HomeMy WebLinkAboutAgenda - 05-11-1999 - 4Orange County
Board of Commissioners
Action Agenda
Item No.
Action Agenda Item Abstract
Meeting Date: May 11,1999
Subject: Employee Pay and Benefits - Follow Up Report on 401(k) Plan
Department: Personnel
Public Hearing: (Y/N) No
Attachment(s): Information Contact:
1 - "Pay Proposal' from October 13, 1998 Elaine Holmes, Personnel Director
Employee Compensation Work Session Telephone Numbers: - - ext. 2550
2 - 401(k) Plan Information Updated from Hillsborough 732 -8181
October 1998 Pay and Benefits Report Chapel Hill 968 -4501
3- State 401(k) Plan letter confirming options Durham 688 -7331
4 - 401(k) Plan Options and Cost Estimates for Mebane 227 -2031
1999 -2000
Purpose: To receive an updated, comprehensive report on the State 401(k) plan and
consider County contribution options for 1999 -00, as requested by the Board
in the April 21 employee pay and benefits work session.
Background: On April 21, 1999 the Board held a work session on employee compensation
for 1999 -00. In that work session, the Board reviewed the planned pay and
benefits components for 1999 -00 from its October 13, 1998 work session,
including the plan to implement a County 401(k) Plan contribution effective
July 1, 1999.
In the April 21 work session, the Board reaffirmed its desire to implement a
401(k) contribution but wished to revisit the:
❑ Previous Board discussion related to the type of contribution and
contribution amount, and
❑ 401(k) Plan information generally, including types of contribution
options available to the County.
Previous Discussion
In preparation for the October 13, 1998 work session, the Board received a
comprehensive pay and benefits report. This included an extensive benefits
review and 401(k) Plan information. In support of the Board's discussion of
employee pay and benefits at the October 13 work session, then Board Chair
Margaret Brown presented a "Pay Proposal" (Attachment 1) for the Board's
consideration. This provided under "Additions to the Pa and 2
Y d Benefits
"To be established a 401 -K plan effective July 1, 1999 — a county
match based on flat dollar amount of $15.00 er a
P Pay period"
In the October 13 work session the Board discussed the option of a County
match as compared to a non matching, across -the -board contribution. At the
conclusion of that work session, the Board adopted Commissioner Brown's
Proposal including the $15 per pay period amount with the modification to
not make a decision about the in range increase amount until a decision was
made about the cost of living increase for 1999. Staff was not clear about
the end result of the Board's discussion of the matching vs. non - matching
401(k) contribution. The draft minutes for the October 13 work session
reflect a non - matching contribution.
In presenting the October 13 planned pay and benefits components for the
Board's review and confirmation or clarification, staff presented the $15
across - the -board contribution 401(k) County contribution as the last
understanding of the October 13 discussion outcome for the Board's
confirmation or clarification.
Updated 401(k) Plan Information
Attachment 2 to this abstract is the updated 401(k) information from the
October 1998 Pay and Benefits Report. The updates include:
❑ Current numbers of employees voluntarily participating in the 401(k)
plan, including salary level information, and
❑ Current numbers of other local government employers participating in
the 401(k) and the types of plans that they have (matching as compared
to non - matching, percentage of salary as compared to flat dollar
contribution).
As part of the updating process, staff met again with the State 401(k) Plan
representative and reviewed in detail the types of 401(k) contribution
options available to the County. This indicated no change from the options
previously identified in the report. Attachment 3 is a letter from the 401(k)
Plan representative confirming the options available.
Financial Impact: Attachment 4 shows the various 401(k) Plan options and updated cost
estimates for 1999 -00. In the April 21 work session, the Board said that it
wished to consider options within the estimated cost range of the $15 per
pay period across the board amount so the options shown reflect these
amounts. This amount of funds also will be available within the Manager's
Recommended Budget for 1999 -00. At this time, the Board is not being
asked to make a decision on funding or to appropriate funds. These
decisions will be part of the final budget deliberations in June.
