Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Employee Benefits topic
No spam. Unsubscribe anytime.
Supervisors shorten vesting period for non-uniform employee retirement plan
Summary
The board approved reducing the defined-contribution plan vesting period from 10 years to five years with a phased vesting schedule, making current and future non-uniform employees eligible for accelerated employer-portion vesting.
Lower Gwynedd Township supervisors voted July 23 to revise the vesting schedule for the township’s defined-contribution (401a-style) retirement plan for non-uniform employees, shortening the vesting period from 10 years to five years.
Staff explained that the 10-year vesting period was originally adopted to mirror the closed traditional pension’s timeline but is now longer than typical private-sector defined-contribution plans. The Finance Director and investment-advisory committee recommended reducing the vesting to five years, with no vesting in year one and a 25% increase in vesting each year from year two through year five.
According to staff, the change would apply to employees currently in the defined-contribution plan as well as future hires. Staff noted only a small number of current employees were at or approaching the original 10-year mark.
A supervisor moved to adopt the revision (Resolution 2024-??); the motion was seconded and carried. Board members thanked staff for their analysis and said the change is meant to support employee retention and fairness between plan types.
Next steps: staff will implement the revised vesting schedule administratively and notify affected employees.
