TO: AC Transit Board of Directors
FROM: Salvador Llamas, General Manager/Chief Executive Officer
SUBJECT: Deferred Compensation Plan Committee
ACTION ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider adoption of Resolution 25-025 to create a Deferred Compensation Plan Committee to oversee the District's existing Deferred Compensation Plan.
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - High-Performing Workforce
Initiative - Employee Recruitment, Training and Retention
The District's deferred compensation plan is an important benefit for employees to help save for their retirement as a complement to their pension. Having a formal governance structure is a best practice that helps the District meet its fiduciary duty as the plan sponsor. The Committee composed of participants also helps ensure that administrative and investment decisions are reflective of participant views.
BUDGETARY/FISCAL IMPACT:
The deferred compensation plan expenses are currently paid by the participants, the only direct cost to the District is the staff time required to administer the Committee and any plan consultants.
BACKGROUND/RATIONALE:
The District first established a deferred compensation plan (also known as a defined contribution plan) under Internal Revenue Service code section 457(b) in 1979 as a benefit for employees that allows them to save for retirement in addition to the existing defined benefit pension plan. The deferred compensation plan is also known as a defined contribution (DC) plan, as opposed to pension plans which are also known as defined benefit (DB) plans. The deferred compensation plan is a complement to the pension, allowing employees to supplement their pension payments in retirement. The 457(b) deferred compensation plan is essentially the government agency version of the 401(k) plans offered by private employers.
In October 2024 staff brought a briefing item to explain the...
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