PURPOSE: This rule is intended as good faith compliance with the provisions of section 457(b) of the Code and is to be construed in accordance with such provisions and guidance issued thereunder.

1. (1) The following words and terms, when used in this section, have the meaning set forth below:

   1. (A) Administrator—The Board of Directors of the County Employees’ Retirement Fund;
   2. (B) Account Balance—The bookkeeping account maintained with respect to each Participant which reflects the value of the deferred Compensation credited to the Participant, including the Participant’s Annual Deferrals, the earnings or loss of the Trust Fund (net of Trust Fund expenses) allocable to the Participant, any transfers for the Participant’s benefit and any distribution made to the Participant or the Participant’s Beneficiary. The Account Balance includes any account established under section (5) for rollover contributions and plan-to-plan transfers made for a Participant;
   3. (C) Annual Deferral—The amount of Compensation deferred in any year; 16 CSR 50-20
   4. (D) Beneficiary—The designated person who is entitled to receive benefits under the Plan after the death of a Participant;
   5. (E) Code—The Internal Revenue Code of 1986, as now in effect or as hereafter amended. All citations to sections of the Code are to such sections as they may from time-totime be amended or renumbered;
   6. (F) Compensation—All cash compensation for services to the Employer, including salary, wages, fees, commissions, bonuses, and overtime pay, that is includible in the Employee’s gross income for the calendar year, plus amounts that would be cash compensation for services to the Employer includible in the Employee’s gross income for the calendar year but for a compensation reduction election under section 125, 132(f), 401(k), 403(b), or 457(b) of the Code (including an election to defer compensation under section (3));
   7. (G) Employee—Shall have the meaning set forth in rule 16 CSR 50-20.020(1)(H);
   8. (H) Employer—Shall have the meaning set forth in rule 16 CSR 50-20.020(1)(I);
   9. (I) Includible Compensation—An Employee’s actual wages in box 1 of Form W-2 for a year for services to the Employer, but subject to a maximum of two hundred thousand dollars ($200,000) (or such higher maximum as may apply under section 401(a)(17) of the Code) and increased (up to the dollar maximum) by any compensation reduction election under section 125, 132(f), 401(k), 403(b), or 457(b) of the Code (including an election to defer Compensation under section (3));
   10. (J) Normal Retirement Age—Age sixtytwo (62);
   11. (K) Participant—An individual who is currently deferring Compensation, or who has previously deferred Compensation under the Plan by salary reduction and who has not received a distribution of his or her entire benefit under the Plan. Only individuals who perform services for the Employer as an Employee may defer Compensation under the Plan;
   12. (L) Plan—Shall have the meaning set forth in rule 16 CSR 50-20.020(1)(L);
   13. (M) Severance from Employment—The term Severance from Employment means the date that the Employee dies, retires, or otherwise has a severance from employment with the Employer, as determined by the Administrator (and taking into account guidance issued under the Code);
   14. (N) Trust Agreement—The written agreement (or declaration) made by and between the Board and the Trustee under which the Trust Fund is maintained;
   15. (O) Trust Fund—The Trust Fund created under and subject to the Trust Agreement;
   16. (P) Trustee—The Trustee duly appointed and currently serving under the Trust Agreement; and
   17. (Q) Valuation Date—Each business day.

2. (2) Participation and contributions shall be in accordance with the following:

