R-2005-17 adopt Public Agency Retirement Services (PARS) 457 Trust

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e e REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: 9-12-05 ~ Bude:et Requested By: Cynthia Alexander Source of Funds: Department: Finance Account Number: Report: Resolution: Ordinance: Amount Budgeted: Exhibits: Resolution! Agreement Amount Requested: Exhibits: PARS Interoffice Memo Budgeted Item: YES NO Exhibits PARS Information Sheet SUMMARY & RECOMMENDATION Public Agency Retirement Services (PARS) - Saves City money and is better for part-time employees. Currently the City contributes 6.2% into the federally mandated Social Security System. PARS allows the City to contribute to an Alternative Retirement System for part-time employees (ARS) with a lower City contribution rate of 1.3%. The benefits to employees from enrollment in the PARS versus Social Security are as follows: I. PARS plans participants are fully vested in their individual accounts from day one, This compares to social security which requires contributions for a minimum of 40 (forty) calendar quarters (10 years total) before the employee is eligible for any Social Security retirement benefits. 2. In the event of the participant's separation from the City, the participant may receive the contributed funds, including the City portion and interest accrued. 3. PARS contributions are pre-tax dollars. The result is additional take home pay for the emolled employees. 4. Contributions to the PARS plan increase account balances without limit With Social Security, once the limit is met, additional contributions do not result in any higher benefits for the contributing participant. We are recommending that the City enter into a contract with PARS, Action Required bv Council: ~ Approve resolution adopting the PARS 457 Trust and authorize the City Manager to sign. contract. Approved for City Council Ae:enda De~F~e~~~~ f -{p r{)!J- Date