To: Honorable Mayor and Members of Town Council
From: Fritz Sprague, Deputy Town Manager
Title
Resolution Approving an ICMA Retirement Corporation Government Money Purchase Plan and Trust Adoption Agreement (Police Retirement)
Body
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Executive Summary
Following second reading of the 2018 budget, the next step implementing the adjustment to Police Officer retirement contributions is adoption of a resolution creating the Town of Castle Rock Police Officer 401a Plan. Making this change will create the new Plan, allow individual officers to transfer assets to the new Plan and set contribution rates in accordance with the budget.
Discussion
The Town has a long-held philosophy of paying ‘market’ when it comes to compensation and benefits. ‘Market’ is being defined as not leading nor lagging behind benchmark jurisdictions. The Town takes into account the contributions made for all benefits when calculating parity, or making sure comparable levels of benefit are extended to each employee.
The Town of Castle Rock provides a retirement benefit through the International City and County Association Retirement Corporation (ICMA-RC) for Police, Executives and General employees as part of our total compensation package. Those within the Fire service are within FPPA and are not part of this discussion.
Annually, Human Resources conducts a benchmark analysis of comparable jurisdictions to make sure we remain competitive in the marketplace (attached). This benchmark analysis supported increasing the Town’s retirement contribution for Police Officers by 1.6% from 7% to 8.6%. Additionally, as part of this plan change Police Officers will increase their contributions, effectively matching the Town’s match by the same 1.6%. This will take their individual contributions from 4% to 5.6%.
In order to implement this change, the Town will need to create a separate Town of Castle Rock Police Officer Money Purchase Plan (401a). Adoption the attached resolution and plan document accomplishes this task. If adopted by Council this new Plan will go into effect Jan.1 2018.
A 1.6 % increase in the employer contribution from 7% to 8.6% for all Police Officers will cost approximately $120,500 in 2018, which has been accounted for in the 2018 budget. This will be an on-going cost and an analysis of the Town’s 3-Year Balanced Financial Plan demonstrates sufficient financial capacity in the General Fund to continue this retirement contribution moving forward.
Recommendation
It is recommended that Town Council approve the resolution adopting a Town of Castle Rock Police Officer 401a Money Purchase Plan.
Proposed Motion
“I move to approve a Resolution approving an ICMA Retirement Corporation Government Money Purchase Plan and Trust Adoption Agreement”
Attachments
Attachment A: Resolution
Attachment B: Adoption Agreement
Attachment C: Benchmark data