Recommendation(s): The Manager recommends the Board receive the 401(k) Plan information
and provide direction to staff on the type of plan option it wishes to pursue
for 1999 -00.
H:\e\99401abs
May 2, 1999
4
ATTACHMENT 1
PAY PROPOSAL
1. Desuspend the current payplan and adopt the 1997 -98 plan for this year.
2. Starting July 1, 1999 - adopt a 2 -year employee pay plan and benefits
package including the following:
* COLA/Market based oav _ see page 15 of the notebook
* Addressing the salary progression schedule - after the first year a 2.5%
or equivalent to 1/2 step increase will be given to all employees that rate
effective or higher on the WPPR (replaces 1.25 salary progression)
* Meritorious Service Awards _ exceptional (highest) and superior 2 -tier award
program)
Exceptional - employees would receive a meritorious award of $1500 in
a lump sum payment, not to be attached to base pay. Exceptional is those
employees who excel in 100% of their job duties.
* Superior - employees would receive a meritorious award of $750 in a
lump sum payment, not to be attached to base pay. Superior is those
employees who consistently exceed job expectations at least 95% of the
time.
Employees rated at this level will receive a certificate of recognition from the
Board of County Commissioners as recommended by the County Manager and
the County Manager may also recommend other recognition for these
employees
* Longevity - remains at the current level
* COLA - determined annually by the Board of Commissioners
ADDITIONS TO THE PAY AND BENEFIT PLAN
to be established a 401 -K plan, effective July 1, 1999 - a county match
based on flat dollar amount of $15.00 per pay period - see page 67, tab
"H"
* Personal leave days - 2 days to be used as determined by employees and
approved by the department head
* Equity /Retention Fund to be used to address re- establishing equitable
salary relationships among employees in a work unit and retention - adopt
as presented in the notebook - see page 22 Tab "B°
401(k) Plan Information
1. Background
5
Attachment 2
The North Carolina legislature created the Supplemental Income Plan of North Carolina
[NC 401(k) Plan] in 1984 to offer employees a tax- deferred investment program for their
retirement. The plan is established under Section 401(k) of the Federal Internal Revenue
Code.
2. Plan Governance
The Plan is sponsored by the State of North Carolina and is governed by the Department
of the State Treasurer and the Plan's Board of Trustees. The Board is composed of
members of the Boards of Trustees for the State Retirement System and the Local
Government Employees Retirement System. The State Treasurer and the Board have
contracted with Branch Banking and Trust Company (BB &T) to administer the plan.
3. Plan Eligibility
The Plan is available to employees who are members of the State Retirement System or
the Local Government Employees Retirement System.
4. How the Plan Works
❑ An employee and/or employer makes a contribution to the plan through payroll
deduction. The contribution goes into the employee's individual 401(k) account that
is owned by the employee.
✓ An employee's contributions are pre -tax; that is, they are sheltered from Federal
and State income taxes and not subject to taxes until withdrawal.
✓ An emplo econtributions are pre -tax and also are exempt from mandatory
deductions for Social Security and Local Government Employees Retirement
System.
❑ The employee selects the investment options for the funds in his or her account from
a range of options that include bank investments or mutual funds.
❑ Funds may be withdrawn:
✓ At retirement in a variety of payout options to provide retirement income.
✓ For certain financial hardships.
✓ Through a loan provision in which employees borrow from the account and pay
back to themselves for any reason such as for medical or college expenses.
✓ At age 55 if separated from service or age 59 1/2 if still employed.
5. Benefits for the Employee
❑ Retirement income and security
❑ Tax savings
❑ Full ownership, 100% vested immediately
❑ Hardship withdrawal provisions
❑ Loan provision
6. Employee Participation
❑ One of the key purposes of an employer contribution is to encourage employee
participation in the supplemental retirement plans. This supports employees in
actively planning for retirement. The experience of the 401(k) plan has been that an
employer contribution has the effect of significantly increasing employee
participation.
