Title
Report regarding a resolution approving an amendment to the Executive Management Compensation Plan regarding employee contributions to the Medical After Retirement Account. (Leah Lockhart, Human Resources Director)
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RECOMMENDATION
Recommendation
Adopt a resolution approving an amendment to the Executive Management Compensation Plan regarding employee contributions to the Medical After Retirement Account (“MARA”)
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BACKGROUND/DISCUSSION
The City of South San Francisco maintains a Health Reimbursement Arrangement “HRA” plan, also known as a Medical After Retirement Account (“MARA”), for all full-time and regular part-time employees. This plan allows employees to accumulate earnings on a tax-free basis in a trust during their working years to pay for qualified post-retirement health benefits as allowed under the Internal Revenue Code. The City contributes one and one-half percent (1.5%) of salary to this plan for employees who were hired after April 24, 2010, as such employees are not eligible for the defined benefit retiree health plan offered to employees hired before this date. The plan also allows the City to establish mandatory employee contributions. Unlike other deferred compensation plans such as a 457(b), employees may not elect to make voluntary contributions to an HRA plan on an individual basis. Mandatory employee contributions must be consistent among employees or a defined group or class of employees (such as an employee bargaining unit.) Contributions may also be tiered by date of hire so long as a logical grouping of employees is established. The mandatory employee contributions for each of the City’s employee bargaining units vary and are memorialized within the applicable memorandum of understanding (“MOU”) or compensation plan.
On August 13, 2025, the City Council approved the Executive Management Compensation Plan for the period of July 1, 2025, through June 30, 2027, which covers compensation and benefit provisions for d...
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