HomeMy Public PortalAbout2010_06_08_R061 - VRS AuthorizationThe Town o f
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PRESENTED June 8, 2010
RESOLUTION NO. 2010-061 ADOPTED June 8, 2010
A RESOLUTION: AUTHORIZATION FOR THE TOWN OF LEESBURG TO PICK-UP
THE EMPLOYEE' S CONTRIBUTION TO VRS UNDER § 414 (h) OF
THE INTERNAL REVENUE CODE FOR PLAN 2 EMPLOYEES
WHEREAS, the Virginia General Assembly, in its 2010 session passed legislation
creating a separate retirement plan for employees hired on or after July 1, 2010 (hereafter
referred to as "Plan 2 Employees"). The legislation stipulates that Plan 2 Employees will pay
their 5 percent member contribution and that, absent other action by the employer, such
contribution will be paid through salary reduction according to Internal Revenue Code § 414
(h) on a pre-tax basis; and
WHEREAS, the legislation allows certain employers, including the Town of Leesburg,
to pick-up and pay all or a portion of the member contributions on behalf of its Plan 2
Employees as an additional benefit not paid as salary; and
WHEREAS, the election to pick-up and pay all or a portion of the member
contributions on behalf of its Plan 2 Employees as an additional benefit not paid as salary shall,
once made, remain in effect for the .applicable fiscal year (July 1-June 30, 2011) and shall
continue in effect beyond the end of such fiscal year absent a subsequent resolution changing
the way the 5 percent member contribution is paid; and
WHEREAS, employee contributions that are picked-up as an additional benefit not
paid as salary are not considered wages for purposes of VA Code § 51.1-700 et seq. nor shall
they be considered salary for purposes of VA Code § 51.1-100 et seq.; and
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A RESOLUTION: AUTHORIZATION TO PICK-UP THE EMPLOYEE'S
CONTRIBUTION TO VRS UNDER § 414 (h) OF THE INTERNAL
REVENUE CODE FOR PLAN 2 EMPLOYEES
WHEREAS, the Town of Leesburg desires to pick-up and pay its Plan 2 Employees'
Member contributions to VRS as an additional benefit not paid as salary in an amount equal to
(5%) of creditable compensation; and
WHEREAS, VRS tracks such picked-up member contributions and is prepared to treat
such contributions as employee contributions for all purposes of VRS.
THEREFORE, IT IS HEREBY RESOLVED that effective the first day of July,
the Town of Leesburg shall pick-up member contributions of its Plan 2 Employees to VRS as
an additional benefit not paid as salary in an amount equal to ((5%) of
creditable compensation subject to the terms and conditions described above; 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 nothing herein shall be construed so as to permit or extend an option
to VRS members to receive the picked-up contributions by the Town of Leesburg directly
instead of having them paid to VRS.
PASSED this 8th day of June, 2010.
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Krist n C. mstattd, Mayor
Town of Leesburg
ATTEST:
Clerk of Co it
P:Utesolutions\Resolutions 2010\0608 VRS Authotization.doc