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2012-05-05 VRS Employee ContributionsResolution 2012-05-05 Member Contributions by Salary Reduction for Counties, Cities, Towns, and Other Political Subdivisions (In accordance with Chapter 822 of the 2012 Acts of Assembly (SB497)) Resolution WHEREAS, the Pittsylvania County 55171 employees who are Virginia Retirement System members who commence or recommence employment on or after July 1, 2012 ("FY2013 Employees" for purposes of this resolution), shall be required to contribute five percent of their creditable compensation by salary reduction pursuant to Internal Revenue Code § 414(h) on a pre-tax basis upon commencing or recommencing employment; and WHEREAS, the Pittsylvania County 55171 employees who are Virginia Retirement System members and in service on June 30, 2012, shall be required to contribute five percent of their creditable compensation by salary reduction pursuant to Internal Revenue Code § 414(h) on a pre-tax basis no later than July 1, 2016; and WHEREAS, such employees in service on June 30, 2012, shall contribute a minimum of an additional one percent of their creditable compensation beginning on each July 1 of 2012, 2013, 2014, 2015, and 2016, or until the employees' contributions equal five percent of creditable compensation; and WHEREAS, the Pittsylvania County 55171 may elect to require such employees in service on June 30, 2012, to contribute more than an additional one percent each year, in whole percentages, until the employees' contributions equal five percent of creditable compensation; and WHEREAS, the second enactment clause of Chapter 822 of the 2012 Acts of Assembly (SB497) requires an increase in total creditable compensation, effective July 1, 2012, to each such employee in service on June 30, 2012, to offset the cost of the member contributions, such increase in total creditable compensation to be equal to the difference between five percent of the employee's total creditable compensation and the percentage of the member contribution paid by such employee on January 1, 2012. BE IT THEREFORE RESOLVED, that the Pittsylvania County 55171 does hereby certify to the Virginia Retirement System Board of Trustees that it shall effect the implementation of the member contribution requirements of Chapter 822 of the 2012 Acts of Assembly (SB497) according to the following schedule for the fiscal year beginning July 1, 2012 (i.e., FY2013): Type of Employee Employer Paid Member Contribution Employee Paid Member Contribution Plan 1 4 % 1 Plant 4% 1% FY2013 Employees 0% 5% (Note: Each row must add up to 5 percent.); and BE IT FURTHER RESOLVED, that such contributions, although designated as member contributions, are to be made by the Pittsylvania County in lieu of member contributions; and BE IT FURTHER RESOLVED, that pick up member contributions shall be paid from the same source of funds as used in paying the wages to affected employees; and BE IT FURTHER RESOLVED, that member contributions made by the Pittsylvania County under the pick up arrangement shall be treated for all purposes other than income taxation, including but not limited to VRS benefits, in the same manner and to the same extent as member contributions made prior to the pick up arrangement; and BE IT FURTHER RESOLVED, that nothing herein shall be construed so as to permit or extend an option to VRS members to receive the pick up contributions made by the Pittsylvania County directly instead of having them paid to VRS; and BE IT FURTHER RESOLVED, that notwithstanding any contractual or other provisions, the wages of each member of VRS who is an employee of the Pittsylvania County shall be reduced by the amount of member contributions picked up by the Pittsylvania County on behalf of such employee pursuant to the foregoing resolutions. NOW, THEREFORE, the officers of Pittsylvania County 55171 are hereby authorized and directed in the name of the Pittsylvania County to carry out the provisions of this resolution, and said officers of the Pittsylvania County are authorized and directed to pay over to the Treasurer of Virginia from time to time such sums as are due to be paid by the Pittsylvania County for this purpos . Governing B Chairman CERTIFICATE I, {,lilliam D. Sleeper , Clerk of the Pittsylvania County, certify that the foregoing is a true and correct copy of a resolution passed at a lawfully organized meeting~ of the Pittsylvania County held at Chat am ,Virginia at 7:OOpm o'clock on May 15 2012. Given under my hand and seal of the Pittsylvania County this 15 day of May , 2012. Jerk This resolution must be passed prior to July 1, 2012 and received by VRS no later than July 10, 2012. VIRGINIA ACTS OF ASSEMBLY -- 2012 RECONVENED SESSION CHAPTER 822 An Act to amend and reenact ~ 51.1-144 of the Code of Virginia, relating to Virginia Retirement System employee