Optional Retirement Plan
The vendor for the Jackson College Optional Retirement Plan is Teachers Insurance and Annuity Association (TIAA-CREF).
Optional Retirement Plan Contacts
TIAA-CREF Web Site: www.tiaa-cref.orga
Enroll Online: www.tiaa-cref.org/jccmi
General Questions: (800) 842-2252
Retirement Plans: (800) 842-2776
P.O. Box 1259
Charlotte, NC 28201
OPTIONAL RETIREMENT PLAN
Available for Full Time Administrators, Faculty and Technicians ONLY
Effective Date July 1, 1996
This Plan, adopted effective July 1, 1996 (the “Effective Date”) by the Board of Jackson College, a community college district organized under the laws of the State of Michigan, (“Employer”).
WHEREAS, this Plan document sets forth the provisions of the Plan, which is a “governmental plan,” as defined in Section 414(d) of the Internal Revenue Code of 1986, as amended and which is a Code Section 403(a) Plan; and
WHEREAS, the Plan will be administered by the Plan Administrator as more fully described in section 8.01.
WHEREAS, the Plan shall be funded exclusively by the purchase of Annuity Contracts for Eligible Employees as further described in section 4.01.
NOW, THEREFORE, the Employer establishes the Jackson College Optional Retirement Plan (“Plan”) on the following terms:
As used in this Plan, the following words and phrases shall have the meanings set forth below:
The account established and maintained under the Annuity Contract for each Participant with respect to his interest in the contract. The term “Account” may also refer to the separate accounts maintained for Employer Contributions and Nonelective Contributions.
1.02 ANNUITY CONTRACT
A group fixed, variable or combination fixed and variable annuity contract issued by a life insurance company licensed to do business in the State of Michigan and approved for sale in the State of Michigan, which provided for periodic payments at regular intervals whether for a period certain or during one or more lives.
The person or persons designated by the Participant to receive any benefits payable under the Annuity Contract in the event of the Participant’s death.
1.04 BREAK IN SERVICE
A Period of Severance of at least 12 consecutive months. In the case of an Employee who is absent from work by reason of such Employee’s pregnancy, the birth of such Employee’s child, or the placement of a child with such Employee in connection with adoption by such Employee, or for purposes of caring for such a child for a period immediately following such birth or placement, such Employee shall not be considered to have begun a Break in Service until the second anniversary of the first date of such absence. This provision shall not apply, however, unless the individual furnished to the Plan Administrator, in a timely manner, such information as the Plan Administrator may reasonably require to establish that the absence is for the permitted reasons and the length of such absence. The foregoing shall not be construed to increase the amount of Service that would otherwise be credited to an Employee.
The Internal Revenue Code of 1986, as amended or replaced from time to time.
Compensation shall mean for each Employee the compensation (within the meaning of Code Section 415(c)(3) received during the Plan Year by such Employee from the Employer. However, Compensation shall not be reduced by the amount of elective contributions or exclusions that are not currently includible in the Employee’s gross income by reason of the application of Section 125, 402(e)(3), 403(b), and 457 of the Code, or by reason of the application of Section 414(h)(2) of the Code.
Effective for the first Plan Year beginning on or after January 1, 1996, or such later date as may be prescribed by law or any regulation or ruling issued by the Department of Treasury, the amount of Compensation taken into account under this Plan for any purpose for any Employee for any Plan Year shall not exceed $150,000 (or such greater amount as may be taken into account under Code Section 401(a)(17) for such Plan Year). For any short Plan Year the above-referenced limit shall be an amount equal to the compensation limit for the calendar year in which Plan year begins multiplied by the ratio obtained by dividing the number of full months in the short Plan year by twelve (12).
An Employee who has satisfied the eligibility requirements during a Plan Year shall be entitled to contributions with respect to Compensation earned on and after the date he becomes a Participant.
A Participant’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to be of long continued and indefinite duration. A Participant shall be considered Disabled only if such determination is made by the Social Security Administration or a physician approved by the Plan Administrator.