❑ As of April 30, 1999, 159 Orange County general government employees participate
in the 401(k) plan by making an employee contribution. By salary grade, the
following numbers of employees make a voluntary contribution:
Salary Grade Category
Number Employees
Grades 57 -63
46
Grades 64 -70
83
Grades 71 and over
30
For the 159 general government employees making a voluntary contribution, the
average salary grade is grade 65. The average salary is $28,000. (For County
employees as a whole, the average salary grade is 65 and the average salary is about
$32,000.)
❑ As of April 30, 1999, 137 employees participate in the 457 Plan (another type of
supplemental retirement plan with some different provisions as outlined in
Attachment 1). By salary grade the following numbers of employees make a
voluntary contribution.
Salary Grade Category
Number Employees
Grades 57 -63
35
Grades 64 -70
73
Grades 71 and over
29
For these 137 employees, the average salary grade is 66 and the average salary is
about $39,000.
7. Benefits to the County
❑ An employer contribution to the 401(k) plan would support the County in recruitment
as it competes with other local government employers and private employers.
Attachment 2 shows area local governments with supplement retirement
contributions.
There are about 140,000 active plan participants state -wide. About 242 local
government employers state -wide make an employer contribution to the plan for
general government employees, including 38 counties.
❑ An employer contribution to the 401(k) has cost savings to the County over cash
payments. An employer contribution to a 401(k) plan is a declared expenditure for
public purpose and therefore exempt from FICA and Retirement contributions.
❑ An employer contribution to the 401(k) plan also would offer some disability
protection wherein employees can access money through the loan and hardship
provisions. Currently the County does not offer an employer paid disability insurance
plan. Some local government employers in the area offer short-term and/or long -term
disability coverage. Unlike making premium payments to purchase disability
insurance, money contributed to a 401(k) plan is there and available to the employee
for a variety of financial hardships.
❑ An employer contribution to the 401(k) plan would significantly increase employee
morale. It is most appreciated by employees that their employer is helping to plan for
future retirement as well as meet immediate needs such as college tuition, medical
expenses, purchase of a primary residence, or the like.
❑ An employer contribution to the 401(k) plan would offer additional incentive for
voluntary participation.
❑ An employer contribution to the 401(k) plan would support the County's efforts in
retaining qualified employees as it competes with other local government employers
and private employers.
8. Types of Employer Contributions
There are three forms in which an employer contribution may be made to the 401(k) Plan.
These are listed and described below.
a. Across the Board Contribution Option
(1) An across the board contribution is one in which the County makes a employer
paid contribution to employees without regard to whether or not the employee
makes a contribution. An across the board contribution may be a fixed percent of
salary or a flat dollar amount provided that each employee receives the same
contribution.
(2) Of the 242 local government employers who make a 401(k) contribution, 201 (83
percent) make an across the board contribution.
8
(3) With an across the board contribution, the effective date could be effective on a
retroactive or current basis.
b. Matching Option
(1) A matching option is one in which the County makes a contribution if the
employee makes a contribution. A matching contribution may be up to a
percentage of salary or a flat dollar amount provided that the employee elects to
participate by making a voluntary contribution.
(2) The 401(k) matching option is a new provision now available to all local
government employers effective January 1, 1998.
(3) Of the 242 employers, 43 (18 percent) provide for a matching option. Of the 38
counties, four provide a matching contribution.
(4) The minimum employee 401(k) Plan contribution is $10 a pay period for the 24
pay periods in which deductions are made. This would be the minimum required
for any matching option.
(5) The match may be dollar for dollar up to specified limit such as two percent of
salary or it may be that any employee contribution triggers the full employer
match such as if the employee contributes $10 a pay period then the employer
contributes two percent of salary.
(6) A matching option must be effective on a prospective basis and may not be
retroactive.
(7) The employee may not match by designating a percentage of his or her salary for
the contribution. The match must designate a specific dollar amount each pay
.period. This means any increase in earnings such as overtime pay or other
requires the employee do a change form in order to maximize any match which is
based on a percentage of salary.
(8) Several examples of employer matches are listed below:
Craven County matches voluntary employee contributions up to 2 percent of
salary.
