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Council hears pension plan proposal; legal counsel sees no structural IRS barrier but costs and estimates drew questions
Summary
The council heard from AmRett and external counsel about a proposed supplemental pension plan. Morris, Manning & Martin counsel said he saw no legal impediment to IRS approval, but councilmembers pressed vendors for clearer cost estimates and questioned inconsistent figures on the one-page summary.
Town staff introduced representatives from AmRett and Morris, Manning & Martin to answer council questions about a proposed supplemental pension plan.
Ed Emerson, partner at Morris, Manning & Martin, said he provided legal-fee estimates for creating a plan document, seeking an IRS determination letter, reviewing vendor and trust agreements, drafting committee bylaws and providing ongoing counsel. Emerson told the council his legal estimate range to create and process the plan was $40,000–$60,000, depending on negotiation complexity, and he described typical startup and ongoing legal tasks. "I gave a range of services ... and I assume that that's the engagement of the custodian for this new plan and to establish the investment pieces," Emerson said.
Councilmembers repeatedly sought clarification about numbers on a one-page summary provided by AmRett. Several councilmembers said the summary the council received listed higher amounts than the figures Emerson described; Emerson said his estimate was a legal-only range and that AmRett, as consultant and investment adviser, may have aggregated additional costs.
Emerson also addressed IRS approval and legal viability. "I don't see any legal challenges now," he told the council, adding that the IRS determination-letter process for qualified plans of this type typically takes 12 to 16 months but that sponsors may start the plan before final IRS action.
Council members pressed for better documentation tying each line on the vendor summary to its supporting estimate. One councilmember said the sheet's bottom line—"additional annual funding $200,000 times CPI"—lacked a sourcing explanation and raised sustainability questions. Staff acknowledged multiple documents were submitted in November and that a clearer, consolidated cost breakdown would be provided to council members for follow-up.
No formal action was taken on the pension plan at the meeting; councilmembers requested written backup from AmRett and the legal team and said they would submit follow-up questions to staff.
