City Council Packet - 12/06/1994 ~
1 1, Ill
CITY OF TIGARD
OREGON
Pl1EUC NOTICE. Anyone wishing to speak on an agenda Item should sign on the
appropriate sign-up sheet(s). If no sheet is available, ask to be recognized by the Mayor
at the beginning of that agenda item.
Assistive Ustening Devices are available for persons with Impaired hearing and should
be scheduled for Council meetings by noon on the Monday prior to the Council meeting.
Please call 639-4171, Ext. 309 (voice) or 684-2772 (TDD - Telecommunications Devices
Z-48- Man+
lul 6l/p .riw~.
Upon request, the City will also endeavor to arrange for the following services:
• Qualified sign language interpreters for persons with speech or hearing
impairments; and
• Qualified bilingual interpreters.
Since these services must be scheduled with outside service providers, it is important to
allow as much lead time as possible. Please notify the City of your need by 5:00 p.m. on
the Thursday preceding the meeting date at the same phone numbers as listed above:
639-4171, Ext. 309 (voice) or 684-2772 (TDD - cicvin;~►rrienicariv~~s Devices for the Del
SEE ATTACKED AGENDA
COUNCIL AGENDA - DECEMBER 6, 1994 - PAGE 1
4
TIGARD CITY COUNCIL
DECEMBER 6, 1994
AGENDA
• STUDY MEETING (6:30 PM)
Executive Session: The Tigard City Council will go into Executive Session
under the provisions of ORS 192.660 (1) (d) to discuss labor relations.
1. BUSINESS MEETING (Immediately following the study meeting.)
1.1 Call to Order - City Council
1.2 Roll Call
1.3 Pledge of Allegiance
1.4 Council Communications/Liaison Reports
1.5 Call to Council and Staff for Non-Agenda items
2. COUNCIL CONSIDERATION - RESOLUTION APPROVING EXTENSION OF
THE CITYOFTIGARD OREGON PUBLIC EMPLOYEES' UNION CONTRACTTO
DECEMBER 31, 1995 - RESOLUTION NO. 94-
• Staff Summary: City Administrator Monahan
3. COUNCIL CONSIDERATION - RESOLUTION TO ENTER INTO CONTRACTS
WITH PION-REPRESENTED EMPLOYEES TO EXTEND RETIREMENT
CONTRIBUTIONS BY THE CITY OF TIGARD TO A DATE CERTAIN AND
AUTHORIZING THE CITY ADMINISTRATOR TO SIGN - RES. NO. 9470 Staff Summary: City Administrator Monahan
4. NON-AGENDA ITEMS
4.1 if Resolution for, Item No: 3 is approved by City Council the City Council will
then consider:
x Resolution to amend contract with City Administrator to extend City
of Tigard retirement contribution to a date certain; Res. No. 94
5. ADJOURNMENT
COUNCIL AGENDA - DECEMBER 6, 1994 - PAGE 2 ' .
9
o
Council Agenda Item ` . 6 ' I G . A a R D C I T Y C O U N C I L
ME:ETINfG MINUTES - DECEMBER 6, 1994
Meeting was called to order at 6:45 p.m. by Mayor Schwartz.
• Executive Session: The Tigard City Council went into
Executive Session at 6:45 p.m. under the provisions of ORS
192.660 (1) (d) to discuss labor relations.
1. ROLL CALM,
Council Present: Mayor John Schwartz; Councilors Wendi
Conover Hawley, Paul Hunt, Bob Rohlf, and Ken Scheckla. Staff
present: Bill Monahan, City Administrator; Liz Newton,
Community Involvement Coordinator; and Catherine Wheatley,
City- Recorder. (Note: Pam Beery, Legal Counsel, was
available to the City Council by speaker telephone during the
Executive Session.
2. COUNCIL CONSIDERATION - RESOLUTION APPROVING EXTENSION OF THE
CITY OF TIGARD . OREGON PUBLIC MMLOYEES' UNION CONTRACT TO
DECWMER 31, 1995
a. Mayor Schwartz anno77nc~ed that the Counc.L.L had met in
Executive Session and this agenda item had been
discussed.
b. Flavio Martinez, President of OPEU Local 199, presented
testimony on behalf of the OPEU employees for the City of
Tigard. (See letter on file with the packet material.)
