Adoption Agreement #002
Letter Serial No. D346279a
Nonstandardized Money Purchase Pension Plan
Nonstandardized Money Purchase Pension Plan Features - Maximum employer
contributions - Ability to exclude classifications of employees - May enforce
last-day requirement for employer contribution - Allows integrated contribution
formula
Provided by:
The Financial Funds
Managed & Distributed by
INVESCO Funds Group, Inc.
Custodian:
INVESCO Trust Company
A Subsidiary of INVESCO MIM PLC
Your Adoption Agreement and Basic Plan Document together constitute the rules
and parameters under which your retirement program will operate. Each section of
the Adoption Agreement requires the employer to make a selection. Whenever
possible (balancing complexity and space constraints) we have provided
instructions to the left of key selections. These instructions are intended to
assist you, the employer, in choosing the optional provisions for your
retirement program. They are not intended to substitute or replace competent
advice from your legal counsel or accountant. If further clarification is
necessary, contact your advisors or INVESCO Trust Company. We recommend that you
obtain the advice of your legal or tax advisor before you sign this Adoption
Agreement.
ADOPTION AGREEMENT #002
NONSTANDARDIZED MONEY PURCHASE PLAN
The undersigned, _______________________________________ ("Employer"), by
executing this Adoption Agreement, elects to become a participating Employer in
the INVESCO Trust company Defined Contribution Master Plan (basic plan document
#01) by adopting the accompanying Plan and Trust in full as if the Employer were
a signatory to that Agreement. The employer makes the following elections
granted under the provisions of the Master Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is:
(Choose (a) or (b))
(a) A discretionary Trustee, See Section 10.03[A] of the Plan.
(b) A nondiscretionary Trustee. See Section 10.03[B] of the
Plan. [Note: The Employer may not elect Option (b) if a Custodian
executes the Adoption Agreement.]
1.03 PLAN. The name of the Plan as adopted by the Employer is
---------------------------------------------------------------.
1.07 EMPLOYEE. The following Employees are not eligible to
participate in the Plan: (Choose (a) or at least one of (b)
through (g))
(a) No exclusions.
(b) Collective bargaining employees (as defined in Section 1.07 of the
Plan). [Note: If the Employer excludes union employees from the Plan, the
Employer must be able to provide evidence that retirement benefits were the
subject of good faith bargaining.]
(c) Nonresident aliens who do not receive any earned income (as defined in
Code ss.911(d)(2)) from the Employer which constitutes United States source
income (as defined in Code ss.911(d)(2)) from the Employer which constitutes
United States source income (as defined in Code ss.861(a)(3)).
(d) Commission Salesmen.
(e) Any Employee compensated on a salaried basis.
(f) Any Employee compensated on an hourly basis.
(g) (Specify)
Leased Employees. Any Leased Employee treated as an Employee
under Section 1.31 of the Plan, is: (Choose (h) or (i))
(h) Not eligible to participate in the Plan.
(i) Eligible to participate in the Plan, unless excluded by reason
of an exclusion classification elected under this Adoption Agreement Section
1.07.
Related Employers. If any member of the Employer's related group (as defined in
Section 1.30 of the Plan) executes a Participation Agreement to this Adoption
Agreement, such member's Employees are eligible to participate in this Plan,
unless excluded by reason of an exclusion classification elected under this
Adoption Agreement Section 1.07. In addition: (Choose (j) or (k))
(j) No other related group member's Employees are eligible to participate
in the Plan.
(k) The following nonparticipating related group member's Employees are
eligible to participate in the Plan unless excluded by reason of an exclusion
classification elected under this Adoption Agreement Section 1.07:
_______________________________
1.12 COMPENSATION
Treatment of elective contributions. (Choose (a) or (b))
(a) "Compensation" includes elective contributions made by the
Employer on the Employee's behalf.
(b) "Compensation" does not include elective contributions.
Modifications to Compensation definition. (Choose (c) or at least
one of (d) through (j))
(c) No modifications other than as elected under Options (a) or (b).
(d) The plan excludes Compensation in excess of $_____________.
(e) In lieu of the definition in Section 1.12 of the Plan, Compensation
means any earnings reportable as W-2 wages for Federal income tax withholding
purposes, subject to any other election under this Adoption Agreement Section
1.12.
(f) The Plan excludes bonuses.
(g) The Plan excludes overtime.
(h) The Plan excludes Commissions.
(i) The Plan excludes Compensation from a related employer (as defined in
Section 1.30 of the Plan) that has not executed a Participation Agreement in
this Plan unless, pursuant to Adoption Agreement section 1.07, the Employees of
that related employer are eligible to participate in this Plan.
(j) (Specify) _______________________________________________.
If, for any Plan Year, the Plan uses permitted disparity in the contribution or
allocation formula elected under Article III, any election of Options (f), (g),
(h) or (j) is ineffective for such Plan Year with respect to any Nonhighly
Compensated Employee.
1.17 PLAN YEAR/LIMITATION YEAR.
Plan Year. Plan Year means: (Choose (a) or (b))
(a) The 12 consecutive month period ending every _____________.
(b) (Specify) ________________________________________________.
Limitation Year. The Limitation Year is: (Choose (c) or (d))
(c) The Plan Year.
(d) The 12 consecutive month period ending every ______________.
1.18 EFFECTIVE DATE.
New Plan. The "Effective Date" of the Plan is __________________.
Restated Plan. The restated Effective Date is _________________.
This Plan is a substitution and amendment of an existing retirement plan(s)
originally established _____________________.
(Note: See the Effective Date Addendum.)
1.27 HOUR OF SERVICE. The crediting method for Hours of Service
is: (Choose (a) or (b))
(a) The actual method.
(b) The ___________________________ equivalency method, except:
(1) No exceptions.
(2) The actual method applies for purposes of: (Choose at least
one)
(i) Participation under Article II.
(ii) Vesting under Article V.
(iii)Accrual of benefits under Section 3.06.
[Note: On the blank line, insert "daily," "weekly," "semi-monthly
payroll periods" or "monthly."]
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the
predecessor service the Plan must credit by reason of Section
1.29 of the Plan, the Plan credits Service with the following
predecessor employer(s): _____________________________________
______________________________________________________________.
Service with the designated predecessor employer(s) applies:
(Choose at least one of (a) or (b); (c) is available only in
addition to (a) or (b))
(a) For purposes of participation under Article II.
(b) For purposes of vesting under Article V.
(c) Except the following Service: ____________________________.
[Note: If the Plan does not credit any predecessor service under this provision,
insert "N/A" in the first blank line. The Employer may attach a schedule to this
Adoption Agreement, in the same format as this Section 1.29, designating
additional predecessor employers and the applicable service crediting
elections.]
1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan and
also participates in a plan maintained by the leasing organization: (Choose (a)
or (b))
(a) The Advisory Committee will determine the Leased Employee's
allocation of Employer contributions under Article III without taking into
account the Leased Employee's allocation, if any, under the leasing
organization's plan.
(b) The Advisory committee will reduce a Leased Employee's
allocation of Employer contributions under this Plan by the Leased Employee's
allocation under the leasing organization's plan, but only to the extent that
allocation is attributable to the Leased Employee's service provided to the
Employer. The leasing organization's plan:
(1) Must be a money purchase plan which would satisfy the
definition under Section 1.31 of a safe harbor plan, irrespective of
whether the safe harbor exception applies.
