BOARD OF COMMISSIONERS AGENDA ITEM COVER SHEET January 7, 2016

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1 Board Meeting Date: Presenter: Subject: Background: BOARD OF COMMISSIONERS AGENDA ITEM COVER SHEET January 7, 2016 Scott Adair Amendment of the Authority s sponsored Pension Plan documents in anticipation of the final IRS Determination Letters. The Authority sponsors four retirement plans for its employees. There are two Union plans for Union Employees of Regional Transit Services, Inc. and Union Employees of Lift Line, Inc. and Rural Properties; and two Non-Union plans for Non-Union Employees of Regional Transit Services, Inc. and Non-Union Employees of Lift Line, Inc. and Rural Properties. All of these plans are defined benefit plans. From time to time each of these four plans are required to comply with the Internal Revenue Code, conform to collectively bargained changes, and to improve the four plans administration and processes. At this time, the Internal Revenue Service (IRS) is requiring governmental pension plans determination letters to be updated based on technical changes required by the IRS. Therefore, we have adjusted each of the four Authority sponsored pension plans Plan Document to present the most current IRS regulations for these plans. The four pension plans revised documents are attached, in final version, as we have adjusted each pension plan document to flow in a logical format and add the additional required changes from both an IRS standpoint and to adhere to changes that have been adopted by this Board since the last IRS Determination Letter. None of the changes, in any of these documents, has a financial impact either in terms of added cost or change in benefit on the plans that were not previously approved by the Board.

2 Financial Impact: Recommendation : Finally, the Board of Commissioners has the power delegate the authority to sign certain plan amendments to the Chief Executive Officer as it is an efficient model of governance. This delegation would allow the CEO to sign plan amendments administratively when they are required by applicable laws or have no negative or positive financial impact on the Authority s four sponsored plans. The Authority has worked with the defined benefit plan s attorneys and other than their charges for services there are no additional costs to the Authority or the defined benefit plans for the adoption of these Plan Documents. That the Chief Executive Officer or his designee be authorized to sign the amended plan documents for the Authority s four sponsored pension plans. In addition, the Board of Commissioners delegates to the Chief Executive Officer the power to administratively execute future plan amendments administratively when required by applicable laws or that have no negative or positive financial impact to any of the Authority s four sponsored Pension Plans.

3 Resolution: RGRTA AMENDMENT OF THE AUTHORITY S SPONSORED PENSION PLAN DOCUMENTS IN ANTICIPATION OF THE FINAL IRS DETERMINATION LETTERS WHEREAS, the Rochester Genesee Regional Transportation Authority (the Authority) sponsors four retirement plans for its employees, as follows: The two Union Plans are the Retirement Plan for Union Employees of Regional Transit Service, Inc. and the Retirement Plan for Union Employees for Lift Line, Inc. and Rural Properties; and the two non-union plans are the Retirement Plan for General Administrative and Supervisory (Non-Union) Employees of Regional Transit Service, Inc. and the Retirement Plan for Non-Union Employees of Lift Line, Inc. and Rural Properties (collectively, the Plans ); and WHEREAS, from time to time the Plans are required to comply with the Internal Revenue Code, conform to collectively bargained changes, and to improve the Plans administration and processes; and WHEREAS, at this time the Internal Revenue Service (IRS) is requiring governmental pension plans determinations letter to updated based on technical changes required by the IRS; and WHEREAS, we have adjusted the Plans Plan Document for the IRS technical changes and all other Board adopted changes since the last time the plan documents were revised; and WHEREAS, none of the changes included in any of the plan documents has a financial impact either in terms of added cost or change in benefit on the plans that were not previously approved by the Board; and WHEREAS,, the Board of Commissioners has the power to authorize the Chief Executive Officer to execute plan amendments the Plans ; and WHEREAS, the Board of Commissioners desires to delegate the power to execute such amendments for the Plans to the Chief Executive Officer where the amendments are required by applicable laws, or that do not result in a financial impact to the Plans; NOW, THEREFORE, BE IT RESOLVED, that the Board of Commissioners hereby authorizes the Chief Executive Officer or his designee to perform any and all actions and to execute the Plans Plan Documents ; and BE IT FURTHER RESOLVED, that the Board of Commissioners delegates the authority to execute amendments to the Plans that are required by applicable laws or that have no negative or positive financial impact to the Plans.

