04-26-2006 Council Agenda - Laserfiche WebLink

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MAYOR 13111 Blesener COUNCIL Jim LaValle Rick Montour Barbara Allan John Keis 515 Little Canada Road, Little Canada, MN 55117 -1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson www.ci.little- canada.mn.us MEMORANDUM TO: Mayor Blesener and Members of the City Council FROM: Shelly Rueckert, Finance Director Kathy Glanzer, City Clerk DATE: April 21, 2006 RE: Post Employment Health Care Savings Plan As has been discussed previously, the public sector has available to it a benefit called Post Employment Health Care Savings Plan that allows employees to build a tax -free savings account to offset future health care expenses for the employee, spouse, and eligible dependents. These fund are available to the employee upon separation of service. The money deposited in the fund is tax -free both going in and going out, and provides an opportunity for employees to build a fund to cover health care costs during retirement. We have done extensive research of the plans offered by various plan administrators and recommend ICMA- Retirement Corporation based on the enhanced features offered by ICMA -RC. (ICMA -RC is the plan administrator for the employees' deferred compensation accounts.) Attached is an Executive Summary of the plan. Please note that the "Existing Provisions" are commonly offered by plan administrators, while the "New Features" are unique to ICMA -RC and not offered by the other plan administrators we have met with. The benefits of these "New Features" are as follows: ➢ Employees can elect to participate now or in the future, and are not mandated to participate if they prefer not to. ➢ Employees that elect to participate choose the level of participation that works for them, rather than a level of participation that is mandated by the employer. However, once an employee decides to participate and chooses their level of participation, they cannot withdraw from the Plan, nor can they change their participation level. ➢ If approved by the employer, employees can, on an annual basis, elect to contribute all or a portion of their vacation into this account.