(2) Must satisfy the features and, if a defined benefit plan,
the method of reduction described in an addendum to this
Adoption Agreement, numbered 1.31.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY.
Eligibility conditions. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions:
(Choose (a) or (b) or both)
(a) Attainment of age ___________________ (specify age, not exceeding 21).
(b) Service requirement. (Choose one of (1) through (4))
(1) One Year of Service.
(2) Two Years of Service, without an intervening Break in
Service. See Section 2.03(A) of the Plan.
(3) ________________ months (not exceeding 24) following the
Employee's Employment Commencement Date.
(4) One Hour of Service.
Plan Entry Date. "Plan Entry Date" means the Effective Date and:
(Choose (c), (d) or (e))
(c) Semi-annual Entry Dates. The first day of the Plan Year and the first
day of the seventh month of the Plan Year.
(d) The first day of the Plan Year.
(e) (Specify entry dates) ____________________________________.
Time of Participation. An Employee will become a Participant,
unless excluded under Adoption Agreement Section 1.07, on the
Plan Entry Date (if employed on that date): (Choose (f), (g) or
(h))
(f) immediately following
(g) immediately preceding
(h) nearest __________________________________________________
the date the Employee completes the eligibility conditions
described in Options (a) and (b) of this Adoption Agreement
Section 2.01. [Note: The Employer must coordinate the selection
of (f), (g) or (h) with the "Plan Entry Date" selection in (c),
(d) or (e). Unless otherwise excluded under Section 1.07, the
Employee must become a Participant by the earlier of: 91) the
first day of the Plan Year beginning after the date the Employee
completes the age and service requirements of Code ss.410(a); or
(2) 6 months after the date the Employee completes those
requirements.]
Dual eligibility. The eligibility conditions of this Section 2.01
apply to: (Choose (i) or (j))
(i) All Employees of the Employer, except: (Choose (1) or (2))
(1) No exceptions.
(2) Employees who are Participants in the Plan as of the
Effective Date.
(j) Solely to an Employee employed by the Employer after ________________.
If the Employee was employed by the Employer on or before the specified date,
the Employee will become a Participant: (Choose (1), (2) or (3))
(1) On the latest of the Effective Date, his Employment
Commencement Date or the date he attains age ___________ (not to exceed
21).
(2) Under the eligibility conditions in effect under the Plan
prior to the restated Effective Date. [For restated plans only]
(3) (Specify) ____________________________________________.
2.02 YEAR OF SERVICE - PARTICIPATION.
Hours of Service. An Employee must complete: (Choose (a) or (b))
(a) 1,000 Hours of Service
(b) ___________ Hours of Service during an eligibility
computation period to receive credit for a Year of Service.
[Note: The Hours of Service requirement may not exceed 1,000.]
Eligibility computation period. After the initial eligibility
computation period described in Section 2.02 of the Plan, the
Plan measures the eligibility computation period as: (Choose (c)
or (d))
(c) The 12 consecutive month period beginning with each anniversary
of an Employee's Employment Commencement Date.
(d) The Plan Year, beginning with the Plan Year which includes the
first anniversary of the Employee's Employment Commencement Date.
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule
described in Section 2.03(B) of the plan: (Choose (a) or (b))
(a) Does not apply to the Employer's Plan.
(b) Applies to the Employer's Plan.
2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or (b))
(a) Does not permit an eligible Employee or a Participant to
elect not to participate.
(b) Does permit an eligible Employee or a Participant to elect not
to participate in accordance with Section 2.06 and with the following
rules: (Complete (1), (2) (3) and (4))
(1) An election is effective for Plan Year if filed no later
than ________________.
(2) An election not to participate must be effective for at
least ___________________ Plan Year(s).
(3) Following a re-election to participate, the Employee
or Participant:
(i) May not again elect not to participate for any
subsequent Plan Year.
(ii) May again elect not to participate, but not earlier
than the ___________ Plan Year following the Plan Year in
which the re-election first was effective.
(4) (Specify) ____________________________________________
[Insert "N/A" if no other rules apply].
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT. The amount of the Employer's annual contribution to the Trust will
equal: (Choose (a), (b), (c), (d) or (e); (f) is mandatory if the Employer
elects (b) or (c), or Adoption Agreement Section 3.04(b)(2))
(a) Nonintegrated Contribution Formula. ___________% of each Participant's
Compensation for the Plan Year.
(b) Integrated Contribution Formula. (Complete both percentages) _____% of
each Participant's Compensation for the Plan Year in excess of the Integration
Level. [Note: The second percentage may not exceed the lesser of the first
percentage or the applicable percentage described in the Maximum Disparity
Table.]
(c) Step-rate Integrated Contribution Formula. (Complete both
percentages) ___________% of each Participant's Compensation for the Plan Year
which does not exceed the Integration Level, plus __________________% of each
Participant's Compensation for the Plan Year in excess of the Integration Level.
[Note: The difference between the second percentage and the first percentage may
not exceed the lesser of the first percentage or the applicable percentage
described in the Maximum Disparity Table.]
(d) Flat Contribution Formula. (Choose (1), (2) or (3); (4) is
optional only in addition to (2) or (3))
(1) $_____________, subject to the limitations of Part 2 of
Article III of the Plan.
(2) For each Participant, $_______________ for each
________________________________________________________.
(3) For each Participant, _________% of Compensation for each
_____________________________________________________.
(4) The contribution on behalf of any Participant: (Choose
(i) or (iii)
(i) May not exceed _____________________________.
(ii) May not be less than _______________________.
(e) Frozen Plan Formula. This Plan is a frozen Plan effective ________________.
The Employer will not contribute to the Plan with respect to any period
following that stated date.
(f) Integration Level. The Integration Level under the Plan is:
(Choose (1) or (2))
(1) __________% (not exceeding 100%) of the taxable wage base, as
determined under Section 230 of the Social Security Act in effect on
the first day of the Plan Year. (Choose any combination of (i) and (ii)
or choose (iii))
(i) Rounded to _____________ (but not exceeding the
taxable wage base).
(ii) But not greater than $_________________.
(iii)Without any further adjustment or limitation.
(2) $______________ [Note: Not exceeding the taxable wage base for the
Plan Year in which this Adoption Agreement first is effective.
Maximum Disparity Table. For purposes of Options (b) and (c) and
Adoption Agreement Section 3.04(b)(2), the applicable percentage
is:
Integration Level (as Applicable
percentage of taxable wage base) Percentage
100% 5.7%
More than 80% but less than 100% 5.4%
More than 20% (but not less than
$10,001) and not more than 80% 4.3%
20% (or $10,000, if greater) or less 5.7%
Application of contribution formula. The Employer will determine its
contribution under Options (a), (b), (c) or (d) by taking into account only the
Participants who satisfy the conditions under Section 3.06 for an allocation of
Employer contributions and only the Participant's Compensation taken into
account under Section 3.06. The Employer contribution on behalf of a Participant
may not exceed the Participant's annual additions limitation described in Part 2
of Article III, even if the contribution formula otherwise would require a
larger contribution. The Employer will reduce its contribution for a Plan Year
if an allocation offset elected by the Employer under Section 3.04 requires
reduction of that contribution.
