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Personnel: KB "rh: t- \person "mise \councll\staffrpt\councI2 7 Santa MOnica, Ca"mll,c2 3 198
Council Meeting. June 23, 1998
TO: Mayor and City CounCil
FROM: CIty Staff
SUBJECT Adoption of Resolution Establishing a Defined ContributIon Pension Plan
Pursuant to Section 401 (a) of the Internal Revenue Code of 1986
INTRODUCTION
This report requests adoptIon of the attached resolution establishing a defined
contribution pension plan under Section 401 (a) of the Internal Revenue Code of 1986,
as amended.
BACKGROUND
PEBSCO, the City of Santa Monica's deferred compensatIon plan administrator, offers
a defined contributIOn pensIon (401 (a)) plan. The 401 (a) plan complements the
eXisting deferred compensation plan and similarly serves as a supplemental retIrement
savings program
Under the 401 (a~ program, a separate account [s established for each employee who
particIpates In the program. Employer or employee contributions to the program are
made on a pre-tax basIs Several Investment options are available, With each
participant selecting the Investment optlon(s) for his/her account The annual program
administratIon fees, If any, are paid by each account holder (I.e , the employee; As
such, the employee IS responslbie for any gains and losses to his/her account. Once
~;l~
the employee leaves City employment, he/she determines the method of distribution
of the accumulated funds and IS responsible for any taxes on those distributions
Implementation of the 401 (a) plan IS done on a bargaining unit basIs. Employees
covered by the Executive Pay Plan (EPP) and those represented by the Management
Team Associates (MT A) negotiated provISions In their current contract and
Memorandum of Understanding (MOU), respectively, which prOVide for the
Implementation of the 401 (a) plan.
FINANCIAL IMPACT
There IS no financial Impact to the City which Will be Incurred by Implementing a
401 (a) plan for these bargaining Units as all costs and contnbutlOns come out of
employee earnIngs If other employee bargaining unrts should negotiate
Implementation of the plan, City CounCil review and approval would be required.
RECOMMENDA TlON
It IS recommended that City CounCIl adopt the attached resolution establishing a
401 (a) plan for City employees and authorizing the City Manager to execute a contract
with the Public Employees Benefits Services Corporation (PEBSCQ) to administer the
plan
Prepared By' Karen Bancroft, Director of Personnel
Attachment: Resolution
.
.
Resolution # 9281 (CCS)
(CITY COUNCIL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
AUTHORIZING THE CITY OF SANTA MONICA TO ADOPT AND IMPLEMENT A
DEFINED CONTRIBUTION PENSION PLAN PURSUANT TO SECTION 401 (a) OF
THE INTERNAL REVENUE CODE OF 1986
WHEREAS, the City of Santa MOnica has employees renderrng valuable services,
and
WHEREAS, the City of Santa Monica desires to establish a pension plan pursuant
to the provISions of SectIon 401 (a) of the Internal Revenue Code of 1986, as amended,
and
WHEREAS, the City of Santa MOnica Intends to provide reasonable retirement
security for Its employees, and
WHEREAS, the Public Employees Benefit ServIces CorporatIon (PEBSeD) has
been selected to prOVide record keeping and adminIstrative services for the pension plan,
NOW, THEREFORE, BE IT RESOLVED that the City of Santa MOnica appoints
Public Employees Benefit Services Corporation (PEBSCO) to prOVide record keeping,
employee education and other techmcal and administrative services relating to the plan,
and
BE IT FURTHER RESOLVED that the City of Santa MOnica hereby authorizes and
directs the City Manager to perform all acts and sign all documents necessary to put said
plan Into operation, and
BE IT FURTHER RESOLVED that the Director of Personnel and Director of Finance
are hereby apPointed as Trustee(s) and upon acceptance. by executing the AdoptIon
Agreement of said plan. shall receive the necessary reports, notices, etc from Public
Employees Benefit Services Corporation (PEBSCO) and NatIonwide Life Insurance
Company
APPROVED AS TO FORM
~LLtJ~~{h jtu.~
MARSHA JONES MOUTRIE
City Attorney"V
I
Adopted and approved this 23rd of June, 1998
4~
Robert Holbrook, Mayor
I, Mana M Stewart, City Clerk of the City of Santa Monica, do hereby certify that
the foregoing Resolution 9281 (CCS) was duly adopted at a meeting of the Santa
MOnlca City CounCil held on the 23rd of June. 1998 by the follOWing vote
Ayes Councllmembers Ebner, Felnstem, Genser, Greenberg, Holbrook,
O'Connor, Rosenstein
Noes Councllmembers None
Abstain Councllmembers None
Absent Councllmembers None
ATTEST
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Beth Sanchez, AssIstant City Clerk