CITY COUNCIL AGENDA ITEM
Meeting Date: October 25, 2005
Subject/Title: Adopt a Resolution redefining the coverage groups eligible to
elect pre-tax payroll deductions for California Public Employees’ Retirement
System (CalPERS) service credit purchases by removing the coverage group
code numbers and providing text descriptions that cover all miscellaneous
and all safety coverage groups and repeal previously adopted Resolution No.
Prepared by: Patricia Standley, Human Resources Manager
Submitted by: Karen L. Chew, Assistant City Manager
Adopt a Resolution to cover all miscellaneous and safety coverage groups
currently in place, as well as those established in the future, that will
continue to allow qualified California Public Employees’ Retirement System (CalPERS)
members the option to elect the pre-tax payroll deduction plan for their
service credit purchases (i.e., redeposit, service prior to membership,
military, etc.) and repeal Resolution No. 97-01.
The pre-tax payroll deduction plan was approved on January 14, 1997 when the
City Council approved Resolution 97-01. This Resolution covered all
employees in the following CalPERS coverage groups that existed at that
Effective August 1, 2003, the City Council approved a CalPERS contract
amendment which resulted in a new coverage group code for the miscellaneous
coverage group listed above. The establishment of the new coverage group
code inadvertently excludes miscellaneous members in the new coverage group
code from electing the pre-tax payroll deduction plan for service credit
purchases because Resolution 97-01 included specific coverage group codes in
place at that time.
To avoid the recurrence of this restriction, the attached Resolution
describes the coverage groups in general terms without coverage group codes
so that any future coverage group code changes will not impact the
eligibility of plan participants to elect the pre-tax payroll deduction plan
for service credit purchases.
CalPERS requires specific language relative to the pre-tax payroll deduction
plan for service credit purchases, therefore, with the exception of the
general description of the coverage groups instead of coverage groups
identified by coverage group code, the attached Employer Pickup Resolution
Pre-Tax Payroll Deduction Plan for Service Credit Purchases (Contribution
Code 14) contains the same language contained in Resolution 97-01 that staff
recommends to be repealed.
There is no cost impact to the City of Brentwood in providing this benefit
to its employees.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING EMPLOYER
PICKUP FOR PRE-TAX PAYROLL DEDUCTION PLAN FOR SERVICE CREDIT PURCHASES
(CONTRIBUTION CODE 14) AND REPEAL RESOLUTION NO. 97-01
WHEREAS, the Board of Administration of the California Public Employees’
Retirement System (CalPERS) at the April 1996 meeting approved a pre-tax
payroll deduction plan for service credit purchases under Internal Revenue
Code (IRC) section 414 (h)(2); and
WHEREAS, the City of Brentwood (“City”) 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 CalPERS;
WHEREAS, the City elects to participate in the pre-tax payroll deduction
plan for all employees in the following CalPERS coverage group(s):
All Miscellaneous Coverage Groups
All Safety Coverage Groups
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Brentwood
1. The City will implement the provisions of IRC 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 CalPERS and who have made a binding irrevocable election to participate
in the pre-tax payroll deduction plan. “Employee contributions” shall mean
those contributions reported to CalPERS 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
2. The contributions made by the City to CalPERS, although designated as
employee contributions, are being paid by the City in lieu of contributions
by the employees who are members of CalPERS.
3. The employees shall not have the option of choosing to receive the
contributed amounts directly instead of having them paid by the City to
4. The City shall pay to CalPERS 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.
5. The effective date for commencement of the pre-tax payroll deduction plan
cannot be any earlier than July 1, 1996, or the date the completed
resolution is received and approved in CalPERS, whichever is later.
6. The City Council shall participate in and adhere to requirements and
restrictions of the pre-tax payroll deduction plan by authorizing the City
Manager or his/her designee to report pre-tax payroll deductions when
authorized by CalPERS for those employees of the above stated Coverage
Group(s) who have elected to participate in this plan.
7. Resolution No. 97-01 is hereby repealed.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at
a regular meeting held on 25th day of October, 2005 by the following vote: