The County, effective, August 31, 2021 will close the existing defined benefit or pension plan. All current participants in the plan will retain their same benefits under the plan. No new employees or re-employed employees hired on and after September 1, 2021 will be allowed to participate in the pension plan. However, effective September 1, all new hires and re-hires of former employees will be automatically enrolled in the 401(a) defined contribution plan. Participation in the 401(a) Plan will be mandatory for these employees as well as a mandatory base level contribution of 2.0%. The County will match that contribution 100%. Participants may make voluntary or elective contributions above the 2.0% required minimum. The County will match 100% those additional contributions up to a max of 4.0%. In total, the County will match a maximum of 6.0% of an employees salary, which is a 100% match of an employees’ mandatory contribution and voluntary contribution, not to exceed 6.0%.
The closing of the pension plan and addition of the 401(a) Plan will ultimately save the County costs associated with funding a pension plan and provide a more portable option of pre-tax investing and matching for those employees under the 401(a) plan. The County makes the recommended contribution to the pension plan. Contributions to pension plans can fluctuate from year-to-year based on numerous factors. For 2020 and 2021 the County made slightly over $500,000 into the pension plan.
No comments:
Post a Comment