C. Mayor Schwartz asked each Councilor to comment on this
issue.
Mayor Schwartz commented that this was a difficult
issue and noted that he was a PERS retiree. He
advised those present that he was elected to
conduct City business for the citizens of Tigard.
He stressed that he must uphold State and Federal
laws.
He said that Measure 8 was pazsed by the voters;
however, he personally did not like this ballot
measure. The problem now before the Council is how
to fulfill the voters' mandate and also be
sensitive to City employees. He noted he seldom
received negative comments about City employees and
often heard praise for those who work for the City.
City council Meeting Minutes - December 6, 1994, Page 1
Mayor Schwartz explained that the proposal offered
to the City employees was to give OPEU an extension
for six months on their present contract. There is
also a proposal that non-represented employees
would be given a one-year notice period (until
1/1/96) before a 6 percent contribution is deducted
from their pay for retirement benefits. The Mayor
said that many things could happen in one year;
Measure 8 could be overturned by the courts. He
also noted that during labor negotiations, the
issue of wages and comparisons to like cities for
like work could be examined.
Mayor advised that he was not persuaded that a
three-year contract extension was warranted as was
requested by OPEU.
Councilor Rohlf advised that he had been a public
employee when the State employees' union decided to
accept the trade-off of a PERS pick-up rather than
a wage increase. At that time, he would have
preferred to receive the pay raise.
Councilor Rohlf advised he had voted against
Measure 8. He said he values City employees and
a.cc.a.v taau.- r+caouic W is idaitas.ro aac asvc.cu, 11V1kC-'"vE:r,
that Measure 8 is neither "immoral or illegal" and
the voters in Tigard clearly wanted to pass Measure
8.
He said he believes the employees will have a
chance to overturn the measure in the courts. He
advised he was not present during the first
discussion when Council considered this offer to
employees for a contract extension he noted that
he does have concerns about this offer. At this
time, however, he would not support a withdrawal of
the offer for a contract extension.
Councilor Hawley noted her support for the original
Council offer to give employees until January 1,
1996, as time to prepare for the implementation of
Measure 8. Councilor Hawley said that she, too,
voted against Leasure 8.
She advised she must be fiscally responsible and
honorable in her representation for the city of
Tigard. She said she would not be willing to go
against what the voters have said. Councilor
Hawley noted that the contract extension offer was
an attempt to "soften the blow."
City Council Meeting Minutes - December 6, 1994, Page 2
Councilor Hunt advised that he felt that the City
of Tigard has good employees and wanted to do what
was fair. He also said he must comply with the
wishes of the voters. He noted that employees
should be given a chance to prepare for this wage
reduction because of implementation of Measure 8.
The contract iextension would also give time so
that, perhaps, answers could be given as to the
intent of Measure S.
- Councilor Scheckla advised that "we are in a no-win
situation." he said that he did not like the
results of Measure 8, but the Council was
attempting to be fair.
d. Motion by Councilor Hunt, seconded by Councilor Rohlf, to
offer to OPEU to extend the current contract through
December 31, 1995, with no additional changes to the
contract; the offer to extend the contract shall expire
at 5 p.m. on December 7, 1994.
The motion was approved by a unanimous vote of Council
present. (Mayor Schwartz and Councilors Hawley, Hunt,
Rohlf and Scheckla voted "yes.")
c. iaacrc vrcic saveral questions raised itom O'n-EU members
from the floor including the question of whether or not
a cost-of-living increase in July could be negotiated.
f. Mayor Schwartz requested that the Council go into
Executive Session at 8:21 p.m. under the provisions of
ORS 192.660 (1) (d) to discuss labor relations.
Council meeting reconvened at 8:26 p.m.
g. Mayor Schwartz advised that the Council discussed the
comments with regard to the cost-of-living allowance in
July. This would not be open to negotiation and the
motion would stand as voted on.
3. COUNCIL CONSIDERATION - RESOLUTION TO ENTER INTO CONTRACTS
WITH NON-REPRESENTED RA9PLOYEES TO XKTEND RETIREk=
CONTRIBUTIONS BY THE CITY OF TIGARD TO A DATE CERTAIN AND
AUTHORIZING THE CITY ADMINISTRATOR TO SIGNi
a. City Administrator Monahan advised that the proposed
resolution was the same proposal made to OPEU. The
proposed resolution would give non-represented employees
a year's notice before the implementation of Pleasure 8.
