8 CCR 1502-1-16 - DEFINED CONTRIBUTION PLAN
16.10
Terms
A. Defined Contribution Plan means the Association's defined contribution plan established pursuant to 24-51-1501, C.R.S., as a component of the 401(k) Plan. The Defined Contribution Plan is a separate trust fund within the 401 (k) Plan and is also governed by PERA's 401 (k) and Defined Contribution Plan and Trust Document (the "Plan document"). The Defined Contribution Plan is a profit-sharing plan intended to satisfy the requirements of Section 401(a) of the Internal Revenue Code.
B. Defined Contribution Account refers to an account containing sums transferred to the account via trustee to trustee transfer together with the contributions to the Defined Contribution Plan on behalf of the member of the Defined Contribution Plan and the earnings thereon less any distributions, any losses, and the member's allocable portion of the costs and expenses of administering the Plan.
C. Commence Employment means the date the employee began actual performance of services in the position eligible for the Defined Contribution Plan and earned salary for such services, regardless of when the payment occurs.
D. Community College refers to any Community College in the state system of community and technical colleges governed by the State Board for Community Colleges and Occupational Education which shall include Arapahoe Community College, Colorado Northwestern Community College, the Community College of Aurora, the Community College of Denver, Front Range Community College, Lamar Community College, Morgan Community College, Northeastern Junior College, Otero Junior College, Pikes Peak Community College, Pueblo Community College, Red Rocks Community College, Trinidad State Junior College and the Colorado Community College and occupational education system.
E. Member of the Defined Contribution Plan means an employee who elected to participate in the Defined Contribution Plan pursuant to 24-51-1503(1) or 24-51-1506(4), C.R.S., or who became a member pursuant to 24-51-1501(2) or 24-51-1503(3), C.R.S, and is presently performing services for that PERA- affiliated employer for salary resulting in contributions to the Defined Contribution Plan. Member of the Defined Contribution Plan also means, to the extent required, a member who is inactive but who has a Defined Contribution Account.
F. Except as expressly provided herein, for purposes of Part 15 of the PERA Statutes and this Rule 16, all time periods shall be determined in accordance with 2-4-108, C.R.S.
G. Year of Membership in the Defined Contribution Plan means 12 months, not necessarily consecutive, during which contributions are made on the member's behalf pursuant to 24-51-1505(1), C.R.S., to the Defined Contribution Plan. A Defined Contribution Plan member's total years of membership in the Defined Contribution Plan shall be calculated by dividing the total number of months during which contributions were made on the member's behalf to the Defined Contribution Plan by 12. Credit shall not be provided for member contributions transferred pursuant to Rule 16.30 D after an employee elects to participate pursuant to 24-51-1506(4), C.R.S. Years of membership before a 12-month break in service shall not be includable for purposes of determining a Defined Contribution Plan member's years of membership after such 12-month break in service. Each time an election is made to participate in the Defined Contribution Plan after a 12-month break in service, the employee shall have a new Defined Contribution Account with a new vesting schedule.
H. For purposes of 24-51-1506(4), C.R.S., year of membership in the plan means 12 months of contributions, not necessarily consecutive, with an employer as defined in 24-51-1501(4), C.R.S. A member's total years of membership in the Defined Benefit Plan shall be calculated by dividing the total number of months of contributions by 12. Years of membership before a 12-month break in membership shall not be includable for purposes of determining a member's years of membership after such 12-month break in membership. Each time an election is made pursuant to 24-51-1502(1) or 1503(1), C.R.S., after a 12-month break in membership, the employee shall have a new calculation for years of membership for the purposes of 24-51-1506(4), C.R.S. Years of membership with an employer other than an employer defined in 24-51-1501(4), C.R.S., shall not count towards the calculation of years of membership pursuant to 24-51-1506(4), C.R.S.
I. For purposes of Rule 16.10 H., reference to 12-month break in membership means 12 consecutive months for which no contributions are made on the member's behalf to the Defined Benefit Plan with an employer defined in 24-51-1501(4), C.R.S.
J. 12-Month Break in Service means, except as otherwise required by federal law, 12 consecutive months for which no contributions are made on the member's behalf to the Defined Contribution Plan.
K. Transfer Account means an account within the PERA 401 (k) account containing the vested portion of the Defined Contribution Account together with any earnings thereon, less any distributions, losses and the member's allocable portion of the costs and expenses of administering the Plan that is established if there is a 12-Month Break in Service from the Defined Contribution Plan or an election is made to become a member of the Association pursuant to 24-51-1506(1), C.R.S., and Rule 16.30 A. The Transfer Account will be an account within the PERA 401 (k) account but will be subject to the same distribution and investment election rules as the Defined Contribution Account.