4 C E R T I F I C A T I O N The undersigned hereby certifies that the above is an excerpt from the Minutes of a Regular Meeting of the Rochester-Genesee Regional Transportation Authority, which was held on January 7, 2016 and that the Resolution is still in full force and effect. Date: January 7, 2016 Rochester, New York James H. Redmond, Chairman

5 EXECUTIVE SUMMARY OF MATERIAL CHANGES TO EACH AUTHORITY SPONSORED PENSION PLANS The Authority sponsors four retirement plans for its employees. There are two Union plans for Union Employees of Regional Transit Services, Inc. and Union Employees of Lift Line, Inc. and Rural Properties; and two Non-Union plans for Non-Union Employees of Regional Transit Services, Inc. and Non-Union Employees of Lift Line, Inc. and Rural Properties. In order to provide some clarity on the changes and what their origins are this Executive Summary is provided to the Board as additional information. RTS Union Retirement Plan: Item #1 "Government Pick-Up Contributions", allow members to have their contributions to the plan to be pre-tax. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #2 "Years of Service", clarifies the practice of an employee working at least one hour in a Plan Year to be eligible for vesting service. This change aligns the Plan Document with of the Plan. Item #3 Members with service in both the RTS Union Retirement Plan and the RTS Non- Union Retirement Plan have vesting time calculated based on time in both plans. The benefit that the member receives upon retirement is calculated for each individual plan separately. This change aligns the Plan Document with the practice in place currently and thus required to be included in the governance practice of the Plans. Item #4 Pension Benefits updated to reflect the collective bargaining agreement. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #5 "Disability Benefit" is revised to align with the timing of the end of an Authorized Leave. This allows the employer to cause the pensioner to undergo an examination once each year. This change aligns with Plan Document with the practice in place currently and thus required to be included in the governance practice of the Plan. Item #6 The indemnification provision of the Plan for each Committee Member has been revised to reflect industry standards and current insurance coverage. The change aligns with the practice in place currently and thus required to be included in the governance practice of the Plan. Item #7 The Committee may determine to provide appropriate training concerning fiduciary obligations, plan operations, or other relevant subjects by, among other methods, attendance at approved educational programs paid for by the Plan. This change aligns with an IRS recommended practice.

6 Item #8 The "Qualification" section requires that the Plan be amended to conform to IRS requirements. These are changes throughout the document and are required by the IRS. Access (IRS name is Lift Line ) Union Retirement Plan: Item #1 "Contributions by Members", describes how a part-time employee that has moved to full-time must pay into the Plan in order to receive past Service Credit for time worked prior to their change in status. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #2 Pension Benefits updated to reflect the collective bargaining agreement. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #3 "Years of Service" definition clarified for those employees that work less than 1000 hours in any Plan Year. The change aligns with the practice in place currently and thus required to be included in the governance practice of the Plan. Item #4 "Disability Credited Service" is defined as unable to perform the same occupation at the time of Disability. The change aligns with the practice in place currently and thus required to be included in the governance practice of the Plan. Item #5 Added a 30-Year Early Retirement Benefit as bargained. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #6 When a "Disability Benefit" has ceased, the Employee is permitted to return to his or her employment with no loss of seniority. Also, language has been added regarding the timing of an offer of a substitute job in the event of Disability. The change aligns with of the Plan. Item #7 A Member may receive an estimate of his or her projected pension within 60- days of a written request. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #8 The indemnification provision of the Plan for each Committee Member has been revised to reflect industry standards and current insurance coverage. The change aligns with the practice in place currently and thus required to be included in the governance practice of the Plan. Item #9 The "Qualification" section requires that the Plan be amended to conform to IRS requirements. These are changes throughout the document and are required by the IRS.

