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HomeMy WebLinkAbout4715-18 Electing to Participate in the Public Employee's Retirement Fund's MyChoice: Retirememnt Savings Plan As Administered by the Indiana Public Retirement System RESOLUTION No. 4715-18 Passed by the Common Council of the City of South Bend, Indiana May 14, 20-1-8— Attest City Clerk Kareemah N. owter Attest President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana May 14, 20 City Clerk reemah N. FoWW Approved and signed by me Mew 20a . Maylor ,/ United States of America Certificate STATE OF INDIANA, COUNTY OF ST. JOSEPH, ss: I, Kareemah Fowler, Clerk of the City of South Bend, County of St. Joseph, Indiana, hereby certify that the attached and foregoing is a full, true, and correct copy of RESOLUTION 4715-18 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 ADOPTED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, MAY 14,2018 PRESENTED TO,APPROVED AND SIGNED BY MAYOR PETE BUTTIGIEG,MAY 2192018 ATTEST: TIM SCOTT, PRESIDENT OF THE COMMON COUNCIL ATTEST: KAREEMAH N. FOWLER, CITY CLERK the original of which is now on file in the office of the Clerk of the City of South Bend. St. Joseph County, Indiana. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official Sealgf the City of South Bend, St. Joseph County, Indiana, this day of M 20 lb Kareemah Fowler Clerk of the City of South Bend St. Joseph County, Indiana By Deputy BILL NO. 18-22 RESOLUTION NO. 471;-18 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_% [to be filled in by 1NPRSI 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 1 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 affirmative 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 5-I0.2-2-11(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 of the 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. 2 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 1st day of July, 2018,the City of South Bend, Indiana shall pay 1 '/2% 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. 3 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 1% 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 of Active 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 r South Bend Common Council APPIZU,A.. '5-1/q� 4