HomeMy WebLinkAbout9/7/2005 - STAFF REPORTS (37) V N
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City Council Staff Report
DATE: September 7, 2005 CONSENT CALENDAR
SUBJECT: AMENDING THE CITY'S HEALTH RETIREMENT SAVINGS PLAN TO
ALLOW FOR EMPLOYER CONTRIBUTIONS
FROM: David H. Ready, City Manager
BY: Department of Finance and Treasury
Department of Human Resources
SUMMARY
The City has reached tentative agreements with several of the bargaining units to
establish individual retirement health saving plan for new employees and contribute a
specified amount in place of providing medical retirements. In order to enact this new
provision, the City Council needs to authorize the Director of Finance and Treasurer to
amend the current plan.
RECOMMENDATION:
Approve minute order number authorizing the Director of Finance and
Treasurer to amend its Retirement Health Saving Plan with ICMA Retirement
Corporation to allow for City contributions.
STAFF ANALYSIS:
In December of 2004 the City Council approved the establishment of Retirement Health
Savings for City employees administered by ICMA Retirement Corporation. The plan
was established to allow each City employee to voluntarily contribute on a pre-tax basis
to an account established in their name. It is operated in much the same manner as the
City's existing Section 457 Deferred Compensation Plan. Upon retirement, the
employee can use the accumulated funds to pay for medical and dental expenses on a
tax-free basis.
During the current negotiations with its bargaining units, several of the units have
tentatively agreed that in place of the City paying a certain percentage of medical
retirement costs; it would establish for new employees, individual retirement savings
Item No. 2 2.
City Council Staff Report
(September 7, 2005) -- Page 2
(Amending City's Retirement Health Savings Plan)
plans. The city would contribute a certain amount monthly to the plan as long as the
person was an employee of the City.
By establishing these plans for new employees it will allow the City to reduce its long
term medical insurance costs. However, it also allows employees who do not work
long enough to qualify for medical retirement contributions or who leave the City before
retirement to have funds that they can use for medical costs after they retire.
For the City to contribute to a new employee's plan, ICMARC is requesting a letter
amending the current plan.
FISCAL IMPACT:
The costs will vary depending the final amounts approved for each bargaining unit's
MOU and the number of employees hired during the next fiscal year. It will reduce
future costs of payments for retiree's medical insurance premiums.
Craig,,. Graves, Director of Finance and David H. Ready, City M�rfger
Treasurer
Sue Mills, Directbr-4 Human
,Attachments: Minute Order
Letter Amending Current Plan
MINUTE ORDER NO.
AUTHORIZE THE DIRECTOR OF FINANCE AND
TREASURER TO AMEND THE CITY'S CURRENT
RETIREMENT HEALTH SAVINGS PLAN TO ALLOW
THE CITY TO MAKE CONTRIBUTIONS TO NEW
EMPLOYEE'S PLANS HIRED AFTER SEPTEMBER
7, 2005.
I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that this
Minute Order authorizing the Director of Finance and Treasurer to amend the City's
Retirement Health Savings allowing for the City to make contributions to new
employees, hired after September 7, 2005, to their individual retirement health savings
account as determined by the respective MOU's was adopted by the City Council of
the City of Palm Springs, California, in a meeting thereof held on the 7th day of
September, 2005.
James Thompson, City Clerk
�pALM Sp
�0' City ®f Palm Springs
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* * Departinent of Finance and Treasury
3200 E.Taliquitz Canyon Way ° Palm Springs, California 92262
�+ m°ORpTEO Q. Tel: (760) 323-8229 • Fax: (760) 322-8320 • Web: www ci.palm-springs.ca.us
September 7, 2005
Jennifer Jones
ICMARC
Post Office Box 96220
Washington,DC 20090-6220
Subject: Palm Springs Retiree Health Savings Plan Amendment Plan Number 800957
Dear Jennifer:
Our current employees desire the City to make contributions to our RHS plan. Please
modify the plan as follows:
1. Add the following group
All employees hired on or after September 7, 2005. City will contribute
an amount in accordance with the applicable Memorandum of
Understanding plus the account fee. Please make this amendment
effective immediately.
2. Add the following group
All employees hired on or prior to September 7, 2005. City will
jcontribute an amount in accordance with the applicable Memorandum of
Understanding plus the account fee. Please make this amendment
effective immediately.
i
Thank you for your attention. Please feel free to call me if you have any questions at
(760) 323-8229.
Sincerely,
Craig A. Graves
Director of Finance and Treasurer
Post Office Box 2743 • Palm Springs, California 92263-2743