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FINANCIAL MANAGEMENT DEPARTMENT <br /> #99 - 23 <br /> November 8, 1999 <br /> MEMO TO: Honorable Mayor and City Council Members <br /> FROM: Steve Garman, City Manager <br /> Beth Couter, Director of Financial Management � <br /> SUBJECT: Section 401 Trust for the City Manager I'' <br /> According to the City Manager's personnel contract, the City will contribute an amount <br /> equal to ten percent of his salary to a retirement plan, which for 1999-2000 fiscal year equates to <br /> eleven thousand dollars. The City does offer a section 457 deferred compensation plan to all <br /> employees which allows annual contributions only up to eight thousand dollars. <br /> We contacted ICMA (International City Manager's Association) to find out if there were <br /> other retirement plans which the City could implement which would allow for annual <br /> contributions of at least eleven thousand dollars. The IRS section 401 (a) (3) plan trust will <br /> accomplish what we need, and in fact, we were told other cities are using it for their City , <br /> Managers. The 401 plan allows for contributions equal to the lesser of twenty-five percent of <br /> salary or$30,000 of the participant. <br /> Attached are the resolution, plan adoption agreement, and the service agreement with <br /> ICMA for your consideration. <br /> City staff will be at the Council meeting to answer any questions the Council may have. <br />