07 Staff Report - Pre-Tax Payroll Deduction Plan0~ N QF
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!ps GA~05 COUNCIL AGENDA REPORT
MEETING DATE: 12/15/08
ITEM NO: 'I']
DATE: December 15, 2008
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: ADOPT RESOLUTION UPDATING THE EMPLOYER PICKUP PRE-TAX
PAYROLL DEDUCTION PLAN FOR SERVICE CREDIT PURCHASES
RECOMMENDATION:
Adopt resolution of the Town of Los Gatos approving the employer pickup pre-tax payroll
deduction plan for service credit purchases.
DISCUSSION
In December 2000, the Town adopted a resolution to implement a Ca1PERS program that
permits Town employees who have worked in CaIPERS agencies or the military to purchase
service credit. Ca1PERS has advised the Town that it is necessary to update that resolution to
correctly identify the employee coverage groups. The attached resolution provides the necessary
updates as required by Ca1PERS.
ENVIRONMENTAL ASSESSMENTS:
Is not a project defined under CEQA, and no further action is required,
FISCAL IMPACT;
Adoption of the resolution will have no fiscal impact on the Town of Los Gatos.
Attachment: Resolution
PREPARED BY: R I PORTPL
Human Resources Director
NAIMGWAdminworkFilesMOS Council ReportsTERS Service Credit Council Report 12-15-08.doc
Reviewed by: Assistant Town Manager Town Attorney
Clerk Administrator Finance Community Development
RESOLUTION 2008
RESOLUTION OF THE TOWN OF LOS GATOS
UPDATING THE EMPLOYER PICKUP PRE-TAX PAYROLL DEDUCTION PLAN
FOR SERVICE CREDIT PURCHASES
EMPLOYER CODE: 0870
RESOLUTION OF THE TOWN OF LOS GATOS
EMPLOYER PICKUP RESOLUTION
PRE-TAX PAYROLL DEDUCTION PLAN
FOR SERVICE CREDIT PURCHASES
(CONTRIBUTION CODE 14)
WHEREAS, the Board of Administration of the California Public Employees'
Retirement System (Ca1PERS) 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 Town of Los Gatos 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 those employees who are members of
Ca1PERS; and
WHEREAS, the Town of Los Gatos elects to participate in the pre-tax payroll
deduction plan for all employees in the following Cal PERS coverage group(s):
All Miscellaneous
All Safety
NOW THEREFORE, BE IT RESOLVED:
1. That the Town of Los Gatos will implement the provisions of IRC Section 414 (h) (2) by
making employee contributions for service credit purchases pursuant to California State
Government Code on behalf of its employees who are members of Ca1PERS 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 Ca1PERS
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.
II. That the contributions made by the Town of Los Gatos to CaIPERS, although designated
as employee contributions, are being paid by the Town of Los Gatos in lieu of
contributions by the employees who are members of Cal PERS.
111. That the employees shall not have the option of choosing to receive the contributed
amounts directly instead of having them paid by the Town of Los Gatos to the
Cal PERS.
IV. That the Town of Los Gatos shall pay to Ca1PERS 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 the date the completed resolution is received and approved in
Ca1PERS, whichever is later.
VL That the governing body of the Town of Los Gatos 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 Ca1PERS for those employees of the above
stated Coverage Group(s) who have elected to participate in this plan.
VII. That this resolution replaces the Town of Los Gatos Resolution 2000-142 previously
adopted by the Town Council on December 4, 2000.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California, held on the 15th day of December, 2008 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA