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HomeMy WebLinkAbout2013 - Defined Contribution Plan Minutes CITY OF LANSING DEFINED CONTRIBUTION PENSION PLAN/ VEBA PLAN MEETING OF FEBRUARY 7, 2013 The Administrative Board was called to order at 9:08 a.m. Present: Members: Bill Barkyoumb, Angela Bennett, Randy Endsley, Antonia Kraus, T'�W''ri r Taylor (9:09a)- 5. = Absent: Randy Hannan, Faith Rach n :� �a Others: Anne Omiljan, Wells Fargo; Karen E. Williams, Finance; Attorney Don KulhanekjavV- C Mark Parker, Employees Retirement System Board. �- 10 N It was moved by Ms. Kraus and supported by Ms. Bennett to approve the Administrative B drd Committee Meeting Minutes for November 8, 2012. Adopted by the following vote: 4 -0. Ms. Anne Omiljan provided an overview of the Defined Contribution plan assets. Ms. Omiljan reviewed the plan assets, explained the fee breakdown of plan fund expenses, and performance of the funds for the fourth quarter of 2012. Ms. Omiljan reported to the Administrative Board that Eagle Capital and William Blair Small Cap Growth had been placed on the watch list. Ms. Omiljan provided suggested alternatives to replace these funds. Ms. Omiljan suggested William Blair Growth to replace Eagle Capital Appreciation. Oppenheimer Discovery, Pioneer Oak Ridge Small Cap Growth and RS Small Cap Growth were suggested as alternatives for the William Blair Small Cap Growth Fund. The Administrative Board discussed that both Eagle Capital and William Blair had struggled to meet it investment criteria in several of its last quarters. The Board also discussed that Perkins Small Call Value did not have any participants invested in the fund. Ms. Omiljan suggested that Wells Fargo had alternative investment funds that would provide similar offerings. The Administrative Board discussed dropping Perkins Small Cap Value and finding a replacement for the William Blair Small Cap Growth. Ms. Omiljan suggested the Perkins Small Cap Value could be mapped into the Small Cap Index. It was moved by Ms. Kraus and supported by Mr. Endsley to drop the Eagle Capital Appreciation and to map the Eagle Capital Appreciation to William Blair Growth Fund. Adopted by the following vote: 5 —0. The Administrative Board Committee reviewed and discussed the Fund Fact reports for Oppenheimer Discovery, Pioneer Oak Rid Small Cap Growth and RS Small Cap Growth with Ms. Anne Omiljan. It was by Ms. Bennett and supported by Mr. Endsley to select Oppenheimer Discover to replace the William Blair Small Cap Growth Fund. Adopted by the following vote: 5 - 0 Karen Williams reported that she received an email from Ms. Rach requesting an excused absence from the February meeting. It was moved by Ms. Bennett and supported by Mr. Endsley to excuse Ms. Rach from the February Defined ContributionNEBA plan meeting. Adopted by the following vote: 5 —0 Mr. Mark Parker reported that the Joint Retirement Boards have planned a Retirement Conference for Thursday, September 12, 2013 from 12:30 p.m. —8:00 p.m. Mr. Parker explained that the Conference will be similar to the one that was held in 2008. The City's health care providers will be invited and there will be break-out sessions, and a keynote speaker for dinner. Mr. Parker would also like to include the City's Deferred Compensation Plans at the Conference and requested a volunteer from the Deferred Compensation Committee to assist with the planning. Ms. Williams indicated that Ms. Faith via her email requested to be included on the Retirement Conference Planning Committee, Attorney Don Kulhanek updated the Administrative Board regarding the status of the Plan. Attorney Kulhanek indicated that the City Attorney's Office is working with Foster Swift to amend the Defined Contribution Plan. The amendment would allow Teamster 214 contract members to be eligible for the Plan with different benefits. The Administrative Board would meet to review and recommend the amendment to the Mayor's Office for approval. Ms. Anne Omiljan discussed the Defined Contribution Plan Default fund suggestion. Ms. Omiljan suggested the Wells Fargo Target Date Funds. Ms. Omiljan also discussed the Defined Contribution enrollment materials. It was moved by Ms. Bennett and supported by Mr. Endsley to name the Target Date Funds as the Defined Contribution Plan Default fund. Adopted by the following vote: 5 —0. Ms. Omiljan also informed the Administrative Board that Wells Fargo now has E-statements that can be electronically mailed to participants. The Administrative Board Committee agreed to add E-statements to the Wells Fargo services for