Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
APPLE PARTICIPATION AGREEMENT
This Services Agreement (“Agreement”) is made and entered into by and between City of Marysville (“Employer”) and Keenan & Associates (“Keenan”), as of November 1, 2023 (“Effective Date”).
RECITALS
WHEREAS, Keenan & Associates (“Keenan”) has established the Accumulation Program for PartTime and Limited-Service Employees (“APPLE”) which offers public entities a means of funding an asset accumulation program for their part-time employees; WHEREAS, MidAmerica Administrative Solutions, Inc. (“MidAmerica”), is the exclusive provider of administrative services and technical support for the Social Security Alternative plans established by APPLE participants in accordance with the provisions of Section 3121 of the Internal Revenue Code (hereinafter referred to as the “APPLE Plan”);
WHEREAS, Keenan provides certain services to APPLE participants and acts as broker of record for annuities purchased by APPLE participants; and
WHEREAS, Employer desires to participate in APPLE, and desires to utilize the services of Keenan.
THEREFORE, IN CONSIDERATION OF the mutual covenants herein contained and for other good and valuable consideration the receipt and sufficiency is hereby acknowledged, it is mutually agreed as follows:
AGREEMENT
1. TERM
A. This Agreement shall be for an initial term of one (1) year (the “Initial Term”), beginning with the execution date of this Agreement, and shall continue from year to year thereafter (each year a “Successive Term” and, collectively with the Initial Term, the “Term”), unless and until terminated by either party hereto upon written notice to the other in accordance herewith.
2. KEENAN SERVICES AND RELATIONSHIP OF THE PARTIES
A. Employer elects and Keenan shall provide the services indicated in Exhibit A attached hereto and incorporated herein.
B. The relationship of Keenan and Employer shall be that of an independent contractor and Keenan shall at all times remain responsible for its own operational and personnel expenses. Under no circumstance shall any employee of one party look to the other party for any payment or the provision of any benefit, including without exception, workers’ compensation coverage. Except as may be expressly set forth in or contemplated by this Agreement, neither party shall have the right to act on behalf of the other, or to bind the other to any contract or other obligation.
Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
C. In providing the Services, Keenan shall act exclusively in an advisory and consultative capacity. Employer shall at all times have the right to determine whether to act on or implement the information, recommendations, and suggestions provided by Keenan, and the manner by which any such action or implementation shall be undertaken.
Except for Keenan’s responsibilities with respect to funds obtained from or on behalf of Employer, Keenan shall not be a fiduciary of Employer.
D. Keenan shall not provide any legal, tax, or accounting service, advice, or opinion, and the Services shall not be interpreted as representing any such service, advice or opinion.
Employer shall consult its own attorney on all legal issues and its own tax and accounting experts on all tax, accounting, and financial matters relating to its operations, including without limitation, the establishment, implementation and operation of the APPLE Plan.
E. In providing its Services, Keenan shall comply with all applicable state and federal laws and regulations, and obtain and maintain all necessary licenses, registrations, and/or permits necessary for the performance of its duties under this Agreement.
F. The Services provided to Employer are non-exclusive and Keenan reserves the right to provide the same or similar services to other Employers who may be in the same industry, business, or service as Employer.
3. EMPLOYER’S DUTIES AND RESPONSIBILITIES
A. Employer shall retain decision-making authority for its APPLE Plan, and shall manage the day-to-day activities of the APPLE Plan, except for those duties and/or functions expressly assigned to Keenan under this Agreement or to Keenan under the APPLE Administrative Services Agreement executed contemporaneously herewith.
B. Employer shall provide Keenan with timely access to such information and individuals, including its outside advisors and consultants, as may be necessary for Keenan to perform the Services. Keenan shall not be responsible for any delay in its performance that results from the failure of Employer, or any person acting on behalf of Employer, to make available any information or individual in a timely manner.
C. All information provided to Keenan, either in anticipation of or during the term of this Agreement, shall be complete and accurate, and that Keenan may rely upon such information.
