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ITEM: |
CONSENT
CALENDAR |
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2. |
CONSIDER ADOPTION OF RESOLUTION
NO. 2005-09 ELECTING TO PARTICIPATE IN THE |
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Meeting
Date: |
October
17, 2005 |
Budgeted: N/A |
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From: |
David A.
Berger, |
Program/ |
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General
Manager |
Line Item No.: |
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Prepared
By: |
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Cost Estimate: |
None |
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General
Counsel Approval: Yes |
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Committee Recommendation: The Administrative Committee reviewed this
item on October 6, 2005 and recommended approval. |
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CEQA
Compliance: N/A |
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SUMMARY: By filing a Resolution with the California Public Employees’ Retirement System (CalPERS), employers are allowed to extend the pick-up of member contributions, under Internal Revenue Code section 414(h)(2), to service credit purchases. This provision of the tax code allows retirement contributions, made directly from payroll, to be pre-tax. Individual employers who opt to participate in this “pick-up” program provide their employees, who elect to participate, with the benefit of deferring income tax liability on member service credit purchases. The effective date for the commencement of this pre-tax plan can not be any earlier than the date the completed resolution is received and approved in CalPERS.
RECOMMENDATION:
That the Board
elect to participate in the CalPERS pre-tax payroll deduction plan for service
credit purchases, by adoption of the attached Resolution (Exhibit
2-A). The Administrative Committee
reviewed this item at its October 6, 2005 meeting and voted 2 to 0 to
recommended approval.
IMPACTS TO STAFF/RESOURCES: Adopting the attached resolution will have no
impact on staff resources. Service
credit purchases will be paid to CalPERS by District check. However, deductions
from the paychecks of participating employees will cover those payments.
BACKGROUND: The District has
previously adopted a resolution allowing employees to take advantage of IRS
provisions regarding pre-tax contributions to the California Public Employees
Retirement’ System. This resolution
involved the District “pick-up” of member contributions towards retirement
premiums. Resolution 2005-09 would
extend the benefit of pre-tax status to employee payroll deductions for the
purchase of retirement service credit.
EXHIBITS
2-A Resolution No.
2005-09
U:\staff\word\boardpacket\2005\2005boardpackets\20051017\ConsentCal\02\item2.doc