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.

1. (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 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. (2) Matching Contribution. The Board, in its sole discretion, shall determine if it will make matching contributions for a Plan Year and the aggregate amount of the contribution. Such determination shall be made 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 matching contribution is made shall be eligible to receive an allocation of this matching contribution. Generally, the Board shall allocate matching contributions pro rata to the Qualified Participant’s 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:

   1. (A) Contributions allocated to a Qualified Participant who is not a member of LAGERS shall equal the least of: i) three percent of such non-LAGERS member’s Compensation for the Plan Year, ii) fifty percent of such non-LAGERS 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.
   2. (B) Contributions allocated to a Qualified Participant who is a member of LAGERS shall equal the least of: i) one and one-half percent of such LAGERS member’s Compensation for the Plan Year, ii) twentyfive percent of such LAGERS member’s contributions to the 457 Plan, or iii) one-half of 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.
   3. (C) If a matching contribution is made for a Plan Year, it shall be allocated to the Participant’s 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.

3. (3) A Participant is a “Qualified Participant” for a Plan Year, if he or she is employed by an Employer and:

   1. (A) Is employed on the last day of the Plan Year and has earned 1,000 Hours of Service during the Plan Year;
   2. (B) Is on a leave of absence taken under the Family and Medical Leave Act of 1993 on the last day of the Plan Year or, as of the last day of the Plan Year, is on an absence for sickness or injury of less than 12 months, that is counted as Creditable Service under 16 CSR 50-5.030;
   3. (C) Dies during the Plan Year; or
   4. (D) Retires during the Plan Year. “Retirement,” for this purpose, means termination of employment after attainment of age 62 after having become fully vested in accordance with rule 16 CSR 50-10.070.
4. (4) Source of Matching Contributions. The source of 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. (5) Rollover Contributions. The Plan shall accept a cash rollover contribution (within the meaning of Code sections 402(c) 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) 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)) before allowing the Participant to make a contribution under this section.
6. (6) 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). The Board shall use W-2 compensation (as defined in 26 CFR 1.415-2(d)(11)(i)) in making this determination, except that the Board shall include amounts excluded from W-2 compensation by reason of Code sections 125, 402(g)(3) and 457. 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, matching contributions constituting excess annual additions (and any gains on those contributions) shall be forfeited and applied to reduce the matching contribution obligation for the Plan Year in which the forfeiture occurs.

7. (7) 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:

   1. (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
   2. (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 50.1230, RSMo Supp. 1999.* Original rule filed May 9, 2000, effective Jan. 30, 2001. *Original authority: 50.1220, RSMo 1999; 50.1230, RSMo 1999.