Number
240406
Version
ORIGINAL
Reference
210466, 231018
Sponsor
ALD. SPIKER
Title
Resolution authorizing amendments to the City of Milwaukee Deferred Compensation Plan Master Agreement to allow for emergency withdrawals, as permitted by SECURE 2.0.
Analysis
This resolution authorizes amendments to the Milwaukee Deferred Compensation Plan Master Agreement specific to allowing for emergency withdrawals, as now permitted by SECURE 2.0.
Body
Whereas, The City of Milwaukee established in s. 5-50 of the City Charter a deferred compensation plan which is an eligible deferred compensation plan under s. 457(b) of the Internal Revenue Code; and
Whereas, The plan is supervised by a board and administered pursuant to a written Master Agreement for Plan of Deferred Compensation which is amended from time to time as required by federal tax law or as deemed advisable by the Common Council; and
Whereas, On July 27, 2021, the Common Council adopted Resolution File Number 210466, authorizing an amendment to the City of Milwaukee Deferred Compensation Plan Master Agreement to permit distributions from participant rollover accounts; and
Whereas, On November 21, 2023, the Common Council adopted Resolution File Number 231018, authorizing an amendment to the City of Milwaukee Deferred Compensation Plan Master Agreement to eliminate the “first day of the month” rule, as permitted by SECURE 2.0; and
Whereas, Congress authorized two provisions of SECURE 2.0 allowing amendments to a Master Agreement for a Plan of Deferred Compensation that provide greater financial flexibility with respect to emergency withdrawals:
1) Withdrawals for certain emergency expenses, and
2) Penalty-free withdrawal from a retirement plan for an individual in a case of domestic abuse.
; and
Whereas, According to Forbes and CNBC, in 2022, nearly half of Americans could not cover an unexpected $400 expense, and 56% could not cover an unexpected $1,000 expense with savings; and
Whereas, According to the Department of Health and Human Services, there are 1.3 million victims of domestic violence yearly; and
Whereas, Studies show that nearly three out of four survivors of domestic abuse report staying with an abusive partner because they did not have the financial means to leave, and nearly half return to their abusive partner within a year of leaving because they lack money to support themselves and their children; and
Whereas, Adding the two new Plan features permitted by SECURE 2.0 will result in no additional administrative costs to the Plan; and
Whereas, The Board of the Deferred Compensation Plan wishes to amend and restate the Master Agreement, which is attached to this file, in order to allow for emergency withdrawals, as permitted by SECURE 2.0; now, therefore, be it
Resolved, by the Common Council of the City of Milwaukee, that the amendments to the Master Agreement to allow for emergency withdrawals, as permitted by SECURE 2.0, in the form attached to this file, are hereby approved, subject to any such revisions which may be necessary as approved by the City Attorney to comply with applicable law; and, be it
Further Resolved, That the proper City officers are authorized to execute the Master Agreement.
Requester
Deferred Compensation
Drafter
LRB179930-1
Tea B. Norfolk
5/24/24