R-10-24RESOLUTION NO. R-10-24
Authorization 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 City of Fairfax 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) 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
WHEREAS, the City of Fairfax 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.
NOW, THEREFORE, IT IS HEREBY RESOLVED that effective the first day of July, the
City of Fairfax 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 City of Fairfax 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 made by the City of Fairfax directly
instead of having them paid to VRS.
Adopted: June 8, 2010
Aayor
Dat
ATTEST:
City Clerk
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