Laserfiche WebLink
6.3. B. - Page 1 <br /> RE PO RT <br /> To the Honorable Mayor and City Council <br /> From the City Manager <br /> August 22, 2011 <br /> SUBJECT <br /> Resolution implementing Section 414(h)(2) of the Internal Revenue Code. <br /> RECOMMENDATION <br /> It is recommended that the City Council adopt a resolution implementing Section <br /> 414(h)(2) of the Internal Revenue Code (IRC) for employee contributions to employer <br /> pension costs. <br /> BACKGROUND <br /> The City has entered labor agreements which require the employees to cost share <br /> pension obligations by contributing a percentage toward the employer cost of <br /> retirement. It is desired that such employee contributions toward the employer cost of <br /> retirement be made on a pre-tax basis in accordance with Section 414(h)(2) of the IRC. <br /> A resolution implementing Section 414(h)(2) must be adopted to incorporate the <br /> proposed changes. <br /> The employee contributions toward the employer cost of retirement will occur as follows: <br /> Executive Management: <br /> • Effective January 1, 2012 each unit member will pay two and one-half percent <br /> (2.5%) toward the employer cost of retirement <br /> • Effective January 1, 2013 each unit member will pay five percent (5%) toward the <br /> employer cost of retirement <br /> Chief Officers Association: <br /> • Effective January 1, 2012 each unit member will pay two and one-half percent <br /> (2.5%) toward the employer cost of retirement <br /> • Effective January 1, 2013 each unit member will pay five percent (5%) toward the <br /> employer cost of retirement <br />