16.20
Initial Election Period
A. Election to participate in the Defined Contribution Plan by an eligible employee pursuant to 24-51-1503(1), C.R.S., must be made in a manner approved by the Association. Such election must be received by the Association within 60 days from the date the employee commences employment. Such election becomes effective on the first valuation date following the receipt of the election form by the Association. If no such election is received by the Association within 60 days from the date the employee commences employment, the employee will automatically become a member of the Association's defined benefit plan.
B. An eligible employee shall make only a single election pursuant to 24-51-1502(1) and 24-51-1503(1), C.R.S. Such an election, once made, may not be withdrawn.
C. If member and employer contributions are made to the Association during the initial election period on behalf of an eligible employee who elects to be covered by the Defined Contribution Plan pursuant to 24-51-1502(1), C.R.S., such contributions (without interest) shall be transferred to the plan within 90 days after the eligible employee's election becomes effective.
D. An employee of an employer as defined in 24-51-1501(4), C.R.S., who terminates his or her employment for any reason prior to the expiration of the 60 days pursuant to 24-51-1502(1) or 1503(1), C.R.S., and who has not made a choice to become a participant in a retirement plan, shall be deemed to have been a member of the Association from the date of employment to the date of termination and thereafter an inactive member of the Association.
E. For purposes of Section 24-51-1747(2)(b)(lll), C.R.S., any service performed for DPS prior to the merger date of January 1, 2010 shall count as service for purposes of the twelve month break in service.
16.30
Additional Choice Within Years Two Through Five
A. Election to become a member of the Association pursuant to 24-51-1506(1), C.R.S., must be made in writing in a manner designated by the Association. Membership in the Association is effective on the first date of the pay period following the date the Association receives the form. Such election must be received within the second to fifth year of the employee's current period of membership in the Defined Contribution Plan. Years of membership in the Defined Contribution Plan shall be determined in accordance with Rule 16.10 G.
B. Election to become a member of the Defined Contribution Plan pursuant to 24-51-1506(4), C.R.S., must be made in writing in a manner designated by the Association. Such election becomes effective on the first date of the pay period following the date the Association receives the election form. Such election form must be received within the second to fifth year of the employee's membership in the Association as determined in accordance with Rule 16.10 H.
C. For an employee who becomes a member of the Association pursuant to 24-51-1506(1), C.R.S., the vested portion of his or her Defined Contribution Account pursuant to 24-51-1505(3), C.R.S., shall be transferred into the employee's Transfer Account. The amount of unvested employer contributions shall be forfeited pursuant to 24-51-1505(3), C.R.S.
D. An employee who elects to participate in the Defined Contribution Plan pursuant to 24-51-1503(1) or 1506(4), C.R.S., who has an existing member contribution account and is an inactive member of the Association, may either (i) elect to maintain his or her inactive member contribution account in the Association or (ii) direct that his or her member contribution account be transferred to the Defined Contribution Account; provided that after-tax contributions shall be transferred to an aftertax account in the employee's PERA 401 (k) account. If an employee elects to transfer his or her member contribution account pursuant to this subsection (ii), and that employee has two member contribution accounts in the defined benefit plan, both accounts shall be transferred. If an employee elects to transfer his or her member contribution account pursuant to this subsection (ii), the Association will transfer such account within 90 days after the employee's election becomes effective.
E. An employee who elects to become a member of the Association pursuant to 24-51-1506(1), C.R.S., or after a 12-Month Break in Service from the Defined Contribution Plan and who has previously elected to transfer his or her member contribution account to the Defined Contribution Account pursuant to Rule 16.30 D (ii), may reestablish his or her member contribution account and corresponding service credit. The cost to reestablish the member contribution account shall be the amount of money that was originally in the member contribution account, plus interest calculated at the actuarial investment assumption rate pursuant to PERA Rule 2.90 C plus an amount equal to one percent of the member's highest average salary for each month or partial month of service credit to be reestablished in accordance with 24-51-503(4), C.R.S. An employee who elects to reestablish his or her member contribution account pursuant to this Rule 16.30 E may reestablish a portion of the account.
F. A member of the Defined Contribution Plan who elects to receive a distribution of the entire vested balance of his or her Defined Contribution Account pursuant to Rule 16.90 or a member of the Defined Benefit Plan who elects to refund his or her Member Contribution Account pursuant to Rule 4.40 , and then subsequently returns to membership in the Association or in the Defined Contribution Plan before there has been a 12-month break in service shall begin with the same number of years of membership he or she had accrued prior to terminating membership for purposes of the additional choice within years two through five as provided for in 24-51-1506, C.R.S. and Rule 16.30.