   1. (A) Election Required for Participation. An Employee may elect to become a Participant by executing an election to defer a portion of his or her Compensation (and have that amount contributed as an Annual Deferral on his or her behalf) and filing it in accordance with such other applicable Plan terms. This participation election shall be made on the deferral agreement provided by the Administrator under which the Employee agrees to be bound by all the terms and conditions of the Plan. The participation election shall also include designation of investment funds and a designation of Beneficiary. Any such election shall remain in effect until a new election is filed;
   2. (B) Commencement of Participation. An Employee shall become a Participant as soon as administratively practicable following the date the Employee files a participation election pursuant to subsection (2)(A). Such election shall become effective no earlier than the calendar month following the month in which the election is made. A new Employee may defer Compensation payable in the calendar month during which the Participant first becomes an Employee if an agreement providing for the deferral is entered into on or before the first day on which the Participant performs services for the Employer;
   3. (C) Information Provided by the Participant. Each Employee enrolling in the Plan should provide to the Administrator at the time of initial enrollment, and later if there are any changes, any information necessary or advisable for the Administrator to administer the Plan, including, without limitation, whether the Employee is a participant in any other eligible plan under Code section 457(b);
   4. (D) Contributions Made Promptly. Annual Deferrals by the Participant under the Plan shall be transferred to the Trust Fund within a period that is not longer than is reasonable for the proper administration of the Participant’s Account Balance. For this purpose, Annual Deferrals shall be treated as contributed within a period that is not longer than is reasonable for the proper administration if the contribution is made to the Trust Fund within fifteen (15) business days following the end of the month in which the amount would otherwise have been paid to the Participant;

   5. (E) Amendment of Annual Deferrals Election. Subject to other provisions of the Plan, a Participant may at any time revise his or her participation election, including a change of the amount of his or her Annual Deferrals, his or her investment direction and his or her designated Beneficiary. A change in the amount of the Annual Deferrals shall take effect as soon as administratively practicable but not earlier than the first day of the first pay period beginning in:

      1. 1. Except as otherwise determined pur-

suant to paragraph (2)(E)2., the next calendar year quarter following the receipt of the properly completed Deferral Agreement by the Employer; or

1. 2. If so determined by the county clerk

of the Employer, the calendar month following receipt of the properly completed Deferral Agreement by the Employer. A change in the investment direction shall take effect as of the date provided by the Administrator on a uniform basis for all Employees. A change in the Beneficiary designation shall take effect when the election is accepted by the Administrator;

1. (F) Leave of Absence. Unless an election is otherwise revised, if a Participant is absent from work by leave of absence, Annual Deferrals under the Plan shall continue to the extent that Compensation continues; and
2. (G) Disability. A disabled Participant may elect Annual Deferrals during any portion of the period of his or her disability to the extent that he or she has actual Compensation (not imputed Compensation and not disability benefits) from which to make contributions to the Plan and has not had a Severance from Employment.

1. (3) Limitations on amounts deferred shall be in accordance with the following:

   1. (A) Basic Annual Limitation. The maximum amount of the Annual Deferral under the Plan for any calendar year shall not exceed the lesser of i) the Applicable Dollar Amount or ii) the Participant’s Includible Compensation for the calendar year. The Applicable Dollar Amount is the amount established under section 457(e)(15) of the Code as set forth below: The Applicable Dollar For the following years: Amount is: 2002 $11,000 2003 $12,000 2004 $13,000 2005 $14,000 2006 or thereafter $15,000

      Adjusted for cost-of-

living after 2006 to the extent provided under section 415(d) of the Code.

1. (B) Age Fifty (50) Catch-up Annual Deferral Contributions. A Participant who will attain age fifty (50) or more by the end of the calendar year is permitted to elect an additional amount of Annual Deferrals, up to the maximum age fifty (50) catch-up Annual Deferrals for the year. The maximum dollar amount of the age fifty (50) catch-up Annual Deferrals for a year is as follows:

   The maximum age 50 catch-up

For the following years: dollar amount is: 2002 $1,000 2003 $2,000 2004 $3,000 2005 $4,000 2006 or thereafter $5,000 Adjusted for cost-ofliving after 2006 to the extent provided under the Code

1. (C) Special Section 457 Catch-up Limitation. If the applicable year is one of a Participant’s last three (3) calendar years ending before the year in which the Participant attains Normal Retirement Age and the amount determined under this subsection (3)(C) exceeds the amount computed under subsections (3)(A) and (3)(B), then the Annual Deferral limit under this section (3) shall be the lesser of:

   1. 1. An amount equal to two (2) times the

subsection (3)(A) Applicable Dollar Amount for such year; or

1. 2. The sum of:

