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Council approves updates to MissionSquare deferred-compensation plan to comply with SECURE Acts
Summary
Council voted to approve amendments to the city's MissionSquare (457(b)) deferred-compensation plan to conform with the SECURE Act 1 and 2, adding Roth options, expanded in-service and hardship withdrawals and updated military service provisions; changes take effect Jan. 1, 2026 for qualifying employees.
The Sanford City Council voted to approve staff-recommended amendments to the city's deferred-compensation plan (MissionSquare/457(b)) to bring the plan into compliance with the federal SECURE Act 1 and SECURE Act 2.
City Manager Steve Buck summarized the changes, saying the amendments add Roth-account features and expand in-service withdrawal rules (lowering the earliest in-service withdrawal age to 59.5), introduce new emergency and hardship options (including a self-certified $10,000 domestic abuse withdrawal and a $1,000 emergency expense withdrawal once per year), and update military service provisions. Buck said there will be no increase in employer contribution amounts as a result of the amendments.
"So the summation of those are the new amendments would take effect 01/01/2026 for all permanent and full time employees," Buck said.
Councilor Jonathan moved to approve the amendments and the motion was seconded. During roll call, members on the remote meeting recorded affirmative votes and the council approved the amendments.
Why it matters: The changes update benefit-administration rules to match federal law and add new withdrawal options for employees that may affect retirement planning and short-term emergency access to funds. The amendments apply only to qualifying employees under the city's personnel policies and employment agreements.
What comes next: Implementation steps include updating plan documents, notifying eligible employees and ensuring HR and payroll systems reflect the Jan. 1, 2026 effective date.
