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Home My WebLink AboutResolutions - 2007.12.13 - 28389November 29, 2007 MISCELLANEOUS RESOLUTION #07271 BY: Personnel Committee, Thomas F. Middleton, Chairperson RE: HUMAN RESOURCES DEPARTMENT SOCIAL SECURITY INCOME TAX ALTERNATIVE FOR PART-TIME NON-ELIGIBLE EMPLOYEES To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen. WHEREAS, Oakland County continues to explore opportunities to control personnel costs while maintaining a competitive salary and benefit package; and WHEREAS, Oakland County has part-time non-eligible employees rendering valuable services; and WHEREAS, the Omnibus Budget Reconciliation Act of 1990 (OBRA) and IRS section 3121(b)(7)(F) allows for a defined contribution plan in lieu of Social Security; and WHEREAS, the establishment of a defined contribution plan for such employees serves the interests of Oakland County by enabling it to provide reasonable retirement plan for its employees while creating savings for the County; and WHEREAS, Oakland County has determined that the establishment of a defined contribution plan for part-time non-eligible employees, to be administered by a third party with all or a portion of the funds invested in a trust, would be beneficial to both the County and to PTNE employees; and WHEREAS, the plan would allow part-time non-eligible employees to defer federal and state income taxes on savings in their account until retirement; and WHEREAS, Oakland County currently pays 6.2% of every dollar earned by part-time non-eligible employees in Social Security Taxes, in addition to the employee paying 6.2%; and WHEREAS, Oakland County could save approximately $640,000 a year by instituting this program. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners establish a Defined Contribution plan for part-time non-eligible employees in lieu of paying into Social Security. BE IT FURTHER RESOLVED that Oakland County will contribute 1.3% of part-time non-eligible employee's earnings into a defined contribution plan in lieu of paying 6.2% in Social Security Taxes. BE IT FURTHER RESOLVED that part-time non-eligible employees contribute 6.2% into a defined contribution plan in lieu of paying 6.2% in Social Security Taxes. BE IT FURTHER RESOLVED that the employee will immediately be 100% vested in both the employer and employee contributions into the plan. BE IT FURTHER RESOLVED the employee cannot access the money invested in the plan until they are separated from County employment. BE IT FURTHER RESOLVED that the cost of Information Technology programming this change be offset from the savings from the implementation of this plan. BE IT FURTHER RESOLVED that this change will apply to all current and future part-time non-eligible employees effective with the adoption of this resolution or as soon thereafter as administratively feasible. Chairperson, on behalf of the Personnel Committee, I move the adoption of the foregoing resolution. Personnel Committee Personnel Committee Vote: Motion carried unanimously with Coleman absent Resolution #07271 November 29, 2007 The Chairperson referred the resolution to the Finance Committee. There were no objections. FISCAL NOTE (M.R. #0727I) December 13, 2007 FINANCE COMMITTEE, MIKE ROGERS, CHAIRPERON IN RE: HUMAN RESOURCES DEPARTMENT - SOCIAL SECURITY INCOME TAX ALTERNATIVE FOR PART-TIME NON-ELIGIBLE EMPLOYEES TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen: Pursuant to Rule XII-C of this Board, the Finance Committee has reviewed the above referenced resolution and finds: 1. Oakland County has determined establishing a defined contribution plan for part-time non-eligible employees enables the County to provide a reasonable retirement plan for its employees while creating savings for the County. 2. The plan would be administered by a third party with all or a portion of the funds invested in a trust and allow part-time non- eligible employees to defer federal and state income taxes on savings in their account until retirement. 3. Currently Oakland County pays 6.2% of every dollar earned by part- time non-eligible employees in Social Security Taxes, in addition to the employee paying 6.2%. 4. With the new plan, the County would contribute 1.3% and the part- time non-eligible employee would contribute 6.2% of the part-time non-eligible employee's earnings into a defined contribution plan in lieu of paying 6.2% in Social Security Taxes. 5. The County would save approximately $649,250 a year by reducing the County's contribution from 6.2% to 1.3%. 6. The employee would be immediately 100% vested in both the employer and employee contributions into the plan, but cannot access the money invested in the plan until they are separated from County employment. 