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Commission approves BenCor plan to hold employees' unused leave in retirement account; non‑bargaining employees enrolled automatically
Summary
The commission voted to adopt a BenCor 401(a) plan that will receive payouts of unused leave when employees separate from county service; the plan is mandatory for participating non‑bargaining employees and allows rollovers or immediate withdrawal options at separation.
Miami‑Dade County commissioners on Feb. 11 approved a BenCor 401(a) plan to receive and hold employees’ accrued unused leave (for example, vacation or sick leave) when employees separate from county service.
Supporters said the plan gives employees a tax‑advantaged option to defer taxes on lump‑sum leave payouts, and it also produces long‑term federal tax savings for the county. Under the approved motion, non‑bargaining employees will be included in the plan automatically (the item applies immediately to non‑bargaining staff), and these funds will be invested; employees will be able to elect to roll the funds into eligible retirement accounts or to receive immediate payout. The plan’s structure was described as required by IRS rules governing 401(a) arrangements, which created the mandatory enrollment design.
Commissioners asked administration and BenCor representatives for details about opt‑out procedures, tax consequences and special‑risk employee exceptions. BenCor representatives said: (a) there are no administrative fees on the account line item; (b) underlying investment expense ratios support the service provider; (c) employees who are retirement‑age or in special‑risk classes can generally withdraw without the IRS early‑withdrawal penalty; and (d) for younger separating employees an “early‑offset” provision would preserve parity so those employees are not financially disadvantaged by the year of separation.
The vote followed substantial public and commissioner questioning about whether employees were being adequately informed and whether bargaining units should be consulted. Commissioners asked for educational outreach to employees; the mayor’s office said the item applies to non‑bargaining employees immediately and that bargaining‑unit implementation would be addressed in labor negotiations.
Why it matters: The approved plan changes how the county handles a recurring budget liability (leave payouts at separation) by creating a tax‑advantaged vehicle intended to reduce payroll‑tax costs and give separating employees more options about how to receive their leave payouts. Commissioners asked staff to provide outreach materials for employees before implementation.