1.08 ELIGIBLE EMPLOYEE
Any full-time Employee who meets the requirements and is in the classifications as more fully described in Article II.
Any person employed by the Employer, but excluding any person who is an independent contractor.
Jackson College, a community college district organized under the laws of the State of Michigan.
Contributions made by the Employer.
1.12 ENTRY DATE
The date as of which an Eligible Employee becomes a Participant as determined by reference to Article II.
1.13 HOUR OF SERVICE
An hour for which an Employee is directly or indirectly paid or entitled to payment for the performance of duties.
1.14 NONELECTIVE CONTRIBUTIONS
Contributions that are made by a Participant pursuant to the reduction of an Employee’s Compensation but picked up by the Employer as described in Section III and as provided for under Section 414(h)(2) of the Code. Nonelective Contributions shall be treated as Employer Contributions.
1.15 NORMAL RETIREMENT AGE
The date on which a Participant attains age 65. A Participant’s Normal Retirement Date is the 1st day of the 1st month after his attainment of Normal Retirement Age.
An Eligible Employee or former Eligible Employee for whom contributions have been made under the Plan and who has not yet received all of the payments of benefits to which he is entitled under the Plan.
1.17 PAYOUT OPTION
Any of the annuity options or other options for payment that may be available under an Annuity Contract purchased under the Plan.
1.18 PERIOD OF SEVERANCE
A continuous period of time during which the Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits, or is discharged, or if earlier, the twelve month anniversary of the date the Employee was otherwise first absent from service. A Period of Severance shall not include any period of service with the Armed Forces of the United States of America if the Employee directly enters such service and returns to employment with the Employer within the time and under the conditions which entitle the Employee to reemployment rights under the federal laws of the United States of America.
This document, including all amendments.
1.20 PLAN ADMINISTRATOR
The entity named in Section 8.01 of the Plan.
1.21 PLAN YEAR
The Plan Year shall be the 12 consecutive month period beginning on July 1 and ending on June 30.
1.22 QUALIFIED DOMESTIC RELATIONS ORDER (“QDRO”)
Any judgment, decree, or order (including a property settlement agreement) made pursuant to state domestic relations law which:
(1) Relates to child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent;
(2) Creates or recognizes the existence of an alternate payee’s right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable under a plan; and
(3) Satisfies all applicable requirements of Section 414(p) of the Code.
1.23 SEPARATION FROM SERVICE
The severance of the Participant’s employment with the Employer. A Participant shall be deemed to have severed employment with the Employer in accordance with the standards of Section 402(d)(4)(A)(iii) of the Code.
The aggregate of all time periods commencing with the Employee’s first day of employment or his reemployment commencement date and ending on the day a Period of Severance begins. The first day of employment is the first day the Employee performs an Hour of Service. An Employee’s reemployment commencement date means the date on which an Employee first completes an Hour of Service for the Employer after a Period of Severance. An Employee will also receive credit for any Period of Severance less than 12 consecutive months.
A Participant’s or Beneficiary’s nonforfeitable right to receive benefits based on the Account balance under the Annuity Contract.
ELIGIBILITY AND PARTICIPATION
All full-time administrators, faculty, professional employees, and technicians (as defined in the collective bargaining agreement between the Employer and Jackson College/ Education Support Personnel Association (ESPA).
3.01 NONELECTIVE PARTICIPANT CONTRIBUTIONS
Eligible Employees who become Participants under this Plan in accordance with the provision of Article III shall be deemed to have authorized his Employer to deduct from his Compensation, prior to its payment, four percent (4%) of his Compensation, as a Nonelective Contribution to the Plan. The amount of the Nonelective Contribution shall be picked up by the Participant’s Employer in lieu of the Contributions required by the Participant as provided for in Section 414(h)(2) of the Code. The Participant shall not have the option to receive this picked up contribution directly and such contributions shall be paid by the Employer directly to the insurance company or companies which issue the Annuity Contracts for funding the Plan under section 4.01.
