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HomeMy WebLinkAboutES06-062 - Other - Flex-Plan Services, Inc. - Transportation Fringe Benefit Plan - 12/01/2012 Records M ern "'17KENT Document WASMI.GTON CONTRACT COVER SHEET This is to be completed by the Contract Manager prior to submission to City Clerks Office. All portions are to be completed. If you have questions, please contact City Clerk's Office. Vendor Name: Vendor Number: JD Edwards Number Contract Number: C--3C) �(P This is assigned by City Clerk's Office Project Name: biF-Jo CTR r Description: ❑ Interlocal Agreement ❑ Change Order ❑ Amendment Contract ❑ Other: Contract Effective Date: I a-pi -tom Termination Date: t�4('A Contract Renewal Notice (Days): NIA Number of days required notice for termination or renewal or amendment Contract Manager ¢Department: tj-Z . Detail: (i.e. address, location, parcel number, tax id, etc.): 1-'l ,yN. �-0 2- �i-�- c A�LfI��SS 0-tk71C t- S•Public\RecordsManagement\Forms\ContractCover\adcc7832 1 11/08 -- City Of Kent Transportation Fringe Benefits Plan SECTION (.INTRODUCTION City Of Kent is offering this Transportation Fringe Benefits Plan effective December 1, 2012, to provide a tax-free transportation benefit in lieu of otherwise taxable compensation This plan is intended to allow eligible employees to exclude from gross income under the IRS code section 132 certain Eligible Transportation Expenses This plan is intended to qualify as a "qualified transportation fringe" benefit under the IRS Code section 132(f) and its supporting regulations City Of Kent will establish, pursuant to this document, the City Of Kent Transportation Fringe Benefits Plan SECTION II. DEFINITIONS "Affiliated Employer" means the Employer and any other corporation that is a member of a controlled group of corporations(as defined in Code Section 414(b), (c), (m), or(o) "Anniversary Date" means the first day of any Plan Year "Commuter Highway Vehicle" means any highway vehicle that satisfies the following conditions (1)The vehicle must have a seating capacity of at least six adults, not including the driver, and (2) at least 80% of the mileage is used for the purpose of transporting Employees between their residence and place of employment during which the number of Employees transported occupy, on average, at least half of the seating capacity(not including the driver) "Code"means the Internal Revenue Code of 1986, as amended or replaced from time to time. "Compensation" means the total cash remuneration received by the Participant from the Employer during a Plan Year prior to any salary redirections Compensation shall include bonuses, commissions, and overtime "Coverage Period" means the monthly, or other specified period, during the Plan Year which a Salary Redirection Agreement is in effect "Initial Effective Date" means December 1, 2012. "Eligible Employee" means any Employee who satisfies the requirements established in Article III Eligible Employee does not include Individuals who are partners, sole proprietors, or independent contractors are not eligible to participate in the Plan In addition, under section 1372(a), more-than 2-percent shareholders of S corporations are treated as partners for fringe benefit purposes Thus, an individual who is both a more-than 2-percent shareholder of an S corporation and a common law employee of that S corporation is not considered an employee for purposes of section 132(f)and, therefore, also not eligible to participate in the plan "Eligible Parking Expense" means the parking expenses incurred by an Employee to(1)park at or near the place of employment, (2)at or near a place from which the Employee commutes to work by either a mass transit facility or a Commuter Highway Vehicle or carpool "Eligible Transit Expense" means the expenses incurred by an Employee to purchase a fare card, voucher, token, pass, or similar item on a mass transit facility or Commuter Highway Vehicle for the purpose of commuting between an Employee's residence and place of work "Employee" means any person who is employed by the Employer who meets the eligibility requirements, but excludes any person considered by the employer to be leased, temporary, a contract worker, a partner, sole proprietor, independent contractor, or a 2%or greater shareholder of a Subchapter S corporation "Employer" means City Of Kent and any Affiliated Employer which has adopted the provisions of this Plan "Participant° means any Eligible Employee who has elected to participate in the Plan "Plan" means the City Of Kent Transportation Fringe Benefits Plan as established by this document and any such amendments made thereto "Plan Year"means the 12-month period from January 1 and ending December 31. A Plan Year may be less than 12 months provided that it is the initial Plan Year or a transition year to a different Plan Year The first plan year will be a short plan year beginning on December 1, 2012 "Qualified Transportation Expense" means the expenses incurred by an Employee to purchase an Eligible Transit Expense or Eligible Parking Expense "Salary Redirection Agreement"means the actual agreement between the Employee and Employer pursuant to the Employee's