Contributions

PURPOSE: This rule describes the contributions that may be made to the defined contribution plan, the allocation of those contributions to participants, the source of these contributions, and limitations on the contributions. PUBLISHER’S NOTE: The secretary of state has determined that the publication of the entire text of the material which is incorporated by reference as a portion of this rule would be unduly cumbersome or expensive. This material as incorporated by reference in this rule shall be maintained by the agency at its headquarters and shall be made available to the public for inspection and copying at no more than the actual cost of reproduction. This note applies only to the reference material. The entire text of the rule is printed here. (1) Seed Contribution. Each Employee who is not a member of Local Government Employees’ Retirement System (LAGERS) shall make a contribution of seven-tenths of one percent (0.7%) of his or her Compensation to his or her seed account. This contribution shall be made by payroll deduction. Contributions shall commence immediately upon the date the individual becomes an Employee (or January 1, 2000, if later). The seed contribution shall be designated as an employee “pick-up” contribution, as described in section 414(h)(2) of the Code. A Participant may not waive this contribution requirement by opting out of the Plan. (2) Board Matching Contribution. The Board, in its sole discretion, shall determine if it will make Board matching contributions for a Plan Year and the aggregate amount of the contribution. Such determination may be made during or after the close of the Plan Year for which the contribution is made. Each Qualified Participant (as defined in section (3) below) who makes contributions to the 457 Plan during the Plan Year for which the Board matching contribution is made shall be eligible to receive an allocation of this Board matching contribution. Generally, the Board shall allocate Board matching contributions pro rata to the Qualified Participant’s Board matching account, on the basis of a Qualified Participant’s contributions to the 457 Plan. However, the Board shall follow these rules in making this allocation— (A) Contribution allocation to a Qualified Participant shall equal the least of: i) three percent (3%) of such member’s Compensation for the Plan Year, ii) fifty percent (50%) of such member’s contributions to the 457 Plan, or iii) the matching percentage designated by the Board for the Plan Year, multiplied by the Qualified Participant’s contributions to the 457 Plan for the Plan Year. (B) If a Board matching contribution is made for a Plan Year, it shall be allocated to the Participants’ Board matching account as soon as administratively feasible after the close of the Plan Year without regard to any earnings or losses from the close of the Plan Year until the date such allocation is made. (C) Each Qualified Participant’s Employer shall submit information and records to the Board with respect to the amount of such Qualified Participant’s contributions to the 457 Plan for a Plan Year no later than February 28 following the close of such Plan Year. The amount of Board matching contributions to any Qualified Participant’s Board matching account for a Plan Year shall be based upon such information and records and shall not be adjusted upward if the information or records submitted by the Qualified Participant’s Employer subsequently are shown to be incomplete or inaccurate, or if additional 457 Plan contributions are subsequently deposited by the Qualified Participant’s Employer for such Plan Year; provided, however, the Board will be entitled to recover (either by reducing the Qualified Participant’s Board matching account balance or, in the event such balance has been distributed, directly from the Qualified Participant) any amounts overcredited to the Qualified Participant’s Board matching account (and earnings thereon) if a Qualified Participant’s Employer has filed inaccurate records or information regarding the amount of a Qualified Participant’s contributions to the 457 Plan. (3) A Participant is a “Qualified Participant” for a Plan Year, if he or she is employed by an Employer and— (A) Has earned one thousand (1,000) Hours of Service during the Plan Year; (B) Dies during the Plan Year; or (C) Retires during the Plan Year. “Retirement,” for this purpose, means termination of employment after attainment of age sixty-two (62) after having become fully vested in accordance with rule 16 CSR 50-10.070. (4) Source of Board Matching Contributions. The source of Board matching contributions (if made) shall be the funds described in sections 50.1020, 50.1190, and 50.1200, RSMo. Such funds shall be held in a separate trust (which shall be exempt from federal income tax in accordance with section 115 of the Code) until the Board determines whether all such funds must be contributed to the pension plan described in sections 50.1000 to 50.1200, RSMo, to maintain the actuarial sufficiency of such plan or whether a portion of these funds may be contributed to the Plan described in this Chapter 10. (5) Employer Matching Contributions. Each Employer, in its sole discretion, shall determine if it will make Employer matching contributions for any Plan Year beginning after December 31, 2001. (A) An Employer may elect, before or as soon as possible after the beginning of each Plan Year, to make Employer matching contributions for the Plan Year by transmitting minutes of the meeting of the county commission or other governing body at which Employer matching contributions are authorized for such Plan Year to the Board within thirty (30) days of such meeting. Any such election shall not apply to subsequent Plan Years. (B) The election made by any Employer under subsection (5) (A) shall set forth the rate, method, or rules to be used by the Employer for making Employer matching contributions for the Plan Year. 1. If the Employer’s election is made after the beginning of the Plan Year, it shall specify whether retroactive Employer matching contributions shall be made with respect to contributions made to the 457 Plan prior to such election. 