participants. Karen Williams distributed a membership roster, the administrative rules and an election posting for the Committee to review. She informed the Board that Faith Rach's appointed term would expire April 1, 2013. Ms. Kraus provided a history of the Administrative Board and suggested that the Committee discuss redefining the future membership and name of the Administrative Board. Ms. Kraus indicated that the membership is changing with the addition of Teamster 214. Ms. Kraus discussed that the VEBA started in 2000 and the duties and administration of the fund was added to the Money Purchase Board. Ms. Williams asked if the Administrative Board wished to delay the posting for the election. Mr. Barkyoumb stated that the administrative rules indicated that an election should be held. The Administrative Board agreed that the election posting for the term ending April 1, 2013 should proceed. The Administrative Board discussed subcommittee membership. Ms. Kraus requested that she be removed from Education committee. Mr. Barkyoumb requested that he be added to the Education committee. The Administrative Board reviewed the pending items and agreed to remove item A: the eligibility of former members for participation in the VEBA. Ms. Kraus provided a background of the health care for beneficiaries after a retiree's death. The VEBA did not begin until 2000 for retiree health care for those in the Money Purchase Plan. Mr. Barkyoumb clarified that the question was to determine if a non-spousal beneficiary can be eligible for retiree health care. Attorney Don Kulhanek can review the VEBA. Ms. Anne Omiljan stated that she could review the VEBA document also. Mr. Barkyoumb asked the status of Angela Bennett's position. Ms. Williams indicated that she had contacted Mr. Randy Hannan's Office and requested re-appointment of Angela Bennett to the Defined Contribution PlanNEBA Plan Agenda. Mr. Barkyoumb indicated that Angela Bennett may continue to serve as the Mayor's appointment until he re-appoints her. Ms. Williams confirmed that members in the past have continued to serve while waiting for re-appointment. Mr. Barkyoumb requested that the Election of Officers be moved to pending to await the outcome of the election for Faith Rach's position. Ms. Angela Bennett updated the Administrative Board that the OPEB Actuary Report will be provided to Defined Contribution Board for review. It was moved by Ms. Kraus and supported by Ms. Bennett to adjourn the meeting. Adopted by following vote: 4—0. The meeting adjourned at 10:42 a.m. CITY OF LANSING DEFINED CONTRIBUTION PENSION PLAN/ VEBA PLAN MEETING OF MAY 2, 2013 The Administrative Board was called to order at 9:08 a.m. Present: Members: Bill Barkyoumb, Angela Bennett, Randy Endsley, Faith Rach- 4. Absent: Randy Hannan, Terri Taylor, Antonia Kraus > Others: Anne Omilj an, Wells Fargo; Karen E. Williams, Finance; Attorney Don KulhaRk,Vaw. It was moved by Ms. Bennett and supported by Mr. Endsley to approve the Administra�i" e _ c� Board Committee Meeting Minutes for February 7, 2013 with amendments. C' Adopted by the following vote: 4 -0. C- w IM CD Ms. Anne Omiljan provided an overview of the Defined Contribution plan assets. Ms. O.jnil5�Ri reviewed the plan assets, explained the fee breakdown of plan fund expenses, and performance of the funds for the first quarter of 2013. Ms. Omiljan reported on the unclaimed checks held by the fund. Ms. Omiljan reviewed the Executive Summary for the Plan and reviewed the new format for the City of Lansing Defined Contribution Plan Performance Summary. Ms. Omiljan provided an overview of the updated reporting criteria: Fund Characteristics, Performance, Risk Adjusted Return and Expenses. Ms. Omiljan also discussed the Wells Fargo platform for monitoring funds, with ranges from A to D. Ms. Omiljan reviewed the criteria for the platform. However, the plan must have $10 million of investments. Ms. Omiljan informed the Committee that the E-Statements are available for participants and discussed the Education offered by Wells Fargo. Ms. Bennett requested if Wells Fargo could provide a demonstration of the online education. Ms. Omiljan will also send out information for a demo web site that committee members can review. Ms. Omiljan explained that the Wells Fargo has been using elapsed time since the account was transferred from Comerica. Ms. Omiljan stated that this information was discovered during a recent audit. The Plan document indicates that hours should be used for Defined Contribution vesting. The Plan would allow the member who has earned 1000 hours would