Coordination with defined benefit plan. If the Employer maintains a defined
benefit plan under which at least one Participant in this Plan participates, the
Employer will determine its contribution under Options (a), (b), (c) or (d) by
reducing the total contribution, if necessary, to equal the maximum deductible
amount under Code ss.404(a)(7). If the Employer must reduce its contribution,
the Employer determines its contribution with respect to each Participant by
adjusting each percentage under Options (a), (b), (c) or (d) by the same ratio
as the reduced total Employer contribution for the Plan Year bears to the total
Employer contribution determined without application of Code ss.404(a)(7). The
Employer may modify this paragraph by attaching an addendum to this Adoption
Agreement, numbered 3.01, setting forth the modified provision.
Related Employers. Unless obligated by the joint and several liability
provisions of the Code or of ERISA, a related group member, as defined in
Section 1.30 of the Plan, may not contribute to this Plan unless it executes a
Participation Agreement, even if its Employees are Participants in the Plan. The
signatory Employer and any Participating Employer(s) will satisfy the annual
contribution under this Section 3.01 as agreed upon by those Employers. A
Participating Employer may attach a schedule to this Adoption Agreement, in the
same format as this Section 3.01 and Section 3.04, designating separate
contribution and allocation formulas. If a Participating Employer attaches a
separate contribution/allocation schedule, the contributions, and attributable
Participant forfeitures, made by that Participating Employer are allocable only
to the Employees of that Participating Employer. If a Participant receives
Compensation from more than one contributing Employer and that Participant is
subject to two or more contribution/allocation formulas, the Advisory Committee
will apply the contribution/allocation formulas, the Advisory Committee will
apply the contribution/allocation formulas by prorating among the separate
formulas the Participant's Compensation and any integration level applicable to
the Participant.
3.04 CONTRIBUTION ALLOCATION
Method of Allocation. (Choose (a) or (b); (c) is optional to (a)
or (b))
(a) Incorporation of Contribution Formula. Subject to any restoration allocation
required under Section 5.04, the Advisory Committee will allocate and credit
each annual Employer contribution to the account of each Participant who
satisfies the conditions of Section 3.06, in accordance with the contribution
formula adopted by the Employer under Adoption Agreement Section 3.01. [Note:
The Employer must elect this Option (a) if it elects Adoption Agreement Section
3.01(b), (c), (d)(2) or (d)(3). The Employer may not elect this Option (a) with
Adoption Agreement Section 3.01(d)(1).]
(b) Allocation Formula Different From Contribution Formula. (Choose (1) or (2))
[Note: The Employer must elect this Option (b) if it elected Adoption Agreement
Section 3.01(d)(1). The Employer may not elect this Option (b) if it elected
Adoption Agreement Section 3.01(b), (c), (d)(2) or (d)(3).
(1) Nonintegrated Allocation Formula. The Advisory Committee will
allocate the annual Employer contributions in the same ratio that each
Participant's Compensation for the Plan Year bears to the total
Compensation of all Participants for the Plan Year.
(2) Two-Tiered Integrated Allocation Formula - Maximum Disparity.
First, the Advisory Committee will allocate the annual Employer
contributions in the same ratio that each Participant's Compensation
plus Excess Compensation for the Plan Year bears to the total
Compensation plus Excess Compensation of all Participants for the Plan
Year. The allocation under this paragraph, as a percentage of each
Participant's Compensation plus Excess Compensation, must not exceed
the applicable percentage (5.6% or 4.3%) listed under the Maximum
Disparity Table in Adoption Agreement Section 3.01. A Participant's
"Excess Compensation" is his Compensation for the Plan Year in excess
of the Integration Level elected under Adoption Agreement Section
3.01(f).
The Advisory Committee then will allocate any remaining Employer
contributions in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all Participants
for the Plan Year.
(c) Allocation offset. The Advisory Committee will reduce a Participant's
allocation otherwise made under this Section 3.04 by the Participant's
allocation under the following qualified plan(s) maintained by the Employer:
________________________________________________________________________________
_______________________________________________________________________________.
(1) By treating the term "Employer contribution" as including all
amounts paid or accrued by the Employer during the Plan Year to the
qualified plan(s) referenced under this Option (c). If a Participant
under this Plan also participates in that other plan, the Advisory
Committee will treat the amount the Employer contributes for or during
a Plan Year on behalf of a Particular Participant under such other plan
as an amount allocated under this Plan to that Participant's Account
for that Plan Year. The Advisory Committee will make the computation
of allocation required under the immediately preceding sentence before
making any allocation required by this Section 3.04.
(2) In accordance with the formula provided in an addendum to this
Adoption Agreement, numbered 3.04(c).
Top Heavy Minimum Allocation - Method of Compliance. If a
Participant's allocation under this Section 3.04 is less than the top
heavy minimum allocation to which he is entitled under Section
3.04(B): (Choose (d) or (e))
(d) the Employer will make any necessary additional contribution to the
Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan.
(e) The Employer will satisfy the top heavy minimum allocation under the
following plan(s) it maintains: ______________________. However, the Employer
will make any necessary additional contribution to satisfy the top heavy minimum
allocation for an Employee covered only under this Plan and not under the other
plan(s) designated in this Option (e). See Section 3.04(B)(7)(b) of the Plan.
If the Employer maintains another plan, the Employer may provide in an addendum
to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan
necessary to satisfy the top heavy requirements under Code ss.416.
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under
Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant
forfeiture: (Choose (a) or (b); (c) is optional in addition to (a) or (b))
(a) Reduction of Employer contribution. In accordance with Section 3.04, to
reduce the Employer contribution for the Plan Year: (Choose (1) or (2))
(1) in which the forfeiture occurs.
(2) immediately following the plan Year in which the forfeiture occurs.
(b) Increased allocation. In addition to the Employer contribution for the Plan
Year in which the forfeiture occurs. The Advisory Committee will allocate the
Participant forfeitures for a Plan Year to the Account of each Participant who
satisfies the conditions of Section 3.06: (Choose (1) or (2))
(1) in the same ratio that such Participant's Compensation for the Plan
Year bears to the total Compensation of all Participants for the Plan
Year.
(2) as an Employer contribution for the Plan Year, in accordance with
Option (b) of Adoption Agreement Section 3.04, as if the Participant
forfeiture were an additional Employer contribution for that Plan
Year.
(c) First to reduce the Plan's ordinary and necessary administrative
expenses for the Plan Year, and then will allocate any remaining
forfeitures in the manner described in Option (a) or in Option (b),
whichever applies.
3.06 ACCRUAL OF BENEFIT.
Compensation Taken Into Account. For the Plan Year in which the
Employee first becomes a Participant, the Advisory Committee will
determine the contribution/allocation under Adoption Agreement
Sections 3.01 and 3.04 by taking into account: (Choose (a) or
(b))
(a) The Employee's Compensation for the entire Plan Year.
(b) The Employee's Compensation for the portion of the Plan Year in which the
Employee actually is a Participant in the Plan.
Accrual Requirements. Subject to the suspension of accrual requirements of
Section 3.06(E) of the Plan, to receive an allocation of Employer contributions
and Participant forfeitures, if any, for the Plan Year, a Participant must
satisfy the conditions described in the following elections: (Choose (c), or at
least one of (d) through (f)
(c) Safe harbor rule. If the Participant is employed by the Employer on the last
day of the Plan Year, the Participant must complete at least one Hour of Service
for that Plan Year. If the Participant is not employed by the Employer on the
last day of the Plan Year, the Participant must complete at least 501 Hours of
Service during the Plan Year.
