City of Milwaukee - File #: 061049

• File #: 061049
• Version: 0
• Type: Charter Ordinance
• Status: Passed
• File created: 11/14/2006
• In control: FINANCE & PERSONNEL COMMITTEE
• Final action: 12/12/2006
• Effective date: 3/5/2007
• Title: A charter ordinance relating to the investment of funds and administration of the deferred compensation plan for employees of the city, and making technical changes.
• Sponsors: THE CHAIR
• Indexes: DEFERRED COMPENSATION PLAN, RETIREMENT BENEFITS

Date	Ver.	Action By	Action	Result	Tally
1/3/2007	0	CITY CLERK	PUBLISHED
12/18/2006	0	MAYOR	SIGNED
12/12/2006	0	COMMON COUNCIL	PASSED	Pass	15:0
11/29/2006	0	FINANCE & PERSONNEL COMMITTEE	RECOMMENDED FOR PASSAGE; Minutes note: Appearances by: Assist. City Attorney Ellen Tangen William C. Thompson, Exec. Director Milwaukee Deferred Compensation Plan	Pass	4:0
11/22/2006	0	FINANCE & PERSONNEL COMMITTEE	HEARING NOTICES SENT
11/16/2006	0	FINANCE & PERSONNEL COMMITTEE	REFERRED TO
11/14/2006	0	COMMON COUNCIL	ASSIGNED TO

Number
061049
Version
ORIGINAL
Reference

Sponsor
THE CHAIR
Title
A charter ordinance relating to the investment of funds and administration of the deferred compensation plan for employees of the city, and making technical changes.
Sections
5-50-3 am
5-50-4 am
Analysis
This ordinance clarifies the limits of fiduciary responsibilities with respect to participant (city employee)-directed investments in the city’s “Section 457 Deferred Compensation Plan.” Failure of a fiduciary to make prudent investments on behalf of a beneficiary may result in liability.

Participant-directed investment plans qualify for “safe harbor” protection when they meet the requirements of s. 404(c) of the federal Employee Retirement Income Security Act (ERISA). These include a choice of 3 or more alternative investments, each with different risk characteristics which, when combined, provide diversified risk normally appropriate to a participant’s portfolio.

This ordinance amends adopts the federal requirements for “safe harbor.’ Upon passage, the amendments will also be reflected in changes to the “Master Plan Document for the City of Milwaukee Section 457 Deferred Compensation Plan.”

Body
The Mayor and Common Council of the City of Milwaukee do ordain as follows:

Part 1. Section 5-50-3 and 4 of the charter is amended to read:

5-50. Deferred Compensation Plan.

3. INVESTMENT OF FUNDS. All amounts of compensation deferred under the plan, all property and rights purchased with such amounts, and all income attributable to such amounts, property of rights shall be held in trust for the exclusive benefit of participants and beneficiaries as provided in s. 457 of the Internal Revenue Code. For purposes of this subsection, custodial accounts and contracts described in s. 457(g) of the Internal Revenue Code shall be treated as trusts. Such compensation, property, rights and income shall be invested at the discretion of the board in the manner authorized for deferred compen...