   1. A. An amount equal to (A) the aggre-

gate subsection (3)(A) limit for the current year plus each prior calendar year beginning after December 31, 2001 during which the Participant was an Employee under the Plan, minus (B) the aggregate amount of Compensation that the Participant deferred under the Plan during such years, plus—

1. B. An amount equal to (A) the aggre-

gate limit referred to in section 457(b)(2) of the Code for each prior calendar year beginning after December 31, 1978 and before January 1, 2002 during which the Participant was an Employee (determined without regard to subsections (3)(B) and (3)(C)), minus (B) the aggregate contributions to Pre-2002 Coordination Plans for such years. However, in no event can the deferred amount be more than the Participant’s Compensation for the year.

1. (D) Special Rules. For purposes of this section (3), the following additional rules shall apply:

   1. 1. Participant covered by more than one

1. (1) eligible plan. If the Participant is or has been a participant in one (1) or more other eligible plans within the meaning of section 457(b) of the Code, then this Plan and all such other plans shall be considered as one plan for purposes of applying the foregoing limitations of this section (3). For this purpose, the Administrator shall take into account any other such eligible plan maintained by the Employer and shall also take into account any other such eligible plan for which the Administrator receives from the Participant sufficient information concerning his or her participation in such other plan;

   1. 2. Pre-participation years. In applying

subsection (3)(C), a year shall be taken into account only if i) the Participant was eligible to participate in the Plan during all or a portion of the year and ii) Compensation deferred, if any, under the Plan during the year was subject to the Basic Annual Limitation described in subsection (3)(A) or any other plan ceiling required by section 457(b) of the Code;

1. 3. Pre-2002 coordination years. For pur-

poses of subparagraph (3)(C)2.B. “contributions to Pre-2002 Coordination Plans” means any employer contribution, salary reduction or elective contribution under any other eligible Code section 457(b) plan, or a salary reduction or elective contribution under any Code section 401(k) qualified cash or deferred arrangement, Code section 402(h)(1)(B) simplified employee pension (SARSEP), Code section 403(b) annuity contract, and Code section 408(p) simple retirement account, or under any plan for which a deduction is allowed because of a contribution to an organization described in section 501(c)(18) of the Code, including plans, arrangements or accounts maintained by the Employer or any employer for whom the Participant performed services. However, the contributions for any calendar year are only taken into account for purposes of subparagraph (3)(C)2.B. to the extent that the total of such contributions does not exceed the aggregate limit referred to in section 457(b)(2) of the Code for that year;

1. 4. Disregard excess deferral. For pur-

poses of subsections (3)(A), (3)(B) and (3)(C), an individual is treated as not having deferred compensation under a plan for a prior taxable year to the extent Excess Deferrals under the plan are distributed, as described in subsection (3)(E). To the extent that the combined deferrals for pre-2002 years exceeded the maximum deferral limitations, the amount is treated as an Excess Deferral for those prior years.

1. (E) Correction of Excess Deferrals. If the Annual Deferral on behalf of a Participant for any calendar year exceeds the limitations described above, or the Annual Deferral on behalf of a Participant for any calendar year exceeds the limitations described above when combined with other amounts deferred by the Participant under another eligible deferred compensation plan under section 457(b) of the Code for which the Participant provides information that is accepted by the Administrator, then the Annual Deferral, to the extent in excess of the applicable limitation (adjusted for any income or loss in value, if any, allocable thereto), shall be distributed to the Participant.
2. (F) Protection of Persons Who Serve in a Uniformed Service. An employee whose employment is interrupted by qualified military service under Code section 414(u) or who is on a leave of absence for qualified military service under Code section 414(u) may elect to make additional Annual Deferrals upon resumption of employment with the Employer equal to the maximum Annual Deferrals that the Employee could have elected during that period if the Employee’s employment with the Employer had continued (at the same level of Compensation) without the interruption or leave, reduced by the Annual Deferrals, if any, actually made for the Employee during the period of the interruption or leave. This right applies for five (5) years following the resumption of employment (or, if sooner, for a period equal to three (3) times the period of the interruption or leave).

