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6.3.B. - Page 1 <br />REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />January 9, 2017 <br />SUBJECT <br />Adoption of Resolution to Modify Employee Contributions to 401(a) Retirement <br />Enhancement Plan for Executive Management Employees and to Designate City <br />Manager as Plan Administrator <br />RECOMMENDATION <br />Adopt a Resolution Approving an Amendment to the 401(a) Retirement Enhancement <br />Plan for Executive Management Employees and Designating City Manager as the Plan <br />Admnistrator <br />BACKGROUND <br />In December 2002, the City Council adopted a Public Agency Retirement System <br />(PARS) 401(a) Retirement Enhancement Plan effective January 28, 2003, of which the <br />City reserves the right to amend from time to time. Under this plan, the City contributes <br />two percent (2%) of salary towards the plan, and employees contribute an amount <br />designated by the City upon hire. At the time of adoption, the City Council designated <br />the Human Resources Director as the plan administrator with ability to execute legal <br />and administrative service documents on behalf of the City to implement amendments <br />to the plan. In 2013, the Human Resources Director classification was eliminated and <br />any plan amendments made after that time were authorized by the City Manager. <br />In 2015, staff conducted a review of the plan and recommended a more consistent <br />approach to contributions made by newly -hired employees. On October 24, 2016, the <br />City Council approved amendments to the Executive Management Summary of Benefits <br />which included anticipated amendments to the 401(a) Public Agency Retirement <br />System (PARS) Retirement Enhancement Plan to modify employee contributions, to be <br />effective upon Council approval in January 2017. No changes to City contributions <br />were proposed or authorized. <br />ANALYSIS <br />In order to implement a new employee contribution structure, staff presented the <br />changes to City Council in October 2016, and City Council approved the proposed <br />changes when approving the latest Executive Management Summary of Benefits on <br />October 24, 2016. The amendments include continuing existing contributions for those <br />Executive Management members appointed prior to January 1, 2015, and establishing <br />