Harnett County matches a 1 percent employee contribution with a 1 percent match
(employee has to contribute 1 percent to get the match).
Scotland County matches 3.75 percent of salary if the employee contributes
anything.
9
c. Combination of Across the Board contribution and a Match
(1) The 401 (k) Plan advises the two options also may be combined. Each part of the
combination must apply to all employees and the amounts may not vary.
(2) An example would be if an employer made a $10 a pay period across the board
contribution and a match of up to one percent of salary. A combination may not
be in a form such as $20 or one percent of salary, whichever is higher.
(3) At present, five employers have a combination plan. One of these is a county.
Rutherford County has a two percent across the board contribution and a one
percent match.
9. Impacts (Pros /Cons) of Across the Board Contribution
a. Benefits more the lower salaried employee who may have more difficulty making a
matching contribution.
b. Is more competitive in the labor market since this is the most frequent practice in
local government.
c. Could be effective retroactive to July 1, 1999, based on a Board decision with budget
adoption on June 21, 1999.
d. Encourages employee 401(k) participation but not as strongly as a match.
10. Impacts (Pros /Cons) Matching Option
a. Strongly encourages employee participation in the 401(k) plan.
b. Higher salaried employees may be more able to take advantage of the match than
lower salaried employees.
c. Must be effective on a prospective basis. Based on a Board decision on June 21, 1999
with budget adoption, could be effective August 23, 1999 with the September 3
payday.
d. More difficult for employees to maximize the employer contribution (if the employer
contribution is a percentage of salary) because a change form must be completed by
the employee with every change in salary.
e. Is more complex to communicate and requires significantly more administrative time
than an across the board contribution.
11. Impacts (Pros /Cons) of Flat Dollar Amount Vs a Percentage of Salary
a. A flat dollar amount provides a relative greater percentage increase to a lower salaried
employee. The following chart shows the impact of a $10, $15 and $20 a pay period
contribution as a percentage of salary.*
lU
*Based the matching option for 24 pay periods.
b. While a flat dollar amount serves the objective of addressing the lower salaried
employees, it does not serve as well the objective of competing with the other
employers in the market who offer a 401(k) Plan contribution as a percentage of
salary. Of the 201 employers who make an across the Board contribution, nine or
four percent make a flat dollar amount contribution and 192 or 96 percent make a
percentage of salary contribution. One county makes a flat dollar amount
contribution.
12. Waiting Periods
The County could make a 401(k) plan contribution or match effective with the hire date
or could impose a waiting of up to six months from the hire date.
13. Employers Making 401(k) Contributions or Matches
Attachment 3 is a list provided by the 401(k) Plan of governmental employers who make
401(k) Plan contributions.
14. Types of Options and Cost
The separate chart provided with the agenda abstract shows various 401(k) contribution
and matching options and the estimated County costs.
15. Benefits as a Percent of Salary
If the County adopted a one percent of salary 401(k) plan contribution for general
government employees, the County's benefits as a percent of salaries would change from
the current 25.8 percent to 26.6 percent.
K\health/401 info
May 6, 1999
Amount Per Pay Period Yields
At a salary of
$10
($240 yr)
$15
($360 yr)
$20
($480 yr)
$17,561 (pay plan
minimum)
1.37%
2.05 %
2.73%
$25,000
.96%
1.44%
1.92%
$32,000
.75%
1.13%
1.50%
$50,000
.48%
.72%
.96%
*Based the matching option for 24 pay periods.
b. While a flat dollar amount serves the objective of addressing the lower salaried
employees, it does not serve as well the objective of competing with the other
employers in the market who offer a 401(k) Plan contribution as a percentage of
salary. Of the 201 employers who make an across the Board contribution, nine or
four percent make a flat dollar amount contribution and 192 or 96 percent make a
percentage of salary contribution. One county makes a flat dollar amount
contribution.
12. Waiting Periods
The County could make a 401(k) plan contribution or match effective with the hire date
or could impose a waiting of up to six months from the hire date.
13. Employers Making 401(k) Contributions or Matches
Attachment 3 is a list provided by the 401(k) Plan of governmental employers who make
401(k) Plan contributions.
