Deferred Compensation 457 Plan
Employees who wish to contribute to a supplemental retirement program are encouraged to join one of the City’s deferred compensation plans. Section 457 of the Internal Revenue Code allows employees to defer a certain portion of their income and invest that deferred income to provide them additional financial security at retirement. Income that is deferred reduces the current tax obligation, and the earnings s on the investments also remain tax free until withdrawal.
A Roth IRA is a savings vehicle that can complement your employer retirement plans by allowing for tax-fee earnings and, if needed, flexible withdrawals. Mission Square Retirement’s Payroll Roth IRA allows you to make convenient contributions directly from your paycheck.
General Employees 401(a) Plan
The City will contribute 10% of an employee’s base earnings towards a 401(a) plan with Mission Square Retirement. There is a 6-year graduated vesting schedule. Employees are not required to contribute anything. If an employee wishes to voluntarily contribute, they may do so to a 457 Deferred Compensation Plan. For every 1% that an employee contributes to the 457 the City will match them ½ % up to a maximum of 3%. Normal retirement under this plan is age 55.
Sworn Police Officers will be enrolled into the Section 185 Police Pension Plan. Membership in this plan is mandatory and members must contribute 8% of their pensionable earnings to this plan. The City will contribute whatever is necessary to keep the plan actuarially sound based upon the annual valuation. Normal retirement is age 48 with 10 years of service.
Sworn Firefighters will be enrolled into the Section 175 Fire Pension Plan. Membership in this plan is mandatory and members must contribute 8% of their pensionable earnings to this plan. The City will contribute whatever is necessary to keep the plan actuarially sound based upon the annual valuation. Normal retirement is age 55 with 10 years of service of age 52 with 25 years of service.