contributions; local employees; school board employees. [S 497] Approved April 18, 2012 Be it enacted by the General Assembly of Virginia: 1. That § 51.1-144 of the Code of Virginia is amended and reenacted as follows: § 51.1-144. Member contributions. A. Each member shall contribute five percent of his creditable compensation for each pay period for which he receives compensation. The employer shall deduct the contribution payable by the member. Every employee accepting employment shall be deemed to consent and agree to any deductions from his compensation required by this chapter. l~Fe dedust~ shall be talEe~3 €rem the sempensatien of a mex3her a€te~ 13is gal rt~ement date i€ the mex~ier elee~s net to seute- B. In determining the creditable compensation of a member in a payroll period, the Board may consider the rate of compensation payable to the member on the date of entry or removal of his name from the payroll as having been received throughout the month if service for the month is creditable. If service for the month is not creditable, the Board may consider any compensation payable during the month as not being creditable compensation. C. The minimum compensation provided by law for any member shall be reduced by the deduction required by this section. Except for any benefits provided by this chapter, payment of compensation minus the deductions shall be a full and complete discharge of all claims for services rendered by the member during the period covered by the payment. D. No deduction shall be made from any member's compensation if the employer's contribution is in default. E. The Board may modify the method of collecting the contributions of members so that the employer may retain the amounts deducted from members' salaries and have a corresponding amount deducted from state funds otherwise payable to the employer. F. 1. Except as provided in sul~dlv}sieu subdivisions ~ 3 and 4, any employer may elect to pay an equivalent amount in lieu of all member contributions required of its employees. Such payments shall be credited to the members' contribution account. These contributions shall not be considered wages for purposes of Chapter 7 (§ 51.1-700 et seq.) e€ this t-itle, nor shall they be considered to be salary for purposes of this chapter. 2. A person who becomes a member on or after July 1, 2010, shall be required to pay member contributions on a salary reduction basis in accordance with § 414(h) of the Internal Revenue Code in the amount of five percent of creditable compensation if the person is (i) a member covered by the defined benefit plan established under this chapter, (ii) a member of the State Police Officers' Retirement System under Chapter 2 (§ 51.1-200 et seq.), (iii) a member of the Virginia Law Officers' Retirement System under Chapter 2.1 (§ 51.1-211 et seq.), (iv) a member of the Judicial Retirement System under Chapter 3 (§ 51.1-300 et seq.), or (v) earning the benefits permitted by § 51.1-138. €~ash seu~3; ~3` te~~; leeal publie sc-heel beard; er ether leeal employer ~a3` elect to pay are equ~alent ameee£ ~ lieu e€ the mender cee~s ~ e€ its empleyees dessrihed ~ this suhdi~isien- The ceu~y; city; teiv~~ ~l pehfic se-heel er ether lesal ex~leYer nom}` paw; ~ ivhele pe~seutages; up to ~f~ve ~ of the cFedital34e ~ ^oe ~ e€ such employees; pre~led that the emple}~eF pays the same peke a€ ~r~~ eet~tl-ensetien ~ all seep employees; and is paying all memlu~ dens wired under tl~s sest~ €er all of its etl~ ~ emple3sees net dess~ed h3 this men- ~ pertlen e€ the €rve per~eat e€ sred}tal~le ensatiae wed e€ a person who hesemes a mend3eF en er after Sul} ~ ~~; that is rzet paid h}` the ~; ~ teiv~~; leezal pablis wheel liea~d; er ether leeal employer; shall 13e ~ ~ suEh ~~ l*le employer ether tluan a sew; ~ } lesal p~ic Scheel heard; er ether local employer shall he al-leveed to elect to pa} ally ame~t e€ fiJie ~ eentt-ieas ~equ-ice e€ a perse}3 she heseme~s a mernher en er after Sul} ~ ~& 3. A member who is an employee of a county, city, town, or other local employer other than a local public school board, regardless of whether the member is a person who becomes a member on or after July 1, 2010, shall be required to pay member contributions on a salary reduction basis in accordance with ~ 414(h) of the Internal Revenue Code in the amount of five percent of creditable compensation as follows: (i) any member who commences or recommences employment on or after July 1, 2012, shall be required to contribute five percent of his creditable compensation upon commencing or recommencing 2 of 2 employment and (ii) members in service on June 30, 2012, shall be required to contribute five percent of their creditable compensation no later than July 1, 2016. Such member described in subdivision (ii) shall contribute a minimum of an additional one percent of his creditable compensation beginning on each