Agenda

Return

C. 98

To:	Board of Supervisors
From:	Ann Elliott, Human Resources Director
Date:	March 23, 2021

Contra

Costa

County

Subject:

Amendments to the County Deferred Compensation Plan (I.R.C. IRC § 457), effective 3/23/2021

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 03/23/2021

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Diane Burgis, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Salma Sadiq, 925-655-2176

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: March 23, 2021
Monica Nino, County Administrator

BY:	, Deputy

RECOMMENDATION(S):

1. ADOPT Resolution No. 2021/106 approving amendments to update and to add a ROTH Deferral Account option to the Contra Costa County Deferred Compensation Plan (I.R.C. §457), effective March 23, 2021.

2. AUTHORIZE the Human Resources Director, or designee, to take all necessary actions in implementing the County’s Deferred Compensation Plan as amended.

FISCAL IMPACT:

The program is funded through plan participant fees. There is no fiscal impact beyond overhead administration support costs which are reimbursed annually through the plan.

BACKGROUND:

The Deferred Compensation Committee voted on August 13, 2020 to add a provision to the County’s Deferred Compensation Plan (“Plan”) that allows the Plan’s participants to allocate deferrals on an after-tax basis to a Roth Elective Deferral Account.

In addition to adding a Roth Elective Deferral Account option, various other amendments have been made to the Plan to reflect recent changes in the law:

Because the SECURE Act increases the age by which some participants must take their first required minimum distribution, this age has been increased from 70½ to 72 for those participants who attain the age of 70 ½ on or after January 1, 2020.

In accordance with the SECURE Act, a new provision concerning the timing of required minimum distributions to the beneficiaries of participants who die after December 31, 2021 has been added. Under the revised requirement, distributions to most beneficiaries must be made by the end of the tenth year following the participant's date of death. However, certain categories of beneficiaries are exempt from the ten-year limitation, including a participant's spouse and minor children, a disabled beneficiary, a chronically ill beneficiary, and a beneficiary who is no more than 10 years younger than the participant. Additionally, the revised Plan waives the required minimum distribution for 2020 to the extent permitted by the CARES Act.

To ensure compliance with IRS regulations, existing language relating to required minimum distributions has been replaced with IRS model language.

The restriction under the Plan, which prevents a Plan participant who makes an emergency withdrawal from making deferrals under the Plan for six months, has been eliminated.

As authorized by the CARES Act, a provision has been added to permit the Plan Administrator to suspend repayments for a year on a Plan participant's loan that would otherwise have been due between March 27, 2020 to December 31, 2020.

As additionally authorized by the CARES Act, a provision has been added to permit coronavirus-related distributions for Plan participants affected by coronavirus and the option to recontribute any such distributions.

CONSEQUENCE OF NEGATIVE ACTION:

If this amendment is not approved, County employees will not have access to the ROTH option and the Plan will not be amended for consistency with recent updates in federal law