HomeMy WebLinkAboutCC Resolution 11386 (Purchasing Allowable Service Credit)RESOLUTION NO. 11386
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL
IMPLEMENTING THE PROVISIONS CONTAINED IN SECTION 414(H)(2) OF THE
INTERNAL REVENUE CODE CONCERNING THE TAX TREATMENT OF EMPLOYEE
CONTRIBUTIONS PAID BY THE EMPLOYER ON BEHALF OF AFFECTED
EMPLOYEES FOR THE PURPOSE OF PURCHASING ALLOWABLE SERVICE
CREDIT
WHEREAS, members in the Marin County Employees' Retirement Association are
permitted to redeposit contributions previously withdrawn plus interest and/or to purchase
permissive service credit ("Service Credit") pursuant to various Sections of Title 3, Division 4, Part
3, Chapter 3 of the California Government Code, the County Employees' Retirement Law of 1937
("37 Act"); and
WHEREAS, the Marin County Board of Retirement is recommending that the City
Council authorize a pre-tax payment plan for members to purchase Service Credit; and
WHEREAS, the City wishes to permit Plan members to elect to have their contributions to
purchase Service Credit "picked up" by the city as permitted under Internal Revenue Code
("Code") Section 414(h)(2) thereby resulting in pre-tax employee contributions; and
WHEREAS, under such pre-tax payment plan, if a Plan member and the city execute an
irrevocable payroll deduction authorization agreement ("PDA Agreement") authorizing the City to
pick up contributions to purchase Service Credit under Code Section 414(h)(2), the City will make
contributions to purchase such Service Credit on behalf of that member in lieu of contributions that
otherwise would be made by that member to purchase such Service Credit; and
WHEREAS, the Plan will not accept direct payments to purchase Service Credit covered
by the PDA Agreement; and
b
WHEREAS, any PDA Agreement shall authorize the pick up of contributions made after,
but not before the date that such PDA agreement is executed, and it shall set forth the number of
pay periods during which the payroll deductions will be made and the dollar amount of each such
deduction; and
WHEREAS, any PDA Agreement shall provide that the member authorizes the appropriate
deduction from salary for the purposes of having it picked up by the County and that the member
understands and acknowledges the following:
1) the PDA Agreement is irrevocable;
2) the member cannot receive cash in lieu of having the contribution made to the
Plan; and
3) the Plan will not accept direct payments to purchase this Service Credit while the
PDA Agreement is effective.
NOW THEREFORE, the City Council of the City of San Rafael does resolve, that the pick
up of service credit purchase, as described above, is hereby adopted and the Marin County Board
of Retirement is hereby authorized to implement such pick up and adopt such procedures as it
deems necessary to do so.
I, Jeanne M. Leoncini, Clerk of the City of San Rafael, hereby certify that the foregoing resolution
was duly and regularly introduced and adopted at a regular meeting of the City Council of said City
held on Monday, August 4, 2003, by the following vote, to wit:
AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips & Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
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JEAN&fM. LEONCINI, CITY CLERK