participation into the Plan SECTION III. ELIGIBILITY Employees are eligible to participate in the Plan once they have satisfied the conditions for coverage under the group medical plan Once the eligibility requirement has been satisfied, the Employee will enter the plan the first day of the month coinciding with or following the date they met the eligibility requirements If a Participant's employment with the employer should terminate for any reason, then the Employee must re-complete any applicable eligibility requirements before becoming eligible to participate in the Plan Individuals who are partners in a partnership, sole proprietors, or independent contractors are not eligible to participate in the Plan In addition, under section 1372(a), more-than 2-percent shareholders of S corporations are treated as partners for fringe benefit purposes Thus, an individual who is both a more-than 2-percent shareholder of an S corporation and a common law employee of that S corporation is not considered an employee for purposes of section 132(f)and, therefore, also not eligible to participate in the plan SECTION IV. BENEFITS AND ELECTIONS Election of Benefits The Employer will purchase the requested Qualified Transportation Expense on behalf of the Employee and deduct the cost of the Qualified Transportation Expense from the Employee's pay check The Employee agrees to reduce their Compensation by the cost of the Qualified Transportation Expenses ri Vnc,, , 2 Limitations Eligible Parking Expense The reimbursement for Eligible Parking Expenses shall not exceed the $240 00 monthly limit for 2012 as set forth in Code Section 132(f) The limitation may be adjusted for inflation and the Plan will be amended at such time that the adjustment is made Eligible Transit Expense The reimbursement for Eligible Transit Expense shall not exceed the $125 00 monthly limit for 2012 as set forth in Code Section 132(f) The limitation may be adjusted for inflation and the Plan will be amended at such time that the adjustment is made A cash reimbursement may not be provided to an Employee for Eligible Transit Expenses if a voucher(or similar item that may be used for a transit pass) is readily available to the Employer for distribution to the Employee The voucher(or similar item) is considered readily available if(1)the Employer can obtain the voucher on terms no less favorable than those available to the Employee and (2) a significant administrative cost is not incurred by the Employer(excluding delivery charges under$15 of such vouchers) in obtaining the voucher The administrative cost is deemed "significant" if the average administrative cost is more than 1%of the average monthly value of the vouchers for a mass transit system(i a tram, bus, subway,ferry, etc) Costs Exceeding IRS Pre-Tax Limits The employer may deduct any additional amounts post-tax to cover the costs of commuter products in excess of the IRS limits Modifying an Election Upon authorizing a salary redirection, such agreement cannot be changed during the Coverage Period to which it relates The agreement maybe modified for the following Coverage Period Such modifications will be in effect the first pay date of the following Coverage Period City Of Kent maintains complete discretion on whether to allow any changes All changes will be effective prospectively and not retrospectively Termination of Employment In the event of an Employee's termination from the Employer or loss of eligibility for any reason, the salary redirection shall also terminate SECTION V.ADMINISTRATION Plan Administrator The Administrator of this Plan, or hereto referred as the Plan's Administrator, shall be City Of Kent which shall act in its administrative capacity to administer the Plan in all of its details, subject, however, to the pertinent provisions of the Code The Plan Administrator may use its discretionary power and authority to (a) To make and enforce any rules it deems necessary or proper for the administration of the Plan (b) To interpret the Plan,the Administrator's interpretation with respect to benefits, duties, and entitlements, including but not limited to, eligibility, amounts of benefits, and all other matters pertaining to the Plan's Administration, will be in good faith final and conclusive on all Participants claiming benefits under this Plan T11 v,i f 1 ro 3 (c) To take any action it deems necessary to stay in compliance with the regulations as set forth in the Code (d) To appoint such agents to assist in the administration of the Plan SECTION VI.AMENDMENT AND TERMINATION Amendment City Of Kent may, at any time, amend any or all of the provisions of this Plan in its sole discretion Such amendments shall not modify, in any manner, the existing elections of a Participant in the Plan unless the amendment is made to comply with local, state, or Federal laws, statutes, or regulations Termination The Employer has established the Plan with the intent that it will be maintained for an indefinite amount of time However, the Employer reserves the right to(1)terminate or limit the Plan as set forth in this document, in whole or in part, at any time If such termination of the Plan occurs, all Salary