A statement made at the Paonia Town Council that the town has been out of compliance for 10 years concerning the employees' retirement plan may have been over-stated. The town may have been out of compliance since 2009 to 2013.
If the town is indeed out of compliance, it may be assessed fines.
Currently, the town has their retirement plan with Dreyfus. The town contributes five percent of each qualified employee's pay into Dreyfus. The employee chooses which Dreyfus fund to invest in. With the present Dreyfus plan, the employees can't contribute, only the employer.
The town wants the employees to be able to contribute to their own retirement fund.
"We want to move to a plan that allows both [employee and employer contributions]," Cindy Jones, Paonia finance officer stated on April 10.
The plan documents with Dreyfus have not been updated by the town with the Internal Revenue Service (IRS) since 2002.
"Dreyfus does not have very good customer service or assistance. They don't provide much assistance to the employer that's contributing the funds. They also don't have much assistance for the employees," Jones said. "[Due to a] lack of communication, when the IRS changed their rules, new plan documents were required. Nobody here ever knew that."
In 2009, the IRS made significant changes to plan documents and increased what could be done with the plan. The town should have resubmitted the plan documents. "That never happened," Jones said.
Jones has documentation that she has been working on fixing the problem since she learned three to four months ago that the town was out of compliance. It's not an easy fix, she said. Attorneys and advisers will need to be involved besides just the town council approving the fix.
"I talked to the accountants today, and as long as we are working to get it fixed, we are okay," Jones said.
The town council on April 9 voted to table switching to Mutual of Omaha as the retirement fund provider until they have more information.
Jones wants to switch to a new plan with the fixes rather than make the fixes with Dreyfus and then have all the attorney fees once again if the council agrees to move the plan to Mutual of Omaha.
The matter is on the April 23 council agenda under unfinished business.blog comments powered by Disqus