001-99
BOARD OF SUPERVISORS
RESOLUTION
AUTHORIZATION TO PICK UP THE EMPLOYEE'S CONTRIBUTION
TO VRS FOR PAST SERVICE CREDIT
UNDER ~414(h) OF THE INTERNAL REVENUE CODE
WHEREAS, the County of Frederick, Virginia desires to provide its employees with tax
deferral pursuant to g414(h) ofthe Internal Revenue Code wi th respect to their member contributions
to the Virginia Retirement System, the State Police Officers Retirement System and the Judicial
Retirement System (collectively referred to as VRS) for the permissible purchase of past service
credit by picking up member contributions to the VRS; and
WHEREAS, the pick up is authorized under Virginia Code Sections 51.1-142.1 and
51.1-143.C.;
WHEREAS, the VRS keeps track of such picked up member contributions, and is prepared
to treat such contributions as employee contributions for all purposes ofVRS;
NOW, THEREFORE, IT IS HEREBY RESOLVED, that effective the first pay day on
or after the later of July 1, 1999, or the date the member executes a binding and irrevocable salary
reduction election relating to the past service permitted to be purchased, the County of Frederick,
Virginia shall pick up all or a portion of the member contributions of its employees to VRS based
on the terms of the salary reduction election, and such contributions shall be treated as employer
contributions in determining tax treatment under the Internal Revenue Code of the United States;
and it is further
RESOLVED, the binding salary reduction election to be executed by the member shall
include the following: (1) the beginning and ending date ofthe election, (2) the amount ofthe salary
reduction on a pay period by pay period basis, (3) the total amount of contribution expected to be
involved, (4) a statement that the member may not receive the contributed amounts instead of having
them paid by the County of Frederick, Virginia to the VRS, and (5) an agreement that the member
will not purchase the service credit through a lump sum payment during the period in which the
salary reduction election is in effect; and it is further
Resolution - VRS Past Service Credit
Page 2
RESOL VED, the member may revoke the salary reduction election only in the event of an
unforeseeable emergency as that phrase is used and defined in IRC Section 457 and Treasury
Regulation Section 1.4572(h)( 4), and if such a revocation is made, the member may not make a new
salary reduction election during his period of employment; and it is further
RESOL VED, that such contributions, although designated as member contributions, are to
be made by the County of Frederick, Virginia in lieu of member contributions; and it is further
RESOLVED, that pick up member contributions shall be paid from the same source of funds
as used in paying the wages to affected employees; and it is further
RESOLVED, that member contributions made by the County of Frederick, Virginia under
the pick up arrangement shall be treated for all purposes other than income taxation, including but
not limited to VRS benefits, in the same manner and to the same extent as member contributions
made prior to the pick up arrangement; 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 pick up contributions made by the County of Frederick, Virginia
directly instead of having them paid to VRS; and it is further
RESOLVED, that notwithstanding any contractual or other provisions, the wages of each
member ofVRS who is an employee ofthe County of Frederick, Virginia, shall be reduced by the
amount of member contributions picked up by the County of Frederick, Virginia on behalf of such
employee pursuant to the foregoing resolutions.
ADOPTED in Frederick County, Virginia, this 14th day of July, 1999.
Upon motion made by Charles W. Orndoff, Sr., seconded by W. Harrington Smith, Jr., the
above resolution was approved by the following recorded vote:
James L. Longerbeam
Aye
Robert M. Sager
Aye
Richard C. Shick1e
Aye
Margaret B. Douglas
Aye
W. Harrington Smith, Jr.
Aye
Charles W. Orndoff, Sr.
Aye
Resolution - VRS Past Service Credit
Page 3
A COPY TESTE:
~~I~
County Administrator
RESOLUTION NO.: 001-99
cc: Cheryl B. Shiffler, Finance Director
C. William Orndoff, Jr., Treasurer