HomeMy WebLinkAboutResolution No. 08-7080 - Establish pre-tax payroll deduction plan for service credit purchasesRESOLUTION NO. 08-7080
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY
ESTABLISHING A PRE-TAX PAYROLL DEDUCTION PLAN FOR SERVICE CREDIT
PURCHASES (CONTRIBUTION CODE 14).
WHEREAS, the Board of Administration of the California Public Employees’ Retirement
System (CaIPERS) at the April 1996 meeting approved a pre-tax payroll deduction plan for
service credit purchases under Internal Revenue Code (IRC) section 414(h)(2); and
WHEREAS, the City of Downey has the authority to implement the provisions of IRC
section 414(h)(2) and has determined that even though implementation is not required by law,
the tax benefit offered by this section should be provided to those employees who are members
of CaIPERS; and
WHEREAS, the City of Downey elects to participate in the pre-tax payroll deduction plan
for all employees in the following CaIPERS coverage group(s):
All Miscellaneous and all Safety coverage groups
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
HEREBY RESOLVE AS FOLLOWS:
I That the City of Downey will implement the provisions of IRC section 414(h)(2) by
making employee contributions for service credit purchases pursuant to the
California State Government Code on behalf of its employees who are members of
CaIPERS and who have made a binding irrevocable election to participate in the pre-
tax payroll deduction plan. “Employee contributions” shall mean those contributions
reported to CaIPERS which are deducted from the salary of employees and are
credited to individual employee accounts for service credit purchases, thereby
resulting in tax deferral of employee contributions.
11 That the contributions made by the City of Downey to CaIPERS, although designated
as employee contributions, are being paid by the City of Downey in lieu of
contributions by the employees who are members of CaIPERS.
111.That the employees shall not have the option of choosing to receive the contributed
amounts directly instead of having them paid by the City of Downey to CaIPERS.
IV. That the City of Downey shall pay to CaIPERS the contributions designated as
employee contributions from the same source of funds as used in paying salary,
thereby resulting in tax deferral of employee contributions.
V. That the effective date for commencement of the pre-tax payroll deduction plan
cannot be any earlier than July 1 , 1996, or the date the completed resolution is
received and approved in CaIPERS, whichever is later.
VI. That the governing body of the City of Downey shall participate in and adhere to
requirements and restrictions of the pre-tax payroll deduction plan by reporting pre-
tax payroll deductions when authorized by CaIPERS for those employees of the
above stated Coverage Group(s) who have elected to participate in this plan.
RESOLUTION NO. 08-7080
PAGE TWO
SECTION 1. The City Clerk shall certify to the adoption of this Resolution.
APPROVED AND ADOPTED this 23'd of September, 2008
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ATTEST:
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KATHLEEN L. MIDSTOKKE, City Clerk
I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of
the City of Downey at a regular meeting held on the 23'd day of September, 2008, by the
following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN :
Council Members: Bayer, Cartozian, Guerra, Trejo, Mayor Gafin
Council Member: None
Council Member: None
Council Member: None
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KATHLEEN L. MIDSTOKKE, City Clerk
RETURN ADDRESS:
City of Downey Attn: Human Resources
11111 Brookshire Avenue
Downey, CA 90241
FOR CALPERS USE ONLY
Pre-tax Payroll Deduction Plan Effective Date
TitleApproved b
MEMBER SERVICES DIVISION, Service Credit Section – Unit 830