HomeMy WebLinkAbout18-22 Electing to Participate in the Public Employee's Retirement Fund's MyChoice: Retirememnt Savings Plan As Administered by the Indiana Public Retirement System 21200 COUNTY-Crry 27 W.JEFFE1 oNN BOu[mvmw O�$pU 1 1� F1AXN�574/235-7670
SOUTH BEND,INDIANA 46601-1830 x TTY 574/235-5567
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CITY OF SOUTH BEND Pr-'1T BU'1'17GIRG,MAYOR
DEPARTMENT OF LAW
STEPIIANIE STI ELE ALADEAN M.DEROSE
CORPORATION COUNSM, Q-TY
Filed in Clerk's Office
Ma), 8,2018 !
Mr.Tim Scott,President MAY 09; 2018
South Bend Common Council L� .-___ _
227 West Jefferson Blvd.,4`'Floor KAREEMAH FOWLER
South Bend,IN 46601 CITY CLERK,SOUTH BEND,IN
Re: Resolution Electing to Participate in the Public Employees'Retirement Fund's
MyChoice:Retirement Savings Plan as Administered by the Indiana Public
Retirement System
Dear Council President Scott:
Attached for filing with the South Bend Common Council is a Resolution electing to join
the Public Employees' Retirement Fund's ("PERF'� MyChoice: Retirement Savings Plan as
administered by the Indiana Public Retirement System (copy also attached). Passage of this
Resolution will enable the City of South Bend to offer its employees hired after July 1, 2018 the
option between enrolling in the currently offered "PERF Hybrid Plan" and the new "MyChoice:
Retirement Savings Plan."
The new MyChoice: Retirement Savings Plan would give the City more control over
contribution rates while allowing participating employees to have a shorter vesting period and
greater portability. Employees hired before July 1,2018 would remain enrolled in the PERF Hybrid
Plan.
Human Resources Director Kyra Clark and City Controller Jennifer Hockenhull will present
this Resolution to the Council at its Committee and regular meeting.
Thank you for your consideration.
Sincerely,
Danielle Campbell Weiss
Assistant City Attorney
cc: Kyra Clark,Director of Human Resources
Jennifer Hockenhull,City Controller
FI.LIOT A.ANDERSON ASHLEY MILLS COLBORN SANDRA KENNEDY
CLARA MCDANIELS THOMAS E.PANOWICZ DANIELLE CAMPBELL WEISS
Filed in Clerk's Office
BILL NO. 18-22 MAY 09 2018
RESOLUTION NO. KAREEfdlAH FOWLER
CITY CI-ERK,S01JTH BEND, I1\1
A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF
SOUTH BEND,INDIANA, ELECTING TO PARTICIPATE IN THE
PUBLIC EMPLOYEES' RETIREMENT FUND'S MYCHOICE:
RETIREMENT SAVINGS PLAN AS ADMINISTERED BY THE INDIANA
PUBLIC RETIREMENT SYSTEM
WHEREAS,the Common Council of the City of South Bend, Indiana is the governing body
of the City of South Bend, a political subdivision or miscellaneous participating entity in
the State of Indiana; and
WHEREAS, for the purposes of this document and interpretation of statutes governing
the Public Employees Retirement Fund ("PERF"), the public employees' defined
contribution plan under IC 5-10.3-12,known as the "My Choice: Retirement Savings
Plan," shall be referred to as "the Plan."The PERF Hybrid defined benefit pension fund,
known as "PERF Hybrid," shall be referred to as "the Fund."
WHEREAS, political subdivisions may participate in the Plan and also choose whether
employees are required to become members of the Plan,the Fund,or whether employees
may choose membership in either the Plan or the Fund.
WHEREAS, the Council as governing body is fully cognizant that, if it resolves that it
will place any employees in the Fund, the percentage of cost of gross annual payroll of
covered employees has been set at_% rto be filled in by INPRSI by the actuary
of the Fund, and that the Board of Trustees of the Indiana Public Retirement System
directs the actuary to annually review the status of the employees covered and shall
adjust the cost percentage accordingly so that the Fund will remain on an actuarially
sound basis; and
WHEREAS,the Council as governing body is fully cognizant that, if it resolves to
require employees to enter the Plan or offer employees a choice between Fund and Plan
membership,the Council shall submit a resolution with the following information
regarding their participation in the Plan:
1. Specify the political subdivision's contribution rate to the plan as a percentage
of each member's compensation AND pay such contributions as required under
IC 5-10.3-12-23 and IC 5-10.3-12-24.5. Such rates must be greater than or
equal to zero percent (0%) and may not exceed the percentage that would
produce the normal cost for participation in the fund under IC 5-10.2-2-11.
2. Specify the political subdivision's matching rate that is the percentage of each
member's additional contributions to the plan that the political subdivision will
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match. A political subdivision may specify only:
(1)zero percent(0%); or
(2) fifty percent(50%).
3. Specify whether the political subdivision will pay any part of a member's
contribution on behalf of the member;
4. Specify whether employees will automatically be enrolled in the Fund or the
Plan if an eligible employee does not make an affnmative election.
WHEREAS, if such governing body participates in the Fund, such governing body
acknowledges its liability and that, pursuant to law, it and its successors in office, must
appropriate sufficient funds each year to retire the employees' prior service liability in
an orderly manner and also fund the current cost accruing annually.