1. (4) Benefit distributions shall be in accordance with the following:

   1. (A) Benefit Distributions at Retirement or Other Severance from Employment. Upon retirement or other Severance from Employment (other than due to death), a Participant is entitled to receive a distribution of his or her Account Balance under any form of distribution permitted under subsection (4)(C) commencing at the date elected under subsection (4)(B). If a Participant does not elect 16 CSR 50-20

otherwise, the distribution shall be paid as soon as practicable following Normal Retirement Age or, if later, following retirement or other Severance from Employment and payment shall be made in a lump sum.

1. (B) Election of Benefit Commencement Date. A Participant may elect to commence distribution of benefits at any time after retirement or other Severance from Employment by a notice filed at least thirty (30) days before the date on which benefits are to commence. However, in no event may distribution of benefits commence later than the date described in subsection (4)(H).
2. (C) Forms of Distribution. In an election to commence benefits under subsection (4)(B), a Participant entitled to a distribution of benefits under this section (4) may elect to receive payment in such forms of distribution described in the Plan, to the extent the material terms and conditions for those forms are set forth in the Plan and the additional forms of payment satisfy the requirements of section 401(a)(9) of the Code and are not inconsistent with this section (4).
3. (D) Death Benefit Distributions. Commencing no later than the calendar year following the calendar year of the Participant’s death, the Participant’s Account Balance shall be paid to the Beneficiary in a lump sum.
4. (E) Account Balances of Five Thousand Dollars ($5,000) or Less. Notwithstanding subsections (4)(B), (4)(C) and (4)(D), if the amount of a Participant’s Account Balance is not in excess of five thousand dollars ($5,000) (or the dollar limit under section 411(a)(11) of the Code, if greater) on the date that payments commence under subsection (4)(C) or on the date of the Participant’s death, then payment shall be made to the Participant (or to the Beneficiary if the Participant is deceased) in a lump sum equal to the Participant’s Account Balance as soon as practicable following the Participant’s retirement, death, or other Severance from Employment; provided, however, that if the amount of a Participant’s Account Balance is in excess of one thousand dollars ($1,000), then any such lump sum payment to the Participant may not be made prior to the Participant’s Normal Retirement Age without the Participant’s written consent.
5. (F) Amount of Account Balance. Except as provided in subsection (4)(C), the amount of any payment under this section (5) shall be based on the amount of the Account Balance on the preceding Valuation Date.
6. (G) Revocation of Prior Election. Any election made under this section (4) may be revoked at any time.

7. (H) Latest Distribution Date. In no event shall any distribution under this section (4) begin later than the later of:

   1. 1. April 1 of the year following the cal-

endar year in which the Participant attains age seventy and one-half (70 1/2); or

1. 2. April 1 of the year following the year

in which the Participant retires or otherwise has a Severance from Employment. If distributions commence in the calendar year following the later of the calendar year in which the Participant attains age seventy and onehalf (70 1/2) or the calendar year in which the Severance from Employment occurs, the distribution on the date that distribution commences must be equal to the annual installment payment for the year that the Participant has a Severance from Employment determined under subsection (4)(C) and an amount equal to the annual installment payment for the year after Severance from Employment determined under subsection (4)(C) must also be paid before the end of the calendar year of commencement.

1. (I) Unforeseeable Emergency Distribution.

   1. 1. Distribution. If the Participant has an

unforeseeable emergency before retirement or other Severance from the Employment, the Participant may elect to receive a lump sum distribution equal to the amount requested or, if less, the maximum amount determined by the Administrator to be permitted to be distributed under this subsection (4)(I).

1. 2. Unforeseeable emergency defined.