3.02 EMPLOYER CONTRIBUTIONS
Employer Contributions shall be made at a rate equal to fourteen percent (14%) of the Compensation of each Participant for whom Nonelective Contributions are made.
3.03 LIMITATIONS ON CONTRIBUTIONS
Notwithstanding any other provision of the Plan, no Nonelective or Employer Contributions shall be made that would exceed the limitations on the amounts under Section 415 of the Code, and those limitations are incorporated herein by reference. Compensation for purposes of determining such limitations shall be determined in accordance with the regulations issued by the Internal Revenue Service under Section 415 of the Code. If any of these limits would otherwise be exceeded, the Participant’s Nonelective Contributions and the Employer Contributions for the Participant shall be reduced (in a practicable and proportional manner to be determined by the Plan Administrator) until all contributions are within the relevant limitations.
3.04 CORRECTIVE DISTRIBUTIONS
If, notwithstanding the application of Section 3.03, the limits under Section 415 of the Code are exceeded for any taxable year, and such excess is a result of a reasonable error in estimating a participant’s annual compensation or under such other facts and circumstances that are permitted under any regulation or other ruling of the U.S. Department of Treasury then the Participant’s Account will be adjusted by the amount of Employer Contribution in excess of such limitations, and such excess amounts shall be used to reduce Employer Contributions for the next Limitation Year in accordance with section 1.415(b)(6)(iii) of the Income Tax Regulations. Limitation Year for purposes of Section 415 of the Code shall mean the Plan Year.
FUNDING, ROLLOVERS AND TRANSFERS
4.01 ANNUITY CONTRACT
This Plan shall be funded exclusively by the purchase of Annuity Contract for Participants. The terms and conditions of such Annuity Contracts shall be considered part of, and shall be construed as having been incorporated into, the Plan.
If the Board selects two or more Annuity Contracts as funding vehicles for this Plan, and if Participants are given the right to select the Annuity Contract or Annuity Contracts to which Plan contributions on their behalf will be made, such selections shall be communicated to the Plan Administrator or its agent designated for that purpose. If multiple investment options are available to the Participants under a single Annuity Contract, the Plan Administrator may authorize Participants to make their investment selections by direct communication with the issuing life insurance company pursuant to the terms of the Annuity Contract.
4.02 INTRA-PLAN TRANSFERS
Subject to an issuing life insurance company’s rules for transfers, a participant may specify that a part or all of his account may be transferred among different investment options offered under such Annuity Contract or may be transferred to the Annuity Contract of another authorized insurance company under this Plan. Transfer between insurance companies are subject to each insurance company’s rules for such transfers.
4.03 ACCEPTANCE OF ROLLOVERS AND TRANSFERS FROM PLANS OF OTHER EMPLOYERS
Any employee who has participated in a plan under Section 401(a) and/or 403(a) of the Code attributable to previous employment and who has received or is entitled to receive a distribution from such other plan may elect to make a rollover contribution or a transfer to this Plan of all or a portion of the amount derived from such other plan provided such rollover or transfer satisfies all applicable requirements for a tax free rollover under sections 402(c) and 403(a) of the Code or any successor provision of the Code or otherwise qualifies as a tax-free transfer under generally accepted interpretations of the Code.
4.04 VESTING AND DISTRIBUTION OF ROLLOVER AND TRANSFER AMOUNTS
Any amount that is credited to a Participant’s Account pursuant to a rollover or transfer under Section 4.04 of this Plan shall be one hundred percent (100%) Vested and nonforfeitable at all times. In all other respects, the portion of a Participant’s Account attributable to such a rollover or transfer shall be subject to the terms of this Plan.
4.05 TRANSFERS FROM A PLAN OF THE EMPLOYER
Any Employee who has participated in a plan under section 401(a) or 403(a) of the Code attributable to his current employment with the Employer may elect to transfer all or a portion of the amount accumulated under such other plan to this Plan, provided such transfer may be effected in a manner consistent with the terms of such other plans as well as the terms of this Plan, and provided further that such transfer qualifies as a tax-free transfer under generally accepted interpretations of the Code. The portion of a Participant’s Account attributable to such a transfer shall be subject to the terms of this Plan as if the contributions from which the transferred amount are derived were made under this Plan. However, no such transfer shall have the effect of reducing a Participant’s Vested percentage in transferred amounts or otherwise eliminating any benefit rights applicable to the transferred amounts that are protected by applicable law.
