REPORT TO THE CITY COUNCIL
July 16, 2015
FROM: JEFF CARDELL, Director
Personnel Services Department
BY: KEN PHILLIPS, Labor Relations Manager
Personnel Services Department
SUBJECT
Title
1. ***BILL NO. B-25 - (Intro. 7/16/2015) (For adoption) - Adding Section 3-356 to Chapter 3, Article 3 of the Fresno Municipal Code relating to the establishment of a Qualified Excess Governmental Benefit Arrangement in the City of Fresno Fire and Police Retirement System
2. ***BILL NO. B-26 - (Intro. 7/16/2015) (For adoption) - Adding Section 3-570 to Chapter 3, Article 5 of the Fresno Municipal Code relating to the establishment of a Qualified Excess Governmental Benefit Arrangement in the City of Fresno Employees Retirement System
Body
RECOMMENDATIONS
It is recommended City Council approve the introduction of the ordinances adding Sections 3-356 and 3-570 to the Fresno Municipal Code relating to the establishment of Qualified Excess Governmental Benefit Arrangements in the City of Fresno Fire and Police Retirement System and the City of Fresno Employees Retirement System, respectively.
EXECUTIVE SUMMARY
The attached ordinances will establish Replacement Benefit Plans known as a Qualified Excess Governmental Benefit Arrangements ("QEBA"s) in the respective systems to protect the systems' tax-exempt status should an employee retire and receive a retirement benefit beyond the Internal Revenue Service ("IRS") statutory limits. The Internal Revenue Code ("IRC") limits the amount of annual retirement benefits an employee can receive. However, some City employees who were hired on or before June 28, 1991, may earn vested benefits beyond the statutory limits. Should an employee retire and receive a retirement benefit beyond the IRC statutory limits, the employer's retirement plan could lose its tax-exempt status. The respective QEBA plans will compensate City retirees for the difference, if any, between the benefits an employee may be entitled...
Click here for full text