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R-OB-33 A RESOLUTION AFFIRMING AUTHORIZATION FOR THE CITY OF PORTSMOUTH TO PICK UP THE EMPLOYEE'S CONTRIBUTION TO THE VIRGINIA RETIREMENT SYSTEM. WHEREAS, the City of Portsmouth provides its employees with tax deferral pursuant to g 414(h) of the Internal Revenue Code with respect to their member contributions to the Virginia Retirement System ("VRS") by picking up member contributions to VRS; and WHEREAS, VRS keeps track of such picked up member contributions, and treats such contributions as employee contributions for all purposes of VRS; WHEREAS, the Internal Revenue Service in Notice 2006-43 has provided transition relief for existing pick up arrangements provided that an authorized person or entity takes formal action to evidence the establishment of the pick-up arrangement no later than January 1,2009. WHEREAS, in order to avail itself of the protection given under Notice 2006-43, the City of Portsmouth desires to affirm its intention to establish and maintain a pick-up arrangement through formal action by the City Council. NOW THEREFORE BE IT RESOLVED by the Council of the City of Portsmouth, Virginia: 1. That the existing member contribution pick-up arrangement is hereby affirmed as it relates to salary reduction elections in effect prior to the date of this Resolution; 2. That, effective the first pay day on or after September 9, 2008, the City of Portsmouth shall pick up member contributions of its employees to VRS, and such contributions shall be treated as employer contributions in determining tax treatment under the Internal Revenue Code of the United States; 3. That such contributions, although designated as member contributions, are to be made by the City of Portsmouth in lieu of member contributions; 4. That pick up member contributions shall be paid from the same source of funds as used in paying the wages to affected employees; 5. That member contributions made by the City of Portsmouth 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;