because of retirement before some later age in the state retirement basic pension plan.

(8) "Employee" means any person who is employed by and receives any type of compensation from the employer for services rendered to the employer, specifically including salaried employees of the employer. An individual who is not treated by the employer as an employee for payroll tax purposes during the period that he or she performs services for the employer, will not be treated as an employee for such period.

(9) "Employer" means Snohomish County, or any of its agencies or departments for which services are performed by a participant.

(10) "Investment" means the investment funds or products authorized by the committee for the investment of participant accounts.

(11) "Committee" means the deferred compensation plan committee.

(12) Qualified domestic relations order means a qualified domestic relations order as defined in IRS Code Section 414(p) and made pursuant to the laws of the State of Washington.

(13) Alternate payee means any spouse, former spouse, child or other dependent of a participant who is recognized by a qualified domestic relations order as having a right to receive all, or a portion or, the benefits payable under the plan with respect to the participant.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003; Ord. 05-046, July 13, 2005, Eff date July 25, 2005).

3.34.030 Administration.

(1) The deferred compensation plan authorized by this chapter shall be administered by the deferred compensation committee which shall consist of the director of the department of finance, the director of the department of human resources and the county prosecuting attorney or his designee.

(2) The committee shall have the power and authority to adopt rules and regulations for the administration of the plan consistent with this chapter.

(3) The committee is authorized to contract with any person to provide any services for the administration of the plan including but not limited to processing of employee participation agreements, maintenance of participants’ records and selection of investment media pursuant to the requirements and procedures of chapter 3.04 SCC.

(4) The committee members, if otherwise eligible, shall be eligible to participate in the plan PROVIDED That they shall not be entitled to make decisions solely with respect to their own participation.

(5) The duties of the committee shall include the following:

(a) To determine the appropriate open change periods, which shall be held at least twice per year.

(b) To rule on employee requests to modify agreements and to withdraw funds with consideration given to IRS code Section 457 restrictions and treasury regulations, administrative costs to the county or its agents, and impact on overall status of the plan, financial and otherwise.

(6) The county council shall rule for committee members on any requests to modify agreements and requests to withdraw funds, subject to the guidelines contained in subsection (5)(b) of this section.

(7) The committee shall, on a periodic basis, compare the plan being offered to county employees with those available from other agents or companies, and make plan modifications or changes when appropriate.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003).

3.34.040 Eligibility to participate.

Every permanent full time and permanent part time employee of the county who is a bona fide resident of the state of Washington is eligible for participation in this plan. A participant shall remain a participant until the participant’s benefit has been completely distributed from the Plan. Eligibility to defer compensation, however, shall terminate upon separation from service. All compensation paid under this plan shall be paid pursuant to SCC 3.34.100.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003).

3.34.050 Participation.

(1) An eligible employee may become a participant by executing a participation agreement and filing such participation agreement with the committee or its designee during an open change period. Such deferred amount shall hereinafter be referred to as "deferred compensation" and, except for distributions to alternate payees permitted under the plan and the terms of a qualified domestic relations order, shall only be paid to the employee and his or her beneficiaries at retirement, separation from service, death or upon the proven occurrence of an unforeseeable emergency as defined in IRS Code Section 457 and the regulations promulgated by the internal revenue service.

(2) The participation agreement may only be entered into during an open change period. Other changes in the agreement may be allowed only as provided in the plan.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003; Ord. 05-046, July 13, 2005, Eff date July 25, 2005).

3.34.060 Deferral limitations/maximums.

The annual maximum amount of compensation which may be deferred and the allowance of catch up contributions shall be determined by the plan document, in accordance with provisions of the Internal Revenue Code.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003).

3.34.065 Employer matching contributions

A matching contribution will be made by the county on behalf of eligible participants during each pay period. Eligibility and the amount of the matching contribution are defined by the plan document, subject to amendments adopted by the committee.

(Added Ord. 02-085, December 18, 2002, Eff date January 1, 2003)

3.34.070 Participant Accounts

A separate bookkeeping account shall be maintained for each participant in the plan, to reflect each participant’s interest under the plan. All contributions made to the plan on a participants behalf shall be recorded in the participant’s account, which shall be adjusted for investment interest income or loss and allocable fees, expenses and charges.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003).

