Comparison of Plan Features

 

Defined Benefit Plan

Defined Contribution Plan

City Pension Contribution

Amount determined by actuary (not individually owned)

11.7%

Employee Pension Contribution

9.7% (pre-tax)

7.7% (pre-tax)

City Disability Contribution

0.3%

0.3%

Employee Disability Contribution

0.3% (pre-tax)

0.3% (pre-tax)

Investment Decisions

Made by Pension Board of Trustees

Made by Individual Employee

Vesting Schedule

100% vested at end of 5 years

25% vested at end of 2 years
50% vested at end of 3 years
75% vested at end of 4 years
100% vested at end of 5 years

Portability

 If not vested when employment ends, may transfer employee-only contributions (no earnings) to another qualified plan pre-tax or take as taxable income.

May request a check for the full amount minus 20% for IRS-this ends participation in the plan.

After vested, may receive pension benefit at age 65

Can transfer all vested monies at the Vesting Schedule rate (including earnings) to another qualified plan pre-tax or take as taxable income.

Benefit Receipt

Benefit amount varies for each individual and is determined by retirement age & service requirements, e.g., 50% benefit at age 55 with 20 years service or 80% benefit with 32 years service (any age)

Employee controls amount and timing of funds distribution after employment ends (in accordance with Internal Revenue Code provisions)

Survivor Benefits

Eligible survivor(s) will receive 75% benefit in accordance with plan provisions

Survivor(s) inherit all remaining funds.