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Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: February 14, 2023 Title: MERS- Police
Command HCSP employee
and employer contribution
rates
Submitted By: Kenneth D. Grant Department: Finance
Brief Summary: The City seeks to adopt the Police Command’s Health Care Saving Program contribution
rates as negotiated per their contract.
Detailed Summary & Background:
The Finance Department wants permission to sign the Health Care Savings Plan Agreement to
reduce the employee contribution rate for Police Command as follows:
A police command defined benefit employee shall effective January 1, 2023:
e Police Command employees who are eligible to receive retiree healthcare benefits
will contribute 3 % of their Medicare taxable wages towards the Health Care
Savings program with no employer contribution
e Police Command employees who are not eligible to receive retiree healthcare
benefits will contribute 6% of their Medicare taxable wages towards the Health Care
Savings program with a 6% employer contribution.
Goal/Focus Area/Action Item Addressed: Sustainability in financial practices
Amount Requested: Amount Budgeted:
Fund(s) or Account(s): Fund(s) or Account(s):
Recommended Motion: To approve the required employee and employer Health Care Saving
Program contributions.
Approvals: Guest(s) Invited / Presenting
Immediate Division Head [] Information Technology L]
Other Division Heads [-] Communication CT Yes (J
Legal Review CI No i
For City Clerk Use Only:
Commission Action:
MERS Health Care Savings Program @ MERS
Participation Agreement Municipal Employees’ Retirement System
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I. PARTICIPATING EMPLOYER
City of Muskegon
Employer Name:
(Name of municipality or court)
Municipality Number: ©1!6 Division Number: 200406
Il. EFFECTIVE DATE
1. If this is the initial Participation Agreement relating to the MERS Health Care Savings Program
for this covered group, the effective date of the program here adopted shall be:
(Date)
2. If this is an amendment and restatement of an existing Participation Agreement relating to
the MERS Health Care Savings Program for this covered group, the effective date of this
amendment and restatement shall be effective: 91/01/2023 .
(Date)
Note: You only need to mark changes to your plan throughout the remainder of this Agreement.
II. COVERED EMPLOYEE GROUPS
A participating Employer may cover all of its employee groups, bargaining units, or personnel/
employee classifications (“Covered Group”) in the same Health Care Savings Program plan.
Contributions shall be made on the same basis within each Covered Group according to the
associated HCSP Contribution Addendum, remitted as directed by the Program Administrator.
This agreement encompasses the following group(s):
Police Command
(Name/s of HCSP covered group/s)
Note: To maintain the tax-favored status of the employer’s Health Care Savings Program
and to comply with federal law, the Employer may not provide coverage or benefit levels to
highly-compensated employees that are not provided to non highly-compensated employees.
IV. ELIGIBLE EMPLOYEES
Only Employees of a “municipality” may be covered by the Health Care Savings Program Participation
Agreement. Independent contractors may not participate in the Health Care Savings Program.
The Employer shall provide MERS with the name, address, Social Security Number, and date of birth
for each Eligible Employee, as defined by the Participation Agreement.
V. EMPLOYER CONTRIBUTIONS TO THE HEALTH CARE SAVINGS PROGRAM
The Participating Employer hereby elects to make contributions to the Trust. Contributions shall be
made on the same basis within each Covered Group specified in this agreement, and remitted to
MERS as directed by the employer, to be credited to the individual accounts of Eligible Employees
according to the associated Contribution Addendum.
Form MD-170 (version 2022-01-27) Page 1 of 3
MERS Health Gare Savings Program Participation Agreement
Eeeees BS SRS SBR IE BA EA Sea a AUS AE SVN NL SG aR SRT AE TORN REBOOT Ci Cet NESS aI
Vesting Cycle For Basic Employer Contributions Only. The employer contributions identified
in this Participation Agreement are subject to the following vesting cycle (where vesting is
different, separate participation agreement must be completed).
oO Immediate Vesting upon Participation
O Cliff Vesting: The participant is 100% vested upon year(s).
