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R-99-43 A RESOLUTION AUTHORIZING THE CITY OF PORTSMOUTH TO PICK UP THE EMPLOYEE'S CONTRIBUTION TO VRS FOR PAST SERVICE CREDIT UNDER §414(h) OF THE INTERNAL REVENUE CODE. WHEREAS, the City of Portsmouth desires to provide its employees with tax deferral pursuant to §414(h) of the Internal Revenue Code with respect to their member contributions to the Virginia Retirement System, the State Police Officers Retirement System and the Judicial Retirement System (collectively referred to as VRS) for the permissible purchase of past service credit by picking up member contributions to the VRS; and WHEREAS, the pick up is authorized under Virginia Code Sections 51.1-142.I and 51.1-143.C.; WHEREAS, the VRS keeps track of such picked up member contributions, and is prepared to treat such contributions as employee contributions for all purposes of VRS; NOW, THEREFORE, BE IT RESOLVED that effective the first pay day on or after the later of July 27, 1999 or the date the member executes a binding and irrevocable salary reduction election relating to the past service permitted to be purchased, the City of Portsmouth shall pick up all or a portion of the member contributions of its employees to VRS based on the terms of the salary reduction election, and such contributions shall be treated as employer contributions in determining tax treatment under the Internal Revenue Code of the United States; and BE IT FURTHER RESOLVED, the binding salary reduction election to be executed by the member shall include the following: (1) the beginning and ending date of the election, (2) the amount of the salary reduction on a pay period by pay period basis, (3) the total amount of contribution expected to be involved, (4) a statement that the member may not receive the contributed amounts instead of having them paid by the City of Portsmouth to the VRS, and (5) an agreement that the member will not purchase the service credit through a lump sum payment during the period in which the salary reduction election is in effect; BE IT FURTHER RESOLVED, the member may revoke the salary reduction election only in the event of an unforeseeable emergency as that phrase is used and defined in IRC Section 457 and Treasury Regulation Section 1.457-2(h)(4) and if such a revocation is made, the member may not make a new salary reduction election during his period of employment; BE IT FURTHER RESOLVED that such contributions, although designated as member contributions, are to be made by the City of Portsmouth 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