14. Types of Options and Cost
The separate chart provided with the agenda abstract shows various 401(k) contribution
and matching options and the estimated County costs.
15. Benefits as a Percent of Salary
If the County adopted a one percent of salary 401(k) plan contribution for general
government employees, the County's benefits as a percent of salaries would change from
the current 25.8 percent to 26.6 percent.
K\health/401 info
May 6, 1999
Attachment 1
State 401(k) Plan and 457 Deferred Compensation Plan
Comparison Summary
Benefits 401(k) Plan 457 Deferred
Compensation
Contributions
Minimum Monthly
Maximum Annual
Withdrawal Terms
Penalties
Transfers
Investment Options
Number of Transfers
Allowed
Loans
$20.00
20% of annual gross salary
up to $10,000
- Termination
- Retirement
- Death
- Age 59'/2 (regardless of
employment status)
- Separation from service after
Reaching age 55
- Disability
- Financial Hardships:
Medical Expenses
College Tuition
Eviction
Foreclosure
Purchase of primary residence
Some withdrawals prior to age
59'/2 may be subject to 10% IRS*
Penalty.
A 401(k) plan is transferable to
Another 401(k) plan, IRA or
Another qualified plan.
10 (includes 7 Mutual Funds & 3
Bank Investment Contracts -
BIC)
Unlimited transfers allowed
(5 year BIC — Penalty of 3 months
of interest if moved before
maturity)
Yes - loans for any reason such as
college education, home
improvement or other. The
employee borrows from his or her
account and pays him or herself
back with interest.
$20.00
25% of annual taxable salary
up to $8,000
- Termination
- Retirement (regardless of age)
- Death
- Unforeseeable emergencies
which cannot be budgeted
for as determined by the plan
(catastrophic events)
Withdrawals without a 10% IRS
penalty under above listed terms
regardless of age.
A 457 plan is transferable only to
other 457 plans.
49 (includes 48 Mutual Funds &
Fixed Account)
Mutual Funds
- Unlimited same day transfers
Allowed with no penalty
Fixed Accounts Only
- No more than twice per year
- May not exceed 20% of
account value
- with no penalty
None
11
Benefits
401(k) Plan
457 Deferred
Compensation
Fees:
Not subject to retirement
Not subject to retirement
Administrative
None
None
Asset Fee
0.30% annually on all accounts
0.70 — 0.90% annually on Mutual
N.C. Governmental employees
Fund options
Loan Fee
$60.00 for each loan
Not applicable
Catch Up Option
Calendar year catch up available.
Calendar year catch up available.
Contributions are to be made to all
Also
general employees exactly the
An individual can contribute up to
same.
$15,000 per year for three years
prior to retirement eligibility.
Universal Life and
County may elect no waiting
Any waiting period as the County
Term Life Insurance
No
Yes (premiums are paid with pre-
month waiting period.
tax dollars)
Additional Information Related to Employer Contributions
FICA
Not subject to FICA taxes
Subject to FICA taxes
Retirement
Not subject to retirement
Not subject to retirement
Contributions
Markets
Private Sector nationwide and
Public Service nationwide
N.C. Governmental employees
Governmental employees only
only
Contributions
Fixed contributions amounts:
Contributions may be made to all
Contributions are to be made to all
employees on the same basis or
general employees exactly the
on a tiered basis based on
same.
longevity, job classification,
salary, etc.
Waiting Periods
County may elect no waiting
Any waiting period as the County
period or may impose up to a six
decides.
month waiting period.
Amount of
May be a percentage or may be a
May be a percentage or may be a
Contributions
flat dollar amount
flat dollar amount
Matching Options
Yes, available.
Yes, available.
and/or combinations
12
13
Pros /Cons Summary - 401(k) Plan As Compared to 457*
1. Employer contributions to 401(k) plan are not subject to Social Security. Thus
County cost for the 401(k) contribution is about 7.65 percent less.