WHEREAS, if such governing body participates in Plan, such governing body
acknowledges its liability and that, pursuant to law, it and its successors in office must
appropriate sufficient funds each year to meet all contribution obligations required by
law.
WHEREAS, such governing body acknowledges and agrees to make a supplemental
contribution to the fund in an amount necessary to pay the employer's share of the
fund's actuarial unfunded liability that other employers would otherwise be required
to pay because the employer's employees are becoming members of the plan instead
of the fund.
WHEREAS, such governing body acknowledges and agrees, when an employee
separates from service before the member is fully vested in the employer contribution
subaccount, the amount in the employer contribution subaccount is forfeited as of the
date the member separates from service. Such forfeited amounts shall be used to
reduce the unfunded accrued liability of the fund as determined under IC 5-10.2-2-
11(a)(3) and IC 540.2-2-11(a)(4). For employers without an unfunded liability, such
as employers joining PERF for the first time and offering only Plan membership,
such forfeited amounts will be returned to the employer in the form of a credit to the
employer contribution subaccount.
WHEREAS,the General Assembly ofthe State of Indiana has authorized covered
employers to pay all or part ofinembers' mandatory contributions.
NOW THEREFORE, BE IT RESOLVED by the Common Council of the City
of South Bend, Indiana, as follows:
SECTION I: Election to Participate. The City of South Bend elects to continue
as a participating political subdivision or miscellaneous participating entity in the
Public Employees' Retirement Fund by including classes of employees as stated
below in the coverage under Chapter 340 of the Acts of 1945, and all Acts
amendatory thereof and supplemental thereto.
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SECTION II: Retirement Plans Offered. The City of South Bend elects to
offer the following retirement plan(s) under the Public Employees' Retirement
Fund:
Both PERF Hybrid and My Choice: Retirement Savings Plan shall be offered
to all new employees. The employee may choose the retirement plan in which
the employee will participate. This choice of options shall only apply to new
employees hired after July 1, 2018. Existing employees shall continue to
receive benefits through the currently offered PERF Hybrid system.
SECTION III: Default Plan. If an employee is eligible to choose membership in
either the Fund or the Plan, and that employee fails to make an election within the
period set forth in IC 5-10.3-12-20 and 35 IAC 1.3-4-1, said employee will be
enrolled automatically and irrevocably in the My Choice: Retirement Savings Plan
("the Plan").
SECTION IV: Employee Contribution. That, effective as of the 1 st day of July,
2018,the City of South Bend, Indiana shall pay 1 %s% of the mandatory contribution for
Teamsters employees who are members of PERF, or in the amount specified in the
current Collective Bargaining Agreement. The term"mandatory contribution" means
the mandatory 3% of gross wages required to be contributed in order for an
employee to participate in the Plan. Said employees shall not be entitled to choose to
receive the contributed amounts directly. The contributed amounts will be paid by the
employer to the specified pension fund.
For all other classifications of employees, the City of South Bend, Indiana shall not pay
any of the mandatory contribution requirement. Instead, said contributions shall be paid
by the employee via a 3%reduction of the employee's salary, or as specified by City
policy. Such contributions will not be included in the employee's gross income for
certain tax reporting purposes, that is, for federal, state, or local income tax
withholding, until distributed either though a pension benefit or a lump sum payment.
Such contributions will be included in the employee's gross income for FICA taxes
when they are made. These contributions are made on a pre-tax basis but are paid by
the employee through a payroll deduction.
SECTION V: Employer Contribution. The employer contribution shall consist
of the normal cost and supplemental rate, as required by INPRS. The "normal
cost" is part of the rate employers pay into the employee's MyChoice: Retirement
Savings Plan. This amount may range from 0% to the percentage that would produce
the normal cost for participation in the fund under IC 5-10.2-2-11. The "supplemental
rate" funds the unfunded liability in the Plan, and is paid to INPRS, not the
employee's MyChoice: Retirement Savings Plan account. Both the normal rate
and the supplemental rate are subject to change annually as determined by INPRS
and the City will adjust its contribution rates in accordance with any INPRS
changes.
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The City of South Bend, as a participating political subdivision, offering the Plan,
agrees to pay a contribution rate to the Plan as a percentage of each member's
compensation in the amount of I% less than the current normal cost paid in the PERF
Hybrid Plan.
SECTION VI: Additional Employee Contributions. Employees are permitted
to make additional voluntary contributions to the Plan in an amount not to exceed
10% of gross wages. The City of South Bend, as a participating political subdivision
offering the Plan, will not match any additional contributions made by the employee.
SECTION VII: Employee Classifications. It is hereby declared that none of
the classifications or positions specified in Section III are compensated on a fee
basis or of an emergency nature, or in a part-time category.
SECTION VIII: Date ofActive Participating Membership in the Plan. The active
participation membership ofthe City of South Bend in the Plan shall begin on July 1,
2018.
SECTION IX: Effective Date of Resolution. This resolution shall be in full force
and effect from the date of passage and upon approval of the Board of Trustees of the
Indiana Public Retirement System, except that active participating membership shall
begin on the date set forth in Section VIII.
Tim Scott, Council President
South Bend Common Council
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