CITY OF TEXARKANA, ARKANSAS


                                                EMPLOYEE RETIREMENT PLAN


















                                             CITY OF TEXARKANA, ARKANSAS


                                                EMPLOYEE RETIREMENT PLAN


                                                SUMMARY PLAN DESCRIPTION



                                                          TABLE OF CONTENTS


Topic                                                                                                                                           Page


INTRODUCTION                                                                                                                           1


PROGRAM SPONSOR                                                                                                                   1


ADMINISTRATOR                                                                                                                        1


PLAN PROVISIONS                                                                                                                      2


A.        General Description                                                                                                  2

B.        Eligibility for Participation                                                                                       2

C.        Required Employee Contributions                                                                           3

D.        Amount of Your Pension                                                                                          4

E.         Commencement of Benefits                                                                                     5

F.         Disability Benefits                                                                                                    6

G.        Termination of Employment Prior to Eligibility                                                      8

for Normal, Early, or Disability Retirement                                                              

H.        Methods of Payment of Pension Benefits                                                                9

I.          Death Benefits                                                                                                         11

J.          Non—Assignability of Benefits                                                                             11

K.        Transfer of Employment to City of Texarkana, Texas                                           11

L.         Retirement and Reemployment                                                                              12



CLAIMS PROCEDURE                                                                                                               12


FUNDING THE PLAN AND TAXATION OF YOUR BENEFITS                                            13


NO GUARANTEE OF EMPLOYMENT                                                                                      14


TERMINATION OR AMENDMENT OF PLAN                                                                         14

                                                        CITY OF TEXARKANA


                                              EMPLOYEE RETIREMENT PLAN






The Plan provides pensions to eligible Participants when they attain retirement age.


The following is a summary of the Plan as amended and restated effective July 1, 2012.  This summary is provided to you so that you may better understand your benefits.


The complete provisions governing rights and obligations of Participants are contained in the Plan legal documents.  These documents are on file with your Employer and the Retirement Committee.  You may examine a copy of the documents without charge or obtain a copy for a reasonable charge, by contacting your Employer.




The Plan is sponsored by your Employer:


The City of Texarkana, Arkansas

East 3rd & Walnut Streets

Texarkana, Arkansas  75504


This Summary Plan Description explains the Retirement Plan provisions of participation and benefit entitlement. In the event this Summary Plan Description is ambiguous or conflicts with the provisions of the Plan legal documents, the terms of the Plan legal documents will control.





The administration of the Plan is conducted by the Retirement Committee appointed by the Employer. The City Manager shall have oversight of the Retirement Committee. All decisions of the Retirement Committee shall be subject to review by the City Manager, and the City Manager may take action upon recommendation of the Retirement Committee and approval of the City Board of Directors

                                                            PLAN PROVISIONS




In order to be entitled to benefits under this Retirement Plan, you must first complete the requirements for participation and enter the Plan as a Participant. Your participation in the Plan will continue until the earlier of your termination of employment, retirement or death. A determination of your entitlement to any benefits will be made as of your termination date.


The Normal Retirement Age is your 65th birthday. The Plan also has provisions for early and late retirement.


If you terminate your employment prior to entitlement to Normal or Early Retirement benefits, you may be entitled to a deferred benefit if you meet the plan service requirements for vesting

(entitlement to pension benefits).


Except for the return of participant contributions with interest in limited circumstances, there are no “refunds” or other cash payable to you if you leave employment prior to early or normal retirement age. However, if you complete the vesting requirement, a pension will be payable to you when you attain retirement age.






Only nonexcluded full-time employees who have become participants in the plan prior to July 1, 2012 (reached July 1 or January 1 following completion of 1 year of service) participate in this plan. Employees who hired after July 1, 2012, or employees who have not met the eligibility requirements and become participants prior to January 1, 2012, do not participate in this plan.


The following are excluded from the plan:


n         Any person who is in a group of employees covered by another plan to which the employer contributes (including the ICMA Money Purchase Pension Plan for exempt employees);

n         Uniformed police and fire personnel; and

n         Elected Officials

n         Court Clerk


If you have become a participant in the plan, you will continue to participate in the Plan until termination of employment or the plan is amended to provide for participation in an alternative retirement plan.