Redirections in effect will cease and no further deductions will be taken from the Participant's Compensation Rights to Assets Neither the establishment of the Plan nor the payment of benefits under the Plan shall be construed as giving any legal or equitable right to any Eligible Employee, former Eligible Employee or participating Employee against City Of Kent any employer or their officers or employees except as expressly provided herein, and all rights under any Plan shall be satisfied, if at all, only out of the general assets of the Employer. No Inducement, Contract or Guarantee of Employment Participation in this Plan does not constitute any type of employment contract between the Employer and Employee nor give the Employee the right to continued employment The Employer retains the right and sole discretion to hire or discharge an Employee as if the Plan had not been adopted Adoption by Affiliate Affiliated Employers may, at the consent of the Plan Administrator, adopt the Plan by executing a copy of this Plan Upon doing so, the Eligible Employees of such affiliate will be entitled to the benefits designated herein Taxability Neither the Plan Administrator nor Employer makes any guarantee that the benefits paid under this Plan will be excludable from a Participant's Compensation for income tax purposes It shall be the Employee's responsibility to determine if the benefits paid under this Plan are excludable from Federal and state income taxes a c' � 4 CERTIFICATE OF CORPORATE RESOLUTION City Of Kent hereby certifies that the following resolutions were duly adopted on �`O 1 I and that such resolutions have not been modified or rescinded as of the date hereof RESOLVED, that the form of Transportation Fringe Benefits Plan effective 1 a_0l - t c-), , presented to this meeting is hereby approved and adopted and that the proper employees of City Of Kent are hereby authorized and directed to execute and deliver to the Administrator of the Plan one or more counterparts of the Plan RESOLVED, that the Administrator shall be instructed to take such actions that are deemed necessary and proper in order to implement the Plan, and to set up adequate accounting and administrative procedures to provide benefits under the Plan RESOLVED, that the proper employees of the Corporation shall act as soon as possible to notify the employees by delivering to each employee a copy of the summary description of the Plan in the form of the Summary Plan Description presented to this meeting, which form is hereby approved City Of Kent further certifies that attached hereto as Exhibits A and B, respectively, are true copies of City Of Kent Transportation Fringe Benefit Plan Document and the Summary Plan Description approved and adopted in the foregoing resolutions. Employer Date- 1Z�1 A,z_ TJ vi 5 City of Kent Transportation Fringe Benefit Plan Plan Summary INTRODUCTION City of Kent is pleased to sponsor an employee benefit plan known as a Transportation Fringe Benefits Plan (the"Plan") The Plan allows you to use pre-tax dollars to pay for parking and mass transit expenses associated with your travel to and from work This Summary Plan Description describes the basic features of the Plan, how the Plan operates, and how you can maximize the Plan's benefits This document is only a summary of the key parts of your benefit and provides a brief description of your rights as a participant The Summary Plan description is not a part of the official Plan document In the event of a conflict between the Summary Plan Description and the Plan Document, the Plan Document will supersede QUESTIONS &ANSWERS What is the Purpose of the Plan? The Transportation Fringe Benefit Plan allows eligible employees to use pre-tax dollars provided by the Employer, employee salary redirections, or a combination thereof to pay for Eligible Transportation Expenses as set forth in Section 132(f) of the IRC Am I eligible to participate in the Plan? Employees are eligible to participate in the Plan once they have satisfied the conditions for coverage under the group medical plan Your entry date into the Plan will be the first day of the month coinciding with or following the date you met the eligibility requirements Individuals who are partners in a partnership, sole proprietors, or independent contractors are also not eligible to participate in the Plan In addition, under section 1372(a), more than 2-percent shareholders of S corporations are treated as partners for fringe benefit purposes Thus, an individual who is both a 2-percent shareholder of an S corporation and a common law employee of that S corporation is not considered an employee for purposes of section 132(f) and, therefore, also not eligible to participate in the plan Why should I enroll? The Plan allows you to use pre-tax dollars to pay for Eligible Transportation Expenses Because the plan uses pre-tax dollars to pay for Eligible Transportation Expenses, you do not pay FICA(Social Security) and federal income withholding tax The savings you realize is due to the use of pre-tax dollars that typically would have been paid out for FICA and federal income withholding tax Note, if you pay a state tax, your salary