Any Participant who was a member of the Association shall be credited with any amounts transferred by the Association to the Plan on behalf of the Participant because of his becoming a Participant under this Plan.
4.06 ELIGIBLE ROLLOVERS
This article should not be construed to require this Plan to accept a rollover or transfer which may not meet the requirements for a rollover or transfer under generally accepted interpretations of the Code. The Plan Administrator may require the Participant to furnish such proof as is necessary to show the amount is eligible to be rolled over or transferred.
5.01 NONELECTIVE CONTRIBUTIONS
A Participant shall at all times have a fully Vested and nonforfeitable interest in that portion of his Account attributable to Nonelective Contributions.
5.02 EMPLOYER CONTRIBUTIONS
A Participant shall at all times have a fully Vested and nonforfeitable interest in that portion of his Account attributable to Employer Contributions.
6.01 DISTRIBUTIONS AFTER SEPARATION FROM SERVICE
A Participant’s Account attributable to both Employer Contributions and Nonelective Contributions shall be available for distribution at any time after the Participant’s Separation from Service.
No portion of a Participant’s Account attributable to Employer Contributions or Nonelective Contributions shall be available for distribution prior to the Participant’s Separation from Service.
6.02 FORM OF PAYMENTS
Upon Separation from Service, the Participant shall be entitled to receive distributions under any of the Payout Options that may be provided under the Annuity Contract.
6.03 INVOLUNTARY CASH-OUTS
Notwithstanding Sections 6.01 and 6.02, if a Participant Separates from Service at a time when the Vested portion of the Participant’s Account attributable to both Employer Contribtions and Nonelective Contributions has a value not greater than $3,500 ($5,000 for the Plan Year beginning July 1, 1998 and thereafter), then the Participant shall receive a single sum distribution of the entire Vested Account balance attributable to both Employer Contributions and Nonelective Contributions.
6.04 REQUIRED DISTRIBUTIONS
- The Participant must commence receiving distribution of benefits no later than April 1st of the calendar year following the year in which the Participant attains age 70 1/2 or retires, whichever is later.
- No Payout Option shall be permitted that fails to provide for the Participant or any Beneficiary to receive for each calendar year at least the amounts required to be distributed in accordance with Section 401(a)(9) of the Code.
- For purposes of applying Section 401(a)(9) to a Participant or Beneficiary, a single life expectancy shall be recalculated and a joint life expectancy shall not be recalculated, unless the Participant or Beneficiary elects otherwise.
- Nothing in this section shall be construed as making available any benefit or form or time of distribution not otherwise available under an Annuity Contract.
6.05 DIRECT ROLLOVERS
Notwithstanding any provision of the Plan to the contrary, a Participant who elects to receive a distribution that constitutes an “eligible rollover distribution” within the meaning of the Code, may elect to have any portion of such distribution paid directly to an eligible retirement plan in a direct rollover as permitted under the Code. A Participant’s right to make a direct rollover, and the provision of the required explanation of that right, shall be effected under the Annuity Contract from which the distribution is to be made.
7.01 BENEFIT FORMS
- Death Before Commencement of Benefits: If a Participant dies before the commencement of distributions under a Payout Option, the Participant’s Account balance shall be payable as a death benefit to the Participant’s Beneficiary in accordance with the terms of the Annuity Contract.
- Death After Commencement of Benefits: If distributions under the Annuity Contract have begun and the Participant dies before his entire interest in the Annuity Contract has been distributed, the remaining interest shall be distributed according to the terms of the Payout Option.