2. Several 401(k) plan provisions are stronger:
❑ A loan provision for any reason is available. This enables the employee to access
funds without withdrawal and does not require the employee demonstrate
hardship. Such loans may be used for college education, home improvement or
any other reason. The employee borrows from himself or herself and pays the
money back to him or herself with interest. Among other things, this may provide
some disability protection.
❑ Account fees paid by the employee are lower.
❑ There is greater portability.
3. Other local government employers with whom the County competes primarily offer
the 401(k) Plan.
4. The 457 Plan permits approved withdrawals without an IRS penalty. Some 401(k)
Plan withdrawals may involve an IRS penalty. [A 401(k) loan does not involve an
IRS penalty.] The terms to qualify for withdrawal are significantly more stringent
under the 457 than the 401(k).
5. The 457 plan permits different employer contribution amounts to different employee
groups such as by service or salary. The 401(k) Plan does not.
6. The 457 plan offers more investment options.
* Differences primarily result from the different sections of the Internal Revenue Code
[401(k) or 45 7] under which the plans operate.
(K:\Benefits\Misc \401 &457.Doc)
May 4, 1999
14
Attachment 2
Area Local Government Employers
Supplemental Retirement Contributions
Employer
Amount
Match?
Alamance County
2%
No
Carrboro
3%
No
Chapel Hill
5%
No
Chatham County
2%
No
Durham City
5%
No
Durham County
5 %*
No
Hillsborough
4.5%
No
Orange Water and Sewer Authority
Years Service Pay Period Amt **
0 -4 0
4 -9 $20
10 -14 $30
15+ $40
No
Person County
3%
No
Raleigh
Up to 1.75% **
Yes
Wake County
5%
No
Orange County
-
-
* To 401(k) or 457 plan
* *To 457 plan
A -B Tech Comm Coll
$25 /mon
Aberdeen
5%
Ahoskie
5%
Alamance - Caswell Mental Health 3%
Alamance County
2%
Angier
5%
Anson County
2%
Apex(town)
4.5%
Archdale
5%
Ashe County
2%
Asheville
3 %
Ashevile Reg. Airport
4%
Bald Head Island
5%
Beaufort (town)
1%
Belhaven
2%
Belmont
5%
Benson
3.5%
Bessemer City
2%
Bethel
2%
Beulaville
5%
Biltmore Forest
3%
Black Mountain
3%
Blue Ridge Center
2%
Boiling Spring Lakes
5%
Boiling Springs
5%
Brunswick County
2%
Buncombe County
5%
Bunc County Air Pollution
5%
Burke - Catawba Confinement
2%
Burke County
2%
Burke County Dept. Social Services 2%
Burke County Health Dept.
2%
Burlington
5%
Burlington Graham ABC
5%
Cabarrus County
5%
Cabarrus Health Alliance
5%
Cape Fear COG
1%
Carrboro
3%
Carteret "County
2%
Cary
5%
Caswell Beach
5%
Centralina COG
2.5 %
Chapel Hill
5%
Chatham County
2%
Cher yville
5%
Clayton
2%
Cleveland County
5%
Coastal Regional Solid Waste Mgmt. 5%
Columbus (town)
$10 x 52
Concord
2.5%
Concord ABC
2.5%
Conover
5%
Comelius
5%
Craven County
2%
Craven County Airport Auth.
2%
Creedmoor
4%
Cumberland County ABC
5%
Currituck County
4.52%
Dallas
2%
Davidson (town)
5%
Davie County
2%
Fletcher
5%
Franklin County
3%
Fuquay -Varina
3%
Gamer
3%
Gaston (town)
2%
Gibsonville
4%
Graham (city)
5%
Greensboro ABC
5%
Greenville
$25 x 26
Greenville Housing Authority
$25 x 26
Greenville Utilities
$25 x 26
Grover
5%
Guilford College Vol. Fire Dept..
