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Meeting Date: 10/28/2009

Title of Agenda Item: Retirement Health Savings Plan for New Employees. (R-9) (O-11)

Background: The attached staff memo provides background on the establishment of a Retirement Health Savings (RHS) Plan for employees hired after 12/31/2009.

Fiscal Note: The estimated FY2009-10 budget impact of implementing the RHS is approximately $15,000. This amount reflects the estimated Town contributions to individual employee health savings accounts. This amount will increase in future budget years as more new employees join the program. The increase in the Town contribution will eventually be off-set by a reduction in Other Post Employment Benefits (OPEB) liability. The employee contribution will be budgeted based on estimated turn-over. The Town's contribution will be reviewed as part of the annual budget process.

Recommendations: That the Council adopt the Plan Adoption Resolution, enact the Ordinance Amending Section 14-59.1 Group Medical Insurance for Retiring Employees and authorize the Town Manager to take the following steps to establish a Retirement Health Savings Plan with ICMA Retirement Corporation:

- Establish a retiree welfare benefits plan identifying the benefits available to retirees.
- Execute a plan adoption agreement that describes the details of how the plan works.
- Execute the Administrative Services Agreement for plan administration between the Town and ICMA RC.
- Make a declaration of trust establishing the legal entity to hold assets and the duties of the Town (employer) and the trustee.

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Staff Memorandum
Plan Adoption Agreement
Declaration of Trust