G. Individuals who became members of the Defined Contribution Plan pursuant to section 24-51-1501(2) or 24-51-1503(3), C.R.S., are not eligible to make an additional choice within years two through five and this Rule 16.30 is not applicable to them.
H. An individual with a DPS inactive account who is a member of the Association's Defined Contribution Plan on or after January 1, 2010, who elects at any time during the second to fifth year of membership in the Plan, pursuant to Section 24-51-1506, C.R.S., to terminate membership in the Defined Contribution Plan and to become a member of the Association's Defined Benefit Plan, must make a one-time irrevocable choice between the DPS benefit structure and the PERA benefit structure in accordance with the portability provisions of Section 24-51-1747, C.R.S. The provisions of this paragraph (H) only apply to a member who has not already had a one-time irrevocable choice.
16.40
Investments
The investment alternatives available to a member of the Defined Contribution Plan shall be the same as those available in the PERA 401 (k) Plan. In the event of a transfer from the Defined Contribution Plan to the Transfer Account, the investment alternatives designated by the member of the Defined Contribution Plan shall remain the same until changed.
16.50
Beneficiary(ies)
Beneficiary designations shall be governed by the terms of the Plan document.
16.60
Contributions
A. The employer shall deliver all Defined Contribution Plan contributions, along with the required report, in the manner designated by the Plan Administrator within five days of the date the member of the Defined Contribution Plan is paid and consistent with the provisions of 24-51-401 (1.7) (b) to (1.7)(d), C.R.S. If either the payment or the reports or both are late, interest shall be assessed and paid as specified in PERA Rule 14.30 . Any resulting expenses incurred by the Plan Administrator (including charges or expenses imposed by third parties) for delinquency or inadequate funding by the employer shall be paid by the employer. The Plan Administrator, in its sole discretion, may waive such expenses.
B. For purposes of deferring federal income tax imposed on salary, the employee contributions assumed and paid for by the employer shall be in lieu of paying such amounts as salary and shall be treated as employer contributions pursuant to Section 414(h)(2) of the Internal Revenue Code. For all other purposes, employee contributions assumed and paid for by the employer shall be considered employee contributions.
C. Members of the Defined Contribution Plan shall be eligible to make tax- deferred contributions and rollover contributions to the 401 (k) Plan. Members of the Defined Contribution Plan shall also be eligible to make tax-deferred contributions and rollover contributions to the 457(b) Plan if they are employed by an Employer that is affiliated with the Plan.
D. If a Defined Contribution Plan Participant has assets transferred to the Defined Contribution Plan pursuant to Section 24-51-1501(2), C.R.S., and those assets contain rollover contributions, the rollover contributions will be transferred to the Participant's 401 (k) Account and shall not remain in the Participant's Defined Contribution Plan Account.
16.65
Contributions Based on Uniformed Service
A. A member of the Defined Contribution Plan who is reemployed and has the rights under 24-51-507, C.R.S., and the Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA"), may elect to make up his or her missed contributions for the period of uniformed service up to five years. Contributions must be made in accordance with USERRA, set forth at 38 U.S.C. ยง
4301, et seq.
B. Contributions made by a member of the Defined Contribution Plan pursuant to this Rule must be made during the time period starting with the date of reemployment and continuing for up to three times the length of the member's immediate past period of uniformed service, with the repayment period not to exceed five years. Makeup contributions may only be made during this period and while the member is employed with the post-service employer.
C. Upon PERA's receipt of the member contributions pursuant to section (A) of this Rule, the employer shall pay the employer contribution attributable to the period of time that the member paid make-up contributions. The employer shall remit the entire amount due pursuant to this section within 30 days from the date the member makes his or her make-up contributions.
D. If the employee does not make up all of the contributions attributable to the period of service, his or her defined contribution account may be less than if he or she had done so. Even when the employee and employer make up all contributions attributable to the period of service, the employee's account may not be the same as if the employee had remained continuously employed because the employee is not permitted to experience gains or losses on the make-up contributions that occurred in his or her defined contribution account during the period of service.
16.70
Return to Employment
A. A member of the Defined Contribution Plan who elects to receive a distribution of the entire vested balance of his or her Defined Contribution Account pursuant to this Rule and then subsequently returns to membership in the Association before there has been a 12-month break in service shall begin a new vesting schedule for future contributions.
B. A Member of the Defined Contribution Plan who has elected a lifetime annuity distribution option on or after an age that distributions are exempt from penalty under Internal Revenue Code Section 72(t) shall be deemed to be a Retiree of the Association subject to the provisions of Rule 11 and 24-51-1101, et seq., C.R.S.
C. A Participant in the state defined contribution plan established pursuant to Part 2 of Article 52 of Title 24, as said part existed prior to its repeal in 2009, who has elected a lifetime annuity distribution option on or after an age that distributions are exempt from penalty under Internal Revenue Code Section 72(t) shall be subject to the provisions of Rule 11 and 24-51-1101, et seq., C.R.S.