(d) Hours of Service condition. The Participant must complete the following
minimum number of Hours of Service for the Plan Year: (Choose at least one of
(1) through (4))
(1) 1,000 Hours of Service.
(2) (Specify, but the number of Hours of Service may not exceed 1,000)
_____________________________________.
(3) No Hour of Service requirement if the Participant terminates
employment during the Plan Year on account of: (Choose at least one of
(i) through iii))
(i) Death.
(ii) Disability.
(iii)Attainment of Normal Retirement Age in the current
Plan Year or in a prior Plan Year.
(4) _________________ Hours of Service (not exceeding 1,000) if the
Participant terminates employment with the Employer during the Plan
Year, subject to any election in Option (3).
(e) Employment condition. The Participant must be employed by the Employer on
the last day of the Plan Year, irrespective of whether he satisfies any Hours of
Service condition under Option (c), unless his employment terminates because of:
(Choose (1) or at least one of (2) through (4))
(1) No exceptions.
(2) Death.
(3) Disability.
(4) Attainment of Normal Retiement Age in the current Plan Year or in a
prior Plan Year.
(f) (Specify other conditions, if applicable):
_____________________________________________________.
Suspension of Accrual Requirements. The suspension of accrual requirements of
Section 3.06(E) of the Plan: (Choose (g), (h) or (i))
(g) Applies to the Employer's Plan.
(h) Does not apply to the Employer's Plan.
(i) Applies in modified form to the Employer's Plan, as described in an addendum
to this Adoption Agreement, numbered Section 3.06(E).
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the
Excess Amount attributed to this Plan equals:
(Choose (a), (b) or (c))
(a) The product of:
(i) the total Excess Amount allocated as of such date (including
any amount which the Advisory Committee would have allocated
but for the limitations of Code ss.415, times
(ii) the ratio of (1) the amount allocated to the Participant as of
such date under this Plan divided by (2) the total amount
allocated as of such date under all qualified defined
contribution plans (determined without regard to the
limitations of Code ss.415).
(b) The total Excess Amount.
(c) None of the Excess Amount.
3.18 DEFINED BENEFIT PLAN LIMITATION.
Application of limitation. The limitation under Section 3.18 of
the Plan: (Choose (a) or (b))
(a) Does not apply to the Employer's Plan because the Employer does not maintain
and never has maintained a defined benefit plan covering any Participant in this
Plan.
(b) Applies to the Employer's Plan. To the extent necessary to satisfy the
limitation under Section 3.18, the Employer will reduce: (Choose (1) or (2))
(1) The Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
(2) Its contribution or allocation on behalf of the Participant to the
defined contribution plan under which the Participant participates and
then, if necessary, the Participant's projected annual benefit under
the defined benefit plan under which the Participant participates.
[Note: If the Employer selects (a), the remaining options in this Section 3.18
do not apply to the Employer's Plan.]
Coordination with top heavy minimum allocation. The Advisory Committee will
apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan
with the following modifications:
(Choose (c) or at least one of (d) and (e))
(c) No modifications.
(d) For Non-Key Employees participating only in this Plan, the top heavy minimum
allocation is the minimum allocation described in Section 3.04(B) determined by
substituting _________% (not less than 4%) for "3%", except: (Choose (i) or
(ii))
(i) No exceptions.
(ii) Plan Years in which the top heavy ratio exceeds 90%.
(e) For Non-Key Employees also participating in the defined benefit plan, the
top heavy minimum is: (Choose (1) or (2))
(1) 5% of Compensation (as determined under Section 3.04(B)
of the Plan) irrespective of the contribution rate of any
Key Employee, except: (Choose (i) or (ii))
(i) No exceptions.
(ii) Substituting "7 1/2%" for "5%" if the top heavy ratio
does not exceed 90%.
(2) 0%. [Note: The employer may not select this Option (2)
unless the defined benefit plan satisfies the top heavy
minimum benefit requirements of Code ss.416 for these Non-Key
Employees.]
Actuarial Assumptions for Top Heavy Calculation. To determine the top heavy
ratio, the Advisory Committee will use the following interest rate and mortality
assumptions to value accrued benefits under a defined benefit plan:
_______________________________________________________________________________.
If the elections under this Section 3.18 are not appropriate to satisfy the
limitations of Section 3.18, or the top heavy requirements under Code ss.416,
the Employer must provide the appropriate provisions in an addendum to this
Adoption Agreement.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is:
(Choose (a) or (b))
(a) ____________________ [State age, but may not exceed age 65.]
(b) The later of the date the Participant attains __________ years of age or the
_________ anniversary of the first day of the Plan Year in which the Participant
commenced participation in the Plan. [The age selected may not exceed age 65 and
the anniversary selected may not exceed the 5th.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section 5.02
of the Plan: (Choose (a) or choose one or both of (b) and (c))
(a) Does not apply.
(b) Applies to death.
(c) Applies to disability.
5.03 VESTING SCHEDULE. The Employer elects the following vesting schedule:
(Choose (a) or (b); (c) and (d) are available only in addition to (b))
(a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The Employer
must elect Option (a) if the eligibility conditions conditions under Adoption
Agreement Section 2.01(b) require 2 years of service or more than 12 months of
employment.]
(b) Graduated Vesting Schedules.
Top Heavy Schedule Non Top Heavy Schedule
(Mandatory) (Optional)
Years of Nonforfeitable Years of Nonforfeitable
Service Percentage Service Percentage
Less than 1 _______ Less than 1 _______
1 _______ 1 _______
2 _______ 2 _______
3 _______ 3 _______
4 _______ 4 _______
5 _______ 5 _______
6 or more _______ 6 _______
7 or more _______
(c) Minimum vesting. A Participant's Nonforfeitable Accrued Benefit will never
be less than the lesser of $__________ or his entire Accrued Benefit, even if
the application of the graduated vesting schedule under Option (b) would result
in a small Nonforfeitable Accrued Benefit.
[Note: Under Option (b), the Employer must complete a Top Heavy Schedule which
satisfies Code ss.416. The Employer, at its option, may complete a Non Top Heavy
Schedule. The Non Top Heavy Schedule must satisfy Code ss.411(a)(2). Also see
Section 7.05 of the Plan.]
(d) The Top Heavy Schedule under Option (b) applies: (Choose (1) or (2))
(1) Only in a Plan Year for which the Plan is top heavy.
(2) In the Plan Year for which the Plan first is top heavy
and then in all subsequent Plan Years. [Note: The Employer
may not elect Option (d) unless it has completed a Non Top
Heavy Schedule.]
Life Insurance Investments. The Participant's Accrued Benefit attributable to
insurance contracts purchased on his behalf under Article XI is: (Choose (e) or
(f))
(e) Subject to the vesting election under Options (a) or (b).
(f) 100% Nonforfeitable at all times, irrespective of the vesting election under
Option (b).
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF
FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section 5.04(C)
of the Plan: (Choose (a) or (b))
(a) Does not apply.
(b) Will apply to determine the timing of forfeitures for 0% vested
Participants.
