A news release said the new plan became effective May 7, 2010, and will initially be available to new hires. The county is working with the Internal Revenue Service to give the approximately 15,000 current employees the opportunity to likewise select the new plan.
According to the announcement, the new plan includes:
- A DB plan featuring a lower benefit formula and lower requisite employee contribution, which TIAA-CREF said will cut future county funding liability and increase employee take-home pay, and
- An optional 401(a) plan for employee contributions administered by TIAA-CREF, featuring a dollar-for-dollar match on employee contributions up to 2% of employee salary.
The plan will also feature lifetime income options as part of its investment menu and non-commissioned, investment advice for employees.
“The Orange County hybrid DB/DC pension plan represents an innovative new approach to meeting both the county’s and our employees’ long-term financial objectives,” said Orange County Supervisor Bill Campbell, in the news release. “The new plan will help reduce the funding risk for the county by establishing a stable, fixed employer contribution for participants in the new plan. Further, it will help improve the predictability of our retirement budget, while helping employees gather adequate retirement saving and providing lifetime income options.”