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DISCUSSION <br /> Compensation for management and confidential employees is outlined in the City's <br /> Management/Confidential Employee Performance Compensation Plan. Most forms of <br /> employee compensation are subject to additional costs, such as payments to CaIPERS. <br /> City contributions into a deferred compensation plan on an employee's behalf are not <br /> subject to the additional costs of CaIPERS and allow for a cost effective compensation <br /> option. As such, the City provided managers and confidential employees with a one- <br /> time deposit of .25% of the employee's annual base salary into an IRC 457 deferred <br /> compensation plan in January of this year. <br /> Additionally, recently adopted MOUs with the City's fire and police employees included <br /> modest contributions into deferred compensation plans. These deferred compensation <br /> contributions are a benefit to the City, as it allows for compensation without the expense <br /> of CaIPERS payments and additional costs associate with traditional pay increases. The <br /> City contributions are also a benefit to the employees, as voluntary contributions into <br /> these tax deferred vehicles are already popular with many of the City's employees. The <br /> movement towards providing City employees with deferred compensation contributions <br /> has been consistent. <br /> Staff will bring the entire Compensation Plan to the City Council for its review and <br /> approval in the future. However, staff is requesting Council amend the plan language to <br /> provide clarity and affirm the City's option to provide deferred compensation <br /> contributions to management and confidential employees in the future. The amended <br /> language, set forth in the Management Compensation Plan dated September 15, 2014, <br /> for which Council approval is sought reads as follows: <br /> "9. Deferred Compensation <br /> The City shall provide a voluntary IRC 457 deferred compensation plan for <br /> management and confidential employees and a voluntary IRS 401A plan for <br /> management employees. <br /> The City may provide deferred compensation contributions for management and <br /> confidential employees. Any funds deposited in a deferred compensation plan <br /> under this provision belong to the employee, regardless of length of service or <br /> reason for separation." <br /> Sub ate• by: Fiscat'Review: Aby: <br /> C� 1 11 Approve <br /> �w <br /> Debra Gill / Tina Olson Nelson Fialho <br /> Director of Human Resources Finance Director City Manager <br /> and Labor Relations <br /> Page 2 of 2 <br />