However, if you are not 100% vested in accordance with the Plan’s vesting schedule at June 30, 2012, your benefit under the plan is frozen as of June 30, 2012. If you are one of these employees, you will not accrue any further benefit under the plan. Your future service with the employer will count towards vesting credit and for purpose of determining eligibility for early retirement, but your future service will not count towards determining your retirement benefit. You will instead participate, effective July 1, 2012, in the City of Texarkana Defined Contribution Plan. You will receive your retirement plan under TAPERS in accordance with the provisions of this plan. These participants are referred to as “Transitioned Participants.”


EXAMPLES: Sam was employed March 1, 1999 and participates in the plan. Sam continues to participate in the plan.


Joe was employed on March 2, 2008.  Joe became a participant in the plan on July 1, 2009. Because Joe is not fully vested, Joe will continue to receive credit for vesting purposes and eligibility for early retirement, but Joe will not earn any further credit for benefit purposes. Joe instead begins participating in the City of Texarkana Defined Contribution Plan on July 1, 2012.


Vicki was employed March 1, 2011. Because Vicki has not become a participant in the plan prior to July 1, 2012, Vicki will not participate in this Plan.





As a condition of employment with the Employer, after June 30, 2012, the Employer shall deduct from each participant’s compensation, on a payroll deduction basis, the amounts determined by the City Board of Directors. Such amounts shall be paid to the plan as an additional contribution. The current payroll deduction is 2% of Compensation. Employee contributions shall be considered "picked up" for federal tax purposes and therefore shall not be subject to federal or state income tax; such contributions are subject to FICA and/or medicare taxes. 


This deduction does not apply to Transitioned Participants. Transitioned Participants shall be governed under the City of Texarkana Defined Contribution Plan.


If upon termination of employment your vested benefit under the plan is less than your participant contributions with interest, you will receive your participant contributions with interest. Payment will be made as soon as administratively feasible after the end of the Plan Year in which you terminate employment. Also, if upon termination of employment your vested accrued benefit is greater than your participant contributions with interest but the value of your employer-provided benefit (the value of your accrued benefit less participant contributions with interest) is $5,000 or less, the value of your accrued benefit will be paid to you. Payment will be made as soon as administratively feasible after the end of the Plan Year in which you terminate employment. In the above cases, no further benefit shall be payable to such participant under the Plan.  


Except in the above cases, you will not receive a separate return of your participant contributions; rather, you will receive your vested pension benefit in accordance with the provisions of the plan.






The Plan is a defined benefit pension plan which means that the amount of the pension is determined by a specified benefit formula. The monthly pension which will be paid to you for life, beginning at your Normal Retirement Date, is 1.8% of your average monthly compensation mutliplied by your years of service. The normal retirement benefit of Transitioned Participants is equal to the amount of such participants’ accrued benefit as of June 30, 2012.


EXAMPLE.  Nancy began work in 1998 and has worked for 20 years when she retires at age 65. Her Average Monthly Compensation is $3,000.00. Her Monthly benefit is $1,080 ($3,000.00 * 1.80% * 20 years).


Accrued Benefit


You accrue a portion of your benefit for each Year of Service which you work. Your accrued benefit is expressed as a monthly benefit beginning at normal retirement age. The accrued benefit for Transitioned Participants does not increase from the amount of the benefit at June 30, 2012.


Average Monthly Compensation


Your Average Monthly Compensation is the monthly compensation averaged over the highest 5 consecutive complete calendar years divided by 60 (or your actual completed years and months of service if you have worked less than 5 years at termination); or


Compensation is the total amount received subject to federal income tax, excluding any noncash fringe benefits, but including salary reduction contributions to a Section 125 or 457 plan.


EXAMPLE: Janet was employed in 1998.  She terminates employment on October 11, 2013.  Her Average Monthly Compensation is determined as follows:


Year                                                                            Earned

2008                                                                             $25,000

2009                                                                               26,000         

2010                                                                              27,000         

2011                                                                               28,000         

2012                                                                               29,000         

2013                                                                                 N/A


Total    135,000


Average Monthly Compensation ($135,000/60)                                          $2,250.00



Year of Service


A year of service means a 365 day period during which the Employee is in the employment of the Employer.  All periods of employment are aggregated for this purpose, except for years of service before certain breaks in service.




Normal Retirement


If you retire on your Normal Retirement Date, you will begin receiving your pension benefit payments as determined under the plan benefit formula.


