Agenda - 09-05-2013 - 7a - Laserfiche WebLink

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11 SUPPLEMENTAL RETIREMENT CONTRIBUTIONS Orange County contributes $715 per year ($27.50 per pay period) to either a 401(k) or a 457(b) Supplemental Retirement Account for each permanent employee. Employees can designate one of three Plans: Prudential 401(k), ICMA -RC 457, or Nationwide 457 for the County's contribution and may elect to make a payroll deduction up to legal limits. The $715 per employee is approximately $543,000 over twelve months. The County does not pay any Social Security /Medicare taxes on these contributions, for a payroll savings of $41,000 over twelve months. Effective July 1, 2013, the County matched employee contributions for up to an additional $1,200 per year ($50 semi - monthly). This had a significant impact on employee contributions because many employees recognized the value in doubling their investment. The chart below shows employee contributions to all supplemental retirement plans from 2010 (when the contribution was suspended) to present. Because the County does not pay Social Security or Medicare tax on the majority of these contributions, there is a savings of approximately $60,000 annually in payroll taxes. Employee contributions to the Roth 401(k), totaling $105,000 annually, are taxed at the time of the payroll deduction, and do not provide any tax savings to either the employee or the County. ow Monthly Employee Contribution to All Plans Annualized Employee Contribution to All Plans 2010 $32,203 $386,436 2011 $37,638 $451,656 2012 $38,360 $460.320 2013 $73,678 $884,136 Because the County does not pay Social Security or Medicare tax on the majority of these contributions, there is a savings of approximately $60,000 annually in payroll taxes. Employee contributions to the Roth 401(k), totaling $105,000 annually, are taxed at the time of the payroll deduction, and do not provide any tax savings to either the employee or the County. ow