Placement: Resolutions
Action Requested: Motion / Vote
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Resolution 26-R19, Authorize and Ratify Amendments to the City’s MissionSquare Retirement Plan Documents for SECURE Act Legislation
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Submitted By: Reyna Hahn, Retirement Analyst, Finance Department
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Executive Summary (General Business): This Resolution authorizes and ratifies amendments to the City’s MissionSquare 401(a) and 457(b) retirement plan documents with respect to SECURE Act 1.0 and SECURE 2.0 legislation. The SECURE Acts consist of mandatory and optional retirement plan provisions designed to improve retirement savings, retirement planning and security for Americans.
Presentation Information: Questions will be answered upon request.
Staff Recommendation: Move that the Council adopt the Resolution.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve the Resolution.
2. Move that the Council not approve the Resolution and provide staff with direction.
Background: There are two SECURE Acts, both of which were designed to enhance retirement savings and provide more flexibility for savers by updating and introducing new retirement planning rules. Both SECURE Acts contain numerous provisions, varying effective dates and ongoing guidance from the Department of Treasury and Internal Revenue Service. The Setting Every Community Up for a Retirement Enhancement Act of 2019 (SECURE 1.0) was enacted to expand access to tax-advantaged retirement accounts and encourage retirement savings. The Securing a Strong Retirement Act of 2022 (SECURE 2.0) builds on previous legislation in SECURE 1.0 and includes reforms that seek to expand retirement coverage and savings. Between both SECURE Acts, there are 120 provisions, mandatory and optional, to retirement plans and tax laws. The City has amended the MissionSquare 457(b) deferred compensation plan to include the following optional provisions: (i) eliminating the first of the month requirement for employee deferral changes; (ii) distributions for qualified Federally declared natural disasters; and (iii) $1,000 withdrawals for certain emergency expenses. The 401(a) defined contributions plans were not amended for any optional provision. Retirement plans must adopt their respective mandatory provisions as outlined within the SECURE Acts.
Issues/Analysis: N/A
Financial Information: No additional cost to the City.
Special Consideration: No optional provisions were added to City’s 401(a) plans as these plans contain the City’s retirement benefit for employees. The 457(b) is an optional retirement account that allows employees to save additional for retirement. The three optional provisions that were added to the City’s 457(b) plan are for the benefit of the employees.
Location of Project: N/A
Business Impact Statement: N/A
Attachments:
1. Resolution
2. Exhibit A: Mandatory Plan Amendments
3. Exhibit B: Optional Plan Amendments
4. PowerPoint
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 25127-02
Legal Sufficiency Review:
Reviewed by Richard Berrios, City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.