COUNTY OF ALBEMARLE
Resolution to Affirm the County’s Authorization to Pick-Up Employee’s Contribution to VRS Under
§ 414(h) of the Internal Revenue Code
Adopt a Resolution affirming the County’s authorization to pick up the employee’s contribution to the Virginia Retirement System (VRS)
Messrs. Tucker, Foley, Davis, and Wiggans
LEGAL REVIEW: Yes
August 6, 2008
ACTION: X INFORMATION:
The Internal Revenue Service (IRS) has issued Ruling 2006-43 requiring employers participating in the Virginia Retirement System (VRS) to provide documentation authorizing pick-up plans by January 1, 2009. Pick-up plans allow localities to pick up or pay on a pre-tax basis the employee’s contribution to VRS and allow employees to purchase prior service on a pre-tax basis. VRS is conducting an audit of pick-up plans to ensure that they are compliant with the IRS ruling and is requesting appropriate documentation be submitted to it.
The County approved its pick up plan effective July 1, 1980 as part of the Annual Appropriation for FY 80/81 adopted on April 9, 1980. This election is irrevocable under VRS regulations. The documentation that VRS is requesting must be in the form of a resolution approved by the governing body. The resolution must contain certain basic information required by the IRS ruling.
VRS sent a letter to local governments (Attachment B) 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. Failure to timely provide this documentation could reverse the favorable tax treatment for employee VRS contributions and could impose significant reporting and recordkeeping burdens on the County.
The County Attorney has reviewed the attached Resolution for Albemarle County (Attachment A). The School Board will consider adoption of similar resolutions on August 14, 2008.
There is no budget impact.
Staff recommends that the Board adopt the attached Resolution (Attachment A)
A – Resolution Affirming Albemarle County’s Authorization to Pick Up Employee’s Contribution to VRS
B – VRS Letter to Robert Tucker, County Executive, dated July 11, 2008
Return to consent agenda
Return to regular agenda