If you retire on the first day of the month, your pension is payable on that day.  If you retire on any other day of the month, your payments start on the first day of the following month.  Thereafter, payments are made on the first day of the month.


Early Retirement


Early Retirement is retirement between ages 55 and 65.  You must complete ten years of service and be at least 55 at termination of employment to be eligible for early retirement benefits. An eligible Participant may elect early retirement with or without the consent of the Employer.


If you retire on the first day of a month, your pension is payable on that day.  If you retire on any other day of the month, your payments start on the first day of the following month.  Thereafter, payments are made on the first day of each month.


Your early retirement pension is based on your accrued benefit at the time of early retirement. If you have attained age 60 and completed 20 or more years of service, or if you have attained age 55 and completed 30 years of service, there is no reduction for early commencement of your benefit. If you have neither met the 60/20 or the 55/30 requirements, the amount of your early retirement benefit is the accrued benefit, reduced 1/360th for each month or part thereof by which the payment precedes the first day of the month following your 65th birthday. 


EXAMPLE.  John is age 60 and has 25 years of service. John's accrued benefit (benefit at 65) is $1,000 per month.  John may retire and receive the full $1,000 per month.


EXAMPLE.  Bill is age 57 and has 20 years of service.  Bill’s accrued benefit is also $1,000 per month.  If Bill’s benefit commences the first day of the month after his 57th birthday, his benefit is $733.33 per month.  [1000 - (1000 x 96/360)]


For Transitioned Participants, years of service after June 30, 2012 do count for purposes of determining eligibility for early retirement.


EXAMPLE. Susan is a Transitioned Participant (she has 5 years of service at June 30, 2012, so she is not 100% vested in her benefit at June 30, 2012). Her accrued benefit at June 30, 2012 is $300 per month. However, Susan continues her employment with the City of Texarkana, and at age 60 she retires with 20 years of service. Susan may retire and receive the full $300 per month. Susan may also receive her account under the City of Texarkana Defined Contribution Plan attributable to her service after June 30, 2012. 


Late Retirement


If you continue to be employed beyond your Normal Retirement Date, payment of your pension will begin when you actually retire, based on service and pay at actual retirement. The late retirement benefit for Transitioned Participants would be the accrued benefit.  





1.      Participants other than Transitioned Participants.


If a Participant other than a Transitioned Participant has completed 10 years of service and becomes disabled (as defined in the Plan), the Participant will receive a disability benefit under this Plan.  The disability benefit commences on the first day of the month following termination of employment due to disability, and continues until normal retirement age.  The amount of the disability benefit is 1.8% x average monthly compensation at termination of employment due to disability, multiplied by years of service as if the participant worked until normal retirement age.  At normal retirement age, the disability benefit is discontinued, and the participant receives any pension benefit based on compensation and years of service at the time of disability. 


EXAMPLE.  George becomes permanently disabled in 2012 when he is age 51. He has 15 years of service at that time.  When he became disabled George’s average monthly salary was $2,000.00. His future service (from disability to his normal retirement date) is 14 years.


George’s disability benefit commencing at age 65 is calculated as follows:


Average Salary                                                $ 2,000.00

Years of service                                             X     29

X      1.8%


Monthly Disability Benefit                             $ 1,044.00


2.                  Transitioned Participants. No separate disability benefit is payable in the event of the disability of a Transitioned Participant. Such Participant may receive any benefit otherwise payable to such participant under the provisions concerning normal or late retirement, early retirement or termination prior to early or normal retirement.


The Plan Document contains additional requirements and limitations concerning the disability benefit.  Please contact the Administrator to obtain additional information.



If you are a Transitioned Participant and you terminate employment prior to becoming eligible for Normal or Early Retirement, you may have a right to receive a pension equal to your accrued benefit under the Plan depending upon your years of service.  You are vested in a percentage of your Accrued Benefit determined according to the following schedule:


            Years of Service                                              Vested %

         Less than  6                                                          0

  6                                                        20

  7                                                        40

  8                                                        60

  9                                                        80

 10                                                      100


EXAMPLE. Harry’s accrued benefit is $300 per month.  He has eight years of service.  Harry is entitled to a retirement benefit of $180 per month ($300 x 60%) commencing at his Normal Retirement Age.


If a participant dies while employed or while in active military service, the participant will be 100% vested regardless of years of service.