7.02 LIMITATIONS ON DEATH BENEFITS
Notwithstanding the provisions of Section 7.01, following the death of the Participant, the Participant’s Account must be distributed to the Participant’s Beneficiary at least as rapidly as required under Section 401(a)(9), the requirements of which are incorporated herein by reference. This generally means that, if the Participant dies after distributions to him have commenced (within the meaning of Code Section 401 (a)(9)), the remaining portion of the Participant’s interest in the Annuity Contract must be distributed at least as rapidly as under the method of distribution in effect on the date of the Participant’s death. If the Participant dies before distributions have commenced (within the meaning of Code Section 401(a)(9)), the Vested portion of his Account must (i) be fully distributed by the end of the fifth calendar year following the calendar year of the Participant’s death, or (ii) applied to provide an annuity for the Beneficiary (over the life or a period not exceeding the life expectancy of the Beneficiary) commencing no later than the end of the calendar year of the Participant’s death (or, if the Participant’s surviving spouse is the Beneficiary, commencing no later than the year in which the Participant would have attained age 70 1/2).
ADMINISTRATION OF PLAN
8.01 PLAN ADMINISTRATOR
This Plan shall be administered by a Plan Administrator. The Board shall serve as Plan Administrator. The Plan Administrator shall have full authority to control and manage the operation and administration of the Plan, to construe and interpret the Plan, to decide all questions of eligibility and to prescribe such rules and procedures as are necessary to carry out the terms of the Plan. The Plan Administrator may delegate certain of its responsibility and powers under this Plan to officers, Employees, or agents.
8.02 APPLICATION FOR BENEFITS
Each application for benefits must be made to the life insurance company that has issued the Annuity Contract under which the benefits are payable on such forms and in accordance with the terms of the Annuity Contract under which any such claim is made. The life insurance company shall respond to any such application within a reasonable period, not to exceed 90 days after its receipt of the application. If any application for benefits is denied, the life insurance company shall furnish the Participant with written notice of the specified reasons for the denial and a description of any additional information needed from, or further steps required of, the Participant. A Participant may appeal any such denial by making written application to the life insurance company, which shall respond in writing to any such request for review within 60 days of its receipt and shall give specific reasons if the appeal is denied.
8.03 DOMESTIC RELATIONS ORDER
For purposes of this section, an application for benefits in the form of, or pursuant to, a domestic relations order shall be responded to by the life insurance company only after the Plan Administrator or the Employer has established that such order is a Qualified Domestic Relations Order. Once an order has been established as a Qualified Domestic Relations Order, benefits shall be paid in accordance with the applicable requirements of such order. Reasonable written procedures shall be established to determine the qualifies status of domestic relations orders and to administer distributions pursuant to Qualified Domestic Relations Orders.
Any benefit or interest available under the Plan, any right to receive payments under the Plan, or any payment made under the Plan shall not be subject to assignment or alienation, garnishment, attachment, transfer or anticipation, execution or levy, whether by the voluntary or involuntary act of any interested persion under the Plan, except for a benefit or interest which becomes payable pursuant to a Qualified Domestic Relations Order.
9.02 EXCLUSIVE BENEFIT
This Plan is established for the exclusive benefit of the Participants and their Beneficiaries. Except as otherwise provided by this Plan, no amounts held under the Plan shall ever inure to the benefit of the Employer or any successor. All amounts held under the Plan shall be held for the exclusive purpose of providing benefits to the Participants and their Beneficiaries.
9.03 GOVERNING LAW
This Plan shall be governed by and construed according to the laws of the State of Michigan.
9.04 CONFORMITY WITH CODE
This Plan is established with the intent that it conform to the requirements of Section 401(a) and/or 403(a) and other applicable provisions of the Code. The provisions of this Plan shall be interpreted whenever possible in conformity with the requirements of the Code.
9.05 NOT SUBJECT TO ERISA
This Plan is established and maintained as a plan that is exempt from the requirements of Title I of the Employee Retirement Income Security Act of 1974, as provided by Section 4 of such statute.
9.06 AMENDMENT OF LAW
Where the law (including, but not limited to, the Code) governing the Plan is amended, modified, or interpreted through subsequent legislation,or ruling, or decision, the Plan’s provisions should be construed, insofar as is feasible, as incorporating any such amendment, modification, or interpretation of the law.