7 Access (IRS name is Lift Line ) and Rural Properties Non Union Retirement Plan: Item #1 "Government Pick-Up Contributions", allow members to have their contributions to the plan to be pre-tax. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #2 "Teamster's Union Employee" is included to include the retirement benefit for that bargaining unit. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #3 "Years of Service", clarifies the practice of an employee working at least one hour in a Plan Year to be eligible for vesting service. This change aligns the Plan Document with of the Plan. Item #4 Members with service in both the Lift Line Union Retirement Plan and the Lift Line Non-Union Retirement Plan have vesting time calculated based on time in both plans. The benefit that the member receives upon retirement is calculated for each individual plan separately. This change aligns the Plan Document with the practice in place currently and thus required to be included in the governance practice of the Plans. Item #5 When a "Disability Benefit" is being received, the Pensioner receiving a Disability Benefit, who has not reached his Normal Retirement Date, to undergo a medical examination by a physician or physicians designated by the Employer to determine if they are still appropriately classified as Disabled. This change aligns the Plan Document with of the Plans. Item #6 The indemnification provision of the Plan for each Committee Member has been revised to reflect industry standards and current insurance coverage. The change aligns with the practice in place currently and thus required to be included in the governance practice of the Plan. Item #7 The Committee may determine to provide appropriate training concerning fiduciary obligations, plan operations, or other relevant subjects by, among other methods, attendance at approved educational programs paid for by the Plan. This change aligns with an IRS recommended practice. Item #8 The "Qualification" section requires that the Plan be amended to conform to IRS requirements. These are changes throughout the document and are required by the IRS. RTS Non-Union Retirement Plan: Item #1 "Average Compensation" definition changed to five years for Members hired after April 1, This change aligns the Plan Document with what the Board previously approved.

8 Item #2 "Government Pick-Up Contributions", allow members to have their contributions to the plan to be pre-tax. The change aligns with the practice in place currently and thus required to be included in the governance practice of the Plan. Item #3 "Teamster's Union Employee" is included to include the retirement benefit for that bargaining unit. This change aligns the Plan Document with the contract we have with the Union that the Board previously approved. Item #4 "Years of Service", clarifies the practice of an employee working at least one hour in a Plan Year to be eligible for vesting service. This change aligns the Plan Document with of the Plan. Item #5 Beginning April 1, 2015, there is a one-year waiting period for new Members to participate in the Plan. This change aligns the Plan Document with what the Board previously approved. Item #6 Members with service in both the RTS Union Retirement Plan and the RTS Non- Union Retirement Plan have vesting time calculated based on time in both plans. The benefit that the member receives upon retirement is calculated for each individual plan separately. This change aligns the Plan Document with the practice in place currently and thus required to be included in the governance practice of the Plans. Item #7 For Employees that were hired after April 1, 2015 and become Members of the Plan the retirement benefit is based on the following: Less than 10 years credited service % per year 10 years but less than 20 years credited service % per year 20 years but less than 25 years credited service - 30% 25 years but less than 30 years credited service - 35% 30 years or more credited service - 40% This change aligns the Plan Document with what the Board previously approved. Item #8 When a "Disability Benefit" is being received, the Pensioner receiving a Disability Benefit, who has not reached his Normal Retirement Date, to undergo a medical examination by a physician or physicians designated by the Employer to determine if they are still appropriately classified as Disabled. This change aligns the Plan Document with of the Plans. Item #9 Beginning April 1, 2015, an employee hired on or after this date, who becomes a Member is 100 percent vested upon completing 5 Years of Service (following a one-year waiting period to begin participation). This change aligns the Plan Document with what the Board previously approved.

9 Item #10 Employees hired on or after April 1, 2015 must contribute 3% of their compensation to be a Member of the Plan. This contribution is required each year the Member is in the Plan. This change aligns the Plan Document with what the Board previously approved. Item #11 The indemnification provision of the Plan for each Committee Member has been revised to reflect industry standards and current insurance coverage. The change aligns with the practice in place currently and thus required to be included in the governance practice of the Plan. Item #12 The Committee may determine to provide appropriate training concerning fiduciary obligations, plan operations, or other relevant subjects by, among other methods, attendance at approved educational programs paid for by the Plan. This change aligns with an IRS recommended practice. Item #13 The "Qualification" section requires that the Plan be amended to conform to IRS requirements. These are changes throughout the document and are required by the IRS.