HomeMy WebLinkAbout55B - PRETAX PAYROLL DEDUCTION
REQUEST FOR
COUNCIL ACTION
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CITY COUNCIL MEETING DATE:
CLERK OF COUNCIL USE ONLY:
APRIL 18, 2005
TITLE:
RESOLUTION TO PROVIDE A PRE-
TAX PAYROLL DEDUCTION FOR
EMPLOYEES PURCHASING
EMPLOYMENT SERVICE CREDIT IN
CALPERS . -,
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APPROVED
0 As Recommended
0 As Amended
0 Ordinance on 151 Reading
0 Ordinance on 2nd Reading
0 Implementing Resolution
0 Set Public Hearing For
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTION
Adopt a resolution to provide a pre-tax payroll deduction plan for
employees choosing to purchase employment service credit in the California
Public Employees' Retirement System.
DISCUSSION
The California Public Employees' Retirement System (CalPERS) permits
eligible employees to participate in a program to purchase additional
employment service time on a pre-tax basis under the Internal Revenue Code
provisions. Payments for such member service credit are permitted through
the employer's payroll deduction process when an employer adopts a
resolution authorizing such q program. Employers that participate in this
program provide their employees with the benefit of deferring income tax
liability for member service credit purchases. Upon approval of the
employerjCalPERS resolution, the member has the option to file a binding
irrevocable election with CalPERS to elect the plan for employment service
credit purchase.
FISCAL IMPACT
There is no fiscal impact associated with this action.
Enrique
Executi e
Personnel
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Francisco Gutierrez
Executive Director
Finance & Mgmt. Services
Agency
558-1
RESOLUTION NO. 2005-042
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA TO PROVIDE A PRE-TAX PAYROLL DEDUCTION
PLAN FOR EMPLOYEES PURCHASING SERVICE CREDIT IN
THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1: The City Council hereby finds, determines and declares as follows:
A. 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).
B. The City of Santa Ana 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 member of CaIPERS.
C. The City of Santa Ana elects to participate in the pre-tax payroll deduction
plan for all employees in the following CalPERS coverage groups:
All Miscellaneous members
All Safety members
D. The City of Santa Ana 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 CalPERS 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 CalPERS which are deducted from
the salary of employees and are credited to individual employees accounts for
service credit purchases, thereby resulting in tax deferral of employee
contributions.
E. The contributions made by the City of Santa Ana to CaIPERS, although
designated as employee contributions, are being paid by the City of Santa
Ana in lieu of contributions by the employees who are members of CaIPERS.
F. The employees shall not have the option of choosing to receive the
contributed amounts directly instead of having them paid by the City of Santa
Ana to CaIPERS.
558-2
Resolution No.
Page Two
G. The City of Santa Ana shall pay to CalPERS 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.
H. 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.
I. That the governing body of the City of Santa Ana 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 CalPERS for
those employees of the above stated Coverage Groups who have elected to
participate in this plan.
ADOPTED this
day of
,2005.
Miguel A. Pulido
Mayor
APPROVED AS TO FORM:
Joseph W. Fletcher, City Attorney
By:
AYES:
Councilmembers:
NOES:
Councilmembers:
ABSTAIN:
Councilmembers:
NOT PRESENT
Councilmembers:
558-3
CERTIFICATION OF ATTESTATION AND ORIGINALITY
I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the
attached Resolution No. 2005-042 to be the original resolution adopted by the City
Council of the City of Santa Ana on
Date:
558-4
Clerk of the Council
City of Santa Ana