BOARD MEETING DATE: June 12, 1998 AGENDA NO. 18
PROPOSAL:
Adopt Resolution Authorizing Pretax Payroll Deduction for Employees Purchasing Service Credits in San Bernardino County Employees’ Retirement Association
SYNOPSIS:
On July 3, 1997, the Board of the San Bernardino County Employees’ Retirement Association (SBCERA) took action to authorize SBCERA to open a pretax retirement contribution program to its members under the provisions of Internal Revenue Code (IRC) Section 414(h)(2). This action is to authorize AQMD employees who are members of SBCERA to purchase service credits via payroll deductions with pretax dollars. Approval of this item will result in flexibility and potential cost savings for employees with no financial impact to AQMD.
COMMITTEE:
Not Applicable
RECOMMENDED ACTION:
Adopt attached Resolution authorizing pretax payroll deductions for AQMD employees purchasing service credits in SBCERA.
Barry R. Wallerstein, D.Env.
Acting Executive Officer
Backgroundp
On July 3, 1997, the Board of SBCERA took action to authorize SBCERA to open a pretax retirement contribution program to its members under the provisions of Internal Revenue Code Section 415(h)(2). The program would allow members of the SBCERA retirement system to purchase retirement services credit through pretax payroll deductions. Individual members wishing to participate would then be required to sign an irrevocable contract that would remain in effect until the amount of the purchase is paid or the member terminates employment, whichever occurs first.
AQMD employees are currently able to purchase service credits on an after-tax basis only. The ability to purchase service credits on a pretax basis will provide tax savings to employees who choose to participate in the new program. With this program in place, employees will have a choice between purchasing service credits via payroll deductions with pretax or after-tax dollars.
The AQMD must adopt the proposed resolution before SBCERA can offer the pretax purchase option to eligible employees.
Proposal
Adopt the attached Resolution authorizing pretax payroll deductions for AQMD employees purchasing service credits in SBCERA.
Resource Impacts
This provides flexibility and potential cost savings for employees with no financial impact to the AQMD.
Resolution
/ / /