10. CalPERS service creditHUMAN RESOURCES
CUPERTINO
CITY HALL, pEP,4RTMENT OF ADMINISTRATIVE SERVICES
10300 TORRE A\/ENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (4(18) 777-3227 • FAX: (408) 777-3109
SUMN[ARY
Agenda Item No. ~Q
SUBJECT AND ISSUE
Meeting Date: October 21, 2008
Adopt a resolution amending the City of Cul~ertino's contract with Ca1PERS to continue
allowing pre-tax payroll deductions for service credit purchases.
BACKGROUND
The City of Cupertino's contract with Ca1PERS allows pre-tax service credit purchases
for specified coverage groups. Ca1PERS sul;gested the attached contract amendment to
allow the continuation of pre-tax service credit purchases for all miscellaneous coverage
groups. Using general language to describc; employee coverage groups eliminates the
need for fiiture contract amendments as group numbers change over time.
FISCAL IMPACT
The proposed contract amendment is cost neutral.
RECOMMENDATION
Adopt Resolution 0~-'13q, the Ca1PERS employer pickup resolution pre-tax payroll
deduction plan for service credit purchases.
Submitted by:
s
Sandy Abe
Human Resources Director
Approved by:
David W. Knapp
City Manager
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Resolution N0. 08-139 Refurn fo CaIPERS -Unit 830
Employer code:
EMPLOYER PICKUP RESOLUTION
PRE-TAX PAYROLL DEDUCTION PLAN
FOR SERVICE CREDIT PURCHASES
(CONTRIBUTION CODE 94)
WHEREAS, the Board of Administration of the California Public Employees' Retirement System
(CaIPERS) at the April 1996 meeting approved apre-tax payroll deduction plan for service credit
purchases under In#emal Revenue Code {IRC) section 414{h)(2}; and
WHEREAS, the City of Cupertino{Employer} has the authority to implement the provisions of IRC section
414(h)(2) and has determined that even though implementation is not required by law, the tax benefit
offered by this section should be provided to those employees who are members of CaIPERS; and
WHEREAS, the City of Cupertino {Employer} elects to participate in the pre-tax payroll deduction plan for
all employees in the following CaIPERS Coverage Group(s):
{Membership Coverage Group(s)}
All Miscellaneous Coverage Groups
NOW, THEREFORE, BE IT RESOLVED:
That the City of Cupertino {Employer} will implement the provisions of lRC section 414(h)(2) by
making employee contributions for service credit purchases pursuant to the California State
Government Code on behalf of its employees who are members of CaIPERS and who have made a
binding irrevocable election to participate in the pre-tax payroll deduc#ion plan. "Employee
contributions" shall mean those contributions reported to CaIPERS-which are deducted from the
salary of employees and are credited to individual employee accounts for service credit purchases,
thereby resulting in tax deferral of employee contributions.
II. That the contributions made by the City of Cupertino {Employer} to CaIPERS, although designated as
employee contributions, are being paid by the City of Cupertino {Employer} in lieu of contributions by
the employees who are members of CaIPERS.
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III. That the employees shall not have the option of choosing to receive the contributed amounts directly
instead of having them paid by the City of Cupertino {Employer} to CaIPERS.
IV. That the City of Cupertino {Employer} shall pay to CaIF'ERS the contributions designated as employee
contributions from the same source of funds as used in paying salary, thereby resulting in tax deferral of
employee contributions.
V. That the effective date for commencement of the pre-tax payroll deduction plan cannot be any earlier than
the date the completed resolution is received and approved by CaIPERS.
VI. That the governing body of the City of Cupertino {Emple~yer}shall participate in and adhere to requirements
and restrictions of the pre-tax payroll deduction plan by reporting pre-tax payroli deductions when
authorized by CaIPERS for those employees of the above stated Coverage Group(s) who have elec#ed to
participate in this plan.
PASSED AND ADOPTED by the governing body of the City of Cupertino {Employer}
this 21 st day of October, 2t?48. {year}
BY
(Signature of Official}
(Title of Official)
~ RETURN ADDRESS:
FOR CALPERS USIE ONLY
Pre-tax payroll deduction plan effective date:
Approved By:
Tittle:
MEMBER SERVICES DIVISION, Service credit sectioin-Unit 830
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