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R92-18 APPROVING PLANS AND AUTHORIZING AGREEMENTS - SECTION 125 CAFETERIA PLANS
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R92-18 APPROVING PLANS AND AUTHORIZING AGREEMENTS - SECTION 125 CAFETERIA PLANS
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Resolution/Ordinance
Res Ord Num
R92-18
Res Ord Title
APPROVING PLANS AND AUTHORIZING AGREEMENTS - SECTION 125 CAFETERIA PLANS
Approved Date
2/17/1992
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.• <br /> w �p+ <br /> � <br /> 1 <br /> L � <br /> DEPARTMENT OF FINANCIAL MANAGEMENT <br /> RISK MANAGEMENT DIVISION <br /> MEMORANDUM N0. 92-032 <br /> February 13, 1992 <br /> MEMO T0: Mayor and City Council <br /> FROM: James C. Bacon, Jr. , City Manager <br /> Beth B. Couter, Director of Financial Management <br /> Gerard J. Bauer, Risk Manager <br /> SUBJECT: FLEXIBLE BENEFITS (SECTION 125) PROGR.AM <br /> Per the attached resolution, we are recommending that the City Council <br /> adopt a flexible benefits program for general service and management employees. <br /> The flexible benefits plan has been developed by the Department of <br /> Financial Management, following the requirements of Section 125 of the Internal <br /> Revenue Code, in order to provide employees a method for paying their group <br /> health and life insurance premiums, unreimbursed medical expenses, and <br /> dependent care expenses with pretax earnings, thereby reducing the employees' <br /> tax liability and increasing their spendable income. <br /> In addition to lowering the tax burden for the employee, the program also <br /> decreases the city's tax and pension costs for the amount of wages that <br /> employees elect to put into the plan. This more than offsets administrative <br /> costs that are incurred with the implementation of the program. <br /> Last fall, the Risk Management Division issued a request for proposals <br /> (RFP) for a program claims administrator, and after thorough consideration of <br /> submissions received, is now recommending the use of Fort Dearborn Life <br /> Insurance Company for this purpose. This company has significant experience in <br /> administering Section 125 plans, and was able to offer the most competitive <br /> rates for its services. <br /> A total of 68 city employees have signed up for the plan. It is <br /> estimated, based on their elections, that the program will produce a net <br /> savings of about $11,000 for the city in 1992. <br /> Thank you for your attention to this matter. <br /> GJB/dly <br /> attachment <br />
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