HomeMy WebLinkAbout2002-09• RESOLUTION 2002-09
AUTHORIZATION TO PICK UP THE EMPLOYEE'S CONTRIBUTION
TO VRS FOR PAST SERVICE CREDIT
UNDER §414(h) OF THE INTERNAL REVENUE CODE
WHEREAS, the Town of Pulaski desires to provide its employees with tax deferral
pursuant to §414(h) of the Internal Revenue Code with respect to their member
contributions to the Virginia Retirement System, the State Police Officers Retirement
System and the Judicial Retirement System (collectively referred to as VRS) for the
permissible purchase of past service credit by picking up member contributions to the
VRS; and,
WHEREAS, the pick up is authorized under Virginia Code Sections 51.1-142.I and 51.1-
143 . C; and,
WHEREAS, the VRS keeps track of such picked up member contributions, and is
prepared to treat such contributions as employee contributions for all purposes of VRS.
NOW, THEREFORE, IT IS HEREBY RESOLVED that effective the first pay day on
or after the later of March 5, 2002 or the date the member executes a binding and
irrevocable salary reduction election relating to the past service permitted to be
purchased, the Town of Pulaski shall pick up all or a portion of the member contributions
• of its employees to VRS based on the terms of the salary reduction election, and such
contributions shall be treated as employer contributions in determining tax treatment
under the Internal Revenue Code of the United States; and
It is further RESOLVED, the binding salary reduction election to be executed by the
member shall include the following: (1) the beginning and ending date of the election,
(2) the amount of the salary reduction on a pay period by pay period basis, (3) the total
amount of contribution expected to be involved, (4) a statement that the member may not
receive the contributed amounts instead of having them paid by the Town of Pulaski to
the VRS, and (5) an agreement that the member will not purchase the service credit
through a lump sum payment during the period in which the salary reduction election is
in effect, and
It is further RESOLVED, the member may revoke the salary reduction election only in
the event of an unforeseeable emergency as that phrase is used and defined in IRC
Section 457 and Treasury Regulation Section 1.457-2(h)(4) and if such a revocation is
made, the member may not make a new salary reduction election during his period of
employment, and
It is further RESOLVED that such contributions, although designated as member
contributions, are to be made by the Town of Pulaski in lieu of member contributions;
and
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It is further RESOLVED that pick up member contributions shall be paid from the same
source of funds as used in paying the wages to affected employees; and
It is further RESOLVED that member contributions made by the Town of Pulaski under
the pick up arrangement shall be treated for all purposes other than income taxation,
including but not limited to VRS benefits, in the same manner and to the same extent as
member contributions made prior to the pick up arrangement; and
It is further RESOLVED that nothing herein shall be construed so as to permit or extend
an option to VRS members to received the pick up contributions made by the Town of
Pulaski directly instead of having them paid to VRS; and
It is further RESOLVED that notwithstanding any contractual or other provisions, the
wages of each member of VRS who is an employee of the Town of Pulaski shall be
reduced by the amount of member contributions picked up by the Town of Pulaski on
behalf of such employee pursuant to the foregoing resolutions.
This Resolution is effective upon adoption and is adopted by duly recorded vote of the
Town Council on this Sa' day of March, 2002 as follows:
Jeffrey S. Worrell
Pauline G. Mitchell -Aye
-Aye Bettye H. Steger
James M. Neblett, Jr. -Aye
-Absent
Daniel Talbert, Jr. -Aye Kenneth M. Fleenor -Aye
E. G. Black, 3r. -Aye Lane R. Penn -Aye
By: LiYi.G~~. C Q,~~ ili= 1
Charles W. Stewart, Jr., Mayor
Attest:
,.
Patricia Cruise, Clerk of Council
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