HomeMy WebLinkAbout2000-11-14; City Council; 15956 VOID; Adopting Pre-Tax Payroll Deduction Plan for Service Credit PurchasesCl= OF CARLSBAD - AGEPA BILL
9B # & 956 ( TITLE:
MTG. 11-14-00
DEPT. HR
ADOPTING A PRE-TAX PAYROLL DEDUCTION
PLAN FOR SERVICE CREDIT PURCHASES
a
RECOMMENDED ACTION:
Adopt Resolution No. db00 *a37 approving a pre-tax payroll deduction p
service credit purchases.
ITEM EXPLANATION:
The City of Carlsbad’s current contract with the California Public
Retirement System (CalPERS) provides that eligible employees
years of service credit that can be added to their years of serv
Carlsbad. This pre-tax payroll deduction plan would appl
purchases including military service, part-time employme
service prior to membership.
The attached resolution would allow the City of Car d to extend the provisions of
Internal Revenue Code Section 414(h)(2) to emp ho are making service credit
purchases via payroll deduction. This would a ity employees the benefit of
deferring income tax liability on member servi it purchases. Upon approval of the
attached resolution, employees would hav ion of filing a binding irrevocable
election with CalPERS to election the pre- 011 deduction plan for each type of
service credit purchase. Employees curr making service credit purchases on an
after-tax basis would also be notified by ERS of their opportunity to elect the pre-tax
option.
Staff recommends that the City il approve the pre-tax payroll deduction plan for all
employees covered by the City’s ee contracts with CalPERS to include all police, fire
and miscellaneous employees.
FISCAL IMPACT:
/ There will be no fiscal i pact to the City of Carlsbad. The pre-tax payroll deduction plan
,eni payments for service c dit purchases agreed upon by the employee will be reported to
CalPERS as part of normal payroll
There will be no fiscal i to the City of Carlsbad. The pre-tax payroll deduction plan
payments for service c agreed upon by the employee will be reported to
CalPERS as part of orrnal payroll processing. ? / /’ EXHIBITS: EXHIBITS:
Resolution Resolution No! am * ,97
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RESOLUTION NO. 2000-337
A RESOLUTION OF THE
CARLSBAD, CALIFORNIA, GRANTING A
PAYROLL DEDUCTION
PURCHASING SERVICE
WHEREAS, the City of Carlsbad is a contractin
6 II Public Employees’ Retirement System; and /
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WHEREAS, the Board of Administration of the C mia Public Employees’
Retirement System (CalPERS) at the April 1996 meet proved a pre-tax payroll
deduction plan for service credit purcha al Revenue Code (IRC) section
414(h)(2); and
~ WHEREAS, the City of Carlsbad authority to implement the provisions of
IRC section 414(h)(2) and h at even though implementation is not
required by law, the tax b y this section should be provided to those
employees who are members of C
WHEREAS, the City lsbad elects to participate in the pre-tax payroll
1 8 deduction plan for in the following CalPERS coverage group(s):
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/ 0 Police
That the City of Carlsbad will implement the provisions of IRC section
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pursuant to the California State Government Code on behalf of its employees who are
the pre-tax payroll deduction plan. “Employee contributions” shall mean those
contributions reported to CalPERS which are deducted from the salary of e
are credited to individual employee accounts for service credit purchase
resulting in tax deferral of employee contributions.
2. That the contributions made by the City of Car to CalPERS, although
designated as employee contributions, are being paid by t ty of Carlsbad in lieu of
contributions by the employees who are members of
3. That the employees shall not have tion of choosing to receive the
contributed amounts directly instead of havi m paid by the City of Carlsbad to
CalPERS .
4. That the City of Ca shall pay to CalPERS the contributions
designated as employee contrib s from the same source of funds as used in paying
salary, thereby resulting in t ferral of employees contributions.
tive date for commencement of the pre-tax payroll deduction
plan cannot be any e rer that July 1, 1996, or the date the completed resolution is
ed in CalPERS, whichever is later.
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6. That the governing body
adhere to requirements and restrictions of the pre-tax deduction plan by
deductions when authorized by CalPERS for those employees of th
Coverage Group(s) who have elected to participate in this plan
PASSED, APPROVED, AND ADOPTED at a reg eeting of the Carlsbad
City Council held on the day of 2000, by the following vote, to
wit:
AYES:
NOES:
ABSENT:
CLAUDE A. LEWIS, Mayor
ATTEST:
/
. WOOD, City Clerk
(SEAL
/