HomeMy WebLinkAboutAGENDA REPORT 1991 1218 CC REG ITEM 08F //444/2/
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MOORPARK
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°o\ 799 Moorpark Avenue Moorpark, California 93021 (805) 529-6864
MEMORANDUM
TO: Honorable City Council
FROM: Richard Hare, Deputy City Manager (/1.` DRP 2K CALIFORNIA
IIS` Ciba Council Mooting
DATE: December 11, 1991 a of '2/1199'
RE: Consider Resolution No. 91-$022 ACTION:rederrd
Adopting a Deferred Compensation
Plan for Employee Members of the '- 2'
Public Employees Retirement System By
Background
At the request of employees, the staff has, over the last year,
investigated various deferred compensation programs which are
consistent with Internal Revenue Code (IRS) Section 457 (typically
referred to as 457 plans) . After receiving several proposals, the
Budget & Finance Committee has recommended the Great Western Bank
Deferred Compensation Program.
Great Western Bank provided briefings to employees regarding their
program. The response from the employees who attended the
presentations were positive and it is believed that, if the program
is adopted, twenty percent or more of the employees would
participate. In the Memorandum of Understanding between the City
and the Public Employees of Ventura County it was agreed that the
City would participate in a deferred compensation program, if more
than fifty percent of the employees were interested in
participation.
A deferred compensation program is designed to be a supplemental
retirement program. The employee defers a portion of his or her
compensation until either the employee is no longer employed by the
City, has an emergency as defined by the IRS, or retires. The
employee is taxed when he or she receives distribution of the
deferred compensation. It is anticipated that in the future when
the employee retires his or her tax rate will be lower, therefore
the employee will receive a greater portion of his or her
compensation than if they received it today and were taxed at a
higher rate.
PAUL W.LAWRASON JR. JOHN E.WOZNIAK SCOTT MONTGOMERY BERNARDO M. PEREZ ROY E.TALLEY JR.
Mayor Mayor Pro Tem Councilmember Councilmember Councilmember
Printed On Recycled Paper
Honorable City Council
December 11, 1991
Page Two
In the deferred compensation program, the deferred amount remains
the property of the City. The City would engage a provider (Great
Western Bank) to manage the funds and the City would set aside the
funds as a contingent liability. Great Western Bank would provide
the services under this program and charge a fee of $1. 00 per month
for each participant. There would be no direct costs to the City.
The employee participant does have some control over the
compensation which has been deferred. Dependent upon the risk
tolerance of the employee, he or she can chose between a number of
investment options:
1. A straight savings plan which pays 25 points above the
quarterly treasury bill rate.
2 . A one to five year certificate of deposit which locks in
a specific rate at the time of purchase. The minimum
amount for this option is $1, 000.
3 . Participation in nineteen different mutual funds which
vary from stock funds to U.S. Government Securities
funds.
The indirect costs of the program for the City are related to the
filing of participation agreements with Great Western Bank, the
processing of transfer agreements, the issuance of aggregate
warrants to Great Western Bank each pay period, the review of the
monthly reports, and the inclusion of the summary schedules in the
financial statements. In order to minimize the time spent in
oversight and processing of participant transactions, the following
restrictions are recommended by staff:
1. Minimum amount of deferral $10.
2 . Minimum amount of each distribution of deferral $10.
3 . Minimum amount of transfer $100.
4 . All deferrals, transfers, and distributions to be in
whole dollars unless transferring an entire amount from
one option to another.
5. Four transfers allowed, without fees, per calendar year.
6. Fees for additional transfers $10. 00 each.
Honorable City Council
December 11, 1991
Page Three
Recommendation
Staff recommends passage of Resolution 91- , adopting a deferred
compensation plan for employee members of the Public Employee
Retirement System, authorizing the City Manager to implement the
plan and an agreement with Great Western Bank, with an effective
date of January 1, 1991.
Attch: Resolution 91-
Moorpark Deferred Compensation Plan
RESOLUTION NO. 91- 822
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF MOORPARK ADOPTING A DEFERRED COMPENSATION
PROGRAM PLAN FOR EMPLOYEE MEMBERS OF THE
PUBLIC EMPLOYEE RETIREMENT SYSTEM.
THE CITY COUNCIL OF THE CITY OF MOORPARK HEREBY RESOLVES AS
FOLLOWS:
Section 1. The attached Plan for the employee Deferred
Compensation Program, dated January 1 , 1991 , is hereby adopted.
Section 2. The City Manager is hereby authorized to
implement the plan with an effective date of January 1, 1991.
ADOPTED BY THE MOORPARK CITY COUNCIL ON DECEMBER 18
1991 .
SIGNED AND APPROVED ON DECEMBER 18 , 1991.
Ccettl. La anon 41. ,
ATTEST:
ilian E. Kellerman, City .
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MOORPARK
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799 Moorpark Avenue Moorpark. California 93021 (805) 529-6864
STATE OF CALIFORNIA
COUNTY OF VENTURA ) ss-
CITY OF MOORPARK )
I, Lillian E. Kellerman, City Clerk of the City of Moorpark,
California, do hereby certify under penalty of perjury that
the foregoing Resolution No_ 91-822 was adopted by the
City Council of the City of Moorpark at a meeting held on
the 18th day of DECEMBER )991, -and that the same
was adopted by the following vote:
AYES: COUNCILMEMBERS MONTGOMERY, PEREZ, TALLEY, WOZNIAK AND MAYOR LAWRASON
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
WITNESS my hand and the official seal of said City
this _19th day of DECEMBER 1991.
.ar,14,;46, 0 ?/,0044.41444.--.
Lillian E. Ke lerman
City Clerk
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