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c. Combination of Across the Board contribution and a Match <br />(1) The 401 (k) Plan advises the two options also may be combined. Each part of the <br />combination must apply to all employees and the amounts may not vary. <br />(2) An example would be if an employer made a $10 a pay period across the board <br />contribution and a match of up to one percent of salary. A combination may not <br />be in a form such as $20 or one percent of salary, whichever is higher. <br />(3) At present, five employers have a combination plan. One of these is a county. <br />Rutherford County has a two percent across the board contribution and a one <br />percent match. <br />9. Impacts (Pros/Cons) of Across the Board Contribution <br />a. Benefits more the lower salaried employee who may have more difficulty making a <br />matching contribution. <br />b. Is more competitive in the labor market since this is the most frequent practice in <br />local government. <br />c. Could be effective retroactive to July 1, 1999, based on a Board decision with budget <br />adoption on June 21, 1999. <br />d. Encourages employee 401(k) participation but not as strongly as a match. <br />10. Impacts (Pros/Cons) Matching Option <br />a. Strongly encourages employee participation in the 401(k) plan. <br />b. Higher salaried employees may be more able to take advantage of the match than <br />lower salaried employees. <br />c. Must be effective on a prospective basis. Based on a Board decision on June 21, 1999 <br />with budget adoption, could be effective August 23, 1999 with the September 3 <br />PaY~Y• <br />d. More difficult for employees to maximize the employer contribution (if the employer <br />contribution is a percentage of salary) because a change form must be completed by <br />the employee with every change in salary. <br />e. Is more complex to communicate and requires significantly more administrative time <br />than an across the boazd contribution. <br />11. Impacts (Pros/Cons) of Flat Dollar Amount Vs a Percentage of Salary <br />14 <br />a. A flat dollaz amount provides a relative greater percentage increase to a lower salaried <br />employee. The following chart shows the impact of a $10, $15 and $20 a pay period <br />contribution as a percentage of salary.* <br />