Resolution 2753-03
..- 1 RESOLUTION NO. 2753-03
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A RESOLUTION OF THE BOARD OF DIRECTORS
3 OF THE SOUTH TAHOE PUBLIC UTILITY DISTRICT
TO ADOPT THE CALPERS EMPLOYER PICK-UP PROGRAM
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5 WHEREAS, the South Tahoe Public Utility District has the authority to implement
6 the provisions of section 414(h) (2) of the Internal Revenue Code (IRC); and
WHEREAS, the Board of Administration of the Public Employees' Retirement
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System adopted its resolution re section 414(h) (2) I RC on September 18, 1985; and
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WHEREAS, the Internal Revenue Service has stated in December 1985, that the
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implementation of the provisions of section 414(h) (2) IRC pursuant to the Resolution of
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the Board of Administration would satisfy the legal requirements of section 414(h) (2) IRC;
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and
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WHEREAS, the South Tahoe Public Utility District has determined that even though
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the implementation of the provisions of section 414(h) (2) I RC is not required by law, the
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tax benefit offered by section 414(h) (2) IRC should be provided to its employees who are
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members of the Public Employees' Retirement System:
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NOW, THEREFORE, BE IT RESOLVED:
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I. That the South Tahoe Public Utility District will implement the provisions of section
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414(h) (2) Internal Revenue Code by making employee contributions pursuant to
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California Government Code section 20691 to the Public Employees' Retirement
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System on behalf of its employees who are members of the Public employees
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Retirement System. "Employee contributions" shall mean those contributions to the
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Public Employees' Retirement System which are deducted from the salary of
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employees and are credited to individual employee's accounts pursuant to
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California Government Code section 20691.
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II. That the contributions made by the South Tahoe Public Utility District to the Public
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Employees' Retirement System, although designated as employee contributions,
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are being paid by the South Tahoe Public Utility District in lieu of contributions by
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1 Resolution No. 2753-03
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the employees who are members of the Public Employees' Retirement System.
That employees shall not have the option of choosing to receive the contributed
amounts directly instead of having them paid by the South Tahoe Public Utility
District to the Public Employees' Retirement System.
That the South Tahoe Public Utility District shall pay to the Public Employees'
Retirement System the contributions designated as employee contributions from the
same source of funds as used in paying salary.
That the amount of contributions designated as employee contributions and paid by
the South Tahoe Public Utility District to the Public Employees' Retirement System
on behalf of an employee shall be the entire contribution required of the employee
by the Public Employees' Retirement Law (California Government Code sections
20000, et seq.)
That the contributions designated as employee contributions made by South Tahoe
Public Utility District to the Public Employees' Retirement System shall be treated
for all purposes, other than taxation, in the same way that member contributions are
treated by the Public Employees' Retirement System.
III.
IV.
V.
VI.
PASSED AND ADOPTED by the Board of Directors of the South Tahoe Public Utility
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District this 15th day of May 2003 by the following vote:
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21 AYES: Directors Wallace, Schafer, Jones, Becker, Mosbacher
22 NOES: None
23 BSENT: None
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FEB-19-2003 10:42
CITY SR ADMIN SVCS
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707 5433126 P.02/03
(J-e~, ~7.~-6..~
DocumeD&No.
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~ircular Letter
DCC:
January 22, 1986
lPUe No.:
WdelI No.:
California PubUc Emp1o~s' Retirement Sys~m
P.O. Box 90103
Sacramento. CA 95809- 0103
(916) 322-0245
Telecommunications Device For
The Deaf - (916) 445-8155
Dtstributfoa:
CIreu1ar l..etb!:r NO.:
r,II~, VI, XII & SPECIAL
100-180
To: PUBLIC AGENCIES, COUNTY SUPERINTENDENT OF SCHOOLS, SCHOOL DISTRICTS,
BOARD MEMBERS, DIVISION & OFFICE HEADS
Sub,lect: EMPLOYf.R "PICK-UP" FOR SCHOQLS AND LOCAL AGENCIES
The "private letter ruling" referred to in Circular !..QttCH 1Il00-16l,
da~ed December 18, 1985, has now been received and is attached. This rulin9
officially affirms toe ability for any PERS school or local employer to
participate in the "pick-up" program.
Based on recent inquiries there still appears to be many questlons or
misunderstandings about the "pick-up" program. The following wlll hopefully
cl~rify many of these issues;
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What 15 the "Pick-Up" Program?
Basically, the Internal Revenue Code (IRe) Section 414 (h) (2) allow~
publ1C employers to designate required employee contributions as being
"picked-up" by the employer and treated as employer contributions for
Federal and State tax purposes only. The term "pick-up" is a misnomer.
Actually the member contributions continue to be daductQd from the actual
gross salary reflected On a member's pay stub.
Is the "Pick-Up" program the Same as Employer paid MEunber Contrtbutions (EPMC)?
NO! Under EPMC the employer actually pays the member contributions and
the member's pay stub does not reflect a oeduction from gross salary for
retlrement contributions.
When tlo~s the Employer Need to )\.dopt thE "Resolution"?
The employer shoulo only adopt the rQ~olution when they want to
implement the "pick-up" program. If the employer is und@r the EPMC program,
the IRS required resolution is not necessary.
Does PERS Need .. Copy of tne Resolution if we Implement the "Pick-Up"
Program?
No! All PERS needs is a letter from the employer statin9 that they are
implementing the "pick-up" progralll and indicating the first pay period t:hat
member contributions will be reported as being "picked-up".
P&RS-ADM-<1S (HC1'. [jIB[jJ
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FEB-19-21211213 1121:42
CITY SR ADMIN SUCS
71217 5433126
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Are State Taxes covered by the "Pick-Up" program?
Yes! The State Taxation and Revenue Code Section 11501 provides that
State taxes follow the provisions of IRe Section 414 (h) (2).
IS "Special Compensation" covered by the "Pick-Up" program?
Yes! Any compensation wh~ch is reportable to PERS under the Retirement
Law, Government Code Section 20022 (a) and, therefore, subject to retirement
contributions is covered by the "pick-up" pro9ram.
If you have any further questions, please contact Rich Anderson at
(916) 322-0245.
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ROBERT O. WALTON, CHIEF
ACCOUNTING DIVISION
ROW/pm
Attachment
P.03/1213
TOTAL P. 03
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