5.06 YEAR OF SERVICE - VESTING.
Vesting computation period. The Plan measures a Year of Service on the basis of
the following 12 consecutive month periods:
(Choose (a) or (b))
(a) Plan Years.
(b) Employment Years. An Employment Year is the 12 consecutive month period
measured from the Employee's Employment Commencement Date and each successive 12
consecutive month period measured from each anniversary of that Employment
Commencement Date.
Hours of Service. The minimum number of Hours of Service an Employee must
complete during a vesting computation period to receive credit for a Year of
Service is: (Choose (c) or (d))
(c) 1,000 Hours of Service.
(d) __________ Hours of Service. [Note: The Hours of Service
requirement may not exceed 1,000.]
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer
specifically excludes the following Years of Service: (Choose (a)
or at least one of (b) through (e))
(a) None other than as specified in Section 5.08(a) of the Plan.
(b) Any Year of Service before the Participant attained the age
of _________________. [Note: The age selected may not exceed age
18.]
(c) Any Year of Service during the period the Employer did not maintain this
Plan or a predecessor plan.
(d) Any Year of Service before a Break in Service if the number of consecutive
Breaks in Service equals or exceeds the greater of 5 or the aggregate number of
the Years of Service prior to the Break. This exception applies only if the
Participant is 0% vested in his Accrued Benefit derived from Employer
contributions at the time he has a Bread in Service. Furthermore, the aggregate
number of Years of Service before a Break in Service do not include any Years of
Service not required to be taken into account under this exception by reason of
any prior Break in Service.
(e) Any Year of Service earned prior to the effective date of ERISA if the Plan
would have disregarded that Year of Service on account of an Employee's
Separation from Service under a Plan provision in effect and adopted before
January 1, 1974.
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
Code ss.(d)(6) Protected Benefits. The elections under this Article VI may not
eliminate Code ss.411(d)(6) protected benefits. To the extent the elections
would eliminate a Code ss.411(d)(6) protected benefit, see Section 13.02 of the
Plan. Furthermore, if the elections liberalize the optional forms of benefit
under the Plan, the more liberal options apply on the later of the adoption date
or the Effective Date of this Adoption Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
Distribution date. A distribution date under the Plan means
___________________________________________________________.
[Note: The Employer must specify the appropriate date(s). The specified
distribution dates primarily establish annuity starting dates and the notice and
consent periods prescribed by the Plan. The Plan allows the Trustee an
administratively practicable period of time to make the actual distribution
relating to a particular distribution date.]
Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations
of Section 6.01(A)(1), the distribution date for distribution of a
Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c),
(d) or (e))
(a) _________________ of the ______________ Plan Year beginning after the
Participant's Separation from Service.
(b) _________________ following the Participant's Separation from Service.
(c) ___________________ of the Plan Year after the Participant incurs
___________________ Break(s) in Service (as defined in Article V).
(d) ____________________ following the Participant's attainment of Normal
Retirement Age, but not earlier than _____________ days following his Separation
from Service.
(e) (Specify) ______________________________________________.
Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections
under Section 6.03.
Disability. The distribution date, subject to Section 6.01(A)(3),
is: (Choose (f), (g) or (h))
(f) ______________________________________ after the Participant terminates
employment because of disability.
(g) The same as if the Participant had terminated employment without disability.
(h) (Specify) ______________________________________________.
Hardship. (Choose (i) or (j)
(i) The Plan does not permit a hardship distribution to a Participant who has
separated from Service.
(j) The Plan permits a hardship distribution to a Participant who has separated
from Service in accordance with the hardship distribution policy stated in:
(Choose (1) or (2))
(1) Section 6.01(A)(4) of the Plan.
(2) The addendum to this Adoption Agreement, numbered Section 6.01, in
lieu of the policy stated in Section 6.01(A)(4) of the Plan.
Default on a Loan. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Advisory Committee pursuant to Section
9.04, the Plan: (Choose (k), (l) or (m))
(k) Treats the default as a distributable event only if the Participant has
incurred a Separation from Service or has attained Normal Retirement Age. If
either condition applies, the Trustee, at the time of the default or, if later,
at the time either condition first occurs, will reduce the Participant's
nonforfeitable Accrued Benefit by the lesser of the amount in default (plus
accrued interest) or the Plan's security interest in that Nonforfeitable Accrued
Benefit.
(l) Does not treat the default as a distributable event. When an otherwise
distributable event first occurs pursuant to Section 6.01 or Section 6.03 of the
Plan, the Trustee will reduce the Participant's Nonforfeitable Accrued Benefit
by the lesser of the amount in default (plus accrued interest) or the Plan's
security interest in that Nonforfeitable Accrued Benefit.
(m) (Specify) _______________________________________________.
[Note: Option (m) may not treat default as a distributable event
earlier than the Participant's Separation from Service unless the
Participant has attained Normal Retirement Age.]
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply
Section 6.02 of the Plan with the following modifications: (Choose (a) or at
least one of (b), (c) and (d))
(a) No modifications.
(b) Except as required under Section 6.01 of the Plan, a lump sum distribution
is not available: _________________________.
(c) An installment distribution: (Choose (1) or at least one of (2) or (3))
(1) Is not available under the Plan.
(2) May not exceed the lesser of ________________ years or the maximum
period permitted under Section 6.02.
(3) (Specify) ___________________________________________.
(d) The Plan permits the following annuity options: ___________.
[Note: The Employer may specify additional annuity options in an
addendum to this Adoption Agreement, numbered 6.02(d).]
6.03 BENEFIT PAYMENT ELECTIONS.
Participant Elections After Separation from Service. A Participant who is
eligible to make distribution elections under Section 6.03 of the Plan may elect
to commence distribution of his Nonforfeitable Accrued Benefit: (Choose at least
one of (a) through (c))
(a) As of any distribution date, but not earlier than ________________ of the
______________ Plan Year beginning after the Participant's Separation from
Service.
(b) As of the following date(s): (Choose at least one of Options (1) through
(6))
(1) Any distribution date after the close of the Plan Year in which the
Participant attains Normal Retirement Age.
(2) Any distribution date following his Separation from Service.
(3) Any distribution date in the _________________ Plan Year(s)
beginning after his Separation from Service.
(4) Any distribution date in the Plan Year after the Participant incurs
__________________ Break(s) in Service
(as defined in Article V).
(5) Any distribution date following attainment of age ________________
and completion of at least _____________ Years of Service (as defined
in Article V).
(6) (Specify) _________________________________________.
(c) (Specify) ______________________________________________.
Participant Elections Prior to Separation from Service. Subject to the
restrictions of Article VI, the following distribution options apply under the
Employer's Plan prior to a Participant's Separation from Service. (Choose (d) or
at least one of (e) and (f)
(d) No distribution options prior to Separation from Service.
(e) Attainment of Normal Retirement Age. Until he retires, the Participant has a
continuing election to receive all or any portion of his Nonforfeitable Accrued
Benefit after he attains Normal Retirement Age.
(f) Specify) ____________________________________. [Note: Option (f) may not
permit in service distributions prior to attainment of Normal Retirement Age.]
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICI-
PANTS' ACCOUNTS
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a
distribution from a segregated Account) occurs more than 90 days after the most
recent valuation date, the distribution will include interest at: (Choose (a),
(b) or (c))
(a) _________________% per annum. [Note: The percentage may equal 0%.)