Commencement of Your Vested Pension


For all participants, if you are vested and terminate your employment with the Employer prior to eligibility for Early Retirement, you are entitled to receive a pension equal to your accrued benefit starting on your Normal Retirement Date. For participants other than Transitioned Participants, your vested Accrued Benefit is determined under the plan benefit formula based on years of service at termination of employment.


However, if the lump sum value of your vested Accrued Benefit is less than or equal to $5,000, the value will be paid in a single sum after the end of the plan year in which termination occurs.  If this applies, you will receive the single sum in lieu of any monthly benefit at retirement.


If termination of employment occurs prior to completion of 6 years of service, you will not be entitled to a pension under the Plan unless you are later employed by the Employer and then complete the remainder of the required years of service for vesting.




At the time a benefit is payable, a Participant will receive payment under the normal method unless another method of payment is elected within the time allowed.


                                                      Normal Methods of Payment


Lifetime Only  (The pension normally payable to you if you do not have a spouse.)


This method of payment provides you with a monthly pension payable for as long as you live. Payments stop at your death.


50% Joint Pension  (The pension normally payable to you if you have a spouse.)


The 50% Joint Pension provides you with a reduced monthly lifetime pension; upon your death, a pension (50% of the amount which was payable to you) will be payable to your spouse for life. The amount of your reduced pension will be the actuarial equivalent of the Lifetime Only pension.




                                                    Optional Methods of Payment


In addition to the normal methods of payment, the Plan provides optional methods of payment which you may elect rather than the method normally payable to you under the Plan.  When you select a method of payment which provides for benefits to a survivor, the amount of the benefit paid to you will be reduced to take into account the value of the additional payments anticipated to be made to your survivor.  If you are married and wish to elect a form of payment other than the 50% Joint Pension, your spouse must consent in writing.


Lifetime Only


This method of payment, as previously described, is optional for you if you have a spouse (the normal method would be a 50% Joint Pension)


Joint Pensions


A joint pension may be payable to you and a beneficiary. The amount of the joint pension will be the actuarial equivalent of the Lifetime Only benefit.


A.         The 100% Joint Pension provides you with a reduced monthly pension; upon your death, the same amount becomes payable to your surviving Joint Pensioner for life.


B.         The 50% Joint Pension provides you with a reduced monthly pension; upon your death, a pension (50% of the amount payable to you) will be payable to your surviving Joint Pensioner for life.


Years Certain and Life Thereafter


You may elect this payment method only if your expected lifetime or the expected joint life of you and your beneficiary is at least equal to 10 years.


The Years Certain and Life Thereafter method of payment provides a reduced lifetime monthly pension with payments guaranteed for up to 240 months, as selected by you.  For example, if you select 120 months certain and you die within 120 months  after pension payments commence, the pension is paid to your named beneficiary for the remainder of the selected 120 month period. (For example, if you select the 120 month certain option and die six years after pension payments have commenced, the pension will be paid for four years to your beneficiary.)


The beneficiary is any individual named by you on the appropriate claim form.




This method of payment provides monthly installments of a certain dollar amount over a period not to exceed 15 years.


Lump Sum


A participant may elect to receive the present value of his benefit in a lump sum.




                                         Election of an Optional Method of Payment


An election of an optional method of payment must be made 30-90 days prior to the date benefits are to commence.  The Administrator will notify you concerning your rights to elect an optional method of payment.


Remember that your spouse must consent if benefits are payable in a form other than the normal form.  Because a Participant’s spouse participates in these elections, you should immediately report any change in your marital status to the Plan Administrator.


Upon reaching your Normal Retirement Age, or at any time after you have qualified for Early Retirement Benefits and you notify us that you plan to retire, you will receive a detailed Benefit Statement which illustrates how your Benefit was calculated.


Your Benefit Statement will also show you the amounts of the various payment options.


If you need assistance in selecting the payment option best suited for your personal situation you should consult your financial advisor.





If a participant dies while employed or while in qualified military service, the participant is 100% vested in his or her accrued benefit regardless of the years of service.  The death benefit payable to the participant's beneficiary will be the present value of the participant's accrued benefit determined under the plan's actuarial equivalent factors.


If the participant is married at the time of death, the participant's death benefit must be paid to the participant's spouse unless the spouse consents to a different designation.  If the spouse consents to  a different designation, or if the participant is not married, the death benefit will be paid to the participant's designated beneficiary.  If there is no designated beneficiary, the participant's death benefit will be paid to his descendants, or if none, to his or her estate.


