FLINT TWP. — The township board approved a deferred compensation agreement for its on-call firefighters to allow them to save for retirement.
Also known as a 457(b) the adopted plan adds on-call firefighters as eligible participants under their current union contract.
Effective June 1, the Adoption Agreement amends an original agreement in effect since July 1, 1982, according to background provided to the board by Beth Takacs, controller.
The plan establishes who can participate and what contributions are allowed.
Governmental 457(b) plans allow employees to set aside a portion of pay before tax to be invested with a trustee selected by the employer.
The township will administrate the plan and the trustees are Equitable Life Assurance Society of New York and Pacific Life & Annuity Company of California.
Employee contributions to the deferred plan grow tax-free until withdrawn at retirement or when employment is terminated. Rollovers and transfers are allowed. On-call firefighters become eligible to enroll in the plan on the first day of the month after their hire-in date. The plan also allows a 50-plus catch-up contributions for participants close to retirement age. This provision allows them to defer a greater percentage of pay to the plan. Employers are not required to offer this provision in 457(b) plans.