An unforeseeable emergency is defined as a severe financial hardship of the Participant resulting from: an illness or accident of the Participant, the Participant’s spouse, or the Participant’s dependent (as defined in section 152(a)); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by homeowner’s insurance, e.g., as a result of a natural disaster); the need to pay for the funeral expenses of the Participant’s spouse or dependent (as defined in section 152(a) of the Code); or other similar extraordinary circumstances arising as a result of events beyond the control of the Participant. For example, the imminent foreclosure of or eviction from the Participant’s primary residence may constitute an unforeseeable emergency. In addition, the need to pay for medical expenses, including nonrefundable deductibles, as well as for the cost of prescription drug medication, may constitute an unforeseeable emergency. Except as otherwise specifically provided in this subsection (4)(I), neither the purchase of a home nor the payment of college tuition is an unforeseeable emergency.

1. 3. Unforeseeable emergency distribution

standard. A distribution on account of unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or by cessation of deferrals under the plan.

1. 4. Distribution necessary to satisfy

emergency need. Distributions because of an unforeseeable emergency may not exceed the amount reasonably necessary to satisfy the emergency need (which may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution).

1. (J) Distributions for Certain Account Balances of Five Thousand Dollars ($5,000) or Less. At the direction of the Administrator, a Participant’s total Account Balance shall be paid in a lump sum as soon as practical following the direction if—

   1. 1. The total Account Balance does not

exceed five thousand dollars ($5,000) (or the dollar limit under section 411(a)(11) of the Code, if greater);

1. 2. The Participant has not previously

received a distribution of the total amount payable to the Participant under this subsection (4)(J);

1. 3. No Annual Deferral has been made

with respect to the Participant during the two (2)-year period ending immediately before the date of the distribution; and

1. 4. The Participant elects to receive the

distribution.

1. (K) Rollover Distributions.

   1. 1. A Participant or the surviving spouse

of a Participant who is entitled to an eligible rollover distribution may elect, at the time and in the manner prescribed by the Administrator, to have all or any portion of the distribution paid directly to an eligible retirement plan specified by the Participant in a direct rollover.

1. 2. For purposes of this subsection

(4)(K), an eligible rollover distribution means any distribution of all or any portion of a Participant’s Account Balance, except that an eligible rollover distribution does not include—

1. A. Any installment payment under

subsection (4)(C) for a period of ten (10) years or more;

1. B. Any distribution made under sub-

section (4)(I) as a result of an unforeseeable emergency; or

1. C. For any other distribution, the por-

tion, if any, of the distribution that is a required minimum distribution under section 401(a)(9). In addition, an eligible retirement plan means an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, a qualified trust described in section 401(a) of the Code, an annuity plan described in section 403(a) or 403(b) of the Code, or an eligible governmental plan described in section 457(b) of the Code, that accepts the eligible rollover distribution.

1. (5) Rollovers to the Plan and transfers shall be in accordance with the following:

   1. (A) Eligible Rollover Contributions to the Plan.

      1. 1. A Participant who is an Employee and

who is entitled to receive an eligible rollover distribution from another eligible retirement plan may request to have all or a portion of the eligible rollover distribution paid to the Plan. The Administrator may require such documentation from the distributing plan as it deems necessary to effectuate the rollover in accordance with section 402 of the Code and to confirm that such plan is an eligible retirement plan within the meaning of section 402(c)(8)(B) of the Code.

1. 2. For purposes of paragraph (5)(A)1.,

an eligible rollover distribution means any distribution of all or any portion of a Participant’s benefit under another eligible retirement plan, except that an eligible rollover distribution does not include a) any installment payment for a period of ten (10) years or more, b) any distribution made as a result of an unforeseeable emergency or other distribution which is made upon hardship of the employee, or c) for any other distribution, the portion, if any, of the distribution that is a required minimum distribution under section 401(a)(9) of the Code. In addition, an eligible retirement plan means an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, a qualified trust described in section 401(a) of the Code, an annuity plan described in section 403(a) or 403(b) of the Code, or an eligible governmental plan described in section 457(b) of the Code, that accepts the eligible rollover distribution.