If the participant dies after the commencement of benefits, benefits, if any, shall be payable under the option selected.  A death benefit shall not be payable under the Plan if the participant dies after the commencement of benefits unless the form of benefits specifically provides for a benefit.   






Benefits under the Plan cannot be assigned or transferred.





In the event that a participant transfers employment after July 1, 1998 from the City of Texarkana, Arkansas to the City of Texarkana, Texas, the period of service with the City of Texarkana, Texas shall be counted for vesting purposes in this plan.  The employer may apply a multiplier to the participant's accrued benefit for the participants transferring employment to account for increases in compensation received with the City of Texarkana.  No distribution may be made to an employee who transfers from the City of Texarkana, Arkansas to the City of Texarkana, Texas, so long as the individual remains employed by either.


If a participant transfers from the Employer to the City of Texarkana, Texas after July 1, 1998 and subsequently qualifies for early retirement under the Texas Municipal Retirement System, the participant's combined years of service shall be counted for purposes of determining the eligibility for  early retirement benefits under this plan. Such a participant may retire under the City of Texarkana, Arkansas plan if the participant has satisfied the requirements for early or normal retirement under this plan.  




In the event that a Participant has attained the Normal Retirement Date and has actually terminated employment with Employer, the Participant may subsequently be reemployed by the Employer (at the discretion of the Employer) on a part-time basis, and such reemployment shall not affect the Participant’s retirement benefits. Such Participant shall not in any event accrue any additional benefit under this Plan or any other retirement plan of the Employer as a result of service after re-employment.






Individual Pension Information


Annually, you will receive an Employee Benefit Statement indicating your estimated pension under the Plan and your vesting status. Because the amounts on a statement are only estimates, your actual pension may differ from the amount of the estimate.


If you are nearing retirement age, you may want pension estimates other than those shown on your Employee Benefits Statement. You can request additional information from the Plan Administrator will then prepare the requested information for you.


Filing a Claim for Benefits


Any Participant or beneficiary may file with the Retirement Committee a written statement setting forth a claim for benefits. The written statement shall be signed and set forth the claim in a manner reasonably calculated to bring it to the Retirement Committee’s attention.


If a claim is wholly or partially denied, notice of the decision shall be furnished by the Retirement Committee to the claimant within ninety (90) days after receipt of the claim. If within such 90 days, the claim has neither been denied in writing nor granted, it shall be deemed denied on the 90th day.

Any notice of denial of claim shall be written in a manner calculated to be understood by the claimant and shall include the following:


(i)   the specific reason or reasons for denial;


(ii)  specific reference to pertinent plan provisions on which the denial is based;


(iii) a description of additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and


(iv) appropriate information as to the steps to be taken if the claimant wishes to submit the claim for review.


A claimant may obtain a full and fair review by appealing a denied claim to the Retirement Committee in writing within sixty (60) days after receipt by the claimant of the notice of denial. A claimant may review pertinent documents and may submit issues and comments in writing. An appeal may be requested or pursued by a duly authorized representative of the claimant. Within sixty (60) days of receipt of a request for review, a written decision shall be rendered. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent provisions of the plan on which the decision is based.





All distributions from the plan are subject to federal income taxes.


Benefits under this Plan are not insured by any governmental agency because no insurance is available for plans of this type.


The Employer shall contribute to the Plan 10% of covered compensation of eligible participants. The Board of Directors may change the level of contributions at any time. Except as provided above, the Employer does not guarantee to make contributions to provide the benefits specified in the Plan. Contributions to this Plan are invested in a trust fund. No amounts may be returned to the Employer until the accrued benefits of all Participants have been funded. In the event the trust fund is insufficient to pay all benefits, benefits may be limited.

                                           NO GUARANTEE OF EMPLOYMENT


The Plan provides a pension to eligible Participants when they retire.  The Plan does not confer any legal rights on an employee to the continuance of employment by the Employer, nor does it interfere with the right of the Employer to discharge an employee.



                                    TERMINATION OR AMENDMENT OF PLAN


The Employer intends to continue the Plan indefinitely. However, the Plan does provide that it may be amended or terminated at any time. You will be given advance notice should any amendment or termination affecting your right to benefits occur.  No amendment or termination may affect, to the extent funded, your rights to benefits already accrued.