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(AV e/ V iffe I V qo Rgln.S'tnnt' C"'t ..;(r.:wV3503R Eitab6she,d'1A57 651-429-3232 11IF.,,6si-429, Fla Memorandum Date: October 23, 2024 To: Honorable Mayor and City Council Members Through: Mark Statz, City Administrator From: Bruce DeJong, Finance Director Item: Modifications to the Personnel Policy The City Administrator, Senior Accounting Clerk, and Finance Director are responding to a couple of challenges that our current policy faces. We have received questions regarding both our Health Care Savings Plan (HCSP) and our Earned Sick and Safe Time (ESST) policies. Health Care Savings Plan The HCSP has been rejected by the Minnesota State Retirement System. Our current language was designed to allow employees some flexibility in the percentage of their paid leave to be deposited. However, the state has asserted that a plan percentage can only be flat or increasing as the number of contributed hours increases based off IRS regulations. With this in mind, staff discussed options with staff members approaching retirement to discern their thoughts. It was unanimous that they would prefer the entire amount of remaining leave at retirement to be deposited into the HCSP. The alternatives are essentially cost -neutral to the city. With that in mind, staff proposes the following language to be substituted in the policy: All employees with at least three years of service in the Public Employees Retirement Association (PERA) who are immediately eligible to receive a PERA pension shall contribute the full amount of their unused leave balance into the HCSP upon termination or retirement.