16.80
Forfeiture
A. Except as otherwise required by federal law, upon the earlier of (i) a 12-Month Break in Service, (ii) the distribution of the vested portion of the Defined Contribution Plan member's Defined Contribution Account upon termination of membership in PERA, or (iii) the transfer of the vested portion of the member's Defined Contribution Account to a Transfer Account, the person shall forfeit the portion of the Defined Contribution Account that is not vested. Forfeitures shall be used to pay Plan expenses. If required by federal law, the forfeited portion of the Defined Contribution Account without earnings shall be reinstated upon the person's resumption of participation in the Defined Contribution Plan.
B. If a person has a 12-Month Break in Service from membership in the Defined Contribution Plan, the vested portion of the Defined Contribution Account will automatically be transferred to a Transfer Account. The amount of unvested employer contributions shall be forfeited pursuant to 24-51-1505(3), C.R.S.
16.90
Distributions Upon Termination of Employment
Distribution of a member's Defined Contribution Account may commence as specified in the Plan document.
16.95
Miscellaneous
A. The Domestic Relations Order requirements in PERA Rule 15 shall be the same for the Defined Contribution Plan as they are for the remainder of the PERA 401 (k) Plan.
B. A person may retire from the Association or receive a distribution from his or her Defined Contribution Account only if he or she has terminated PERA covered employment and is no longer actively contributing to either the Defined Contribution Plan or the Association's Defined Benefit Plan. Notwithstanding the foregoing, a person who retired from the Association prior to July 1, 2009, and became a member of the Defined Contribution Plan pursuant to Section 24-51-1501(2), C.R.S., and who is actively contributing to the Defined Contribution Plan as of July 1, 2009, may continue to be a retiree even though he or she is actively contributing to the Defined Contribution Plan. If such person has terminated employment with the employer that he or she was employed with as of July 1, 2009, and subsequently returns to work, he or she shall be treated as a PERA retiree and may not continue to contribute to the Defined Contribution Plan.
C. A member of the Defined Contribution Plan may not obtain a loan from the member's Defined Contribution Account.
D. The lifetime annuity distribution option for members of the Defined Contribution Plan will not be provided by the Association.
E. Subject to Rule 16.95 B, an employee of an employer as defined in 24-51-1501(4), C.R.S. who is hired on or after July 1, 2009, and who was an employee of an employer as defined in 24-51-1501(4), C.R.S. during the 12 months prior to the date that the employee commences employment shall participate in the Plan that he or she was in based on the prior employment with an employer as defined in 24-51-1501(4), C.R.S. during the last 12 months. Notwithstanding the above, and subject to Rule 16.95 F and G, if the employee has been an active participant in the state defined contribution plan established pursuant to part 2 of article 52 of title 24, as said part existed prior to its repeal in 2009, during the 12 months prior to the date the employee commences employment with an employer, the employee shall be a member of the Association's Defined Contribution Plan upon commencing employment with the employer, and the employee shall not be considered an eligible employee for purposes of section 24-51-1506(1) and (2), C.R.S.
F. An employee who is hired on or after January 1, 2008, by a Community College who was an employee of a Community College during the 12 months prior to the date that the employee commences employment, shall participate in the Plan that he or she was in based on the prior employment with a Community College in the last 12 months.
G. An employee who commences employment with a Community College on or after January 1, 2008, who has not been employed by a Community College in the last 12 months, but who has been a Member of the Defined Contribution Plan in the last 12 months, shall continue to be a Member of the Defined Contribution Plan upon commencement of employment with the Community College.
H. Any person who becomes a candidate for Board election in the State or Local Government Division pursuant to Part 2 of the Association's Statutes and these Rules must disclose whether he or she is a member of the Defined Contribution Plan or a member in the Defined Benefit Plan.
I. Except as required by 24-51-212, C.R.S., none of the moneys, accounts, benefits, or contributions associated with a Defined Contribution Account shall be assignable either in law or in equity or be subject to execution, levy, attachment, garnishment, bankruptcy proceedings, or other legal process.
J. A person who no longer has a Defined Contribution Account and has not elected a lifetime annuity distribution option shall not have any rights associated with the Defined Contribution Plan and cannot be a retiree of the Association.
K. A person who has a Transfer Account may only rollover the Transfer Account to another Plan not administered by the Association if that person is no longer a member of the Association. A member or inactive member who has a Transfer Account may rollover the Transfer Account or any portion thereof to the PERA 401 (k) Plan.
L. In the event there is a conflict between these Rules and the Plan Document, these Rules shall govern.
Notes
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