7. The cost for Information Technology to program this change would be offset by the savings realized from implementing the new plan. 8. The new plan would apply to all current and future part-time non- eligible County employees effective with the adoption of the resolution. 9. A budget amendment will be made once the new plan is approved and implemented. FINANCE COMMITTEE FINANCE COMMITTEE Ayes: Middleton, Long, Potter, KowaII, Douglas, Crawford, Rogers Nays: Coulter, Woodward, Greimel, Zack Motion carried. Resolution #07271 December 13, 2007 Moved by Middleton supported by Gingell the resolution (with fiscal note attached) be adopted. Discussion followed. Moved by Greimel supported by Zack to amend the resolution as follows: NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners establish a Defined Contribution plan for part-time non-eligible employees who choose to participate in it in lieu of paying into Social Security. BE IT FURTHER RESOLVED that for those employees who choose to participate, Oakland County will contribute 1.3% of part-time non-eligible employee's earnings into a defined contribution plan in lieu of paying 6.2% in Social Security Taxes. BE IT FURTHER RESOLVED that those part-time non-eligible employees who choose to participate contribute 6.2% into a defined contribution plan in lieu of paying 6.2% in Social Security Taxes. BE IT FURTHER RESOLVED that the employees who choose to participate will immediately be 100% vested in both the employer and employee contributions into the plan. BE IT FURTHER RESOLVED the employees who choose to participate cannot access the money invested in the plan until they are separated from County employment. BE IT FURTHER RESOLVED that the cost of Information Technology programming this change be offset from the savings from the implementation of this plan. BE IT FURTHER RESOLVED that this change will apply to all current and future part-time non- eligible employees who choose to participate effective with the adoption of this resolution or as soon thereafter as administratively feasible. Chairperson, on behalf of the Personnel Committee, I move the adoption of the foregoing resolution. Discussion followed. Vote on Greimel's amendment: AYES: Greimel, Hatchett, Nash, Spector, Woodward, Zack, Burns, Coulter, Gershenson, Gregory. (10) NAYS: Jacobsen, KowaII, Long, Middleton, Potter, Potts, Rogers, Scott, Bullard, Crawford, Douglas, Gingell, Gosselin. (13) A sufficient majority not having voted in favor, the resolution failed. Discussion followed. As a point of order Commissioner Gershenson asked Human Resources Director, Nancy Scarlet, for clarification regarding existing PTNE's. Discussion followed. Moved by Spector supported by Burns to postpone until the next regularly scheduled Board of Commissioners meeting on January 17, 2008. Discussion followed. Vote on motion to postpone: AYES: Hatchett, Nash, Spector, Woodward, Zack, Burns, Coulter, Gershenson, Gregory, Greimel. (10) NAYS: Jacobsen, KowaII, Long, Middleton, Potter, Potts, Rogers, Scott, Bullard, Crawford, Douglas, Gingell, Gosselin. (13) A sufficient majority not having voted in favor, the motion to postpone failed. Discussion followed. As a point of order Commissioner Coulter asked for clarification from Nancy Scarlet regarding the wording of the resolution. Nancy Scarlet addressed the Board and answered questions. Discussion followed. Chairperson Bill Bullard, Jr. declared a recess. Moved by Coulter supported by Burns to amend the resolution as follows: BE IT FURTHER RESOLVED that current part-time non-eligible employees will be offered the opportunity to affirmatively designate their decision to remain in Social Security. Discussion followed. Vote on Coulter's amendment: AYES: Jacobsen, KowaII, Long, Middleton, Nash, Potter, Potts, Rogers, Scott, Spector, Woodward, Zack, Bullard, Burns, Coulter, Crawford, Douglas, Gershenson, Gingell, Gosselin, Gregory, Greimel, Hatchett. (23) NAYS: None. (0) A sufficient majority having voted in favor, the amendment carried. Discussion followed. Vote on resolution, as amended: AYES: KowaII, Long, Middleton, Potter, Potts, Rogers, Scott, Bullard, Crawford, Douglas, Gingell, Gosselin, Jacobsen. (13) NAYS: Nash, Spector, Woodward, Zack, Burns, Coulter, Gershenson, Gregory, Greimel, Hatchett. (10) A sufficient majority having voted in favor, the resolution, as amended, was adopted. 0/.0 I HEREBY APTAVE THE flk?EGOING RESOLUTEVI STATE OF MICHIGAN) 4 2-11 7 COUNTY OF OAKLAND) A I, Ruth Johnson, Clerk of the County of Oakland, do hereby certify that the foregoing resol o 2 n is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on December 13, 2007, with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this 13th day of December, 2007. Ruthilleakg d'OUnty Clerk