R-08-37
RESOLUTION NO_ Ft.-08-37
Affirmat:ion of Aut:horizat:ion 'to Pick-up t:he Employee's Con-tribut:ion 'to VRS
Cor City oC FairCax - 55316
Under ~ 414(h) oC the Internal Ft.cvcnue Code
",,"HEFt.EAS. the City of Fairfax provides its employees vvith tax deferral pursuant to ~ 414(h)
or the Intemal Revenue Code V'V"ith respect to their member contributions to the Virginia
Retirement: System (referred to as VRS) by picking up member contributions to VRS; a.nd
~IIEREAS, VRS keeps track of such picked up member contributions~ arld treats such
contributions as employee contributions for all purposes ofVRS;
VV"HEREAS., the Intemal Revenue Service in Notice 2006-43 has provided transition relief
for existing pick up arrangements provided that an authorized person takes formal action to
evidence the establishment of the pick-up arrangement no later tha.n January 1~ 2009.
VVI-IEREAS, in order to avail itself of the protection given under Notice 2006-43,. the CITY
OF FAIRFAX desires to affirm its intention to establish and maintain a pick-up arrangement
through formal action by its goveming body.
NO",,". THEREFORE. IT IS HEREB"Y RESOLVED that 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~ and it is further
BE IT FUFt.THEFt. RESOLVED that effective the first pay day on or after "Date affirmation
is nassed'" ,. the City of Fairfax 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 Intemal Revenue Code of the United States; and it is further
RESOL VED that such contributions,. although designated as member contributions,. are to be
made by the City of Fairfax in lieu of member contributions; and it is further
RESOLVED that pick up member contributions shall be paid from the Sa.rr:le source of funds
as used in paying the vvages to affected employees; and it is further
RESOLVED 'that member contributions made by the City of Fairfax under the pick up
arrangement shall be treated for all purposes other than income taxation~ including but not
limited to VRS benefits,. in the Sa.rr:le ma.:nrler and to the same extent as member contributions
made prior to the pick up arrangement; and it is further
RESOLVEI> 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 City of Fairfax directly
instead of having them paid to VRS; and it is further
RESOLVEI> that notvvithstanding any contractual or other provisions,. the contributions of
each member ofVRS vvho is an employee of the City of Fairfax shall be picked up either
through a reduction in the current salary of such employee or as a.n offset against future salary
increases of such employee or as a combination of both at the option of the employer by the
City of Fairfax on behalf of such employee pursuant to the foregoing resolutions.
A~p'_ 'h'. 9 day o'Sep'emhe< 2008~~~
ayo
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ATTEST:
~
The vote on the motion to approve was recorded as follows:
VOTE:
Councilwoman Cross Aye
Councilman Drummond Aye
Councilman Greenfield Aye
Councilman Meyer Aye
Councilman Rasmussen Aye
Councilman Stombres Aye