HomeMy Public PortalAbout2008_08_12_R126 Authorization to Pick Up Employee's Contribution to VRS
The Town of
Leesburg,
Virginia
PRESENTED August 12.2008
RESOLUTION NO: 2008-126
ADOPTED August 12.2008
A RESOLUTION: AUTHORIZATION TO PICK UP THE EMPLOYEE'S
CONTRIBUTION TO THE VIRGINIA RETIREMENT SYSTEM
WHEREAS, the Town of Leesburg provides its employees with tax deferral pursuant
to Section 414(h) of the Internal Revenue Code with respect to their member contributions to
the Virginia Retirement System (VRS) by picking up member contributions to VRS; and
WHEREAS, VRS keeps track of such picked up member contributions, and treats
such contributions as employee contributions for all purposes ofVRS; and
WHEREAS, the Internal Revenue Service in Notice 2006-43 has provided transition
relief for existing pick up arrangements provided that an authorized person take formal action
to evidence the establishment of the pick-up arrangement no later than January 1,2009; and
WHEREAS, in order to avail itself of the protection given under Notice 2006-43, the
Town of Leesburg desires to affirm its intention to establish and maintain a pick-up
arrangement through formal action by its governing body.
THEREFORE, RESOLVED, by the Council of the Town of Leesburg in Virginia:
SECTION 1. The existing member contribution pick-up arrangement is hereby
affirmed as it relates to salary reduction elections in effect prior to the date of this Resolution.
SECTION II. Effective the first pay day on or after August 12.2008, the Town shall
pick up member contributions of its employees to VRS, and such contributions shall be
treated as employer contributions in determining tax treatment under the Internal Revenue
Code of the United States.
SECTION 111. Such contributions, although designated as member contributions, are
to be made by the Town of Leesburg in lieu of member contributions.
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A RESOLUTION: AUTHORIZATION TO PICK UP THE EMPLOYEE'S
CONTRIBUTION TO THE VIRGINIA RETIREMENT SYSTEM
SECTION IV. Pick up member contributions shall be paid from the same source of
funds as used in paying the wages to affected employees.
SECTION V. Member contributions made by the Town of Leesburg under the pick
up arrangement shall be treated for all purposes other than income taxation, including but not
limited to VRS benefits, in the same manner and to the same extent as member contributions
made prior to the pick up arrangement.
SECTION VI. Nothing herein shall be construed to permit or to 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.
BE IT FURTHER RESOLVED, by the Council of the Town of Leesburg in Virginia
that not withstanding any contractual or other provision, the contributions of each member of
VRS who is an employee of the Town of Leesburg shall be picked up either through a
reduction in the current salary of such employee or as an offset against future salary increases
of such employee or as a combination of both at the option of the employer by the Town of
Leesburg on behalf of such employee pursuant to the foregoing resolution.
PASSED this 12th day of August, 2008.
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. en C. mstattd, Mayor
Town of Leesburg