redirections may be applied before state taxes are applied thus increasing your savings potential How do I enroll? You must request the Qualified Transportation Expense from your Employer by the deadline determined by your Employer By making this request, you authorize your employer to redirect a portion of your salary, pre-tax, towards this Plan If you do not participate at this time, you can enter the Plan mid-year upon the discretion of City of Kent What is the Plan Year for this benefit? Your Plan Year for this benefit starts on January 1, and ends on December 31 The first plan year will be a short plan year beginning on December 1, 2012 Can I change my redirection amount mid-year? City of Kent maintains complete discretion to allow or disallow changes relating to mid-year changes, changing redirection amounts, or otherwise Any changes will effectuate prospectively and not retrospectively In the event that City of Kent permits a change, that change will not go into effect until the following month of the month the change was authorized If your participation terminates you must re- satisfy all eligibility requirements What is an "Eligible Transportation Expense"? Eligible Transportation Expenses means, (a) qualified parking, (b)transit pass and, (c) transportation in a commuter highway vehicle if such transportation is in connection with travel between the employee's residence and the place of employment What is an Eligible Parking Expense? Eligible Parking Expenses means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation provided by mass transit, a commuter highway vehicle, or by carpool An Eligible Parking Expense shall not include any parking on or near property used by the employee for residential purposes What is an Eligible Mass Transit Expense? Eligible Mass Transit Expenses means any pass, token, farecard, voucher, or similar item entitling a person to transportation (or transportation at a reduced price) if such transportation is— (a) on mass transit facilities, or (b) provided by any person in the business of transporting persons for compensation or hire if such transportation is provided in a vehicle that has a seating capacity of which is at least 6 adults (not including the driver), and a 80% of the mileage must be for the purposes of transporting eligible employees between their residences and their place of employment, and b At least half the capacity must be utilized by eligible employees for the purpose of transportation to and from work Are Vanpools eligible under the Mass Transit Expense? Yes Vanpools or Commuter Highway Vehicles associated with the travel to and from your work premises, or to or from a location that you commute from on mass transit, are eligible expenses under the Mass Transit Account The Vanpool must meet the following three (3) criteria to bean eligible expense (a) the vehicle must have a seating capacity of at least six(6) adults excluding the driver (b) 80% of the mileage must be for the purposes of transporting eligible employees (c) At least half the capacity must be utilized by eligible employees for the purpose of transportation to and from work R7%I�,I I t101 P s 2 What is the maximum Qualified Transportation Expenses benefit I may elect? The IRS has set a maximum amount that you may redirect from your salary towards eligible Parking and/or Mass Transit Expenses For 2012, the maximum amount is For Parking Expenses $240 00/month For Mass Transit Expenses and Vanpool Expenses (combined total) $125 00/month These monthly limits are also the maximum tax-free reimbursements that you may receive for each month of service under this plan How are the dollars redirected from my salary? If your Employer provides these benefits directly to you as a payroll deduction, then the funds will automatically be deducted from your paycheck on a pre-tax basis and no separate account will be established How are benefits provided? Your employer may provide benefits by reducing your compensation and using those funds to purchase Transportation Expenses on your behalf What happens if I terminate my employment? If your employment is terminated, voluntarily or involuntarily, or you become ineligible for the Plan for any reason, all salary red irections shall cease If you should terminate your employment and be rehired at a later date, then you can re-enroll for this benefit Again, you will still need to satisfy any eligibility requirements necessary before you may participate in the plan Will my Social Security Benefits be affected? Participating in a pre-tax reimbursement account may reduce your future Social Security earnings If you are concerned about your future benefit, please see your tax advisor Will the limits ever change? The limits for the mass transit and parking benefit are established by the IRS and may be adjusted for inflation as the plan continues If such an adjustment occurs, you may increase your election to the new limit at your next enrollment period i MISCELLANEOUS INFORMATION Plan Name City of Kent Transportation Fringe Benefit Plan The Effective Date December 1, 2012 Plan Administrator City of Kent 220-4th Ave S Kent, WA 98032-5895 Phone (253)-856-5240 REVtsr� 110109 3