07. Resolution 4948 - Adopting ICMA Medical Savings Retirement Planffi
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ty of Kalispell
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REPORT TO: Mayor Kennedy and City Council
FROM: Array Robertson. Finance Director
SUBJECT: ICMA -RETIREMENT HEALTH SAVINGS PLAN
MEETING DATE: November 1, 2004
BACKGROUND- We currently have ICMA accounts for 457 Deferred Compensation and
401 plans (Manager's retirement). We are asking to enter into an agreement with ICMA to offer
the Retirement Health Savings Plan for our employees. This plan allows employees to roll
vacation and sick leave severance into the plan (like a flex plan) with no FICA taxes or Federal
Income taxes paid ever. Withdrawals from the plan are used to pay health insurance premiums
and medical costs similar to a flex plan. The: benefit to the city is that the city does not have to
pay the matching FICA taxes. Plan fees are paid by the owner of the plan (employee). The plan
is totally optional on the part of the employee. Most employees will elect to join the plan the
year before: their retirement. There is an annual opera enrollment period. Paying health insurance
premiums is the biggest obstacle to retirement for many. This program should also encourage
employees to conserve their sick leave knowing that they can receive the payout tax free. The
city's retirement payout remains at 25%.
RECOMMENDATION:
FISCAL EFFECTS:
ALTERNATIVES:
Amy H. Robertson
Finance Director
Adopt Resolution
Savings will. vary, matching FICA amounts.
As suggested by Council.
Report compiled: October 26, 2004
Frank Garner
Interim City Manager
RESOLUTION NO.4948
A RESOLUTION AUTHORIZING PARTICIPATION IN THE INTERNATIONAL
CITY MANAGER ASSOCIATION (ICMA) VANTAGECARE RETIREMENT
HEALTH SAVINGS (RHS) PROGRAM AND AUTHORIZING SUCH
DOCUMENTS AS MAY BE NECESSARY TO EFFECTUATE PARTICIPATION
IN SUCH EMPLOYEE BENEFITS PROGRAM.
WHEREAS, the City of Kalispell (the "Employer") has employees rendering valuable
services; and
WHEREAS, the establishment of a retiree health savings plan for such employees serves
the interests of the Employer by enabling it to provide reasonable security
regarding such employees' health needs during retirement, by providing
increased flexibility in its personnel management system, and by assisting
in the attraction and retention of competent personnel; and
WHEREAS, the Employer has determined that the establishment of the retiree health
savings plan (the "Plan") serves the above objectives.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL AS FOLLOWS:
SECTION L That the City of Kalispell does hereby adopt the Plan in the form of
the ICMA Retirement Corporation's VantageCare Retirement
Health Savings program.
SECTION II. That the assets of the Plan shall be held in trust, with the Employer
serving as trustee, for the exclusive benefit of flan participants and
their beneficiaries, and the assets of the Plan shall not be diverted for
any other purpose prior to the satisfaction of all liabilities of the
Plan. The Employer has executed the Declaration of Trust of the
City of Kalispell Integral Part Trust.
SECTION IZI. That the Personnel Specialist shall be the coordinator and contact for
the Plan and shall receive necessary reports, notices, etc.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE
MAYOR OF THE CITY OF KALISPELL, THIS I ST DAY OF NOVEMBER, 2004.
Pamela B. Kennedy
Mayor
ATTEST:
Theresa White
City Clerk