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HomeMy WebLinkAboutD-1435-99 Deferred Comp. Match (457)Ordinance D- 1435-99 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA AMENDING CHAPTER 2, ARTICLE 3, DIVISION II, SECTION 2-56 OF THE CARMEL CITY CODE WHEREAS, a competitive benefits package is an important means to attract and retain highly qualified employees in a competitive employment market; and WHEREAS, planning and saving for retirement is an essential part of sound personal financial management; and WHEREAS, the City of Carmel desires to encourage its employees to prepare for retirement and to assist in that preparation; and WHEREAS, the City has approved two (2) deferred compensation plans that are currently funded solely by employee contributions. NOW, THEREFORE, BE IT ORDAINED by the Common Council of the City of Carmel, Indiana, as follows: Chapter 2, Article 3, Division II, Section 2-56 is amended to include the following: "(g) Matching Contributions The City shall match certain contributions of full-time and part- time employees to an approved Deferred Compensation (457) plan to the extent such contributions are allowed by law. (2) Employee contributions will be matched by the City at the levels stated below. a. No match in the first year of employment with the City; b. 10% match after one (1) full calendar year of employment with the City; c. 20% match after two (2) full calendar years of employment with d. 30% with e. 40% with f. 50% with the City; match after three (3) full calendar years of employment the City; match after four (4) full calendar years of employment the City; match after five (5) full calendar years of employment the City. The City reserves the fight, in its sole discretion, to change the level of or cease providing matching contributions at any time. If (3) (4) (5) (6) (7) 2L~ (8) · (9) (lo) the level of matching contributions is changed, the City will promptly notify its employees, in writing, of such change. The level of matching by the City will not exceed 50% of employee contributions, regardless of an employee's longevity with the City. An employee will be eligible for each stated level of matching on the March 1 after the anniversary date on which the required years of service are attained. Employees will be given credit for full calendar years of service completed prior to the inception of the matching plan. The City will match employee contributions only; it will not match City contributions to the non-elective accounts established for Police Department officers in lieu of Social Security. Should an employee have an interruption of employment of 90 or fewer calendar days, the employee shall be entitled to full credit for service prior to the interruption. After an interruption of more than 90 calendar days, a returning employee shall be treated as a new employee for purposes of the Deferred Compensation matching program and shall not receive credit for prior service. All matching contributions made by the City are 100% vested at the time of the contribution. A PEBS O 401(a) account shall be established for each employee who is eligible to receive matching funds, regardless of the aDr~fem~~ompensation plan to which the employee contributions i who deposit money into a PEBSCO Deferred Corr.pensation (457) account. Employees who deposit money into anc~.her authorized Deferred Compensation (457) plan will be assessed an annual service fee, which amount will be deducted from their 401 (a) account. The 401(a) plan, unlike the Deferred Compensation (457) plan, is a qualified plan. Withdrawals may not be made prior to age 59-1/2 without incurring a 10% penalty. All contributions will also be taxed at the time of withdrawal. As a qualified plan, the funds in a 401(a) may be rolled over into an IRA, 401(k) or other qualified plan without penalty or tax." .¢ This Ordinance shall be in full force and effect on the later to occur of (a) passage by the Common Council, execution by the Mayor and such publication as may be required by law or (b) January 1, 2000. All prior Ordinances or parts thereof inconsistent with any provision of this Ordinance are hereby repealed as of the effective date of this Ordinance. 999, by a 62' nays. day of ~~y, IAMC,~Clereasurer Presented~Z. by the Mayor of the City of Carmel, Indiana the ,1999. A(~~efby me, Brainard, Mayor day of Diana L. Cordray, IA surer Mayor of the City of Carmel, Indiana, this (7} day ,1999. of AT ST: · . , , rk-Treasurer Proposed Amendment to Ordinance D- 1435-99 The following amendment to the Deferred Compensation Matching Program will be proposed at the October 4 Council meeting. The primary purpose of the amendment is to eliminate the mention of a specific vendor in the ordinance, and to open the program on an equal basis to all vendors who contract to provide deferred compensation products to City employees (currently PEBSCO and Lincoln). A secondary purpose is to clarify some issues that have apparently confused numerous employees. The plan design is not modified in any significant manner by these changes. The following sections are amended to read: (8) A 401 (a) account shall be established for each employee who is eligible to receive matching funds. Only the matching funds contributed by the City will be deposited into the 401(a) account; employee contributions will continue to be deposited into the Deferred Compensation (457) account. Each employee's 401(a) account shall be established with the vendor that services that employee's Deferred Compensation (457) account. (9) No annual service fee shall be assessed against the 401 (a) accounts. Representatives from PEBSCO and Lincoln will be at the October 4 Council meeting, should you have any technical questions.