Mr. Monahan advised that the proposed resolution does not
deal with any other benefits.
City Council Meeting Minutes - December G, 1994, Page 3
IM !Nil
b. Mayor Schwartz noted that all City employees would be
receiving (if this resolution was adopted and the union
accepted the extension of their contract) a grace period
of at least one year prior to the implementation of
Measure 8. The Tigard Police Officers' Association
(TPOA) contract does not expire until June 30, 1996. In
order to treat employees equitably within the Police
Department, non-represented employees (the Chief of
Police and two Lieutenants), would not begin their
contribution as required by Measure 8 until the and of
that contract period.
The City would enter into agreements to maintain parity
with no changes in employment status or benefit levels
for its employees.
C. Motion by Councilor Rohlf, seconded by Councilor Hawley,
to approve Resolution No. 94-56.
RESOLUTION NO. 94-56 - A RESOLUTION OF THE CITY COUNCIL,
CITY OF TIGARD, OREGON, AUTHORIZING EXECUTION OF
AGREEMENTS EXTENDING RETIREMENT PLAN PAYMENTS TO NON-
REPRESENTED EMPLOYEES.
The motion was approved by a unanimous vote of Council
present. I"- or Schwartz and Councilors iiw lay, Hunt,
Rohlf and Scheckla voted "yes.")
d. Councilor Hawley noted to the employees present that the
City of Tigard intends to establish an escrow account
setting aside the 6 percent contribution the City would
have made at the time Measure 8 provisions are
implemented. These funds would be reserved until such
time that the courts determine to what extent Measure 8
should or should not be implemented.
e. In response to an OPEU member who voiced a question from
the floor, Mayor Schwartz advised that it was not the
City's understanding that the 14 percent plus the
employees' 6 percent would be added to equal a 20 percent
contribution to the retirement. Rather, the City, under
Measure 8, would contribute 8 percent and the employee
would contribute 6 percent.
f. There was brief discussion which followed on the
implementation and some of the issues surrounding Measure
8.
City council meeting Minutes - December 6, 1994, Page 4
r
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a
P, M
g. Mayor Schwartz noted his appreciation for the employees
who attended the meeting. He reiterated the City°s
position of attempting to treat employees equitably while
also following the direction from the voters.
Catherine Wheatley, City Rec der,
Attes
Ma , City of Tigard
Date: I ZI-245
City Council Meeting Minutes - December 6, 1994,'Fage 5
r
Summary of Votes Cast - City of Tigard
Measure 8 - November 8, 1994 Election
F
# of Regis- Turnout
Precinct Polling Place tered Voters Turnout % Yes No
16 Maison Armory 1041 745 71.5% 411 315
30 CF Tigard 1086 678 62.4% 359 294
31 Tigard Water Bldg 1283 903 70.3% 484 390
` 32 CF Tigard 1248 893 71.5% 472 398
33 M. Woodward Elem 752 542 72.0% 296 236
34 J Templeton Sch 1248 906 72.5% 477 406
35 Phil Lewis Sch 814 482 59.2% 262 210
40 Twality Mid Sch 1268 834 65.7% 436 367
41 Summerfield Club 1188 949 79.8% 538 338
46 Our Redeemer Ch. 1407 968 68.7% 536 395
180 Summerfield Club 938 757 80.7% 472 258
192 Metzger School 808 466 57.6% 268 187
194 Phil Lewis Sch 848 490 57.7% 259 209
195 Friends Church 845 598 70.7% 358 225
215 CF Tigard 852 576 67.6% 368 187
217 Vote by Mail 42 22 52.3% 14 8
221 Trinity Evan. Ch. 763 527 69.0% 322 191
224 Fowler Mid. Sch 698 476 68.1% 261 199
225 Chur of Christ 1380 950 68.8% 510 405
226 M. Woodward Elem 991 646 65.1% 369 258
250 Friends Church 648 480 74.0% 288 184
251 M. Woodward Elem 705 509 72.1% 300 200
Tigard Totals 20,853 14,397 68.1% 8,060 (57.9%) 5,850 (42.10
Wash. Co.