(b) The 90 day Treasury bill rate in effect at the beginning of the current
valuation period.
(c) (Specify) _________________________________________________.
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee must
value the Trust Fund on the following valuation date(s): (Choose (a) or (b))
(a) No other mandatory valuation dates.
(b) (Specify) _____________________________________________.
EFFECTIVE DATE ADDENDUM
(Restated Plans Only)
The Employer must complete this addendum only if the restated Effective Date
specified in Adoption Agreement Section 1.18 is different than the restated
effective date for at least one of the provisions listed in this addendum. In
lieu of the restated Effective Date in Adoption Agreement Section 1.18, the
following special effective dates apply: (Choose whichever elections apply)
(a) Compensation definition. The Compensation definition of Section 1.12 (other
than the $200,000 limitation) is effective for Plan Years beginning after
____________________________. [Note: May not be effective later than the first
day of the first Plan Year beginning after the Employer executes this Adoption
Agreement to restate the Plan for the Tax Reform Act of 1986, if applicable.]
(b) Eligibility conditions. the eligibility conditions specified in Adoption
Agreement Section 2.01 are effective for Plan Years beginning after
______________________________.
(c) Suspension of Years of Service. The suspension of Years of Service rule
elected under Adoption Agreement Section 2.03 is effective for Plan Years
beginning ___________________________.
(d) Contribution/allocation formula. The contribution formula elected under
Adoption Agreement Section 3.01 and the method of allocation elected under
Adoption Agreement Section 3.04 is effective for Plan Years beginning after
______________________________________.
(e) Reallocation of Forfeitures. The reallocation of forfeitures under Section
3.05 applies to Plan Years beginning after ________________________________.
[Note: The date specified may not be earlier than December 31, 1985.]
(f) Accrual requirements. The accrual requirements of Section 3.06 are effective
for Plan Years beginning after _____________________________.
(g) Employment condition. The employment condition of Section 3.06 is effective
for Plan Years beginning after _____________________________.
(h) Vesting Schedule. The vesting schedule elected under Adoption Agreement
Section 5.03 is effective for Plan Years beginning after
______________________________.
(i) (Specify) ______________________________________________.
For Plan Years prior to the special Effective Date, the terms of the Plan prior
to its restatement under this Adoption Agreement will control for purposes of
the designated provisions. A special Effective Date may not result in the delay
of a Plan provision beyond the permissible Effective Date under any applicable
law requirements.
Execution Page
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan
and Trust, and in witness of its agreement, the Employer by its duly authorized
officers, has executed this Adoption Agreement, and the Trustee (and Custodian,
if applicable) signified its acceptance on this _______________ day of
______________________, 19_____.
Name and EIN of Employer: ____________________________________
Signed: ______________________________________________________
Name(s) of Trustee: __________________________________________
______________________________________________________________
Signed: ______________________________________________________
______________________________________________________________
Name of Custodian: ___________________________________________
Signed: ______________________________________________________
[Note: A Trustee is mandatory, but a Custodian is optional. See
Section 10.03 of the Plan.]
Plan Number. The 3-digit plan number the Employer assigns to this Plan for ERISA
reporting purposes (Form 5500 Series) is: ____________.
Use of Adoption Agreement. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
3-digit number assigned to this Adoption Agreement (see page 1) is solely for
the Master Plan Sponsor's recordkeeping purposes and does not necessarily
correspond to the plan number the Employer designated in the prior paragraph.
Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the
basic plan document will notify all adopting employees of any amendment of this
Master Plan of any abandonment or discontinuance by the Master Plan Sponsor of
its maintenance of this Master Plan. For inquiries regarding the adoption of the
Master Plan, the Master Plan Sponsor's intended meaning of any plan provisions
or the effect of the opinion letter issued to the Master Plan Sponsor, please
contact the Master Plan Sponsor, please contact the Master Plan Sponsor at the
following address and telephone number: INVESCO Trust Company, 0000 X. Xxxxx
Xxx., Xxxxxx, Xxxxxxxx (000) 000-0000.
Reliance on Opinion Letter. The Employer may not rely on the Master Plan
Sponsor's opinion letter covering this Adoption Agreement. For reliance on the
Plan's qualification, the Employer must obtain a determination letter from the
applicable IRS Key District Office.
PARTICIPATION AGREEMENT
For Participation by Related Group Members (Plan Section 1.30)
The undersigned Employer, by executing this Participation Agreement, elects to
become a Participating Employer in the Plan identified in Section 1.03 of the
accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the Adoption
Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: __________________________.
2. The undersigned Employer's adoption of this Plan constitutes:
(a) The adoption of a new plan by the Participating Employer.
(b) The adoption of an amendment and restatement of a plan currently
maintained by the Employer, identified as __________________, and
having an original effective date of
--------------------.
Dated this ________ day of _____________________, 19_________.
Name of Participating Employer: ________________________________
Signed: ________________________________________________________
Participating Employer's EIN:___________________________________
Acceptance by the Signatory Employer to the Execution Page of the Adoption
Agreement and by the Trustee.
Name of Signatory Employer: ____________________________________
Accepted: ______________________________________________________
[Date]
Signed: ________________________________________________________
Name(s) of Trustee: ____________________________________________
Accepted: ______________________________________________________
[Date]
Signed: ________________________________________________________
[note: Each Participating Employer must execute a separate
Participation Agreement. See the Execution Page of the Adoption
Agreement for important Master Plan information.]
NS MP AA Instructions
Complete the first blank in the paragraph by writing in the business' name in
its entirety.
1.02 Trustee
Option (a) should be chosen when the employer will be the trustee. INVESCO Trust
Company would then act as Custodian. If option (b) is chosen, INVESCO Trust
Company will charge an annual trust fee. Note: See Trustee Comments on page 16
for further explaination of Non-discretionary Trustee.
1.03 Plan
Enter the plan name. Example: ABC Inc. Money Purchase Pension Plan.
1.07 Employee
If you want the plan to cover all types of employees, select option (a). If you
want to exclude from the plan any group(s) of employees, select any combination
of (b) through (g). When a retirement plan excludes employees in options (d)
through (g) from participation, the plan is subject to a minimum coverage test
to maintain its "tax qualified" status. Your accounting firm should be notified
to perform the test annually.
Leased Employees
You may exclude leased employees from participation (option h). However, the
plan must satisfy the coverage rules of Code Section 410(b) and 401(a)(25),
consult your legal or financial counsel.
Related Employers
You may exclude related employers from participating in the plan (option j).
However, the plan must satisfy the coverage rules of Code Section 410(b) and
401(a)(26), consult your legal or financial counsel.
1.12 Compensation
Treatment of elective contributions - Choose option (a) if you prefer to "add
back" employee elective 401(k), contributions to compensation for purposes of
allocating employer contributions, forfeitures and for non-discrimination
testing.
Modifications to Compensation
Modifications to Compensation - You must choose option (C) or any combination of
(d) through (j). Any exclusion of compensation may result in unallowable
discrimination, your accountant may want to test for any discriminatory effect
of excluding any type of compensation.
1.17 Plan Year
You must define the "plan year," usually it will follow the business tax year.
Limitation Year - You must define the "limitation year" (12 month period for
testing allocations to each employee's account), for administrative convenience
it should match the plan year.
1.18 Effective Date
New Plan - Enter the first day of your plan year (usually January 1) and the
year.
