09 - Amending the District's Deferred Compensation Plan Costa Mesa Sanitary District …an Independent Special District Protecting our community’s health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Memorandum To: Board of Directors From: Scott Carroll, General Manager Date: April 18, 2013 Subject: Amending the District’s Deferred Compensation Plan (457) Summary In addition to CalPERS retirement system, District employees can voluntarily participate in a deferred compensation plan (457) to supplement their retirement income. Approving the attached resolution will amend the plan to allow employees to take loans from their 457 plan. Staff Recommendation That the Board of Directors adopt Resolution No. 2013-828 amending the District’s Deferred Compensation Plan (457). Analysis The District participates in a supplemental retirement system through ICMA-RC. This is a voluntary program in which employees can contribute up to $17,000 a year into their plan. The District does not match 457 contributions. ICMA -RC offers a loan program where employees can borrow up to 50% of their balance or a maximum amount of $50,000. The loan must be repaid in five years through bi-weekly payroll deductions and the interest is based on prime plus 0.5%. If the employee separates from the District, he/she must pay the loan in full to ICMA-RC before receiving a distribution of his/her 457 account balance, otherwise, the person will experience a taxable event. Loans will only be granted in the event of a hardship and employees may have only one outstanding loan at a time. Strategic Plan Element & Goal This item adheres to the objective and strategy of Strategic Element 6.0, Personnel/Organizational Management , which states: ITEM NO. 09
Board of Directors April 18 , 2013 Page 2 of 2 “Objective: To employ and retain a high quality, motivated workforce. Strategy: We will do this by utilizing sound policies and personnel practices, offering competitive compensation and benefits, providing opportunities for training, developmen t and professional growth, while ensuring a safe and secure workplace .” Legal Review Not applicable Financial Review There are no financial impacts to amending the District’s Deferred Compensation Plan (457). Committee Recommendation No applicable. P ublic Notice Process Copies of this report are on file and will be included with the entire agenda packet for the April 18 , 2013 Board of Directors regular meeting at District Headquarters and on District’s website. Alternative Actions 1. Do not adopt the r esolution and r efer the matter back to staff. Attachments A: Resolution No. 2013 -828