Totals 206,126 142j632 69.1% 79,323 (57.5%) 58,585(42.50
Ism
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Governo,
d0 POD,
In the Wake of Ballot Measure #8
IWOnnel los
1212 Court St NE +202 PO Box 908 m Salem OR 97308 v Ph (503) 588-2251 o Fx (503) 378-3203
*Retirement Benefit Fblicy Options in the wake of Ballot Measure #8
What follows is a summary overview. Entities should seek the advice of their own legal counsel
before taking action in response to the provisions of Ballot Measure #8.
Option A. Make no change in policy or contract provisions related to retirement except
to follow the provisions of BM #8 as they become operative:
Effective December 8, 1994, BM8 requires that an employee of the State of Oregon or
any political subdivision of the state
who is a member of a retirement system or plan established by law, charter or
ordinance
or who will receive a retirement benefit from a system or plan offered by the state
or a political subdivision of the state
must contribute to the system or plan an amount equal to six percent of their salary or
gross wage.
On or after January 1, 1995, BM8 prohibits the state and political subdivisions of the
state from contracting or otherwise agreeing
to make any payment or contribution to a retirement system or plan that would
have the effect of relieving an employee of the obligation to contribute
to increase any salary, benefit, or other compensation payable to an employee for
the purpose of offsetting or compensating an employee for the obligation to contribute.
Note: For those entities with contracts (entered into prior to January 1, 1995) which provide
that the entity will assume the employee contribution, BM8 allows the entity to continue to
assume the employee contribution until the contract ends. In the absence of such a contract,
BM8 probably requires the employee to begin paying the employee contribution effective with
the first pay period commencing on or after December 8, 1994.
Note: If the entity withholds the employee contribution from employee salary because of BM8
AND BM!8 is subsequently determines) to be "illegal" there is a probability that the entity would
be ordered to reimburse the employee for the amount withheld (plus interest). For this
probability, the entity may wish to set aside funds. Union and Employee groups are preparing
litigation to challenge the legality of BM8. There are a lot of unanswered questions concerning
implementation and illegality of BM8!
Option #2. Contract to extend the period during which the employer will assume the
employee contribution.
A Service of. Association of Oregon Counties League of Oregon Cities
iilliqfljmmlilll PER
yir
Note: Entities with Collective Bargaining Agreements some have negotiated with their union
representatives and agreed to assume the employee contribution for a specified period of time.
Note: Entities with Individual Employment Conu cts some have negotiated an agreement to
assume the employee contribution for a specified period of time.
This period of time can vary according to policy decisions for example:
through the date the Collective Bargaining Agreement expires
for a specified number of years (5,10, etc.)
Note: Entities with employees who are not in a bargaining unit and who do not have individual
employment contracts some entities have entered into individual employment contracts with
these employees.
Note: Any contract to extend the period during which the employer assumes the employee
contribution must be entered into before January 1, 1995. If a contract does not already exist,
and this option is selected, it would be best to enter into contract(s) prior to December 8, 1994
AND prior to the commencement of any pay period which commences in the time period from
December 8, 1994 through December 31, 1994.
Note: At the end of such a contract, BM8 prohibits a compensation adjustment for the purpose
o seeing or compensation an employee for then being obligated to pay the employee
VJL
contribution.
Option #y. FAminate the employer mumption of the employee contribution to the
retirement plan. (This is usually coupled with an increase in the employee salary-- see policy
considerations below).
Effective with the pay period commencing the employer will no longer
assume the employee contribution to the retirement plan.
Effective with the pay period commencing , the employer revokes the
election to assume the employee contribution to the retirement plan.
Note: For entities with Collective Bargaining Contracts or Individual Employment Contracts,
the employer would have to bargain before changing the agreement and revoking the assumption
of the employee contribution.
Note: Any decision to increase compensation in order to relieve an employee of the obligation
to make the employee contribution must be made before January 1, 1995. If this option is
selected, it would be best to make the decision before December 8, 1994.
Note: Policy considerations regarding an increase in compensation
a. Make the salary increase cost neutral to the entity.
