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REQUEST FOR COUNCIL ACTION Date: 03/23198 Item Igo.: C—4 Department Approval: Manager Reviewed Agenda Section Consent Item Descriptione Establishing a 401(a) Money Purchase Plan Background Most City employees are required to belong and to pay a portion of their salary (4.75%) to the State Public Employee Retirement Association (PERA). The City is also required to match the employee contribution at a rate of 5.18% of gross salary. In addition, all city employees are eligible to establish a tax deferred annuity account (457 Plan) and they may contribute up to 25% or $8,000 whichever is the lust, on an annual basis. The City Manager is not part of the PERA and as a result, the City's snatching contribution of 9% is placed into his 457 plan. This limits the Manager's personal financial planning to less than what is available to all other employees. To correct this irnb alance,, we are recommending the City establish a 40 I(a) Mo ney Purchase Plan. This new plan enables the Finance Department to direct the City's contribution into this plan and thus freeing up or snaking available to the City Manager the 457deferred annutity option that is available to all other employees. Because of the PERA requirement, no other employee may join or has a need to have access to a 40 I(a). Financial Implications There are no additional financial obligations being incurred by the City. The availability of a 457 plan for the Manager would strictly from his gross salary. Recommendation It is staffs recommendation that a 401(a) Money Purchase Plan be established by the City of Roseville. Council Action Motion to approve the attached resolution establishing 40 t(a) Money Purchase Flan with the 1 MA Retirement Corporation.