HomeMy WebLinkAbout12-100 - Resolutions RESOLUTION NO. 12-100
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CUCAMONGA, STATE OF CALIFORNIA, PROVIDING FOR THE PRE-
TAX TREATMENT OF COST-SHARING CONTRIBUTIONS TO PERS
UNDER SECTION 414(H)(2) OF THE INTERNAL REVENUE CODE
WHEREAS, the City of Rancho Cucamonga, California, provides retirement benefits to
eligible employees under the California Public Employees' Retirement System (PERS);
WHEREAS, benefits under PERS are funded by "member contributions" and "employer
contributions," at rates determined by PERS in accordance with the laws governing PERS and with
the agreement governing the City's participation in PERS;
WHEREAS, the City may, to the extent permitted by the PERS laws and the City's
memorandums of understanding or similar agreements with employees, deduct employees'
compensation to pay member contributions or employer contributions, or both, to PERS;
WHEREAS, the City previously adopted a resolution providing, in accordance with section
414(h)(2) of the Internal Revenue Code (Code), for the "pick up" of amounts deducted from
employees' compensation to pay member contributions to PERS, in order to qualify the contributions
as pre-tax for income-tax purposes; and
WHEREAS, the City wishes to adopt this resolution in order to (1) designate amounts
deducted from employees' compensation to pay employer contributions to PERS ("cost-sharing
contributions") as employee contributions, and (2) provide for the "pick up" of cost-sharing
contributions in accordance with section 414(h)(2) of the Code, in order to qualify the contributions
as pre-tax for income-tax purposes.
NOW, THEREFORE, BE IT RESOLVED that:
SECTION 1. All cost-sharing contributions made by City employees are hereby designated
as employee contributions.
SECTION 2. The City hereby picks up all cost-sharing contributions in accordance with
section 414(h)(2) of the Code, so that the contributions, even though designated as employee
contributions and deducted from employees' compensation, will be treated as employer contributions
for tax purposes.
SECTION 3. Employees will not have the option of choosing, directly or indirectly, to receive
the contributions instead of having them paid by the City to PERS.
SECTION 4. The City will pay to PERS the contributions designated as employee
contributions from the same source of funds as used in paying salary.
SECTION 5. Contributions picked up under this resolution will be tax deferred to the extent
provided under the Code, Treasury Regulations, and other guidance issued thereunder as described
in a legal opinion on file with the City Clerk.
SECTION 6. This resolution applies to all contributions made on or after July 1, 2012.
SECTION 7. Nothing in this resolution affects or governs PERS's methods for characterizing
or accounting for amounts deducted from employees' compensation for contribution to PERS. Those
methods are governed solely by California law and PERS's policies.
Please see the following page
for formal adoption,certification and signatures
PASSED, APPROVED, AND ADOPTED this 201" day of June 2012.
AYES: Alexander, Buquet, Michael, Spagnolo, Williams
NOES: None
ABSENT: None
ABSTAINED: None
l
L. Den is Wichael, Mayor
ATTEST:
Janic C. Reynolds, ity Clerk
I, JANICE C. REYNOLDS, CITY CLERK of the City of Rancho Cucamonga,
California, do hereby certify that the foregoing Resolution was duly passed, approved and
adopted by the City Council of the City of Rancho Cucamonga, California, at a Regular Meeting
of said City Council held on the 20'" day of June 2012.
Executed this 21st day of June 2012, at Rancho Cucamonga, California.
Ja ice C. Reynolds, Uty Clerk
Resolution No. 12-100 - Page 2 of 2