July 1 of 2012, 2013, 2014, 2015, and 2016, or until the member's contribution eguals five percent of creditable compensation, but the county, city, town, or other local employer other than a local public school board may elect to reguire members to contribute more than an additional one percent each year, in whole percentages. In no case shall a member be required to contribute more than f ve percent of his creditable compensation for each pay period for which he receives compensation. No county, city, town, or other local employer other than a local public school board shall be allowed to elect to pay any amount of member contributions except to pay the difference between five percent and the employee contribution during the phase-in period described in this subdivision for a member who was in service on June 30, 2012. 4. A member who is an employee of a local public school board, regardless of whether the member is a person who becomes a member on or after July 1, 2010, shall be required to pay member contributions on a salary reduction basis in accordance with ~ 414(h) of the Internal Revenue Code in the amount of five percent of creditable compensation as follows: (i) any member who commences or recommences employment on or after July 1, 2012, shall be required to contribute five percent of his creditable compensation upon commencing or recommencing employment and (ii) members in service on June 30, 2012, shall be required to contribute five percent of their creditable compensation no later than July 1, 2016. Such member described in subdivision (ii) shall contribute a minimum of an additional one percent of his creditable compensation beginning on each July 1 of 2012, 2013, 2014, 2015, and 2016, or until the member's contribution eguals five percent of creditable compensation, but the local public school board employer may elect to require members to contribute more than an additional one percent each year, in whole percentages. In no case shall a member be required to contribute more than five percent of his creditable compensation for each pay period for which he receives compensation. No local public school board employer shall be allowed to elect to pay any amount of member contributions except to pay the difference between five percent and the employee contribution during the phase-in period described in this subdivision for a member who was in service on June 30, 2012. S. Notwithstanding any other provision of this section or other law, only those employers who were paying member contributions as of February 1, 2010, may pay member contributions. The .provisions of this subdivision shall not apply to a county, city, town, local public school board, or other local employer. G. ~}est to t-he pre~+-isiens e€ S:~sesti~eH ~; arry enrpleyer ~ese empleyees are paying ~ se~r~ to tke ran system en a salary ~astiea basis ~ a~s~se wig § "'~ e€ tl~e 1•ate~al Be~ex~ee Cede may phase-~ tl~e pay~eat e€ tl~e member seatr~tieas en be~kai€ e€ its empleyees span neti€satien to tl~e Beams e€ i-be eaapleyer~ intext to ~ sash p~ ~e Beard shall appreve tl~e per-ied e€ ~e by ~ t-be phase-in sl3ail be sea3pleted ~ to e~seed sip yews the e€ the ~ payments: I4- ~ ea~pleyer that; by ~eselutien e€ its ge~e~ring bed e~ests to p~eu~ide r+~t leverage €s~ its employees ~ aese~aase ~ c,~..,~ ee er aBeF $eptembe~ ~ 4s}9$; sl~a-11 aileiv i~t5 e~layees to pay bey seatr3betieas to the r+~~ system en a salary red}tstie~ basis in es~~ese § ^'~ e€ the Ixte~al ~e C-ede i~t Nett e€ paying ti}e member eat ee bel~al-f e€ its empleyees in assese the pis e€ °,~ I: The Board may develop procedures to effect the transfer of member contributions paid by employers on or after July 1, 1980, and accrued interest on those contributions, to the member contribution account of the member, if such contributions have been previously deposited into the retirement allowance account of the employer. 2. That any county, city, town, local public school board, or other local employer that currently pays any portion of member contributions to the Virginia Retirement System that the member will be responsible for paying pursuant to the provisions of this act shall provide an increase in total creditable compensation, effective July 1, 2012, to each affected member who was in service on June 30, 2012, to offset the cost of the member contributions. Such increase in total creditable compensation shall be equal to the difference between five percent of an employee's total creditable compensation and the percentage of the member contribution paid by the local member on January 1, 2012. If a county, city, town, local public school board, or other local employer elects to phase in the member contributions pursuant to subdivision F 3 or F 4 of § 51.1-144 of the Code of Virginia, the increase in total creditable compensation may also be phased in at the same rate.