The % of compensation increase varies from entity to entity based upon the amount of other
owl illillil !,I'', !I W_
payroll expenses paid by the entity. Various entities have figured a 4.9% or a 5.2% or a 5.6%
salary increase is cost neutral to the entity.
b. Make the salary increase 6%®
The reasoning is that because of other payroll expenses which the entity and employee will pay
on the salary increase, it will cost the entity a little more and the employee will take home a
little less thus sharing the impact.
c. Make the salary increase cost neutral to the employee
Various entities have figured this would require a 9% to 11 % salary increase. We know of no
entity that has adopted this "cost neutral to the employee" policy.
Note: Option #3 reduces the risk that the entity will be subject to EMS litigation.
*Attorney General Opinion #5232 and PERS Employer Briefs
An Attorney General Opinion was issued on November 21, 1994 to guide PEES in response to
questions from the PERS Board concerning Ballot Measure #8. Based upon the Attorney
General Opinion, PERS subsequently prepared* (and mailed to PERS participating employers)
3 Employer Briefs (93-3 Employer Payment of Employee Contributions; 93-4 Employee
Payment As A "Pre Tax" Contribution; 93-5 Use of T nursed Sick Uwva to increase Retirement
Benefits).
*Employee Contribution "Pre-'Pax Dollars / USC section 414(h)(2)
Some pension attorneys do NOT believe the employee contributions deducted from salary can
be treated as pre-tax dollars. The Attorney General Opinion takes the position that the employee
contributions deducted from salary and sent to PERS can be treated as pre-tax dollars if the
entity takes official action (ordinance, rule, etc) which provides that:
the employee contribution is deemed to be "picked up" for purposes of 26 USC
section 414(h)(2)
employees shall not have the option of receiving the money directly and making
the contribution
and the employees' reported salary on the W-2 form for tax purposes will be
reduced by the amount of the employees' contribution.
(This official action cannot be retroactive --if it is to be effective for the pay period commencing
on 1-1-95, the official action must be taken prior to 1-1-95.)
Note: if the employee contribution does qualify as pre-tax dollars per section 414(h)(2), the
maximum dollars an employee can defer into a deferred compensation plan may be reduced??
NOTE: Consult with your legal counsel and your auditors regarding this pre-tax issue.
*For further information: call Maria Keltner or Don Schaefer at IGPI 585-1121.
Issue 94-3
VRS
Issue: 94-3 November 1994
Employer Payment of ploys Contributions
The passage of Ballot Measure S has created many questions about how
certain parts of the Measure will be administered by PERS. The
information that we share in this brief is based on advice we have
received Roan the Attorney General's office. This information is intended
to be used by PERS in administration of the retirement system; it is not
intended to replace employers' reliance on the advice of their own legal
The measure requires employes of the state and of political subdivisions
of the state to contribute an amount equal to six percent of their gross
wage or salary to PERS, or to the retirement plan in which ibe employe
participates. The measure prohibits employers from contracting or
agreeing to make any payment or contribution to PERS on and after
January 1, 1995, that has the effect of relieving the employe from his or
her obligation to contribute.
Many employers have previously agreed to pay the required 6% of salary
employe contribution to PERS as allowed by ORS 237.075. This is
sometimes referred to as the "PERS pick-up." The measure requires that
payment of employe contributions by employers cease for wages paid
under new employment contracts on and after January 1, 1995.
Please note: Employers cannot pay the required 6% employe
contribution for wages earned on and after January 1,1995, under
contracts that permit the employer to eliminate the contribution at
will. However, under other contracts such as collective bargaining
agreements under which the employer has promised the contribution, the
employer cannot pay the 6 percent employe contribution after that
contract expires.
continued on page 2
'
Issue U4--3
The Attorney General's office has advised that certain limited exceptions
to the general prohibition on employer payment of required employe
contributions may exist. 't'hese exceptions are listed below.
1. A collective bargaining agreement that includes employer payment of
the employe contribution as one of the terms of the contract will allow
continued payment of the employe contribution by the employer until the
expiration date of the collective bargaining agreement. Please ask your
legal counsel to certify the validity of any collective bargaining
agreements that you may currently have with employe groups.
