The Mehlville Fire Protection District Board of Directors amended the employee pension plan for the first time since 1989 at its meeting Sept. 8.
Chief Financial Officer Brian Bond said when the plan was adopted it restricted employee contribution types to pre-tax deferrals because of the way the adoption agreement was filled out. Employees would receive tax-breaks under that plan, but when the money was withdrawn later in life it would be taxable income.
The district’s new plan, which was unanimously approved by the board, includes a Roth option, giving employees the opportunity to pay taxes on contributions right away versus in retirement.
“It would provide individuals who believe they’ll be in a higher tax bracket to be able to avoid those taxes,” Bond said.
Bond said the change would also promote employees to have a diversified income stream. They would have social security income, and taxable and non-taxable incomes.