HomeMy Public PortalAbout2002_05_29_r085The Town of
Leesburg,
rg nta
PRESENTED May 29, 2002
2002-85
RESOLUTION NO. ADOPTED May 29, 2002
A RESOLUTION: AUTHORIZING THE PICK UP OF THE EMPLOYEE'S
CONTRIBUTION TO THE VIRGINIA RETIREMENT SYSTEM FOR
PAST SERVICE CREDIT UNDER §414(b) OF THE INTERNAL
REVENUE CODE
WHEREAS, the Town of Leesburg desires to provide its employees with tax deferral
pursuant to §414(b) of the Internal Revenue Code with respect to their member contributions to
the Virginia Retirement System, the State Police Officers Retirement System and the Judicial
Retirement System (collectively referred to as VRS) for the permissible purchase of past service
credit by picking up member contributions to the VRS; and
WHEREAS, the pick up is authorized under the Virginia Code Sections 51.1-142.1 and
51.1-143.C.
WHEREAS, the VRS keeps track of such picked up member contributions, and is
prepared to treat such contributions as employee contributions for all purposes of VRS.
THEREFORE, RESOLVED by the Council of the Town of Leesburg in Virginia that
effective the first pay day on or after the later of May 29, 2002 or the date the member executes a
binding and irrevocable salary reduction election relating to the past service permitted to be
purchased, the Town of Leesburg shall pick up all or portion of the member contributions of its
employees to VRS based on the terms of the salary reduction election, and such contributions
shall be treated as employer contributions in determining tax treatment under the Internal
Revenue Code of the United States; and it is further
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RESOLUTION: AUTHORIZING THE PICK UP OF THE EMPLOYEE'S CONTRIBUTION
TO VRS FOR PAST SERVICE CREDIT UNDER §414(b) OF THE
INTERNAL REVENUE SERVICE
RESOLVED, the binding salary reduction election to be executed by the member shall
include the following: (1) the beginning and ending date of the election, (2) the amount of the
salary reduction on a pay period by pay period basis, (3) the total amount of contribution
expected to be involved, (4) a statement that the member may not receive the contributed
amounts instead of having them paid by the Town of Leesburg to the VRS, and (5) an agreement
that the member will not purchase service credit through a lump sum payment during the period
in which the salary reduction election is in effect; and it is further
RESOLVED, the member may revoke the salary reduction election only in the event of
an unforeseeable emergency as that phrase is used and defined in the IRC Section 457 and
Treasury Regulation Section 1.457-2(h)(4) and if such a revocation is made, the member may not
make a new salary reduction election during his period of employment; and it is further
RESOLVED, that such contributions, although designated as member contributions, are
to be made by the Town of Leesburg in lieu of member contributions; and it is further
RESOLVED, that pick up member contribution shall be paid from the same source of
funds as used in paying the wages to affected employees; and it is further
RESOLVED, that member contributions made by the Town of Leesburg under the pick
up an'angement shall be treated for all purposes other than income taxation, including but not
limited to VRS benefits, in the same manner and to be the same extent as a member contribution
made prior to the pick up arrangement; and it is further
RESOLVED, that nothing herein shall be construed so as to permit or extend an option to
VRS members to receive the pick up contributions made by the Town of Leesburg directly
instead of having them paid to VRS; and it is further
RESOLUTION:
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AUTHORIZING THE PICK LIP OF THE EMPLOYEE'S CONTRIBUTION
TO VRS FOR PAST SERVICE CREDIT UNDER §414(b) OF THE
INTERNAL REVENUE SERVICE
RESOLVED, that n°twithstanding any contractual or other provisions, the wages of each
member of VRS who is an emploYee of the Town of Leesburg shall be reduced by the amount of
member contributions picked up by the Town of Leesburg on behalf of such employee pursuant
to the foregoing resolutions.
PASSED this 29th day of May 2002.
ATTEST:
erk of Counc}l
RO2:VRS
B. J. Webb, Mayor
Town of Leesburg