City proposes changes to 457(b) plan including Roth option, part‑time participation and graded vesting for new hires

Tiffany Lanford, Villa Rica’s human resources director, presented proposed amendments to the city’s 457(b) retirement plan as the city moves recordkeeping from John Hancock to Empower. Council placed the plan changes on the consent agenda for consideration at the May 13 meeting.

Lanford said the new recordkeeper offers an in‑plan Roth option, which the city does not currently provide. The proposed plan changes would:

- Add an in‑plan Roth option and allow in‑plan rollovers into a Roth; - Allow part‑time employees (working 30 hours or fewer per week) to make contributions, though they would not receive the employer match (the match remains for full‑time employees only); - Clarify the employer matching formula in the plan document (staff described the match as 50% of employee contributions up to 3%, which had been treated operationally but not written into the prior plan document); - Change vesting for employer contributions to a five‑year graded schedule (20% per year) for new hires going forward; current participants would remain fully vested under the prior immediate vesting rule; - Designate Empower as plan custodian rather than naming an individual trustee; and - Permit participant loans for hardship or emergency situations going forward.

Lanford told the council the changes are proposed now because the city is switching recordkeepers, and the transition is an appropriate moment to update plan language. She said the trustee designation shift reduces individual liability and an amended forfeiture policy would return unvested employer contributions to the plan to cover expenses or reduce employer contributions.

Council placed the item on the consent docket; formal plan amendments will be considered at the May 13 council meeting. Lanford said changes to vesting would apply only to new hires; current participants would keep their existing vesting status.