D. Employer shall execute the Broker of Record Designation attached hereto as Exhibit B.
4. COMPENSATION
A. As its sole compensation for its Services, Keenan shall receive commissions from the annuity carrier as provided in Exhibit C. Employer shall have no responsibility for the payment of any such commission to Keenan. Keenan’s annual commissions may be increased from year to year in accordance with the increase in the Consumer Price Index.
Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
B. Keenan shall comply with all applicable state and/or federal laws and regulations regarding disclosure of compensation. We embrace industry efforts for transparency and believe it is important that Employers have access to information that may be relevant to their choice of insurance products, including the cost of such insurance and services, and, the compensation that may be directly or indirectly paid to Keenan in connection with the products or services that are selected. If you have questions regarding any of these items or desire additional information, you may contact your Keenan account representative to discuss this matter in more detail.
5. INSURANCE
Keenan shall procure and maintain during the term of this Agreement the following insurance coverages, and shall provide certificates of insurance to Client upon Client’s request.
A. Workers’ Compensation: Coverage in conformance with the laws of the State of California and applicable federal laws;
B. General Liability: Coverage (including motor vehicle operation) with a Two Million Dollar ($2,000,000) limit of liability for each occurrence and a Two Million Dollar ($2,000,000) aggregate limit of liability; and
C. Errors and Omissions: Coverage with a Two Million Dollar ($2,000,000) limit of liability for each occurrence and a Two Million Dollar ($2,000,000) aggregate limit of liability.
D. Cyber Liability/Privacy: Coverage with a Two Million Dollar ($2,000,000) limit of liability for each occurrence and a Two Million Dollar ($2,000,000) aggregate limit of liability.
6. INDEMNIFICATION
If either party breaches this Agreement, then the breaching party shall indemnify and hold harmless the non-breaching party, its officers, agents and employees against all claims, losses, demands, actions, liabilities, and costs (including, without limitation, reasonable attorneys’ fees and expenses) arising from such breach. In addition, if Keenan (i) becomes the subject of a subpoena or is otherwise compelled to testify or (ii) becomes the subject of a claim, demand, action or liability brought or asserted by one of Client’s employees, Plan beneficiaries, or Plan vendors (“Third-Party Demand”) relating to the Services and such Third-Party Demand is not a direct result of Keenan’s negligence or willful misconduct, then Client shall indemnify and hold Keenan harmless from all losses, payments, and expenses incurred by Keenan in resolving such Third-Party Demand.
7. LIMITATION OF LIABILITY
Notwithstanding anything to the contrary in this Agreement, in no event shall either party be liable for any punitive damages, fines, penalties, taxes or any indirect, incidental, or special damages incurred by the other party, its officers, employees, agents, contractors or consultants whether or not foreseeable and whether or not based in contract or tort claims Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
or otherwise, arising out of or in connection with this Agreement even if advised of the possibility of such damage. Keenan’s liability under this Agreement shall further be limited to, and shall not exceed, two (2) times the amount of its available insurance coverage, but not exceeding the limits of coverage outlined in Section 5.
8. DISPUTE RESOLUTION
A. In the event of an unresolved dispute concerning this agreement, the parties agree to utilize Judicial Arbitration pursuant to California Code of Civil Procedure sections 1141.10 et seq.
B. In any such arbitration, the parties shall be entitled to take discovery in accordance with the provisions of the California Code of Civil Procedure, but either party may request that the arbitrator limit the amount or scope of such discovery, and in determining whether to do so, the arbitrator shall balance the need for the discovery against the parties’ mutual desire to resolve disputes expeditiously and inexpensively.
C. The prevailing party in any action, arbitration, or proceeding arising out of or to enforce any provision of this Agreement will be awarded reasonable attorneys’ fees and costs incurred in that action, arbitration of proceeding, or in the enforcement of any judgment or award rendered.