2. The rate, method, or rules for making Employer matching contributions specified in the Employer’s election may not be changed during the Plan Year; provided that the Employer may at any time during the Plan Year, by notifying the Board, prospectively terminate Employer matching contributions otherwise allocable with respect to contributions made to the 457 Plan after the date of such notice. An Employer which terminates Employer matching contributions for any Plan Year may elect to make Employer matching contributions for any subsequent Plan Year. (C) Each Qualified Participant (as defined in section (3) above) who is employed by an Employer and makes contributions to the 457 Plan during a Plan Year for which such Employer has elected to make Employer matching contributions shall be eligible to receive an allocation of such Employer matching contributions. (D) If Employer matching contributions are made for a Plan Year by any Employer, such contributions shall be sent by such Employer directly to the Trustee no later than the end of the first quarter of the following Plan Year, and shall be allocated to the Employer matching account of each Qualified Participant eligible to receive an allocation of such Employer matching contributions as soon as administratively feasible thereafter. (6) Rollover Contributions. The Plan shall accept a cash rollover contribution (within the meaning of the first sentence of Code section 402(c)(2) and Code sections 403(b)(8) (excluding after-tax employee contributions) and 408(d)(3)(A), including optional direct transfers under Code section 401(a)(31)) on behalf of a Participant, from any plan qualified under Code section 401(a), an annuity contract described in Code section 403(b), and any individual retirement account meeting the requirements of Code section 408(d)(3)(A)(ii). The Board (or its designee) may require a Participant to submit evidence that all of a contemplated contribution constitutes proceeds of an “eligible rollover distribution” (as described in Code section 402(c)(4)) or a “rollover contribution” (as described in Code section 408(d)(3)(A)(ii)) before allowing the Participant to make a contribution under this section. (7) 415 Limitation. As of the close of a Plan Year, the Board shall determine whether contributions to the Plan have been made, which exceed the limitations of Code section 415(c). Such Code section is incorporated by reference and the Plan will at all times comply with the final regulations under Code section 415. All terms and provisions of section 415 of the Internal Revenue Code of 1986, as amended 2012, are incorporated herein by reference. Publisher: Thomson Reuters/RIA, 195 Broadway, New York, NY 10007. This rule does not incorporate any later amendments or additions to Code section 415. The Board shall use compensation within the meaning of Code section 415(c)(3) (i.e., amounts reported in Box 1 of Form W-2, plus amounts that would have been received and includible in gross income but for an election under Code section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)), but not in excess of two hundred thirty thousand dollars ($230,000) (as adjusted in accordance with section 401(a)(17)(B) of the Code) for any Plan Year, limitation year, or calendar year, as applicable, in making this determination. Such remuneration shall not include any severance pay, whether paid before or after an Employee’s termination of employment. In addition, such amount shall not include other compensation paid after an individual’s termination of employment; provided that, to the extent that the following amounts are otherwise included in the definition of remuneration and are paid no later than the date which is two and one-half (2 1/2) months after termination of employment, or, if later, the end of the limitation year in which such termination occurs, such amounts paid after an Employee’s termination of employment shall be deemed remuneration: i) regular pay, including compensation for services during regular working hours, overtime, shift differential, commissions, bonuses, or other similar payments; and ii) payment for unused accrued sick, vacation, or other leave, but only if the Employee would have been able to use the leave if employment had continued, and payment received pursuant to a nonqualified, unfunded deferred compensation plan sponsored by the Employer, but only if the Employee would have received the payment at the same time if employment had continued and only to the extent the payment is includible in the Employee’s gross income. The exclusions provided for in this paragraph with respect to post-employment payments shall not apply to payments to an individual who does not currently perform services for the Employer by reason of qualified military service, to the extent such payments do not exceed the compensation such individual would have received from the Employer if he or she had continued to perform services for the Employer. Effective for limitation years beginning before July 1, 2007, if, as a result of the allocation for forfeitures or a reasonable error in estimating a Participant’s annual compensation, the annual addition to a Participant’s Account exceeds the maximum permitted, i) Board matching contributions constituting excess RETIREMENT FUND annual additions (and any gains on those contributions) shall first be forfeited and applied to reduce the Board matching contribution obligation for the Plan Year in which the forfeiture occurs, and ii) if necessary, Employer matching contributions constituting excess annual additions (and any gains on those contributions) shall then be forfeited and applied to reduce the Employer matching contribution obligation for such Employer for the Plan Year in which the forfeiture occurs. (8) Reemployed Veterans. If a Participant terminates employment to serve in a uniformed service (as defined in the Uniformed Services Employment and Reemployment Rights Act of 1994) and returns to the employ of an Employer before his or her statutory reemployment rights expire, then: (A) The Participant shall be permitted to make the seed contributions he would have been able to make except for the fact that he was in a uniformed service; and (B) The Employer shall match the Participant’s make-up contributions under the 457 Plan in the manner those contributions would have been matched had they been made during the Participant’s stint in a uniformed service. AUTHORITY: sections 50.1220 and 50.1260, RSMo 2000, and sections 50.1230 and 50.1250, RSMo Supp. 2012.* Original rule filed May 9, 2000, effective Jan. 30, 2001. Amended: Filed April 25, 2002, effective Nov. 30, 2002. Amended: Filed Sept. 10, 2002, effective April 30, 2003. Amended: Filed Nov. 10, 2005, effective May 30, 2006. Amended: Filed Sept. 17, 2007, effective March 30, 2008. Amended: Filed Dec. 22, 2008, effective July 30, 2009. Amended: Filed Dec. 20, 2010, effective June 30, 2011. Amended: Filed Sept. 5, 2012, effective March 30, 2013. *Original authority: 50.1220, RSMo 1999; 50.1230, RSMo 1999, amended 2001; 50.1250, RSMo 1999, amended 2001, 2004, 2007; and 50.1260, RSMo 1999.