To: HONORABLE MAYOR AND From: Mark Danaj

CITY COUNCIL

Subject: RESOLUTION ESTABLISHING Date: October 29, 2003

MONEY PURCHASE PLAN FOR

REDEVELOPMENT MANAGER

TO THE AGENCY

RECOMMENDATION

Adoption of a resolution establishing the Redevelopment Manager Money Purchase Retirement Plan, authorizing the Director of Employee Services to execute the Declaration of Trust of the ICMA Retirement Trust and to execute all necessary agreements incidental to the establishment and administration of the Plan, and naming the Benefits Manager as coordinator for the Plan.

BACKGROUND

The Redevelopment Manager is a City employee who serves as the Executive Director of the Redevelopment Agency pursuant to a cooperation agreement between the City and the Agency; salary and benefit costs are reimbursed to the City by the Agency. On September 28, 1999, the City Council approved the salary and benefits for the Redevelopment Manager, including a deferred compensation arrangement to be implemented through the City of José Deferred Compensation Plan and a qualified defined contribution plan. ICMA Retirement Corporation, one of the providers for the City’s Deferred Compensation Plan, can provide a money purchase plan that meets the requirements approved by Council. The proposed resolution would enable that plan to be established.

This matter of the money purchase plan is arising at this particular time because the value of the Executive Director’s deferred compensation program will exceed the deferred compensation §457 limit for the first time in 2003. The money purchase plan establishes another qualified defined contribution plan (§401(a)) into which excess deferred compensation contributions can be made. This same action has already been taken for the City Manager and the City Attorney.

ANALYSIS

The ICMA money purchase plan is a qualified plan under the Internal Revenue Code. Each participant has a plan account to which contributions are made. Contributions made by the City are not taxable income to the participant until the participant leaves service and begins to draw a benefit from the plan. The contributions are deposited into the ICMA Retirement Corporation Governmental Money Purchase Plan & Trust, and ICMA Retirement Corporation serves as the investment advisor, administers the funds and provides investment advisory services.

In order to implement the money purchase plan for the City’s Redevelopment Manager, it is necessary that the Council adopt a resolution establishing the plan. In addition, the City will need to execute the ICMA Declaration of Trust and enter into agreements with ICMA Retirement for plan administration. ICMA-RC also requires that the City designate a person to be the coordinator for the plan so there is a designated person to receive reports, notices and other information and to coordinate with ICMA-RC. The proposed resolution would authorize the Director of Employee Services, or his designee, to execute the necessary documents, and would name the Benefits Manager in the Employee Services Department as the coordinator.

PUBLIC OUTREACH

N/A

COORDINATION

This report has been coordinated with the City Attorney’s Office.

COST IMPLICATIONS

N/A

CEQA

Not a project.

MARK DANAJ

Director, Employee Services