Special Rules for Contributory Plans

Under contributory plans, employees are required to make contributions to the plan. To find out if you have a contributory plan please see Section 19 of the Adoption Agreement. This section will tell you whether or not your plan is a contributory plan and it will also tell you how much employees must contribute to the plan each pay period.

If your plan is contributory, it is extremely important that employee contributions be withheld from the first payroll check and be consistently withheld throughout an employee’s service at the correct rate. If employee contributions are not properly withheld the employee will not receive service credit for that particular time period. If you realize employee contributions have not properly been withheld, GMA will work with the city to help you correct the error. This generally will involve a corrective contribution plus interest. 

All employees who are covered under a contributory plan must complete a Participant Application. The participant application should be completed as part of the on-boarding process. Completing this form should be treated as a requirement for employment and does not signify an “option” to participate in the plan. If you discover that the information on the Participant Application submitted to GMEBS is incorrect please let us know as soon as possible. If the date of hire needs to be changed for any employee already enrolled please contact Joel Levy at jlevy@gacities.com.

Contributions upon Termination

If an employee made contributions to a plan and terminates employment without being vested, he or she is required to apply for a refund of contributions within 90 days of termination. Interest on the contributions will stop accruing after 90 days. It is the city’s responsibility to notify the terminated employee of this requirement and to provide the employee with the Return of Contribution Form. If the employee does not withdraw his or her contributions the money does not go to the city. Instead it will be placed in a forfeiture account and held for the employee until he or she requests a return of contributions. Because a non-vested employee is required to withdraw his or her contributions, he or she is not eligible to receive portability service with another GMEBS employer if he or she does not withdraw his or her contributions.

If an employee made contributions to a plan and terminates employment but is vested in the plan, he or she has the option but is not required to withdraw his or her contributions. If a terminated vested employee withdraws his or her contributions all service credit associated with those contributions will be forfeited. This means the former employee will not receive a retirement benefit associated with any time period(s) of employment during which employee contributions were required or associated with any period of prior service that the employee purchased.

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