FROM:
Human Resources
SUBJECT:
Title
Authorize the Transition of PARS Alternate Retirement Services to Bencor
End
RECOMMENDATION:
Recommendation
Adopt Resolution No. 2022-127, of the City Council of the City of Fontana, Authorizing the Transition of the City of Fontana PARS Alternate Retirement System Plan from Public Agency Retirement Services to Bencor.
End
COUNCIL GOALS:
• Operate in a businesslike manner by creating a memorable customer experience with every interaction.
• Practice sound fiscal management by living within our means while investing in the future.
DISCUSSION:
The City holds a fiduciary responsibility to offer an Alternate Retirement System (ARS) of which is an alternative to Social Security plan for part-time, seasonal, and temporary employees. This complies with OBRA ’90 and Internal Revenue Code Section 3121(b)(7)(F) requirements, in which wages of an employee of a State or local government are generally subject to tax under FICA after July 1, 1991, unless the employee is a member of a retirement system maintained by the State or local government entity. To the extent this Alternate Retirement System plan reduces cost to the City due to lower total contributions rate (7.5% minimum versus 12.4% with Social Security).
The City maintains the City of Fontana ARS defined contribution plan to those eligible employees as defined. This Resolution authorizes the transition of the Alternate Retirement System Plan from Public Agency Retirement Services (PARS) to Bencor authorizing the City Manager or their designee to make any necessary amendments to the ARS Plan to implement the provisions of this Resolution.
FISCAL IMPACT:
This transition will streamline processing and protect data integrity with an online portal maintenance for new enrollments and separations, therefore reducing City administrative costs. In addition to the cost savings to the City, participants will see a decreased administrative cost from Bencor as well protection against fund loss with a guaranteed interest rate on their contributions.
MOTION:
Approve staff recommendation.