receive 1 year of service for vesting. Ms. Omiljan stated that hours would need to be sent to Wells Fargo for new hires or the Plan document would need to change to elapsed time. Ms. Omiljan discussed adding Ms. Terri Taylor or a member from Human Resources to the authorized signers list for new employees into the Plan. Ms. Omiljan stated Wells Fargo would prefer the contribution file be sent electronically. Ms. Omiljan will have file specs to Mr. Endsley. There were no reports. Ms. Bennett left the meeting. The quorum was lost. Attorney Don Kulhanek stated that the Defined Contribution Plan restatement is under review. Karen Williams stated that there were no nominating petitions received for Faith Rach's term. Ms. Rach was appointed by the Mayor. Mr. Bill Barkyoumb stated that past practice that the member whose term expired would continue to serve on the Committee until an appointment by the Mayor. Karen Williams provided an updated of the Retirement Conference 2013. The Retirement Conference will be held at the Lansing Center, September 12, 2013. Mr. Mark Parker of the Employees Retirement System is chairing the planning committee. The Conference is free to all City Employees, Spouses and Retirees. The Conference will have break-out sessions that will include deferred compensation, taxes, social security, health care, and pension legislation. Mr. Barkyoumb asked if there needed to be a special election for Faith Rach's term. Attorney Don Kulhanek indicated that the rules do not discuss special elections. Karen Williams indicated that the next election cycle would be in April 2014. Ms. Rach inquired if she would remain on the Administrative Board. Attorney Don Kulhanek affirmed that she would remain on the Administrative Board until a new appointment from the Mayor or an election. The meeting adjourned at 10:03 a.m. CITY OF LANSING o DEFINED CONTRIBUTION PENSION PLAN/ VEBA PLAN t-�- MEETING OF AUGUST 15, 2013 - amended r, %_0 rm The Administrative Board was called to order at 9:04 a.m. -� ko Present: Members: Angela Bennett, Randy Endsley, Antonia Kraus, Faith Rach, Terri 76ilor,=5. Absent: Randy Hannan, Bill Barkyoumb =? ry t. Others: Anne Omiljan, Wells Fargo; Karen E. Williams, Finance; Attorney Don Kulhanek, Law. It was moved by Mr. Endsley and supported by Ms. Taylor to approve the Administrative Board Committee Meeting Minutes for May 2, 2013. Adopted by the following vote: 5 -0. Ms. Anne Omiljan provided an overview of the Defined Contribution plan assets. Ms. Omiljan reviewed the plan assets, explained the 408 (b) (2) Fee disclosure breakdown of plan fund expenses, and performance of the funds for the second quarter of 2013. Ms. Omiljan provided a Wells Fargo Website Demonstration and reviewed the online tools available for participants. Ms. Omiljan also discussed the Wells Fargo bringing in the investment team to provide a presentation for the VEBA Account. Ms. Omiljan informed the Administrative Board that Wells Fargo has indicated the City of Lansing Defined Contribution account is not large enough and has plans to transfer the DC Plan to a central Relationship Manager, serviced through a toll free number. Ms. Omiljan suggested that combining the Defined Contribution and VEBA accounts with Wells Fargo would allow the accounts to stay with the current relationship manager and a portfolio strategist would be available to attend the quarterly meetings and assist in serving the account. The administrative board requested a presentation regarding options for the VEBA to be held. There were no reports. Attorney Don Kulhanek updated the Adminstrative Board that the Defined Contribution Plan restatement is under legal review. Karen Williams provided an updated of the Retirement Conference 2013. The Retirement Conference will be held at the Lansing Center, September 12, 2013. Mr. Mark Parker of the Employees Retirement System is chairing the planning committee. The Conference is free to all City Employees, Spouses and Retirees. The Conference will have break-out sessions that will include deferred compensation, taxes, social security, health care, and pension legislation. Ms. Rach inquired about the VEBA Account and how retiree health care payments and requests would be processed. Ms. Kraus informed the Board that the VEBA Account is a funding vehicle. The account will be used by the administration to reimburse or pay future health care costs. At the time, the VEBA Account is not large enough to start paying full health care costs for VEBA eligible retirees. Ms. Bennett added the administration is adding to VEBA