Title
A Resolution for the Adoption of a 457(b) Deferred Compensation Plan
PURPOSE: To expand the Town’s retirement benefits by offering a second voluntary savings option, enhancing employee financial wellness and retirement preparedness. This plan complements the existing 401(k), giving employees more flexibility and access to resources for long-term planning, including early withdrawals without penalty.
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Department
DEPARTMENT: Human Resources
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Council Direction
COUNCIL DIRECTION:
___ Race/Equity ____ Climate _X___ Comprehensive Plan ____Other
Council Direction Statement
This item supports Chapter 10, Human Resources Goal 2.
2. Research, review, and recommend competitive and cost-effective benefits to attract and retain highly qualified staff.
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Information
INFORMATION: The North Carolina 457(b) Plan is a supplemental retirement savings plan administered by the North Carolina Department of State Treasurer and made available exclusively to public employees whose employers elect to offer it. By adopting this resolution, the Town will expand its retirement benefit offerings, providing employees with a second voluntary savings vehicle in addition to the existing NC 401(k) plan. Like the 401(k), the 457(b) allows employees to contribute pre-tax or Roth (after-tax) dollars toward retirement, but it also includes unique features that make it an attractive and flexible option for long-term financial planning.
One key advantage of the 457(b) plan is that it imposes no early withdrawal penalties, offering greater access to funds in the event of unforeseen life circumstances or early retirement-an important consideration for public employees. The plan is also administered by Empower, the same provider that manages the Town’s current 401(k) plan, which allows for seamless coordination, a familiar user experience, and simplified plan oversight. Adoption of the NC 457(b) Plan reinforces the Town’s commitment to supporting employee financial wellness by offering more choices to prepare for a secure retirement
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Fiscal and Staff Impact
FISCAL IMPACT: There is no financial impact on the Town by adding the NC 457 plan. Employees contributions are voluntary.
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Recommendation
RECOMMENDATION: Staff recommends that Council approve the resolution.
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