HomeMy WebLinkAbout10-Human Resources CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Linn Livingston Subject: Resolution of City of San
Director of Human Resources Bernardino authorizing the California
Public Employees' Retirement
Barbara Pachon System Member Paid Contributions
Director of Finance to be Tax Deferred.
Dept: Human Resources and Finance ORI G
Date: August 30, 2011
Council Date: September 6, 2011
Synopsis of Previous Council Action:
Recommended motions:
Adopt Resolution
• F
Sig, ture Signature
Contact person: Barbara Pachon, Director of Finance Phone: 5242
Supporting data attached: Staff Report, Attachment Ward: All
FUNDING REQUIREMENTS: Amount:
Source:
Finance:
Council Notes:
Qsd ago/i
Agenda Item No.
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Staff Report
SUBJECT:
Resolution of the City of San Bernardino authorizing the California Public Employees'
Retirement System Member Paid Contributions to be Tax Deferred.
BACKGROUND:
A benefit that employers can provide to their employees at no cost to the employer or
employee is Internal Revenue Code (IRC) Section 414(h)(2), Employer Pick-Up. Under
this IRC Employer Pick-Up provision, employees that pay their own Public Employee
Retirement System (PERS) costs can defer state and federal income taxes on this
payment until after they retire.
Currently and in past years when employees have paid their own PERS costs, the City of
San Bernardino has followed this IRC Employer Pick-Up provision. PERS is currently in
the process of doing a major system up-grade and has informed the City that the prior
City resolution that authorized this IRC Employer Pick-Up can't be located and the new
PERS computer system will not allow the employee contributions to be tax deferred until
a new resolution is adopted.
Since both the City and Water Department have employees who are paying their own
PERS costs, this replacement resolution needs to be adopted and submitted to PERS in
order for employees to continue the same tax deferral that they have had.
FINANCIAL IMPACT:
There is no financial impact or additional administrative work to the city as a result of
adopting this resolution to implement Internal Revenue Code Section 414(h)(2).
RECOMMENDATION:
Adopt resolution.
RESOLUTION NO.
. Fr
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
2 BERNARDINO AUTHORIZING THE CITY OF SAN BERNARDINO TO TAX DEFER
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM MEMBER PAID
3 CONTRIBUTIONS—IRC 414(h)(2).
4 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
5 CITY OF SAN BERNARDINO AS FOLLOWS:
6
WHEREAS, The governing body of the City of San Bernardino ("City") has the
7
8 authority to implement the provisions of Section 414(b)(2) of the Internal Revenue Code (IRC);
9 and
10 WHEREAS, the City of San Bernardino has determined that even though the
11 implementation of the provisions of Section 414(h)(2) IRC is not required by law, the tax
12 benefit offered by Section 414(h)(2) IRC should be provided to all employees, who are
13 members of the California Public Employees' Retirement System;
14
NOW, THEREFORE, BE IT RESOLVED that the Mayor and Common Council of
15
16 the City of San Bernardino by making employee contributions pursuant to California
17 Government Code Section 20691 to the California Public Employees' Retirement System on
18 behalf of all its employees or all its employees in a recognized group or class of employment
19 who are members of the California Public Employees Retirement System. "Employee
20 contributions" shall mean those contributions to the Public Employees' Retirement System
21
which are deducted from the salary of employees and are credited to individual employee's
22
23 accounts pursuant to California Government Code Section 20691. This provision will apply to
24 all employees who are employed by the City of San Bernardino and are members of the
25 California Public Employees' Retirement System.
26 SECTION 1. That the contributions made by the City of San Bernardino to the
27 California Public Employees' Retirement System, although designated as employee
28
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
1 BERNARDINO AUTHORIZING THE CITY OF SAN BERNARDINO TO TAX DEFER
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM MEMBER PAID
2 CONTRIBUTIONS —IRC 414(h)(2).
3
contributions, are being paid by the City of San Bernardino in lieu of contributions by the
4
5 employees who are members of the California Public Employees' Retirement System.
6 SECTION 2. That employees shall not have the option of choosing to receive the
7 contributed amounts directly instead of having them paid by the City of San Bernardino to the
8 California Public Employees' Retirement System.
9 SECTION 3. That the City of San Bernardino shall pay to the California Public
10
Employees' Retirement System the contributions designated as employee contributions from
11
12 the same source of funds as used in paying salary.
13 SECTION 4. That the amount of the contributions designated as employee
14 contributions and paid by the City of San Bernardino to the California Public Employees'
15 Retirement System on behalf of an employee shall be the entire contribution required of the
16 employee by the California Public Employees' Retirement Law (California Government Code
17
Sections 20000, et seq.).
18
SECTION 5. That the contributions designated as employee contributions made by the
19
20 City of San Bernardino to the California Public Employees' Retirement System shall be treated
21 for all purposes, other than taxation, in the same way that member contributions are treated by
22 the California Public Employees' Retirement System.
23
24
25
26
27
28 / / /
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
1 BERNARDINO AUTHORIZING THE CITY OF SAN BERNARDINO TO TAX DEFER
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM MEMBER PAID
2 CONTRIBUTIONS—IRC 414(h)(2).
3
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
4
5 Common Council of the City of San Bernardino at a meeting thereof, held on
6 the day of , 2011, by the following vote, to wit:
7
8 Council Members: AYES NAYS ABSTAIN ABSENT
9 MARQUEZ
10
JENKINS
11
BRINKER
12
13 SHORETT
14 KELLEY
15 JOHNSON
16 MCCAMMACK
17
18
Rachel G. Clark, City Clerk
19
20 The foregoing resolution is hereby approved this day of ,
2011.
21
22
Patrick J. Morris, Mayor
23 City of San Bernardino
24 Approved as to Form:
25
26
27 ames F. Penman, City Attorney
28