account to grow the investment to a point where the money can be used to pay health care costs in the future. The meeting adjourned at 10:04 a.m. CITY OF LANSING DEFINED CONTRIBUTION PENSION PLAN/ VEBA PLAN MEETING OF AUGUST 27,2013 -amended The Administrative Board was called to order at 9:12 a.m. Present: Members: Angela Bennett, Randy Endsley, Antonia Kraus, Faith Rach- 4. Absent: Bill Barkyoumb, Randy Hannan, Terri Taylor Others: Anne Omiljan, Mike Johnshoy, David Nelson, Wells Fargo; Karen E. Williams, Finance; Attorney Don Kulhanek, Law. Ms. Faith Rach presided over the meeting. Ms. Omiljan provided an overview of the Investment Management Service that would li� w available to the City of Lansing by moving the VEBA account to Wells Fargo with the Mfin@ Contribution Plan. Mr. Johnshoy and Mr. Nelson discussed how the VEBA portfolio wad '' --7 constructed and provided a sample Investment Policy Statement. Ms. Omiljian reviewee 1 Tt Wells Fargo fee arrangement and the services included with the management expense. c; There were no public comments. r` r� The Administrative Board Committee discussed the pros and cons of moving the VEBA account from Comerica to Wells Fargo. Ms. Kraus stated that moving the VEBA would be subject to legal review. The Committee members discussed other investment alternatives and the need for VEBA to be actively managed. The members agreed to review the Wells Fargo material and decide at a future meeting. There were no public comments. It was moved by Mr. Kraus and supported by Mr. Endsley to approve excuse Mr. Barkyoumb for the Special Meeting of the Administrative Board Committee. Adopted by the following vote: 4 -0. It was moved by Ms. Kraus and supported by Ms. Bennett to adjourn the meeting. Adopted by the following vote: 4—0. The meeting adjourned at 10:41 a.m. CITY OF LANSING DEFINED CONTRIBUTION PENSION PLAN/ VEBA PLAN SPECIAL MEETING OF NOVEMBER 15,2013 �The Administrative Board was called to order at 8:11 a.m. pgN Present: Members: Angela Bennett, Bill Barkyoumb. Randy Endsley, Antonia Kraus- 4 c� Absent: Randy Hannan, Faith Rach, Terri Taylor Others: Lisa Thelen, Human Resources; Karen E. Williams, Finance; Attorney Don Kul Canek;-= CD Law; Attorney Lauren Dunn, Attorney Stephen Jurmu, Foster Swift. r- `P rT There were no public comments. It was moved by Ms. Bennett and supported by Mr. Endsley to excuse Ms. Faith Rach from the Defined Contribution Administrative Board special meeting. Adopted by the following vote: 4—0 Attorney Don Kulhanek provided a brief overview of the amendment to the Defined Contribution Plan. The Administrative Board discussed the definition of compensation with Foster Swift. Mr. Barkyoumb stated that the taxable amount is not the appropriate amount that should be used for gross compensation definition. Attorney Jurmu opined that gross compensation can reference a benchmark, such as salary scales within personnel policies. Attorney Jurmu also opined the Administrative Board can list exclusions to that definition. Lisa Thelen stated that gross compensation can vary over different employee groups for final average compensation. Ms. Thelen also provided examples of exclusions to gross compensation. Attorney Jurmu explained that the amendment can reference the Employees Retirement System Ordinance's definition of gross compensation. Attorney Jurmu reviewed the exclusions to gross compensation that should be listed within the amendment. The Administrative Board discussed and agreed to reference the gross compensation definition within the Employees Retirement System Ordinance 292.01. Lisa Thelen inquired about termination buyouts will be treated within the definition of compensation. Ms. Thelen believed that that furlough buyouts that are a part of the Teamster 214 memorandum of understanding should be included in gross compensation. The Administrative Board discussed the exclusions to gross compensation that would be detailed in the amendment to the Defined Contribution Plan. Attorney Jurmu provided draft language for the definition of compensation to the amendment for the Administrative Board's consideration, removing the W-2 information and referencing the Employees Retirement System Ordinance. The draft stated that Compensation shall mean the total of all amounts that are paid to a Participant by the Employer for personal services determined on the same basis as is determined under Section 292.01 (g) of the City of Lansing Employees Retirement System Ordinance (or any successor), excluding bonus payments, health-risk assessment payments, medical insurance opt-out