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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 -2- 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: -3- 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