Hollywood City outlines three retirement options for employees; choice due March 11

Dave Keller, a member of the Hollywood City manager’s office, told employees the city is offering three retirement pathways: stay in the existing defined‑benefit (DB) pension, move to a defined‑contribution plan (DC/401(a)) or elect a hybrid that combines a smaller DB benefit with a DC account. “You are all currently in what is called a defined benefit pension plan,” Keller said, then summarized how the DB formula uses a multiplier, years of service and the average of an employee’s five highest annual salaries.

Keller said the city negotiated an option structure that responds to an IRS rule requiring employees to contribute the same percentage if they stay with the same employer. For most employees the contribution rate is 8 percent of salary; Keller said that under the DC/401(a) option the city will give an 8 percent salary offset so the switch is revenue‑neutral for the employee. “If you switch to the 401, your salary goes up. You still contribute 8%,” he said.

The hybrid plan, Keller explained, reduces the DB multiplier to 1 percent but splits contributions so employees contribute 3 percent into the DC piece and 5 percent overall into the combined plan; the city will provide a 3 percent salary offset for employees who choose the hybrid. In that scenario the city also contributes 2 percent to…