payments, sick leave reimbursement, payments made under the Lansing Home Ownership Program for Employees, and any other payments that are excluded from Final Average Compensation as defined in the City of Lansing Employees Retirement System Ordinance pursuant to any collective bargaining agreement and any related documents such as a memorandum of understanding. Attorney Don Kulhanek suggested that the draft language be typed and distributed to provide for members to review and vote upon. Ms. Williams, Attorney Dunn and Attorney Jurmu were excused from the meeting to type the amendment language. Mr. Barkyoumb moved to the VEBA AccountNendor Discussion. Ms. Angela Bennett provided an overview of the VEBA AccountNendor Discussion. Ms. Bennett stated that Wells Fargo could meet the Defined Contribution and VEBA needs on an interim basis. The Administrative Board could then send out a request for proposal to review firms. Ms. Kraus stated that the Administrative Board should determine what services are needed by the Defined Contribution Plan now, and in the future. Ms. Kraus also stated that the Board also needed to evaluate what services are needed for VEBA. Ms. Kraus agreed that the Board could investigate alternatives for the future. It was moved by Ms. Kraus and supported by Mr. Endsley to change the investment manager for the VEBA from Comerica to Wells Fargo subject to prior approval as to form and review by the City Attorney's Office. Adopted by the following vote: 4— 0 Ms. Williams returned to the meeting and distributed the updated language to the amendment of the Defined Contribution Plan. It was moved by Ms. Bennett and supported by Mr. Endsley to approve the following resolution: RESOLUTION CITY OF LANSING DEFINED CONTRIBUTION PLAN GOVERNING COMMITTEE WHEREAS, the City of Lansing ("City") has established the City of Lansing Defined Contribution Plan and related trust (collectively referred to as the "Plan") for the benefit of employees of the City who become participants therein; and WHEREAS, the Plan has been closed to new members who are not elected officials of the City since 2003; and WHEREAS, the City and Teamsters Local 214 ("7214") entered into a Collective Bargaining Agreement ("CBA") effective on August 1, 2012 which was ratified by T214 on September 12, 2012 and the Lansing City Council on September 17, 2012; and WHEREAS, the CBA provided that new employees of the City who are members of T214 will become members of the Plan; and WHEREAS, it is necessary to amend the Plan to provide for membership of employees who are members of T214 on and after September 17, 2012, as set forth in detail in the attached Third Amendment to the Defined Contribution Plan; and WHEREAS, the Governing Committee has deemed it prudent to amend the plan in a manner that will make it more administratively convenient in the event additional employee groups are added in the future; NOW, THEREFORE, IT IS HEREBY RESOLVED that the Governing Committee hereby amends the Plan as set forth in the attached Third Amendment to the Defined Contribution Plan. BE IT FINALLY RESOLVED that the Chairperson of the Defined Contribution Committee is hereby authorized to sign all documents necessary and appropriate to effectuate this Resolution, subject to prior approval as to form and content by the City Attorney, including the attached Third Amendment to the Defined Contribution Plan. Adopted by the following vote: 4—0. The Administrative Board resumed their discussion on investment options for the Defined Contribution Plan. It was moved by Ms. Kraus and supported by Ms. Bennett to begin the Request for Qualification (RFQ)process for an investment manager for the Defined Contribution Plan within six months. Adopted by the following vote: 4 -0 It was moved by Ms. Kraus and supported by Ms. Bennett to adjourn the meeting. Adopted by the following vote: 4 -0 The meeting adjourned at 9:57 a.m. THIRD AMENDMENT TO THE CITY OF LANSING DEFINED CONTRIBUTION PLAN The City of Lansing Defined Contribution Plan is hereby amended effective September 17, 2012, in the maimer described below. 1. The first sentence of Section 2.1(g) is replaced in its entirety with the following: r-- r,,. r"> c=� (g) Compensation: Compensation shall mean the total (n of all amounts that are paid to a Participant by the Employer for cci personal services determined on the same basis as is determined C.) under Section 292.01(g) of the City of Lansing Employees Retirement System Ordinance (or any successor), excluding bonus payments, health-risk assessment payments, medical insurance opt- out payments, sick leave reimbursement, payments made under the cv Lansing Home Ownership Program for Employees, and any other payments that are excluded from Final Average Compensation as defined in the City of Lansing Employees Retirement System Ordinance pursuant to any collective bargaining agreement and any related documents such as a memorandum of understanding. 