9. TERMINATION
A. This Agreement may be terminated upon the occurrence of any of the following events:
i. By either party upon the dissolution or insolvency of a party to this Agreement; ii. By either party following the filing of a bankruptcy petition by or against either party (if the petition is not dismissed within sixty (60) days in the case of an involuntary bankruptcy petition);
iii. If the application of any law, rule, regulation, or court or administrative decision prohibits the continuation of this Agreement or would cause a penalty to either party if the Agreement is continued, and if the Agreement cannot be amended to conform to such law, rule, regulation, or court or administrative decision in a manner that would preserve the original intent of the parties with respect to their rights and duties under this Agreement; or
iv. By the non-breaching party if a breach of this Agreement is not cured within thirty (30) days following receipt of written notice of the breach from the non-breaching party.
B. Termination of this Agreement shall terminate Employer’s participation in APPLE, and shall likewise terminate the Administrative Services Agreement entered into between Employer and MidAmerica. Neither Keenan nor MidAmerica (except as specifically provided for under the Administrative Services Agreement) shall be obligated to provide any further APPLE service as of the termination date of this Agreement. It shall be the sole responsibility of the Employer to provide, directly or Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
through an alternate service provider, the services provided by Keenan and/or MidAmerica in conjunction with its 3121 Social Security Alternative Plan.
Additionally, the termination of this Agreement and the subsequent termination of MidAmerica Administrative Services Agreement may result in the termination of the APPLE group annuity contract. In such event, APPLE Plan assets may be subject to surrender charges if so stated in the carrier’s group annuity contract.
10. GENERAL
A. This Agreement, its recitals and all exhibits attached to the Agreement contain the entire understanding of the parties related to the subject matter covered by this Agreement and supersede all prior and collateral statements, presentations, communications, reports, agreements or understandings, if any, related to such matter(s).
B. This Agreement is made for the benefit of the parties and is not intended to confer any third party benefit or right. The enforcement of any remedy for a breach of this Agreement or claim related to the Services may only be pursued by the parties to this Agreement.
C. No modification or amendment to this Agreement shall be binding unless it is in writing and signed by authorized representatives from both parties. Any waiver or delay by a party in enforcing this Agreement shall not deprive that party of the right to take appropriate action at a later time or due to another breach. This Agreement shall be interpreted as if written jointly by the parties.
D. Any provision determined by a court of competent jurisdiction to be partially or wholly invalid or unenforceable shall be severed from this Agreement and replaced by a valid and enforceable provision that most closely expresses the intention of the invalid or unenforceable provision. The severance of any such provision shall not affect the validity of the remaining provisions of this Agreement.
E. Neither party shall be liable or deemed to be in default for any delay or failure in performance under this Agreement resulting, directly or indirectly, from acts of God, civil or military authority, acts of public enemy, war, accidents, fires, explosions, earthquakes, floods, power outages, failure of computer systems, machinery or supplies, vandalism, strikes, or other work interruptions, or any similar or other cause that is beyond the reasonable control of either party. Each party shall make good faith efforts to perform under this Agreement in the event of any such circumstances, and shall resume full performance once the cause of the delay has abated.
F. All notices hereunder shall be in writing and sent to the parties at the addresses as set forth below, or to such other individual or address as a party may later designate. Notices shall be sent via personal delivery, courier service, United States mail (postage pre-paid, return receipt requested), express mail service, electronic mail, or fax. Notice shall be effective when delivered, or if refused, when delivery is attempted. Notices delivered during non-working hours shall be deemed to be effective as of the next business day.
Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
If the notice relates to a legal matter or dispute, a copy shall be sent to:
Keenan & Associates
2355 Crenshaw Blvd., Ste. 200
Torrance, CA 90501
Attn: Legal Department
Fax: (310) 533-0573
G. Neither this Agreement nor Keenan’s duties hereunder may be assigned without the prior written approval of Employer.
H. This Agreement may be executed in counterparts and by fax signatures and each shall be deemed to be an original.
I. Each person signing this Agreement on behalf of a party represents and warrants that he or she has the necessary authority to bind such party and that this Agreement is binding on and enforceable against such party.
