| ITEM #: 2. DATE: 11/13/2023 AI #:1703 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | NATIONWIDE PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM SUPPLEMENTAL SALARY DEFERRAL PLAN |
| STAFF PRESENTER(S): | Lyman Locket, Human Resources Director |
OTHER PRESENTER(S):
(Matt Gayman, Nationwide Retirement Solutions, Program Director)
SUMMARY
Authorize Nationwide Retirement Solutions to provide the Public Safety Personnel Retirement System Supplemental Salary Deferral 457 Plan.
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
ADOPT RESOLUTION NO. 2023-2360 ESTABLISHING THE PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM SUPPLEMENTAL SALARY DEFERRAL PLAN; DESIGNATING THE CITY MANAGER AS THE AUTHORIZED AGENT; PROVIDING AUTHORIZATION, DIRECTION, AND PROVIDING AN EFFECTIVE DATE. (Lyman Locket, Human Resources Director)
FISCAL IMPACT
There is no direct financial impact to the city.
BACKGROUND AND PREVIOUS ACTIONS
As part of the city's comprehensive benefits package, the city offers several deferred compensation plan options. The city offers two post-tax Roth Plans and two 457 deferred compensation plans administered by MissionSquare Retirement and Nationwide Retirement Solutions (NRS). A 457(b) deferred compensation plan is a voluntary, supplemental, tax-deferred retirement savings plan.
The City Council previously approved a switch from the city's Nationwide 457 plan to the Arizona State Retirement System (ASRS) 457 plan and offered the ASRS supplemental salary deferral 457 plan effective January 3, 2022. All employees enrolled under Nationwide 457 plan were transferred into the ASRS 457 supplemental salary deferral plan. Thereafter, Senate Bill 1083 was passed and became effective on September 24, 2022, and Senate Bill modified A.R.S. § 38-781 in such a fashion that the legislative intent has been interpreted to require new Public Safety Personnel Retirement System (PSPRS) employees to participate in their own supplemental salary deferral 457 plan as opposed to participating in the ASRS 457 supplemental salary deferral plan.
The City Council previously approved a switch from the city's Nationwide 457 plan to the Arizona State Retirement System (ASRS) 457 plan and offered the ASRS supplemental salary deferral 457 plan effective January 3, 2022. All employees enrolled under Nationwide 457 plan were transferred into the ASRS 457 supplemental salary deferral plan. Thereafter, Senate Bill 1083 was passed and became effective on September 24, 2022, and Senate Bill modified A.R.S. § 38-781 in such a fashion that the legislative intent has been interpreted to require new Public Safety Personnel Retirement System (PSPRS) employees to participate in their own supplemental salary deferral 457 plan as opposed to participating in the ASRS 457 supplemental salary deferral plan.
STAFF ANALYSIS
City staff has been working with Nationwide representatives to review and identify affected employees. At this time, this change will affect approximately 60 employees. Sworn public safety employees enrolled in the Nationwide ASRS plan prior to September 24, 2022, may stay in the ASRS plan or voluntarily move to the proposed PSPRS plan. A dedicated Nationwide representative will be available to assist the impacted employees to move to the proposed PSPRS plan after adoption and plan setup. The dedicated representative will also provide individual consultations, including investment discussions. The change to the proposed PSPRS plan must be completed by December 31, 2023.