Restated Plan - Effective date - if you are amending for the Tax Reform Act of
1986 enter: January 1, 1987. If you are amending for another reason, enter the
first day of your tax year, example: January 1, 1990. Original established date
- Enter the original effective date of your plan from your prior Adoption
Agreement.
1.27 Hours of Service
Choose which method you wish to use for counting hours worked by an employee to
accrue benefits. Option (b), the equivalency method, is explained in Section
1.27 of the plan. Option (a) is usually chosen.
1.29 Service for Predecessor Employer
Under this option, you may elect to count service for a predecessor employer
when you are not maintaining the plan of the predecessor employer. (Used
primarily in the event of a merger or acquisition.)
1.31 Leased Employees
The law requires you to state how your plan would treat a leased employee who
could become a participant, even if you don't intend to ever lease employees.
Choose option (a) covering the employee without regard to the leasing company's
plan or option (b) the reduction method. Usually Option (b)(1) is chosen.
2.01 Eligibility
a. An employee must attain this age to become a participant (cannot exceed
age 21).
b. Pick how long (service) an employee must work to become a
participant.
Plan Entry - Choose when employees enter the plan for purposes of contributions
and benefit accrual. Normally, option (c), semi- annual entry dates, is chosen.
Time of Participation - Choose which plan entry date (before or after) an
employee who meets the eligibility requirements will enter the plan. Normally,
option (f) is chosen.
Dual Eligibility - This section allows you to include the plan current employees
who have not met the eligibility requirements and apply the eligibility
requirements to newly hired employees.
Restated plans usually chose (i)(2).
2.02 Years of Service
Option (b) should only be chosen if you wish to require less than 1000 hours to
be worked by an employee for eligibility. Usually Option (a) is chosen.
Eligibility Computation Period - Choose whether to measure subsequent
eligibility periods on the employee's anniversary or the plan year. Option (d)
is chosen for administrative convenience.
2.03 Break In Service
This option may impose a complicated re-entry date for employees who have
termination or whose hours were severely cut back. Option (a) is chosen for
administrative convenience.
2.06 Election Not To Participate
this option allows employees and participants to elect out of participation.
However, these employees are considered when performing all non-discrimination
tests. Option (a) is chosen for administrative convenience.
3.01 Contributions and Forfeitures
Amount - The employer must select a definite contribution formula under a money
purchase pension plan. Options (a) and (d) are nonintegrated formulas, options
(b) and (c) are integrated formulas.
Option (d) allows the employer to choose a fixed amount for the contribution
regardless of compensation (options (d)(1) or (d)(2). Alternatively, the
employer may choose a fixed percentage of compensation, based upon units of
time, (option (d)(3)). The employer may choose optoin (d)(4) only in addition to
options (d)(2) or (d)(3). Option (d)(4) allows the employer to establish both a
maximum and/or a minimum contribution.
Options (b) and (c) are two approaches to allowing permitted disparity in he
contribution formula. Option (b) applies the first percentage to a participant's
total compensation. Option (C) applies the first percentage only to compensation
not exceeding an integration level.
3.04 Contribution Allocation
There are two approaches for allocating (dividing up) the contribution to
participants. Option (a) mirrors the contribution formula chosen in Section
3.01. Option (a) must be chosen if the employer chose either integrated
contribution formula 3.01(a) or (b) of if the employer chose 3.01(d)(2) or
(d)(3).
Option (b) allows the employer to take a "profit sharing" approach to allocating
the contribution if the employer chose a fixed percentage or amount in Section
3.01. Under option (b) the employer has the choice of pro-rate (nonintegrated)
or a two-tiered integrated formula.
Option (c) is available only in addition to options (a) and (b). Option (c)
reduces a participant's allocation under this plan by an amount accrued under
the employer's other specified plan.
3.05 Forfeiture Allocation
Choose the method of allocating (dividing up) forfeitures of terminated
non-vested participant balances. Option (a) allocates forfeitures to reduce
employer contributions. Option (b) allocates forfeitures to increase employer
allocations.
3.06 Compensation Taken Into Account
If you wish to count a participant's full year's compensation (even if he or she
entered during the year), for contributions choose option (a), if not, choose
Option (b).
Accrual Requirements - Specify the service requirements a participant must
satisfy to receive an allocation. You may specify an hours of service
requirement, waive the service requirement for specific contributions and/or
require the participant to be employed on the last day to receive a
contribution.
Suspension of Accrual Requirements
This section allows you to suspend some or all of the accrual requirements found
in Section 3.06(E) of the plan for participants to receive allocations. This
would apply in plan years when a plan may not satisfy coverage and participation
requirements. For administrative convenience choose option (g).
3.15 More Than One Plan
This section only applies if you (the employer) maintain another defined
contribution plan (e.g.: profit sharing, money purchase, 401(k) or target
benefit) that covers at least one participant in this plan.
3.18 Defined Benefit Limitation
Check option (a) if you have never maintained a defined benefit plan for any
participants in this plan. If you have or are currently maintaining a defined
benefit under option (b), choose which plan's benefit would be reduced if a
participant's total allocations for a year were to exceed the allowable limit.
5.01 Normal Retirement Age
Choose what age you (the employer) want the participants to be 100% vested in
their benefits, if still employed (normal retirement age).
5.02 Vesting: Death/Disability
You may choose to allow 100% vesting to participants that terminate from service
because of death, option (b) or disability, option (c).
5.03 Vesting Schedule
Choose what vesting schedule(s) you want to apply to employer discretionary
contributions and matching contributions. If you choose option (b), you must at
a minimum complete the top-heavy vesting schedule. Remember, if the eligibility
requirements are more than one year, option (a) must be chosen.
Complete the Top Heavy Schedule based upon the following:
Years of Service
1
2 (not less than 20%)
3 (not less than 40%)
4 (not less than 60%)
5 (not less than 80%)
6 (not less than 100%)
Optional: Complete the Non Top Heavy Schedule based upon the
following:
Years of Service or
1 1 0%
2 2 0
3 (not less than 20%) 3 0
4 (not less than 40% 4 0
5 (not less than 60%) 5 100
6 (not less than 80%)
7 (not less than 100%)
5.04 Cash-Out Rule
If option (b) is chosen, the plan treats a 0% vested terminated participant has
having received a distribution, allowing for forfeitures to be reallocated to
active participants.
5.06 Years of Service
Choose what measuring period the plan should use to determine years of service
for vesting, employee's anniversary year or plan year. For ease of
administration choose option (a).
5.08 Prior Years of Service - Vesting
By choosing options (b) through (e) you (the employer) may exclude some prior
years of service for purposes of vesting.
Article 6
The employer must establish a specific distribution policy for the plan. Treas.
Reg. 1.411(d)-4 prohibits the Employer, the advisory committee or any third
party to retain discretion over when or in what form to pay the participant's
benefit (Option Forms of Benefit). Under a restated plan, the elections under
Article VI, to the extent they differ from previous plan provisions regarding
optional forms of benefit, may not eliminate an optional form of benefit with
respect to the account balance accrued as of the date the Employer executes the
restated adoption agreement (or, if later, the effective date of that restated
adoption agreement). An optional form of benefit includes the form of payment
(e.g., lump sum or installments), the timing of payment (e.g., immediately after
separation from service, following a break in service, after attaining normal
retirement age) and the medium of payment (e.g., right to elect distribution in
Employer securities, right to elect distribution in the form of an annuity
contract).