(Stated years)
i) Graded Vesting Percentage per year of service: Employers can select the percentage of
vesting with the corresponding years of service:
Years of Service Percent Vested
100%
FORFEITURE PROVISION. Upon separation from service with the Employer prior to meeting
the required vesting schedule set out above or in the event a Participant dies without
Dependent(s) and/or a named Beneficiary, a Participant’s account assets shall (where forfeiture
is different, separate participation agreement must be completed):
Check only one:
O Remain in the HCSP sub-trust to be reallocated among all Plan participants equally
a) Remain in the HCSP sub-trust to be used to offset future Employer Contributions
O Be transferred to the Retiree Health Funding Vehicle (“RHFV”)
Vi. MODIFICATION OF THE TERMS OF THE PARTICIPATION AGREEMENT
If a Participating Employer desires to amend any of its previous elections contained in this
Participation Agreement, including attachments, the Governing Body by official action must adopt
a new Participation Agreement and forward it to the Board for approval. The amendment of the new
Participation Agreement is not effective until approved by the Board and other procedures required by
the Trust Agreement and Plan Document have been implemented.
Vil. APPOINTING MERS AS THE PROGRAM ADMINISTRATOR
The Employer hereby agrees to the provisions of the MERS Health Care Savings Program Plan
Document (“Plan Document”) and Trust Agreement and appoints MERS as the Program Administrator
pursuant to the terms and conditions of the Plan Document and Trust Agreement. The Employer also
agrees that in the event of any conflict between the Plan Document or the Trust Agreement and this
Participation Agreement, the Plan Document and Trust Agreement control.
Vill. FEES AND EXPENSES
Employer acknowledges that investment selection and associated participant fees and operating
expenses are established and charged by MERS as set forth in the Investment Fund and Fee
Summary sheets available at www.mersofmich.com and may be amended by MERS.
Form MD-170 (version 2022-01-27) Page 2 of 3
MERS Health Care Savings Program Participation Agreement
IX. STATE LAW
To the extent not preempted by federal law, this agreement shall be interpreted in accordance with
Michigan law.
X. TERMINATION OF THE PARTICIPATION AGREEMENT
This Participation Agreement may be terminated only in accordance with the Trust Agreement.
Xl. EXECUTION BY GOVERNING BODY OF MUNICIPALITY
The foregoing Participation Agreement is hereby adopted and approved on
the th @ayop_fcbrua ie ,20_2°_ at the official meeting held
by City of Muskegon
(Name : approving employer)
‘Name: Kenneth 9 Geant
Title: ‘ Finanw DP, Rechor
Received and Approved by the Municipal Employees’ Retirement System of Michigan
(Authorized MERS signatory)
Form MD-170 (version 2022-01-27) Page 3 of 3
Contribution Addendum for
MERS Health Care Savings Program (HCSP)
This is an Addendum to the Participation Agreement completed by City of Muskegon
Name of Participating Employer
for Police Command Employees who are eligible to receive a retiree healthcare plan of 300406
Covered Employee Group Division Code
The Addendum modifies the MERS Health Care Savings Program Participation Agreement. Please complete
this addendum for each contribution structure associated with the covered employee group.
Check one or more (A or B, C and/or D):
A. Employer Contributions for Retirees / Former Employees. Employer contributions may be
made according to any frequency. Identify below the contribution formula or amount that will
apply to all in this covered group. Note: /f this contribution is selected, Sections B, C, and D do
not apply.
Contribution structure (specify $ or %):
For active employees, please check one or more below (B, C, and/or D).
B.O Basic Employer (Before-Tax) Contributions. Before-tax employer contributions may be
made as a percentage of salary and/or by a specified dollar amount. Identify below the basic
employer contribution formula to be applied to the covered groups within the Health Care
Savings Program identified in this addendum.
Contribution structure (specify $ or % and, if a %, include the basis for that contribution.
For example: Employer will contribute 3% of base wages):
N/A
c.
4 Mandatory Salary Reduction (Before-Tax) Contributions. Before-tax Employer Contributions
shall be made that represent a mandatory salary reduction resulting from collective bargaining
or the establishment of a personnel policy. These reductions may be made as a percentage of
salary or a specific dollar amount.
Contribution structure (specify $ or % and, if a %, include the basis for that contribution.
For example: Employees will contribute 3% of base wages):
3% of Medicare taxable wages
- Page1 of 2
D.[] Mandatory Leave Conversion (Before-Tax) Contributions. Before-tax Employer
Contributions shall be made that represent a mandatory conversion of accrued leave including,
but not limited to vacation, holiday, sick leave, or severance amounts otherwise paid out, to.a
cash contribution. These contributions may be calculated as a percentage of accrued leave or
a specific dollar amount representing the accrued leave. Leave conversions may be made on
an annual basis or at separation from service, or at such other time as the Employer indicates. ~
(Note: The leave conversion program shall not permit employees the option of receiving cash in
lieu of the employer contribution.)