1. 3. The Plan shall establish and maintain

for the Participant a separate account for any eligible rollover distribution paid to the Plan from any eligible retirement plan that is not an eligible governmental plan under section 457(b) of the Code. In addition, the Plan shall establish and maintain for the Participant a separate account for any eligible rollover distribution paid to the Plan from any eligible retirement plan that is an eligible governmental plan under section 457(b) of the Code;

1. (B) Plan-to-Plan Transfers to the Plan. At the direction of the Employer, the Administrator may permit a class of Participants who are participants in another eligible governmental plan under section 457(b) of the Code to transfer assets to the Plan as provided in this subsection (5)(B). Such a transfer is permitted only if the other plan provides for the direct transfer of each Participant’s interest therein to the Plan. The Administrator may require in its sole discretion that the transfer be in cash or other property acceptable to the Administrator. The Administrator may require such documentation from the other plan as it deems necessary to effectuate the transfer in accordance with section 457(e)(10) of the Code and section 1.457- 10(b) of the Income Tax Regulations and to confirm that the other plan is an eligible governmental plan as defined in section 1.457- 2(f) of the Income Tax Regulations. The amount so transferred shall be credited to the Participant’s Account Balance and shall be held, accounted for, administered and otherwise treated in the same manner as an Annual Deferral by the Participant under the Plan, except that the transferred amount shall not be considered an Annual Deferral under the Plan in determining the maximum deferral under section (3);

2. (C) Plan-to-Plan Transfers from the Plan.

   1. 1. At the direction of the Employer, the

Administrator may permit a class of Participants and Beneficiaries to elect to have all or any portion of their Account Balance transferred to another eligible governmental plan within the meaning of section 457(b) of the Code and section 1.457-2(f) of the Income Tax Regulations. A transfer is permitted under this paragraph (5)(C)1. for a Participant only if the Participant has had a Severance from Employment with the Employer and is an employee of the entity that maintains the other eligible governmental plan. Further, a transfer is permitted under this paragraph (5)(C)1. only if the other eligible governmental plan provides for the acceptance of plan-to-plan transfers with respect to the Participants and Beneficiaries and for each Participant and Beneficiary to have an amount deferred under the other plan immediately after the transfer at least equal to the amount transferred.

1. 2. Upon the transfer of assets under this

subsection (5)(C), the Plan’s liability to pay benefits to the Participant or Beneficiary under this Plan shall be discharged to the extent of the amount so transferred for the Participant or Beneficiary. The Administrator may require such documentation from the receiving plan as it deems appropriate or necessary to comply with this subsection 16 CSR 50-20

(5)(C)1. (for example, to confirm that the receiving plan is an eligible governmental plan under paragraph (5)(C)1., and to assure that the transfer is permitted under the receiving plan) or to effectuate the transfer pursuant to section 1.457-10(b) of the Income Tax Regulations.

1. (6) The Trust Funds shall be in accordance with the following:

   1. (A) Trust Fund. All amounts of Annual Deferrals, all property and rights purchased with such amounts, and all income attributable to such amounts, property, or rights shall be held and invested in the Trust Fund in accordance with this Plan and the Trust Agreement. The Trust Fund, and any subtrust established under the Plan, shall be established pursuant to a written agreement that constitutes a valid trust under the law of the state of Missouri. The Trustee shall ensure that all investments, amounts, property, and rights held under the Trust Fund are held for the exclusive benefit of Participants and their Beneficiaries. The Trust Fund shall be held in trust pursuant to the Trust Agreement for the exclusive benefit of Participants and their Beneficiaries and defraying reasonable expenses of the Plan and of the Trust Fund. It shall be impossible, prior to the satisfaction of all liabilities with respect to Participants and their Beneficiaries, for any part of the assets and income of the Trust Fund to be used for, or diverted to, purposes other than for the exclusive benefit of Participants and their Beneficiaries.
2. (7) This 16 CSR 50-20.120 shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this 16 CSR 50-20.120.

AUTHORITY: section 50.1300, RSMo 2000.* Original rule filed Nov. 10, 2005, effective May 30, 2006. *Original authority: 50.1300, RSMo 1999.