019-08RESOLUTION
Affirmation of Authorization to Pick -up the Employee's Contribution to
VRS for FREDERICK COUNTY, 55134
Under § 414(h) of the Internal Revenue Code
WHEREAS, the FREDERICK COUNTY provides its employees with tax deferral
pursuant to § 414(h) of the Internal Revenue Code with respect to their member
contributions to the Virginia Retirement System (referred to as VRS) by picking up
member contributions to VRS; and
WHEREAS, VRS keeps track of such picked up member contributions, and treats such
contributions as employee contributions for all purposes of VRS;
WHEREAS, the Internal 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 than January 1,
2009.
WHEREAS, in order to avail itself of the protection given under Notice 2006 -43, the
FREDERICK COUNTY desires to affirm its intention to establish and maintain a pick -up
arrangement through formal action by its governing body.
NOW, THEREFORE, IT IS HEREBY 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
RESOLVED that effective the first pay day on or after 7/1/1989 , the county 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 Internal
Revenue Code of the United States; and it is further
RESOLVED that such contributions, although designated as member contributions, are to
be made by the FREDERICK COUNTY 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 FREDERICK COUNTY 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 FREDERICK COUNTY
directly instead of having them paid to VRS; and it is further
1715639
8/2006
RESOLVED that notwithstanding any contractual or other provisions, the contributions
of each member of VRS who is an employee of the FREDERICK COUNTY shall be
— picked up either through a reduction in the current salary of such employee or as an offset
against future salary increases of such employee or as a combination of both at the option
of the employer by the FREDERICK COUNTY on behalf of such employee pursuant to
the foregoing resolutions.
Adopted in WINCHESTER, Virginia this 24th day of September 2008
John R. Riley, Jr., County Administrator
Name & Title Printed
uthorize Signature- Title
BOS Resolution No.: 019 -08
1715639
8/2006
COUNTY of FREDERICK
Finance Department
Cheryl B. Shiffler
Director
540/665 -5610
Fax: 540/667 -0370
E -mail: cshiffle @co.frederick.va.us
TO: Board of Supervisors
FROM: Finance Committee
DATE: August 20, 2008
SUBJECT: Finance Committee Report and Recommendations
The Finance Committee met in the First Floor Conference Room at 107 North Kent
Street on Wednesday, August 20, 2008 at 8:00 a.m. Member Richie Wilkins was absent.
1. The Public Works Director requests an FY 2009 Landfill Fund supplemental
appropriation in the amount of $2,578,000. This amount represents re- appropriation
of funds not spent in FY 2008. This item will require a public hearing. See attached
memo, p. 1. The committee recommends forwarding to public hearing.
2. The IT Director requests an FY 2009 General Fund supplemental appropriation in the
amount of $2,163. This amount represents re- appropriation of funds not spent in
FY 2008 for e- Government Day. See attached memo, p. 2. The committee
recommends approval.
3. The IT Director requests an FY 2009 General Fund supplemental appropriation in the
amount of $37,000. This amount represents re- appropriation of funds not spent in
FY 2008 to be used for unbudgeted annual maintenance fees for county -wide IT
projects. See attached memo, p. 3. The committee recommends approval of $15,000.
107 North Kent Street • Winchester, Virginia 22601
Finance Committee Report and Recommendations
August 20, 2008
Page 2
4. The NRADC Superintendent requests an FY 2009 General Fund supplemental
appropriation in the amount of $16,788. This amount represents funds received from
the State Criminal Alien Assistance Program. Funds disbursed from this revenue
equal $3,693.36. No local funds required. See attached memo, p. 4 — 14.
5. The EDC Director requests an FY 2009 General Fund supplemental appropriation in
the amount of $227,723.04 This amount represents funds for the NetTech Center of
Winchester and will be recovered from GSA. No local funds required. See attached
memo, p. 15 — 19. The committee recommends approval.
6. The Assistant County Administrator requests an FY 2009 General Fund supplemental
appropriation in the amount of $21,000. This amount represents re- appropriation of
funds not spent in FY 2008 to be used for snow removal at the Public Safety Building
and fuel for maintenance staff vehicles. See attached memo, p. 20. The committee
recommends approval.
7. The County Administrator requests an FY 2009 General Fund supplemental
qppropriation in the amount of $2,100. This amount represents funds needed by the
AARP Tax Aide Program for the location rental fee. Local funds required. See
attached memo, p. 21. The committee recommends approval.
8. The Finance Director requests a resolution for the County's VRS pick -up plan.
Formal authorization is required by the IRS. See attached information, p. 22 — 24.
The committee recommends approval.
9. The County Administrator and the Finance Director request discussion on FY 2009
state reductions in Aid to Localities. See attached information, p. 25 — 26. No action
needed.
July 2008 Employer Update
You can print MBPs for employees who request them, using myVRS for Employers.
Copies printed using myVRS will appear identical to the printed copies.
access their 2008 MBPs online, your employees need to:
Page 2 of
Authorization of Coverage Retention
(VRS -170) 'M 24kb
VSDP Long Term Care Plan Protection
f. A ainst Unintentional Lapse (VRS -171)
21kb
Log into their myVRS for members account.
2. After logging into their myVRS online account, select the "Member Benefit Profile
(MBP)" link from the left navigation column.
3. From the MBP page, select the "View 2008 Member Benefit Profile" link to view their
MBP in a PDF file.
4. To retain a copy for their records, select the print button from the PDF screen.
IRS Ruling Affects Employer Pick - Up Plans
Internal Revenue Service (IRS) Ruling 2006 -43 requires employers
to have formal authorization for pick -up plans by January 1, 2009.
Pick -up plans allow employers to pick up or pay the member
contribution rate of 5 percent and to allow purchase of prior service
on a pre -tax basis.
Generally, the formal authorization is in the form of a written
document, and most commonly, a resolution approved by the
governing body. The irrevocable resolution must contain certain
is information that is required by the IRS ruling.
As _ :,sult of the IRS ruling, VRS is conducting a review of pick -up plan resolutions to ensure
that they are compliant with the IRS ruling. State agencies are already in compliance.
To start the process, VRS recently sent a letter to local governments and school boards,
outlining the requirements and including sample resolutions. Employers must return resolutions
approved by their governing boards to VRS no later than September 30, 2008. VRS is required
to ensure all employer pick -up plans are compliant with the IRS ruling. With your help, we can
account for all employers' pick -up plans by January 1, 2009.
Retiring Employees Can Increase Their Benefit with Unused Sick Leave
Your employees can increase their retirement benefit if they have
fi unused sick leave at the time they retire. Eligible VRS- covered
employees may use all or a portion of their unused leave to purchase
service credit.
The cost to purchase service credit with payouts for unused sick
leave is based on the actuarial rate. You can use the actuarial
estimator on the VRS Web site under Employer Resources to assist
employees with determining the cost.
Payment for unused sick leave is subject to income tax; however, the employee can add
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