2. Section 2.1(k) is replaced in its entirety with the following: (k) Employee: Any person who, on or after the Effective Date, is receiving remuneration as a common law employee for personal services rendered to an Adopting Employer (or who would be receiving such remuneration but for an Authorized Leave of Absence) or for personal services rendered to any other employer that must be aggregated with said Adopting Employer under Code Sections 414(b), (c), (m), or (o) and who is: (1) an elected official, including and limited to the Mayor, the City Clerk, and any individual who became a Member of the Lansing City Council on or prior to July 1, 2009; and (2) solely for. purposes of Article XV, any individual who is described in Section 15.3. 3. The following Article XV shall be added to the Plan immediately following Article XIV, effective as set forth herein: ARTICLE XV- TREATMENT OF SCHEDULE A EMPLOYEES 15.1 Applicability. Notwithstanding any Plan provision to the contrary, the provisions of this Article XV shall apply solely with respect to those individuals who become Schedule A Employees on and after the Effective Date and who become Participants in the Plan in accordance with this Article XV. The provisions of this Article XV supersede the provisions of the Plan to the extent, and only to the extent, that such Plan provisions are inconsistent with the provisions of this Article XV. This Article XV shall not be construed: (a) as providing any retirement benefits under the Plan for any individual to whom this Article XV does not apply; and/or (b) causing any Participant to whom this Article XV does apply to receive retirement benefits under any other provision of this Plan. 15.2 Definitions. The following definitions shall apply solely for purposes of this Article XV: (a) Effective Date: The provisions of this Article XV shall be effective as of September 17, 2012. (b) Employee Mandatory Pretax Contribution Account. The account that is maintained by the Plan to record pretax contributions that are made by a Pick-Up Plan Participant pursuant to Section 15.4(a) of the Plan and adjustments relating thereto. (c) Employee Mandatory Pretax Contributions. The contributions that are made pursuant to Section 15.4(a) of the Plan. (d) Employer Mandatory Contribution Account. The account that is maintained by the Plan to record Employer Mandatory Contributions that are made for a Participant pursuant to Section 15.4(b) of the Plan. (e) Employer Mandatory Contributions. Those contributions that are made pursuant to Section 15.4(b) of the Plan. (f) Pick-Up Plan Participant: A Schedule A Employee who participates in the Plan solely pursuant to this Article XV. A Schedule A Employee who is a Pick-Up Plan Participant under this Article XV shall not be permitted to participate in the Plan for any purpose other than as described in this Article XV. (g) Schedule A Employee: A common law employee of the Employer who meets either of the following requirements (1) or (2): (1) the individual's terms of employment with the Employer are controlled by a collective bargaining agreement that is between the Employer and a bargaining unit listed on Schedule A and that was approved by the Lansing City Council on or after the Effective Date; or (2) the individual's terns of employment with the Employer are controlled by an employment relationship between the Employer and the individual as a member of a non- bargaining unit listed on Schedule A. Any Employee of the Employer who becomes a Schedule A Employee because of an internal job transfer at the Employer that occurs on or after the Effective Date shall be treated as a Schedule A Employee for purposes of this Article XV as of the date on which said transfer is effective. An Employee of the Employer who participates in the Plan may, because of an internal job transfer at the Employer, cease to receive compensation for services rendered as a Schedule A Employee. Any compensation that is paid by the Employer to any such individual on or after the date on which said individual ceases to receive compensation for such services shall not be Compensation for purposes of this Article XV. (i) Vesting Service: A Pick-Up Plan Participant shall receive one Year of Service for vesting under Section 15.6 of the Plan for each Year of Service for vesting that the Pick-Up Plan Participant receives Linder the City of Lansing Employees' Retirement System. 