Impact Award

Employer Name:

Ottawa County Central Dispatch

MERS Programs:

  • Defined Contribution Plan
  • 457 Program

MERS Resources:

Download this case study (PDF)

Results

Increased Interest: There has been a noticeable increase in employee interest in understanding the retirement plan.

  • Higher Employer Contributions: Employer contributions to employees’ 401 accounts have increased by 20% based on the new formula.
  • Enhanced Employee Engagement: The new plan design has made the retirement benefits more attractive, potentially aiding in the recruitment and retention of 911 employees.

Situation

The employee population is predominantly younger, with many working in their first full-time, benefited job. Recruitment and retention of 911 employees is a significant challenge both nationally and within Michigan.

Process

The Authority initiated a project to redesign and enhance their Defined Contribution Plan, implemented on January 1, 2024. The goal was to improve the retirement plan’s attractiveness. The previous plan offered a maximum 5% employer match, 3% of which was post-tax. With assistance from MERS personnel, a new plan design was developed to increase the employer match by 1% and fully leverage pre-tax options.

Strategy

The redesigned plan includes the following components:

  • Mandatory Contributions: Employer and employee each make a mandatory 2% pre-tax contribution to the employee’s Defined Contribution account.
  • Voluntary Contributions: Voluntary employee contributions of 1%-4% to the employee’s 457 account receive a matching employer contribution to the Defined Contribution account.
  • Additional Contributions: Employees can make additional voluntary contributions to the 457 account either as a dollar amount or a percentage of pay, with the employer contributing an additional 15% (union) or 20% (non-union) of the employee’s contribution to the Defined Contribution account.

This strategy provides employees with the flexibility to adjust both the rate and method of their contributions to the 457 plan, whether pre-tax or Roth. By leveraging pre-tax contributions and employer matches, employees can maximize their retirement savings and enhance the overall value of their retirement benefits.