Administrative
Report
H.25., File # 23-5409 Meeting Date: 1/17/2023
To: MAYOR AND CITY COUNCIL
From: DIANE STRICKFADEN, DIRECTOR OF HUMAN RESOURCES
TITLE
ADOPT BY TITLE ONLY RESOLUTION NO CC-2301-112, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, AMENDING AND RESTATING THE 401A MONEY PURCHASE PLAN, PLAN NUMBER 10-9324, TO ALLOW IN-SERVICE DISTRIBUTIONS FOR PARTICIPANTS AFTER ATTAINING THE NORMAL RETIREMENT AGE OF 60
EXECUTIVE SUMMARY
Mission Square Retirement (formerly called ICMA-RC) is the administrator of the City's 457(b), 401a, Roth IRA, and Retirement Health Savings plans. Through Mission Square, employees are provided with opportunities for retirement savings via various investment options.
Recent Federal legislation allows employers to decrease the minimum age allowable to “normal retirement age” for in-service withdrawals. An “in-service withdrawal” is one that takes place while the employee is still working for the employer.
BACKGROUND
As plan administrator, the City of Redondo Beach must adopt a resolution if it desires to amend provisions of the 401(a) plan. The purpose of the attached Resolution is to amend the City of Redondo Beach’s 401(a) plan rules to decrease the in-service withdrawal age from 70 ½ to the “normal retirement age” of 60 to be consistent with the recent federal legislative changes. As noted, an “in-service withdrawal” is one that takes place while the employee is still working for the employer.
Previously, participants under age 70 ½ could only withdraw funds after leaving employment, or with an IRS-designated emergency reason. This amendment will allow existing employees who attain the age of 60 to obtain their funds while still remaining employed.
COORDINATION
The Human Resources Department coordinated the resolution with the City Attorney’s Office.
FISCAL IMPACT
There is no fiscal impact to the City for allowing this plan amendment.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
H.25., File # 23-5409 Meeting Date: 1/17/2023
Resolution and Adoption Agreement