5%
Guilford County
5%
Guilford Fire Dist 13
2%
Harnett County
1%
Havelock
5%
Haw River
4.67%
Henderson (city)
4%
Hertford (town)
2%
High Point ABC
5%
Hillsborough
4.5%
Holly Springs
2.5%
Hudson
1%
Huntersvilie
5%
iredell County
5%
Jamestown
2%
Johnston County
5%
Johnston County ABC
5%
Johnston/Smith Library
5%
Jonesville
4.67%
Kenly
2%
Kill Devil Hills
3%
King
5%
Kings Mountain
2%
Kinston
1.5%
Knightdale
2%
Laurinburg
5%
Lee County
3%
Lee -Hamett Mental Health
10%
Lenoir County
5%
Lexington
2%
Lillington
5%
Uncointon Housing Auth
3%
Long Beach
1.51%
Louisburg
5%
Louisburg ABC
5%
Lowell
2.5%
Madison (town)
3%
Madison - Mayodan Recreation
5%
Manteo
5%
Marion
3.46%
Marshville
3.5%
Matthews
5%
Mayodan
5%
McAdenville
5%
McDowell County $10.35
x 24
Mecklenburg County ABC
6%
Metro Sewage Dist
1.5%
Mid- Carolina COG
2%
Middlesex
3.5%
EMPLOYER NAME
RATE:
NC Ctr for Applied Tech for Applied Tech
1.5%
North Topsail Beach
3 %,
North Wilkesboro
2.5%
Northwest Piedmont COG
1%
Ocean Isle Beach
5 %
Person County
3 %,
Pilot Mountain
5 %,
.Pine Knoll Shores
5 %,
Pinecroft -Sedge Fire
2 %,
Pinehurst
5 %,
Pineville
5 %
Pitt - Greenville VisWConv. $25 X 26
Pitt County
4.58%
Plymouth Housing Auth.
1 %
Raeford
5 %
Reidsville
3 %
Reidsville ABC
1 %
River Bend
5 %,
Robbins
2 %,
Robeson County
2%
Rockingham (city)
2.5%
Rocky Mount
4%
Rowan County
3%
Rutherford County
3%
Sampson County
2.53%
Sanford
3%
Sawmills
1%
Scotland County
3.75%
Scotland County ABC
2.25%
Scotland Neck
1.5%
Selma
5 %,
Shaliotte
2%
Shelby
5%
Siler City
2.5%
Simpson(town)
5%
Smithfield
4.47%
Smoky Mountain Center
5%
South Brunswick Water & Sewage
5%
Southern Pines
5%
Southern Shores
5%
Southport
5%
Spindale
5%
Spring Hope
5%
Stanley (town)
5%
Statesville ABC
5%
Stedman
5 %,
Stokes County
1 %
Sunset Beach
10%
Surry- Yadkin Mental Health
1 %
Tarboro
3%
Taylorsville
5%
Topsail Beach
5%
Trent Woods
5%
Triangle J COG
3%
Union County
5%
Vass
5%
Wadesboro
3%
Wake County
5%
Wake County ABC
5%
Wake Forest (town)
3.5%
Wallace
1 %
EMPLOYER NAME RATE EMPLOYER NAME RATE EMPLOYER NAME RATE
Davie Soil and Water District
2%
Mocksville
3%
Dobson
4%
Monroe
5%
Dobson ABC
4%
Monroe Housing Authority
5%
Dunn
2%
Montreat
5%
Dunn ABC Board
2%
Moore County
2.6%
Durham (city)
5%
Moore County ABC
2.5%
Durham County
5%
Moore Water & Sewer Authority
8.8%
Edgecombe County
1 %
Mooresville
5%
Edgecombe County ABC
5%
Morehead City
5%
Edge -Nash Mental Health
2.5%
Mount Holly
2.5%
Electri -Cities of N.C., Inc.