City of Marysville Keenan & Associates
Signature: Signature:
By: Jim Schaad By: J. Daniel Keenan
Title: City Manager Title: Senior Vice President
Address:
526 C Street
Marysville CA 95901 Address:
2355 Crenshaw Blvd., Ste. 200
Torrance, CA 90501
Phone: (530) 749-3901 Phone: 310.212.0363
Attention: Jennifer Styczynski Attention: J Daniel Keenan E-mail: [email protected] E-mail: [email protected] Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
EXHIBIT A
KEENAN’S SERVICES
Keenan shall:
1. Coordinate the ongoing activities of APPLE;
2. Select vendors to provide products and services to the APPLE program (“APPLE Vendors”);
3. Evaluate and review the performance of the APPLE Vendors;
4. In its discretion, remove, replace or change APPLE Vendors;
5. Act as liaison between Employer and the APPLE Vendors;
6. Act as Broker in securing one or more group annuity contracts for Employer’s APPLE Plan(s);
7. Conduct periodic meetings with Employer to review the status of its APPLE Plan;
8. Inform Employer of any changes affecting the APPLE program, including, without limitation, any change in APPLE Vendors;
9. Coordinate the services of the APPLE Vendors;
10. Assist Employer in the implementing of the APPLE Plan;
11. Provide ongoing consultation to APPLE participants;
12. Work with the APPLE Vendors to resolve any customer service issues;
13. Review communication, sales, marketing and customer service materials prepared by APPLE Vendors;
14. Assist Employer in informing its employees about the availability of the APPLE Plan; and
15. Assist Employer in providing educational programs about its APPLE Plan.
Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
EXHIBIT B
BROKER OF RECORD DESIGNATION
This letter confirms that as of November 1, 2023, the organization listed below (“Employer”) has appointed Keenan & Associates (“Keenan”) as the Broker of Record in connection with the group annuity contract(s) to be issued to Employer as a participant of APPLE.
It is understood and agreed that American United Life Insurance Company (“AUL”) is the current exclusive provider of group annuity products for APPLE Plans.
As long as Employer is a participant in APPLE, it shall not seek to acquire annuity products directly from any insurance carrier or through any other broker for its APPLE Plan.
Keenan is authorized to provide a copy of this letter to AUL, and/or any subsequent APPLE group annuity provider, to demonstrate Keenan’s authority to obtain one or more annuities for Employer’s APPLE Plan. This appointment rescinds any and all previous appointments Employer may have made with respect to its APPLE Plan, and shall remain in full force and effect until Employer ceases to be a participant in APPLE.
Employer authorizes Keenan to provide representatives of prospective insurers and other coverage providers with all information regarding Employer, its operations, employees, and financial status as may be necessary for AUL, and/or any subsequent APPLE group annuity provider, to issue the APPLE group annuity contract to Employer.
Acknowledged and agreed to by:
City of Marysville Keenan & Associates
Signature: Signature:
By: Jim Shaad By: J. Daniel Keenan
Title: City Manager Title: Senior Vice President
Keenan & Associates – License #0451271
APPLE Participation Agreement
Confidential For Employer Use Only
(Rev. 07/13/21)
EXHIBIT C
FEES AND COMMISSIONS*
During the first year of the Program, the group annuity carrier shall pay a total commission of 4.0% on any transfer assets of the plan, and 2.0% commission on the flow (new money). Keenan shall receive 60% and MidAmerica shall receive 40% of the total commissions paid.
Beginning with the second year of the program, the carrier shall pay a “trailer” commission of 0.8% on accumulated assets in the group annuity contract and a 3.0% commission on any assets that transfer from any other contracts that the plan may hold. Keenan shall receive 60% and MidAmerica shall receive 40% on the transfer and on the trailer. The Trailer commission shall be calculated based upon the total plan assets beginning in the 13th month and the Transfer commission will be based on assets from other plan contracts as they transfer. *The fees and commissions set forth above reflect the terms of the contracts currently in place between Keenan and the annuity provider and administrative services provider (“Vendors”). If, due to circumstances beyond our control, there is a change in either of the Vendors, the fees and commissions set forth above may be adjusted to reflect the terms of Keenan’s agreements with successor vendors.