The headings and subheadings of this Plan have been inserted merely for convenience of reference, and in no way define or limit the scope of any of the provisions and are to be ignored in any construction of the provisions.
9.08 GENDER AND NUMBER
The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise.
9.09 NECESSARY INFORMATION
All Employees shall provide the Plan Administrator and any life insurance company that issues an Annuity Contract hereunder with any information that may be needed for the proper and lawful operation and administration of the Plan; including, but not limited to, appropriate evidences of the Employee’s age and marital status, his current address, the current address of his spouse, and the current address of any other Beneficiary.
9.10 NO RIGHT OTHER THAN PROVIDED BY PLAN
The establishment of this Plan and the purchase of any Annuity Contract under the Plan shall not be construed as giving to any Participant or Beneficiary or any other person any legal or equitable right against the Employer or its representatives, except as is expressly provided by this Plan. Under no circumstances shall this Plan constitute or modify a contract of employment or in any way obligate the Employer to continue the services of any Employee.
9.11 INABILITY TO LOCATE PARTICIPANT OR BENEFICIARY
In the event that all, or any portion, of any distribution payable to a Participant or his Beneficiary hereunder shall, at the expiration of three (3) years after it shall become payable, remain unpaid solely by reason of the inability of the life insurance company that has issued the Annuity Contract, to ascertain the whereabouts of such Participant or his Beneficiary, the amount so distributable shall be held in a suspence account and used to reduce future Employer contributions. In the event a Participant or Beneficiary is located subsequent to his benefit being reallocated, such benefit shall be restored.
9.12 PROTECTION OF LIFE INSURANCE COMPANY
Any life insurance company that issues an Annuity Contract under this Plan shall be protected and held harmless by the Employer in acting according to any direction, if in writing or otherwise reasonably believed to be genuine, of the Employer, the Plan Administrator, or any delegate thereof, and shall not be required to question any such direction. Regardless of any provision of this Plan, a life insurance company shall not be required to take or permit any action or allow any benefit or privilege contrary to the terms of any Annuity Contract which it may issue under the Plan.
9.13 ANNUAL ACCOUNTING
Records and statements for the Plan and each Participant are to be maintained on the basis of the contract year under the Annuity Contract.
9.14 REPORTING TO PARTICIPANTS
A statement of accrued benefits will be sent to each Participant at least once each Plan Year.
If any provision of the Plan shall be held invalid for any reason, that holding shall not affect the remaining provisions of the Plan which shall be construed and enforced as if the invalid provision had not been included in the Plan.
AMENDMENT OR TERMINATION
10.01 EMPLOYER’S RIGHT TO AMEND THE PLAN
The Employer reserves the right to amend or terminate the Plan at any time, provided that no such amendment may cause any amounts held under the Plan to be used for, or diverted to, purposes other than for the exclusive benefit of Participants and Beneficiaries, and provided further that no amendment or termination of the Plan may reduce the benefits accrued by or the amount credited to the Account of any Participant, reduce any Participant’s Vested percentage in that portion of the Participant’s Account attributable to Employer Contributions made before the day such amendment is adopted or becomes effective, whichever is later.
Notwithstanding the provisions of section 11.01 Contributions may be returned to the Employer, if the Internal Revenue Service does not initially issue a favorable determination letter on the plan’s qualified status under Section 401(a) and/or 403(a) of the Code. In addition, contributions which were made based on a mistake of fact may be returned to the Employer within one year of the date of which such contributions were made.
10.03 MERGER, CONSOLIDATION, OR TRANSFERS OF PLAN ASSETS
The Plan will not be merged or consolidated with any other plan, nor will any of its assets or liabilities be transferred to another plan, unless immediately after a merger, consolidation, or transfer of assets or liabilities, each Participant would receive a benefit under the Plan which is at least equal to the benefit he would have received immediately prior to a merger, consolidation, or transfer of assets or liabilities (assuming in each instance that the Plan had then terminated).