To: Sonoma County Board of Supervisors
Department or Agency Name(s): Retirement
Staff Name and Phone Number: Cristina Hess, 707-565-8113
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Amend Regulations for Required Minimum Distributions
End
Recommended Action:
Recommended action
Adopt the resolution approving amendments to the Sonoma County Employees’ Retirement Association’s Regulation to update Required Minimum Distribution rules to conform with Internal Revenue Code 401(a)(9) requirements as enacted by Secure 2.0.
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Executive Summary:
California Government Code section 31525 allows the Retirement Board to make regulations consistent with the County Employee’s Retirement Law of 1937. It further says that the regulations become effective when approved by the Board of Supervisors.
On August 24, 2023, the Sonoma County Employees’ Retirement Association (SCERA) Board voted to approve the amendments to its Regulations for Internal Revenue Code (IRC) 401(a)(9) Minimum Distributions. The vote was 8 yays and 1 absence.
On the advice of tax counsel SCERA amended the existing Regulation to be consistent with the current Federal Internal Revenue Code requirements.
Discussion:
The SCERA Board of Retirement is comprised of nine members, plus one alternative retiree member. Four of the trustees are appointed by the Sonoma County Board of Supervisors, five are elected by SCERA’s membership (two general, one safety, one retired, one retired alternate), and the County Treasurer is elected by the general public. With the exception of the County Treasurer, Board members serve three-year terms of office with no limits on the number of terms that can be served.
California Government Code section 31525 allows the Retirement Board to make regulations consistent with the County Employee’s Retirement Law of 1937. It further says that the regulations become effective when approved by the Board of Supervisors.
The changes to SCERA’s Regulations for Required Minimum Distribution Rules include minor grammatical changes as well as implementation of the new languages as required by the IRC to comply with Secure 2.0 Act of 2022. Specifically, the required beginning date for minimum distributions no longer starts when an individual turns 70 1/2 years old. It has been replaced by the term “applicable age” as required by the Internal Revenue Code section 401(a)(9). As noted in the attached Required Minimum Distribution Rules document, “Applicable Age” means: (i) age seventy and one-half (70 ½) for Members who were born before July 1, 1949; (ii) age seventy-two (72) for Members who were born after June 30, 1949; (iii) age seventy-three (73) for Members who were born on or after January 1, 1951; and (iv) effective January 1, 2033, Applicable Age shall have the meaning set forth in Code Section 401(a)(9)(C)(v), as amended from time to time. Additionally, effective January 1, 2024, and subject to further guidelines from the IRS a member’s surviving Spouse may elect to have his or her age used in place of the Member’s age when determining the applicable age.
Strategic Plan:
N/A
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
None
Fiscal Summary
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FY23-24 Adopted |
FY24-25 Projected |
FY25-26 Projected |
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Narrative Explanation of Fiscal Impacts:
There is no fiscal impact of approving and adopting this regulation.
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Narrative Explanation of Staffing Impacts (If Required):
There are no staffing impacts.
Attachments:
Resolution
SCERA Regulation for IRC Code 401(a)(9)-Required Minimum Distribution Rules
SCERA Regulation for IRC Code 401(a)(9)-Required Minimum Distribution Rules (Redline Version)
Related Items “On File” with the Clerk of the Board:
N/A