0 Check here if the covered employee group has the option to direct any/all of the
leave conversion lump sum to an existing 457 program.
Check one or more:
im As of ; % of
Annual date or X weeks before termination Percentage Type of Leave Conversion (sick,
must be contributed to the HGSP. vacation, etc.)
O As of ; % of
Annual date or X weeks before termination Percentage Type of Leave Conversion (sick,
must be contributed to the HCSP. vacation, eto.)
i) As of , % of
Annual date or X weeks before termination Perceniage Type of Leave Conversion (sick,
must be contributed to the HCSP. vacation, etc.)
O As of ; % of
Annual date or X weeks before termination Percentage Type of Leave Conversion (sick,
must be contributed to the HCSP, vacation, etc.)
Post-Tax Employee Contributions. Post-tax Employee Contributions made by Eligible Employees
within the Covered Group(s) shall be remitted as directed by the Program Administrator, to be credited
to the individual accounts of Eligible Employees. All Employee Contributions must be remitted to
MERS along with the Participation Report.
Page 2 of 2
Contribution Addendum for
MERS Health Care Savings Program (HCSP) Monica Employee Ratroment
Syn
This is an Addendum to the Participation Agreement completed by City of Muskegon
Name of Participating Employer
for Police Command Employees who are NOT eligible to receive a retiree healthcare plan of 300406
Covered Employee Group Division Code
The Addendum modifies the MERS Health Care Savings Program Participation Agreement. Please complete
this addendum for each contribution structure associated with the covered employee group.
Check one or more (A or B, C and/or D):
A.C) Employer Contributions for Retirees / Former Employees. Employer contributions may be
made according to any frequency. Identify below the contribution formula or amount that will
apply to all in this covered group. Note: /f this contribution is selected, Sections B, C, and D do
not apply.
Contribution structure (specify $ or %):
For active employees, please check one or more below (B, C, and/or D).
B.¥) Basic Employer (Before-Tax) Contributions. Before-tax employer contributions may be
made as a percentage of salary and/or by a specified dollar amount. Identify below the basic
employer contribution formula to be applied to the covered groups within the Health Care
Savings Program identified in this addendum.
Contribution structure (specify $ or % and, if a %, include the basis for that contribution.
For example: Employer will contribute 3% of base wages):
6% of Medicare taxable wages
c.¥] Mandatory Salary Reduction (Before-Tax) Contributions. Before-tax Employer Contributions
shall be made that represent a mandatory salary reduction resulting from collective bargaining
or the establishment of a personnel policy. These reductions may be made as a percentage of
salary or a specific dollar amount.
Contribution structure (specify $ or % and, if a %, include the basis for that contribution.
For example: Employees will contribute 3% of base wages):
6% of Medicare taxable wages
73 (ver Page 1 of 2
Contribution Addendum for MERS Health Care Savings Program (HCSP)
D.1] Mandatory Leave Conversion (Before-Tax) Contributions. Before-tax Employer
Contributions shall be made that represent a mandatory conversion of accrued leave including,
but not limited to vacation, holiday, sick leave, or severance amounts otherwise paid out, to a
cash contribution. These contributions may be calculated as a percentage of accrued leave or
a specific dollar amount representing the accrued leave. Leave conversions may be made on
an annual basis or at separation from service, or at such other time as the Employer indicates.
(Note: The leave conversion program shall not permit employees the option of receiving cash in
lieu of the employer contribution.)
C] Check here if the covered employee group has the option to direct any/all of the
leave conversion lump sum to an existing 457 program.
Check one or more:
a) As of ; % of
Annual date or X weeks before termination Percentage Type of Leave Conversion (sick,
must be contributed to the HCSP. vacation, etc.)
i) As of ; % of
Annual date or X weeks before termination Percentage Type of Leave Conversion (sick,
must be contributed to the HCSP. vacation, etc.)
C As of , % of
Annual date or X weeks before termination Percentage Type of Leave Conversion (sick,
must be contributed to the HCSP, vacation, eto.)
) As of ; % of
Annual date or X weeks before termination Percentage Type of Leave Conversion (sick,
must be contributed to the HOSP. vacation, etc.)
Post-Tax Employee Contributions. Post-tax Employee Contributions made by Eligible Employees
within the Covered Group(s) shall be remitted as directed by the Program Administrator, to be credited
to the individual accounts of Eligible Employees. All Employee Contributions must be remitted to
MERS along with the Participation Report.
Form MD-173 (version 2021-08-20) Page2 of 2
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