Town passes NYS Deferred Compensation Plan resolution

The Town Board passed a resolution on Thursday, June 19, to adopt the New York State Deferred Compensation Plan for town employees. Deferred compensation, according to www.investorwords.com, is “An arrangement in which a portion of an employee’s income is paid out at a date after which that income is actually earned. Examples of deferred compensation include pensions, retirement plans and stock options. The primary benefit of most deferred compensation is the deferral of tax.”Town Bookkeeper Lorna Sherman told the Town Board at its June 19 meeting the town can opt to adopt the state’s plan and none of the employees have to join. Employees can also decide to join at a later time, as there is no deadline for doing so. She said deferred compensation was similar to an IRA.Town Supervisor John Merwin praised the plan and said deferred compensation is “an excellent way for people to save money.”“It lowers the tax because it’s a pretax,” said Sherman. “The good thing is you can choose any amount you want; you can choose 5 percent, 10 percent, or whatever you want. And it’s voluntary participation for all town employees, and it encourages employees to make continued careers with the town of North East [as it] provides for their retirement.”“That would be a good thing for some of them,” agreed Merwin.According to the resolution prepared by Attorney to the Town Warren Replansky, “the purpose of the plan is to encourage employees to make and continue careers with the town of North East by providing eligible employes with a convenient and tax-favored method of saving on a regular and long-term basis and thereby provide for their retirement.”The Town Board then passed the resolution unanimously.