City of Anaheim

The City of Anaheim offers a 401(a) and a 457(b). City employees are also covered by the California Public Employees’ Retirement System—widely known as CalPERS—defined benefit pension plan.

The CalPERS plan serves as the core plan, but Anaheim also offers a 457(b) plan for all of its employees, says Janice Garcia, deferred compensation manager for the city. The 457(b) is meant to supplement retirees’ CalPERS pension and make up the difference between that and what the person earned while working. Employer contributions to CalPERS range from 7.75% to 26.65% of income depending on the employee’s membership group.

The 457(b) plan is voluntary and funded entirely by employee contributions, Garcia says. Both full-time and part-time employees are eligible to participate regardless of their years of service.

For employees making $181,734 or more per year, Anaheim offers a 401(a) plan. This enables those whose contributions to the pension are capped by California law to also come closer to income replacement in retirement. The 401(a) is funded primarily by the city, but participants may elect to contribute between 1% and 5%, a choice that is irrevocable.

Garcia explains that defined-contribution-plan automatic enrollment is not permitted under California law, so “our challenge really is increasing engagement and enrollment.” She says the city’s wellness provider, Vitality, offers gift card incentives to employees for enrollment or making an increase in their contributions. Anaheim also offers three or four webinars and one in-person workshop each month; these provide education on topics such as living in retirement, estate planning and saving for children’s college education.

Khristin Vargas, benefits manager for the City of Anaheim, says, “We prioritize financial wellness, understanding its significance in fostering a healthier, more productive and engaged workforce.”

Vargas notes that Anaheim won the Financial Wellness Olympics Challenge, an award issued by the National Association of Government Defined Contribution Administrators, in 2022, and has been invited by NAGDCA to speak at its events, as a case study on improving employees’ financial wellness.

“This collaboration has significantly boosted employee engagement and fostered a culture of responsibility toward retirement planning,” Vargas says.

For another benefit employees can rely on, Anaheim offers a retirement health savings plan from MissionSquare. Contributions are made by both the employee and the employer at negotiated rates that vary by employee group and are tax advantaged for the saver. An RHS account contributes to the overall financial security of participants by helping to fund their health expenses in retirement.

—Paul Mulholland