3.34.080 Report on status of plan.

The committee shall prepare and present to the county council an annual report covering the period of January through December on the status of the plan which shall include, at a minimum, the total number of participants and the total deferred compensation of the participants.

(Added Ord. 84-120, § 2, Oct. 10, 1984).

3.34.090 Distribution of benefits.

(1) Eligibility for and payment of benefits shall be governed by the provisions of the plan and shall be consistent with the applicable provisions of the Internal Revenue Code, the terms of the plan documents, and the terms of the investments

(2) A participant’s benefit under the plan shall be distributed (or commence to be distributed) to the participant and his or her beneficiaries at such time as the participant may elect in accordance with and subject to the terms of any qualified domestic relations order to which the participant is a party and such rules as the committee or the investment(s) may establish; provided, however, that except for unforeseeable emergency withdrawals and distributions to alternative payees under the terms of a qualified domestic relations order permitted under the plan, distributions from the plan may not be made to the participant or his or her beneficiaries earlier than (a) the calendar year in which the participant attains age 70 1/2;, or (b) the participant’s severance from employment with the employer.

(3) Benefits shall be paid in accordance with the payment option elected by the participant subject to the terms of the Investment(s) and the terms of any qualified domestic relations order to which the participant is a party. If a participant dies before the benefits to which the participant is entitled to under the plan have been exhausted, the remainder of such benefits will be paid to the participant’s designated beneficiary in accordance with the terms of the investment(s) and the plan documents.

(4) A participant may elect a direct rollover distribution to an eligible retirement plan, in a manner prescribed by the committee, in accordance with the terms of the investment(s), the IRS Code, and the plan documents.

(5) As defined by the plan documents, and approved by the committee, a participant or beneficiary may request a distribution from the plan due to an unforeseeable emergency, subject to the terms specified by the investment(s) in accordance with IRS Code.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003; Ord. 05-046, July 13, 2005, Eff date July 25, 2005).

3.34.100 Responsibilities of the county.

(1) The county may not warrant any tax benefits or advantages under the plan.

(2) The county shall be exonerated and held free from any liability of any kind hereunder if decisions or actions taken by the county are in good faith.

(3) Nothing in this chapter shall in any way affect the rights of the county or the employees to terminate the employment relationship between them.

(4) A trust, custodial account, or annuity contract will be established, in accordance with IRS Code and the terms of the plan document, for all amounts deferred under the plan, all property purchased, and rights purchased with such amounts, and all income attributable to such amounts, property or rights, to be held for the exclusive benefit of the participants and their beneficiaries.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003).

3.34.110 Rights of participants.

Each employee, upon having elected to become a participant, shall be deemed to have assented to the terms and conditions of the plan. The participant may not sell, assign or hypothecate any part of his or her account under the plan. Nor shall his or her contractual rights be subject to attachment by any creditor. A participant’s contractual rights, however, may be assigned to an alternate payee as a beneficiary of the participant under the terms of a qualified domestic relations order. Each participant shall at all reasonable times be allowed to examine his or her particular deferred compensation account to determine its status and condition, and the county shall submit to the participant periodic reports of the progress of his or her particular account.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003; Ord. 05-046, July 13, 2005, Eff date July 25, 2005).

3.34.120 Termination or amendment.

The county may terminate the plan at any time. Upon termination, the plan shall continue in operation but without any further crediting of deferred compensation. The county may amend the plan at any time, PROVIDED That no such amendment shall with respect to any participant reduce such benefits provided hereunder as are derived from deferred compensation credited to him or her prior to the effective date of any such amendment.

(Added Ord. 84-120, § 2, Oct. 10, 1984; Ord. 02-085, December 18, 2002, Eff date January 1, 2003).

3.34.900 Severability.

If any provision of this chapter, or its application to any person or circumstance is held invalid, the remainder of the chapter or the application of the provisions to other persons or circumstances is not affected.

(Added Ord. 84-120, § 2, Oct. 10, 1984).