With this in mind, if you are restating an existing plan, pay close attention to
the distribution features under that document and your administrative practice
of distributions. In all cases, try to mirror or liberalize those distribution
features when restating onto this document.
6.01 Distribution Date
A distribution date establishes a predetermined "target" date in a plan year
when the plan will offer distributions. The actual distribution may occur later
than a distribution date as long as the actual distribution is within an
"administratively reasonable period of time" from the distribution date. A
typical distribution date for money purchase plans would be 60 days after the
plan year end.
Nonforfeitable Accrued Benefit Not Exceeding $3500.
When a separated participants vested balance does not exceed $3500, the plan
allows the employer to separately establish the timing of these distributions,
separate from the distribution dates. When you complete this section, you need
to balance two concerns: 1) will the timing of the distribution cause the
participant to consider it a "severance benefit" and therefore encourage
separation from service and 2) the administrative concerns of carrying a
non-active account in the plan. Usually an employer chooses Option (a) and
writes in "the first distribution date" of the "first" plan year beginning after
the Participant's separation from service.
Disability - The plan allows you (the employer) to establish a different target
payout date for disability distributions in options (f) and (h). Usually an
employer chooses Option (g).
Hardship - This option states whether or not the plan would allow a separated
participant to receive a hardship distribution, prior to receiving a total
distribution of his/her vested account balance.
Default on a Loan - This election does not create a loan policy. You (the
employer) must elect the timing of the plan's foreclosure if a participant's
loan were to be defaulted upon even if you do not intend to offer loans in your
plan.
6.02 Method of Payment
Money purchase pension plans require payouts to be in the form of a commercial
annuity unless properly waived. The employer may in options (b) and (c), if this
is a new plan, limit the alternative method of payment. Caution: an employer
cannot eliminate a prior method of payment by restating the plan onto this
document.
6.03 Participant Elections after Separation from Service
You must choose when an employee who has separated from service, with a vested
benefit greater than $3500, may elect to commence distributions. This election
will be tied directly to the "distribution date" definition earlier.
Participant Elections Prior to Separation from Service
The following distribution elections apply to employer discretionary account
regardless of vested account balances, prior to employment separation. If you
prefer not to allow any distribution options from these accounts prior to
separation, select option (d).
9.10 Value of Benefit
This option allows the employer to add interest to a participant's balance, if a
distribution occurs more than 90 days after the most recent plan valuation. You
do not have to provide an interest addition under this section and may complete
option (a) with 0%.
10.14 Valuation of Trust
You may use this option to specify mandatory valuation dates, in addition to the
accounting date. Normally, option (a) is chosen.
Instructions for Effective Date Addendum
You must complete the effective date addendum only if the effective dates of any
of the listed items (a) through (j) have an effective date other than your
restated effective date in adoption agreement section 1.18. Since some
provisions in the Tax Reform Act of 1986 were not effective until 1988 or 1989
the few provisions (if any) that have later effective dates must specify when
they are effective.
a. Compensation definition may not be later than the first day of your 1991 plan
year.
b. Eligibility conditions may not be later than the first day of your 1989 plan
year.
c. Suspension of years of service may not be earlier than the first day of your
1990 plan year.
d. Contribution/allocation formula may not be earlier than the first day of your
1989 plan year.
e. Reallocation of forfeitures may not be earlier than December 31, 1985.
f. Accrual requirements may not be earlier than the first day of your 1989 plan
year.
g. Employment condition may not be earlier than the first day of your 1991 plan
year.
h. Vesting schedule may not be later than the first day of your 1989 plan year.
i. Allocation of Earnings may not be earlier than the first day of the 1990 plan
year.
Execution Page
The Employer must complete the date on which it executes the adoption agreement
and must execute the signature for the Employer. The execution page provides two
lines above the signature line to print or type the name of the Employer and the
Employer's EIN. If the Employer is a sole proprietorship, the individual sole
proprietor should execute as Employer. If the Employer is a corporation or a
partnership, an officer or a partner, as applicable, should execute the adoption
agreement on behalf of the Employer.
Trustee
If you selected option (a) of Section 1.02, then the employer will be the
Trustee. An individual must sign as trustee for the employer. INVESCO Trust
Company will then act as custodian.
If you choose to have INVESCO Trust Company act as "Trustee" then option (b) of
Section 1.02 must be chosen. INVESCO does charge an annual fee for this service.
INVESCO Trust Company will only serve as a non-discretionary trustee, this means
that there is a person who is the "Named Fiduciary." The Named Fiduciary gives
direction to a non-discretionary trustee, and the non-discretionary trustee
accepts all directions from the Named Fiduciary. The Named Fiduciary is either
the President of the Corporation, the managing partner of the partnership or the
self-employed individual of a sole-proprietorship. The Named Fiduciary is
responsible for selecting plan investment.
The execution page also includes a signature line for the Custodian, if any.
Leave the Custodian lines blank if INVESCO Trust Company will act as custodian.
Plan number. This paragraph designates the number the Employer assigns to the
plan for reporting (Form 5500) purposes. If this is the first plan the Employer
ever maintained, the number must be 001. The Employer's plan number does not
correspond to the 3- digit adoption agreement number specified at the top of the
first page of the adoption agreement. Consult your Counsel if unsure what
3-digit plan number to use.
Instructions for the Participation Agreement
This adoption agreement includes a Participation Agreement under which a related
group member of the signatory Employer to the execution page may participate in
the same plan with that Employer. Each related group member wishing to become a
participating Employer should execute a separate Participation Agreement. See
Section 1.30 of the Plan for the definition of related Employers.
Thus, it is possible to exclude the employees of related group members not
participating in the plan. If an Employer is a member of a related group, it
should consider whether the inclusion of other related group members' employees
is necessary to satisfy the coverage requirements of Code ss.410(b) or the
minimum participation requirement of Code ss.401(a)(26). If the Employer
determines inclusion of the employees of a related group member is necessary to
maintain qualification of the plan, the Employer may take one of two approaches:
(1) have the related group member execute a Participation Agreement; or (2)
elect in Adoption Agreement Section 1.07 to include the employees of that
related group member. Under approach (1), the participation of the related group
member will result in the automatic inclusion of the employees of that related
group member, without having to specify their inclusion in Adoption Agreement
Section 1.07. In addition, the related group member, under approach (1), has the
authority to contribute to the plan and, in the event another participating
related group member makes a contribution on behalf of that related group
member's employees, the Participation Agreement will ensure the deductibility of
that contribution (assuming the contribution does not exceed the deduction
limits of Code ss.404). Additional instructions to the appropriate adoption
agreement explain the effect on the allocation of Employer contributions when
related group members maintain a single nonstandardized plan. Please contact us.
Under approach (2), the plan will retain its qualified status, but contributions
the Employer makes on behalf of a nonparticipating related group member's
employees may not be deductible (even if otherwise within the limitations of
Code ss.404), resulting in an excise tax to the contributing Employer.
Unrelated Employers. The Master Plan does not allow the participation in a
single plan of unrelated Employers (i.e., Employers that do not satisfy the
related group definition in Section 1.30 of the Plan).
legal\adop-agr\nsmpaa.002
