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Council delays decision on proposed 2% 401(k) employer match pending URS clarification
Summary
Pleasant Grove staff proposed a 2% city employer match to employee 401(k) contributions to aid retention; the council directed staff to verify vesting and plan mechanics with Utah Retirement Systems (URS) and tabled the item for further information.
City staff presented a proposal to offer a 2% employer match on employee 401(k) contributions during the Aug. 5 Pleasant Grove City Council work session, citing survey responses—particularly from public-safety employees—that showed interest in a match to help retention.
Staff described a model in which employees could begin receiving the match after completing the city’s probationary period (six months for most employees; one year for public-safety staff) rather than using a graded vesting schedule. Members raised questions about whether Utah Retirement Systems (URS) or the plan administrator would allow employer-match amounts to be withdrawn or forfeited if an employee left prior to a vesting threshold.
Council members said they wanted clarity on whether URS or the selected plan provider can implement a vesting schedule or another mechanism that would allow the city to recover employer-match contributions if an employee leaves before a defined period. Staff requested time to confirm the technical and legal options with URS and the plan administrator and recommended tabling the proposal until those answers are obtained.
The council directed staff to return the item on Aug. 19 with firm answers from URS and draft language for any vesting or probationary provisions. No formal vote to adopt a 401(k) match was taken on Aug. 5.
Key details discussed at the work session: - Proposed employer match: 2% of employee contributions (presented as a starting point used by other cities). - Proposed access mechanism: make the city match available after employees complete existing probationary periods (six months generally; one year for public safety) rather than immediate payment. - Unresolved issue: whether URS or the plan administrator supports a graded vesting schedule or another mechanism to recover employer contributions if an employee leaves before a stated period.
Staff emphasized the need to follow URS guidance and to prepare draft ordinance or administrative language before final approval.
