Resolution 1996-39
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RESOLUTION NO. 96 - 39
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City of Gilroy
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 (CarPERS) 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 City of Gilroy has the authority to implement the provision of IRC section
414(h)(2) and has detennined that even though implementation is not required by law, the
tax benefit offered by this section should be provided to those employees who are
members of CaIPERS; and
WHEREAS, the City of Gilroy elects to participate in the pre-tax payroll deduction plan for
all employees in the following CalPERS coverage group(s):
2% @ 60 years old and
2% @ 50 years old (Safety)
NOW, THEREFORE, BE IT RESOLVED:
I. That the City of Gilroy will implement the provision of IRC section 414(h)(2) by making
employee contributions for service credit purchases pursuant to the California State
Govemment Code on behalf of its employees who are members of CalPERS 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 CalPERS 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 City of Gilroy to CaIPERS, although designated as
employee contributions, are being paid by the City of Gilroy in lieu of contributions by the
employees who are members of CaIPERS"
III. That the employees shall not have the option of choosing to receive the contributed
amount directly instead of having them paid by the City of Gilroy to CaIPERS.
IV. That the City of Gilroy shall pay to CalPERS 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 July 1, 1996, or the date the completed resolution is received and
approved in CaIPERS, whichever is later.
RESOLUTION KO. 96 - 39
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VI. That the governing body of the City of Gilroy 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 CaIPERS for those employees of the above stated
Coverage Group(s) who have elected to participate in this plan.
PASSED AND ADOPTED this 24th day of June, 1996, by the following vote:
AYES:
COUNCILMEMBERS: GILROY, MORALES, ROGERS, RO,~ISON, SPRINGER,
VALDEZ and GAGE,
COUNCILMEMBERS: None
NOES:
ABSENT:
COUNCILMEMBERS: None
APPROVED:
ATTEST:
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. City Clerk 0
RESOLUTION NO. 96 - 39