15.3 Eligibility. Plan participation under this Article XV shall be limited to (1) any individual who becomes a Schedule A Employee on and after the Effective Date, and (2) any individual whose internal job transfer at the Employer on or after the Effective Date causes hire or her to become a Schedule A Employee. Each such individual shall become a Pick-Up Plan Participant in this Plan solely with respect to this Article XV effective as of the date on which the individual first perforns an Hour of Service as a Schedule A Employee. Each individual who becomes a Pick-Up Plan Participant in accordance with this Article XV shall not be eligible to make elective deferral contributions to the Plan or to receive any Employer Contribution to the Plan under any provision of this Plan other than this Article XV based on his or her employment with the Employer. 15.4 Pick-Up Feature for Pick-Up Plan Participants. (a) Mandatory Pretax Contributions. On and after the Effective Date, each Pick-Up Plan Participant shall make a contribution to this "pick-up feature'' of the Plan. The contribution that is made pursuant to this Section 15.4(a) shall be an amount equal to three percent (3%) of the Pick-Up Plan's Participant's Compensation for the year as that term is defined in Section 2.1(g). The Compensation that would otherwise be paid to each such Pick-Up Plan Participant by the Employer shall be irrevocably reduced by the amount of the contribution that is required by this Section 15.4(a), and the Employer shall "pick up" said contribution (within the meaning of that phrase in Code Section 414(h)(2)) and shall contribute said amount to the Participant's Employee Mandatory Pretax Contribution Account. The Pick-Up Plan Participant shall not have the option to choose to receive the contributed amounts directly instead of having them paid by the Employer to the Plan. (b) Employer Mandatory Contributions. On and after the Effective Date, the Employer shall contribute to the Trust Fund an amount that will be sufficient to credit the Employer Mandatory Contribution Account of each Pick-Up Plan Participant with an amount that is equal to three percent (3%) of the Pick-Up Plan Participant's Compensation for the year as that term is defined in Section 2.1(g). This Contribution shall be made for any Pick-Up Plan Participant who completes at least one Hour of Service during the Plan Year. 15.5 Individual Accounts, Any Pick-Up Plan Participant who receives contributions pursuant to this Article XV shall have the following two accounts: an Employee Mandatory Pretax Contribution Account and an Employer Mandatory Contribution Account. Such individual shall also have a Transfer Account, if applicable. 15.6 Vesting Schedule for Pick-Up Plan Participants. The extent to which a Participant is vested in amounts that are credited to his or her Article XV Plan Accounts will be determined in accordance with paragraphs (a) and (b) below. If a Pick-Up Plan Participant's employment with the Employer is terminated before the Normal Retirement Age for any reason other than Disability or death;the Pick-Up Plan Participant shall be entitled to the sum of: 4 (a) The entire amount that is credited to his or her Employee Mandatory Pretax Contribution Account, if any, and his or her Transfer Account, if any, plus (b) An amount equal to the "vested percentage" of his or her Employer Mandatory Contribution Account that is determined in accordance with the following schedule: No of Years of Vesting Service Vested Percentage Forfeited Percentage 0 -7 0% 100% 8 or more 100% 0% CITY OF LANSING Dated: `' Z u 13 $y; lJ A l ar k Its: C����cQ 0 �2 5 cl,AJ 5 SCHEDULE A I. Bargaining Units An individual -whose terms of einployinent are governed by a collective bargaining agreement beliveen the Employer and a bargaining unit that is listed below is eligible to participate in the Defined Contribution Plan pzirszrant to the terms of the Plan. Name of Bargaining Unit Effective Date Teamsters Local No. 214 September 17, 2012 II. Non-Bargaining Units An individual whose terms of employment are governed by an employment relationship between the Employer and a non-bargaining unit classification that is listed belol-1, is eligible to participate in the Defined Contribution Plan pursuant to the terins of the Plan. Name of Non-Bargaining Unit Classification Effective Date 06326:00017:1564353-10