Manila council looks at employee retirement program
Nancy Lewis, account executive of the retirement services division of CitiStreet Associates, addressed the Manila City Council in a special called meeting Monday, Oct. 4.
Mayor Clifford Veach has been researching possible retirement programs for city employees. During the July meeting Councilman Dwight Booth discussed the possibility of the city contributing to a retirement plan for city employees.
Mayor Veach introduced Ms. Lewis who gave a presentation on plan options available through her company. She informed the council that Citigroup and CitiStreet is the second largest record keeper in the United States.
"Arkansas Municipal League did a comparison, and CitiStreet came out ahead," Lewis said.
Arkansas CitiStreet clients include the Arkansas Municipal League, Cabot, Camden, Conway, El Dorado, Forrest City, Fort Smith, Paragould Water, Searcy, Sherwood, Bald Knob, Bentonville, Bryant, Cherokee Village, Conway, and Damascus.
She explained the options to the city and employees and the flexibility by offering the 401a and 457b plans.
"How much you match and who participates is totally up to the city," Lewis said. "You can offer both plans in conjunction. I can tell you that participation rate is higher when the city does a matching plan."
She discussed the different investing options and ways employees can access their retirement accounts.
The employees have the control on how they choose to invest the funds.
Lewis told the council once an employees are fully vested, if they quit, retire or are disabled under the age of 59-1/2 they can take all of their money out without the 10 percent penalty. They will have to pay taxes, but not the penalty. She also explained employees would be eligible for a hardship withdrawal in cases of medical expenses, tax liens to government, etc.
She said if the council decides to go with the retirement program, she would sign up each employee and discuss with them all of the options available. She briefly mentioned a sideline whole life insurance plan that will be available to employees.
"It is not term. They can take it with them and it does build cash value," Lewis said. "That (to enroll in the insurance) would be an employee decision."
Lewis said she also does financial planning with the employees at no charge to them or the city.
Councilman Gaylon Gammill asked if the council decides to go with the plan, how long would it take to get the program going.
"Generally, four to six weeks," Lewis said.
Mayor Veach showed Lewis the amount each employee has in his or her city savings plan. The city deposits $50 a month into a savings account for employee retirement. He asked if the money could be rolled over to the employees retirement plan with CitiStreet.
She said she would check with the legal department to see if that could be done.
The council will study the information and discuss it at the next meeting. If the council decides to go with the retirement program, city employees could be enrolled at the first of the year.
Mayor Veach said it sounds like a positive program.
"We will just have to get into it and decide how much we want to contribute," Veach said.
In other business, the council members had no objections to Veach's request that city employees be off for the Columbus Day holiday on Monday.
The council went into executive session for 45 minutes for employee consideration and possible disciplinary action. When they came out, Mayor Veach announced there was a lot of discussion but no action was taken.