June 2010 continued...

5:00 PM – A special meeting was called by Clerk/Treasurer Bobbie Waller for the purpose of passing a resolution for the Virginia Retirement System (VRS) for any new employees hired after July 1, 2010.  This resolution will allow the Town to continue to pay the 5% employee contribution as it does now on current employees for any new employees hired after July 1, 2010.  These employees will be under Plan 2.

The municipal government of the Town of Brookneal met with the following members present:

Phyllis Campbell, Mayor

James Nowlin, Vice Mayor

Robert Jean, Tracy Meisenbach and Kenneth Jennings, Council Members

Bobbie Waller, Clerk/Treasurer

RESOLUTION OF AUTHORIZATION TO PICK UP THE EMPLOYEE’S CONTRIBUTION TO VRS UNDER

Upon motion by Robert Jean, seconded by Tracy Meisenbach and unanimously carried, the Council approved the following resolution.

A verbal vote was taken as follows:

Mr. Jennings Aye                  Ms. Meisenbach Aye

Mr. Nowlin Aye                  Mr. Jean Aye

RESOLUTION

Authorization to Pick-up the Employee’s Contribution to VRS

Under § 414(h) of the Internal Revenue Code For Plan 2 Employees

WHEREAS, the Virginia General Assembly, in its 2010 session passed legislation creating a separate retirement plan for employees hired on or after July 1, 2010 (hereafter referred to as “Plan 2 Employees”). The legislation stipulates that Plan 2 Employees will pay their 5 percent member contribution and that, absent other action by the employer, such contribution will be paid through salary reduction according to Internal Revenue Code § 414 (h) on a pre-tax basis; and

WHEREAS, the legislation allows certain employers, including the Town of Brookneal to pick-up and pay all or a portion of the member contributions on behalf of its Plan 2 Employees as an additional benefit not paid as salary; and

WHEREAS, the election to pick-up and pay all or a portion of the member contributions on behalf of its Plan 2 Employees as an additional benefit not paid as salary shall, once made, remain in effect for the applicable fiscal year (July 1 - June 30) and shall continue in effect beyond the end of such fiscal year absent a subsequent resolution changing the way the 5 percent member contribution is paid; and

WHEREAS, employee contributions that are picked-up as an additional benefit not paid as salary are not considered wages for purposes of VA Code § 51.1-700 et seq. nor shall they be considered salary for purposes of VA Code § 51.1-100 et seq.; and

WHEREAS, the Town of Brookneal desires to pick-up and pay its Plan 2 Employees’ member contributions to VRS as an additional benefit not paid as salary in an amount equal to (1%) (2%) (3%) (4%) (5%) (Circle One) of creditable compensation; and

WHEREAS, VRS tracks such picked-up member contributions and is prepared to treat such contributions as employee contributions for all purposes of VRS.

NOW, THEREFORE, IT IS HEREBY RESOLVED that effective the first day of  July 2010, the Town of Brookneal shall pick-up member contributions of its Plan 2 Employees to VRS as an additional benefit not paid as salary in an amount equal to (1%) (2%) (3%) (4%) (5%) (Circle One) of creditable compensation subject to the terms and conditions described above; and it is further

RESOLVED that such contributions, although designated as member contributions, are to be made by the ___________(Employer Name) in lieu of member contributions; and it is further

RESOLVED that nothing herein shall be construed so as to permit or extend an option to VRS members to receive the picked-up contributions made by the Town of Brookneal directly instead of having them paid to VRS.

Adopted in Brookneal, Virginia this 23rd day of June, 2010.

_______________________   _____________________

Authorized Signature               Title

ADJOURNMENT

Upon motion from Tracy Meisenbach, seconded by James Nowlin, and unanimously carried, Mayor Campbell announced that the June 23, 2010, Council meeting was adjourned at 5:02 p.m.

___________________________                  ____________________________

Bobbie A. Waller Phyllis L. Campbell

Clerk/Treasurer                                               Mayor