Board Agenda - March 21, 2006

k. Amendment to 457 Plan Document

Presenter: Richard Matkin

Purpose: A - Request decision - closure required

Time: No time limit

Description:

This the first amendment to the District's 457 deferred compensation plan. The amendment is necessary to permit transfer contributions to the 457 deferred compensation plan from the terminating Plano ISD 90 -Day 457 FICA Alternative Plan. Recent changes in state law which now allow employees to be eligible for the Texas Teacher Retirement System (TRS) without first satisfying an eligibility waiting period have eliminated the need for the 90-Day 457 FICA Alternative Plan. A small number of participants in the 90-Day 457 Plan have balances in excess of $1,000 which is the threshold for the automatic rollover provision created by the Economic Growth and Tax Relief Reconciliation Act which requires retirement plans to directly roll over a participant's mandatory distributions in excess of $1,000. This amendment provides the District with an option to do a direct transfer from the 90-Day 457 FICA Alternative Plan to the 457 deferred compensation plan, if participants with balances in excess of $1,000 do not respond with written authorization of how to distribute their 90-Day 457 FICA Alternative Plan balance. First Amendment attached.

Recommendation:

Approval of the First Amendment to the 457 Deferred Compensation Plan Document.

Business Impact:

None

Summary:

Appendix:

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