To: MAYOR AND CITY COUNCIL
From: DIANE STRICKFADEN, DIRECTOR OF HUMAN RESOURCES
TITLE
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APPROVE AN ADMINISTRATIVE SERVICES AGREEMENT BETWEEN THE CITY OF REDONDO BEACH AND MISSIONSQUARE RETIREMENT FOR THE ADOPTION OF A GOVERNMENTAL TAX QUALIFIED MONEY PURCHASE PLAN (401A PLAN) UNDER SECTION 401A OF THE INTERNAL REVENUE CODE
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EXECUTIVE SUMMARY
MissionSquare Retirement (MissionSquare) is the administrator of the City's five 457(b), 401a, Roth IRA and Retirement Health Savings plans. Through MissionSquare, employees are provided with opportunities to save for retirement via various investment options in accordance with IRS regulations. Currently, the City and MissionSquare administer five separate retirement plans for various groups of City employees. General rules regarding participation are outlined in the various bargaining groups' Memorandums of Understanding, as well as in the Administrative Services Agreement for each plan. At this time, staff is requesting that the Council review and consider the approval of an Administrative Services Agreement with MissionSquare to create a sixth retirement plan under Section 401a of the Internal Revenue Code.
BACKGROUND
The City has a contract with CalPERS that allows up to one year of unused sick leave to be converted to service credit when a member retires. However, when a police officer reaches thirty years of service, they have already reached their maximum benefit available from CalPERS, and the conversion of unused sick leave provides no additional benefit. In January 2025, the City Council approved an amendment to the Management and Confidential Pay Plan that would allow a Police or Fire Chief with greater than 31 years of City service to convert accrued sick leave to cash, or deposit it on a pre-tax basis into their Retirement Health Savings Account. Specifically, the Council approved allowing this conversion of accrued sick leave to be structured on a graduated basis, at up to 25% each yea...
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