Commerce City - File #: Res 2012-21

• File #: Res 2012-21
• Version: 1
• Name: 401 Retirement Resolution
• Type: Resolution
• Status: Passed
• File created: 6/13/2012
• In control: City Council
• On agenda: 6/18/2012
• Final action: 6/18/2012
• Title: RESOLUTION AMENDING A SECTION 401(a) MONEY PURCHASE PLAN OF THE CITY OF COMMERCE CITY, COLORADO IDENTIFIED AS ICMA-RC PLAN NUMBER 108677

Date	Ver.	Action By	Action	Result
6/18/2012	1	City Council	adopted	Pass

Title

RESOLUTION AMENDING A SECTION 401(a) MONEY PURCHASE PLAN OF THE CITY OF COMMERCE CITY, COLORADO IDENTIFIED AS ICMA-RC PLAN NUMBER 108677

Body

Presenter: Roger Tinklenberg

Recommended City Council Action:
Approval of the resolution.

Summary Statement:
Employees have requested the ability to obtain loans from their contributions to their 401a Plan. This ability is currently available to executive and police employees. This resolution approves the amendment of the 401a Plan for general employees granting them the ability to obtain loans from their contributions.

Next Steps: Approval of the resolution is the only step necessary for the City Council.

Expenditure Required: None

Source of Funds: N.A.

Policy Issue: None

Alternative: Do nothing.

Background Information:
Loans are capped at $50,000 and only the employee's own contributions are available as a loan source for the employee. The employee taking out the loan does risk having to pay off the entire loan balance if they leave employment with the City or else the IRS considers it an early withdrawal from the 401a Plan resulting in penalty and taxes being due to the IRS.