AMENDMENT OF SECTION 457

DEFERRED COMPENSATION PLANS

RECOMMENDATION

It is recommended that the City Council:

1. Adopt the amended and restated plan document with Hartford.
2. Adopt Attachment D, amending the ICMA plan.
3. Adopt Amendment No. 1 to Pebsco plan document.
4. Approve and execute the Establishment of Custodial Account and Life Insurance Transfer Authorization with Pebsco.

BACKGROUND

The Small Business Job Protection Act of 1996 requires that governmental employers with 457 plans establish a plan level trust, custodial account or be invested in annuity contracts prior to 1/1/99. The City has three deferred comp plans: Hartford, ICMA and Pebsco.

ANALYSIS

The purpose of the change in the law is so that amounts deferred are no longer property of the employer, but are held for the exclusive benefit of plan pariticipants and their beneficiaries. In addition, the amendments or revised plan documents incorporate changes that give participants greater flexibility in dealing with their plan assets.

The City Attorney's Office has reviewed all of the amendments and restated plan documents supplied by the providers and recommends adoption of these documents as the easiest way to comply with the changes in law.

Agendas / Minutes Menu | Back to Agenda