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515 Little Canada Road, Little Canada, MN 55117-1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 <br />www.ei.little-canada.mn.us <br />MEMORANDUM <br />TO: Mayor Blesener & Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: November 4, 2005 <br />RE: Authorize Loan Option for ICMA -RC 457 Plan <br />MAYOR <br />Bill Blesener <br />COUNCIL <br />Jim LaValle <br />Rick Montour <br />Barbara Allan <br />John Reis <br />ADMINISTRATOR <br />Joel R. Hanson <br />The City has made a 457 Plan available to our employees through the International City <br />Management Association — Retirement Corporation. Similar to a 401k, participants are allowed <br />to take out a loan against their fund balance. The loan is repaid with interest to the employees <br />plan over a maximum term of five years. (The interest rate floats based on the prime rate.) <br />There is no involvement of City funds in this type of transaction. <br />Staff would like to make this option available to the eligible plan participants. To do so, we need <br />to elect that option with a plan amendment. (We did not initially sign up for this option when we <br />first started the plan in 1990 as we were not aware of its availability.) <br />Paperwork for this option should be available by Wednesday' meeting. Staff would recommend <br />approval. <br />