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City of San Leandro <br />Meeting Date: September 7, 2021 <br />Staff Report <br />Agenda Section:File Number:21-512 CONSENT CALENDAR <br />Agenda Number:8.M. <br />TO:City Council <br />FROM:Fran Robustelli <br />City Manager <br />BY:Susan Hsieh <br />Finance Director <br />FINANCE REVIEW:Susan Hsieh <br />Finance Director <br />TITLE:City of San Leandro City Council Resolution Authorizing the Amendment and <br />Restatement of the City of San Leandro 457(b) Deferred Compensation Plan to <br />Include the Roth Contribution Option <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends that the City Council adopt a resolution authorizing the amendment and <br />restatement of the City of San Leandro 457(b) Deferred Compensation Plan to reflect the <br />addition of the Roth Contribution option. <br />BACKGROUND <br />The City established a Deferred Compensation Plan (“Plan”) in 1983. The Plan has been <br />amended and restated to comply with legislative changes over the years. As stated in the plan <br />document, “the primary purpose of this Plan is to permit Employees of the Employer to enter <br />into an agreement which will provide for deferral of payment of a portion of his or her current <br />compensation until death, retirement, severance from employment, or other event, in <br />accordance with the provisions of the Code Section 457(b), with other applicable provisions of <br />the Code, and in accordance with the General Statutes of the State.” <br />The plan document must be amended to include the Roth option stated above. In the 457(b) <br />Governmental Deferred Compensation Plan, City employees are allowed to make pre-tax <br />contributions into individual retirement accounts. With the Roth Contribution option, employees <br />may elect to make after-tax contributions into individual retirement accounts. When using the <br />Roth option, plan participants contribute to their retirement accounts with after-tax dollars, and <br />their contributions and any investment earnings grow tax-free. The money they withdraw from a <br />Roth account at retirement is tax-free income, provided they are 59½ or older and held their <br />account for at least five years. <br /> <br />Please note that this new option is not an additional benefit to employees, but it will provide <br />Page 1 City of San Leandro Printed on 9/2/2021 <br />449