The city will change to a 401(a) retirement plan with a 457(b) supplement to accommodate voluntary employee contributions, according to The Kingsport Times-News. Leaders say the new retirement plans will give the city more predictable and stable retirement costs.
Full-time city and non-teacher employees hired after June 30, 2012, would be eligible for the retirement plans the first day of employment and would be fully vested after five years working at the city. The change will not affect current employees.
The Kingsport Times-News reports that employees will have a mandatory contribution to the 401(a) plan of 5%, which the city would match. Employees can also make voluntary contributions, and the city will match that amount up to 3%.Kingsport will implement the plan with help from Sherrill Morgan — a Kentucky-based employee benefits consultant that has advised the city in the past on its retirement plan options. The city will request outside investment firms to submit proposals for the new plans. Proposals should include a continuing education element to help ensure employees are investing properly, according to the news report.
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