2.5%
Mount Olive
4%
Elizabeth City
5%
Murfreesboro
1.5%
Elizabethtown
2%
Nags Head
3%
Elkin
3%
Nash County
5%
Elon College
5%
Nash County ABC
5%
Emerald isle
2%
Nashville
3%
Erwin
2.5%
New Bern
6%
Eureka
5%
New Hanover ABC
5%
Farmville
2.75%
NC Assn of County Commissioners
3%
Walnut Cove
1%
Washington (city)
$10 X 26
Washington County
3%
Water and Sewer of Cabarrus
4%
Wayne County ABC
$20 /mon
Weaverville
5%
Whispering Pines
5%
White Lake
2%
Wilson (city)
4.25%
Wilson County
2%
Wilson County ABC
2%
Windsor
5%
Winterville
5%
Woodfin
2.5%
Wrightsville Beach
2%
Yaupon Beach
4%
Zebulon
3.52%
I 01ii
17
MAY - 51999
ORANGE COUNTY PERSONNEL
April 30, 1999
Ms. Elaine Holmes
Personnel Director
Orange County
208 S. Cameron St.
Hillsborough, NC 27278
Re: NC 401(k) Employer Contributions
Dear Elaine:
ATTACHMENT 3
Branch Banking & Trust Co.
State 401(k) Services
P.O. Box 29541
Raleigh, NC 27626 -0541
(919) 716 -9200
1- 800 - 722 -4015
To assist the County with its research of supplemental retirement contributions, I
have confirmed below the options available to the County through the NC 401(k)
Plan as I have discussed them with you:
1., Across the board contributions based on a percentage of compensation or
on a per capita basis (i.e., flat dollar amount). If allocated as a percentage of
compensation, the percentage must be the same for all eligible employees.
Likewise, if allocated on a per capita basis, the dollar amount of employer
contribution must be the same for all eligible employees.
2. Matching contributions based on a percentage of compensation or on a per
capita basis. Again, the percentage* or dollar amount must be the same for
all eligible employees.
3. A combination of across the board contribution and matching
contribution ,for example, a $10 per pay period across the board
contribution and a match of up to one percent of salary. Another example
would be a one percent across the board and a one percent match. Once
again, the percentage or dollar amount must be the same for all eligible
employees.
Access your NC 401(k) Plan account via the 401(k) Action Line at 1- 800 - 228 -6777 or the Web site at www.bbandt.com /nc401 k.
18
There is not a.provision in the NC 401(k) Plan that will permit employers to make
employer contributions on a tiered basis or at varying rates tied to salary level,
longevity, job classification or other factors.
Elaine, thank you for your interest in providing this benefit to your employees.
Please let me know if you need any additional information.
Sincerely,
Jennifer O. Willis
Regional Sales Manager
cc: Beverly Berling, Vice President, BB &T
19
401(k) Options
Examples and Estimated Cost Attachment 4
401(k) Options
1999 -00
Estimated Cost
Full Year
Estimated Cost
A. Across the Board Percent
Contribution (Effective 7 -1 -99)
1%
$
176,360
$
176,360
1.25%
$
220,450
$
220,450
B. Across the Board Flat Dollar
Contribution (Effective 7 -1 -99)
$10
$
138,580
$
138,580
$15
$
207,870
$
207,870
C. County Match Based on Percent
(Effective 8- 23 -99)
1%
$
106,833
$
122,095
1.25%
$
133,542
$
152,619
2%
$
213,667
$
244,191
D. County Match Based on Flat
Dollar Amount (Effective 8- 23 -99)
$10
'$
84,000
$
96,000
$15
$
126,000
$
144,000
$20
$
168,000
$
192,000
E. Combination of Across the Board
and Match (Effective 8- 23 -99)
$10 across the board and $10 match*
$
195,930
$
234,580
*The employee would have to contribute the full $10 per pay period for the match because $10 is the
required minimum employee contribution.
Notes: The across the board contribution is estimated at 100 percent participation for 26 payrolls. The
match is estimated at 75 percent participation for the 24 payrolls in which employee deductions are made.
Under the 401(k) Plan, an across the board contribution may be made with a retroactive effective date. A
match may be effective only with a prospective effective date. Based on a June 21, 1999 Board decision,
an across the board contribution could be effective July 1, 1999 and a match could be effective August 23,
1999.
As requested by the Board, options shown are within the same approximate cost range as the cost of $15
across the board contribution for 1999 -00.
(K:\Health\13enef000.x1s)5 /6/99