HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/05/2002 - RESOLUTION 2002-016 APPROVING THE AMENDMENT OF THE AGENDA ITEM SUMMARY ITEM NUMBER: 32
DATE: February 5,2002
FORT COLLINS CITY COUNCIL FROM: Alan Krcmarik
Rick DeLaCastro
SUBJECT:
Resolution 2002-016 Approving the Amendment of the 401A Money Purchase Pension Plans and
Authorizing the Finance Director to Approve Future Technical Amendments.
RECOMMENDATION:
Staff recommends adoption of the Resolution.
EXECUTIVE SUMMARY:
This Resolution updates the ICMA Retirement Corporation("ICMA")model plan document for the
four qualified 401A money purchase pension plans that the City currently maintains for various
categories of City employees. Federal legislation and IRS regulations adopted over the past several
years require that the model plan document be modified and the ICMA has recommended the
adoption of the new plan document for each of the plans. Adoption of this Resolution is not
expected to result in any significant financial burden to the City.
BACKGROUND:
The City currently has four qualified 401A money purchase pension plans for different categories
of employees. These plans are intended to help provide employees the opportunity to plan and save
for retirement. Traditionally, these plans have been administered by the City Manager through the
Human Resources Department. Because each of these plans hold the pension assets in trust for the
benefit of the employees and their beneficiaries, the City serves as the trustee of the funds. The
proposed Resolution will adopt a new plan document prepared by ICMA that will incorporate
provisions required by federal legislation and IRS regulations,including the Economic Growth and
Tax Relief Reconciliation Act of 2001 ("EGTRRA").
While many of the changes incorporated into the new plan document are technical and of little
practical importance, some of the changes will result in important improvements that will allow
employees to save more for retirement and to roll over accounts into other types of retirement plans
upon separation of employment. However, none of the changes require the City to increase its
funding of the plan or significantly increase the administrative burden upon the City in the
administration the Plans.
In order to allow for more efficient administration of the plan,Section 3 of the Resolution authorizes
the Finance Director to review and approve on behalf of the City any future technical amendments
to the plan made necessary by federal or state legislation or regulation, providing such technical
amendments do not result in a significant increased financial burden to the City. Approval of this
DATE: FTEM NUMBER:
provision will avoid the need to bring technical amendments to City Council for approval when there
is little or no economic impact upon the City. However, future amendments would continue to be
brought to City Council for consideration if they do not meet this criteria.
RESOLUTION 2002-016
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROVING THE AMENDMENT OF THE 401A MONEY PURCHASE
PENSION PLANS AND AUTHORIZING THE FINANCE DIRECTOR
TO APPROVE FUTURE TECHNICAL AMENDMENTS
WHEREAS, the City of Fort Collins (the "City") has established several qualified 401A
money purchase retirement plans (collectively referred to as "Plans")for its employees which are
administered by the International City Management Association Retirement Corporation("ICMA")
pursuant to the provisions of the 401 Governmental Money Purchase Plan&Trust Document("Plan
Document"); and
WHEREAS,ICMA has recommended that certain changes be made to the Plan Document
in order to maintain compliance with recent federal legislation and Internal Revenue Service
regulations governing said Plans; and
WHEREAS, the continuance of the Plans serves the City's best interest by enabling it to
provide reasonable retirement security for its employees, by providing increased flexibility in its
personnel management system, and by assisting in the attraction and retention of competent
personnel; and
WHEREAS,federal legislation and Internal Revenue Service regulation frequently mandate
technical amendments to the Plans which result in no significant financial burden to the City and can
be administratively reviewed and approved without the need for Council action.
NOW,THEREFORE, BE rr RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS, COLORADO as follows:
Section 1. That the City of Fort Collins hereby amends and restates the Plan Document
for each of the Plans in the form of the ICMA Retirement Corporation Governmental Money
Purchase Plan&Trust(including the EGTRRA Amendment),a copy of which is on file in the office
of the City Clerk. The Finance Director is authorized to execute the EGTRRA Amendment
Adoption Agreement on behalf of the City.
Section 2. That the assets of the Plans shall continue to be held in trust, with the City
serving as trustee,for the exclusive benefit of the Plans' participants and their beneficiaries,and the
assets shall not be diverted to any other purpose.
Section 3. That the Finance Director is hereby authorized to review and approve on
behalf of the City any future technical amendments to the Plans made necessary by federal or state
legislation or regulation, providing that such technical amendments do not result in a significant
increased financial burden to the City.
•
Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this
5th day of February,A.D. 2002.
Mayor Pro Tern
ATTEST:
City Clerk