2002 AGN AUG 06 I14 - Laserfiche WebLink

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Item #14 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF August 6, 2002 TO: Honorable Mayor and City Council FROM: City Attorney SUBJECT: Adopt Resolution Amending the Lincoln National Corporation Deferred Compensation Plan DATE: July 29, 2002 BACKGROUND: The City Attorney's office previously summarized the changes to Section 457 Deferred Compensation Plans resulting from the enactment of the Economic Growth and Taxpayer Relief Reconciliation Act of 2001 (EGTRRA) in 2001. Legislation was recently enacted updating the California Revenue and Taxation Code to comply with the changes to the Internal Revenue Code resulting from EGTRRA and certain technical corrections underthe Job Creation and Worker Assistance Act of 2002 (JOCWA). Following the passage of the State legislation, the IRS issued new proposed regulations (the first since 1982) covering the administration of eligible Section 457 plans. Guidance with respect to the administration of 457 plans has been long anticipated and these regulations not only clarify certain ambiguities in the Code but provide much needed guidance on the implementation of the EGTRRA and JOCWA changes. In light of the passage of the State conformity legislation and the issuance of regulations, the City may now proceed with incorporating into its 457 plan the changes to the Federal law which went into effect on January 1, 2002. Following is an updated summary of the mandatory changes to 457 Plans and the optional provisions in the context of the new changes under JOCWA and the IRS regulations: DISCUSSION/ANALYSIS: A. MANDATORY COMPLIANCE PROVISIONS The amendments to the Plan in the proposed Resolution include the following changes: 1. Definition of Includable Compensation. The definition of includable compensation under Section 457 has been amended to mirror the definition of