I. An individually written employment agreement between an employer
and an employe, including the employer payment of employe
contributions as one of the trams of the agreement, will allow continued
employer payment of the contribution until the expiration date of the
employment agreement. Please ask your legal counsel to certify the
validity of any written agreements that you may currently have -with
employes.
3. Letters of understanding between employers and employes may allow
coatexcaed employe? payinenE of employe %vuu`ivii sous until -e eX.,piratirjn
of the letter of understanding, if the letter of understanding is legally
sufficient to stand as a contract. Please ask your legal counsel to certify
the validity of any letters of understanding that you may currently have
with employes.
4. Implied contracts may be sufficient to allow employer payment of
employe contributions until the expiration of the implied contract. Please
ask your legal counsel to review any implied contracts that you may have
with your employes, and certify their validity to serve to extend employer
payment of employe contributions.
The Attorney General's office has advised PERS that if the employer
payment of employe contributions is extended as part of the terms of
employment for a position, or for a group of positions, and negotiation is
not involved, the past practice of extension of employer payment of
contributions is probably = sufficient to allow the required contribution
to be made on the employe's behalf by the employer on and after January
1, 1995. For example,,persons employed in the state management and
executive service have benefited from employer payment of the required
6% of salary employe contribution since 1979, as a term of employment
This past practice is not sufficient in and of itself to allow the payment
the employer to continue after December 31, 1994.
continued on page 3
o.~
November 1994 2 Employer Brief
issue 94-3
If the employer payment of the required 6% employe contribution was
extended as part of a Contract of Integration, the payment will not
extend beyond December 31, 1994, unless provided in the Contract of
Integration.
The Attorney General's office has advised that public employers
should provide direct, written notice to affected employes for whom
the employer will no longer pay the employe contribution. Please seek
the advice of your own legal counsel.
® _ o _ ® We will assume that employe contributions are required to be
withheld from salary payments made to your employes on and
after January 1, 1995, oultas you notify us, in writing, that your
agency or district can continue to pay the required employe
contributions because one of the exceptions listed above exists.
Please address your written notification to your Employer
Coordinator. If one of the exceptions above allows your agency or
district to continue to make payment on behalf of employes, note the
the employe (or group of employes) to whom the exception pertains,
and the expiration date of the exception. Please include your legal
counsel's certification with the notification.
In order for PE113 to correctly process your January 1995 contribution
payments, we must receive your written notification of exceptions by
Friday, January 6, 1995.
If you have questions about the information in this brief, please call
your Employer Coordinator, or call the PERS Membership Unit at
2M 1-503-229-6445.
r7
f .t.
In compliance with the Americans with Disabilities Act, this document can be provided in alternate formats. To
request an alternate format please call your PERS representative at 'W 1-503-229-5824.
1-503-229-6451)
November 1994 3 Employer Brief
x
110
Issue 94-4
Issue: 94-4 November 1994
Employe Payment As A "Pre-Tax" Contribution
- The passage of Ballot Measure 8 has created many questions about how
certain parts of the Measure will be administered by PERS. The
information that we share in this brief is based on advice we have
received from the Attorney General's office. This information is intended
to be used by PERS in administration of the retirement system; it is not
intended to replace employers' reliance on the advice of their own legal
counsel.
Measure 8 precludes employer payment or assumption of the required 6%
of salary contribution on behalf of employes. Measure 8 does not
disallow an employer "pick-up" of required employe contributions as that
term is used in Section 414(h) of the Internal Revenue Code.
Section 414(h)(2) of the Internal Revenue Code allows an employer to
"pick-up" employes' contributions to a retirement plan sponsored by a
governmental unit. This "pick-up" requires employe payment of the
contribution. The employer's action in "picking up" contributions allows
employes to exclude those contributions from the employes' taxable
income.
® o - - o - . If you choose to make this "pick-up" on behalf of your employes, you
should take the following steps:
1. Enact a statute or ordinance, or an administrative rule or order, that
provides that the required PERS contribution of 6%7 of salary 3 deemed to
be "picked up" for purposes of Internal Revenue Code Section 414(h)(2).
continued on page 2
It 111 IRA, 1110
k
.
Issue 94-4
2. Make sure that your ordinance or rule provides that.
a. employes do not have the option of receiving the salary
payment, and paying the PERS employe contribution
directly; and
b. employes' reported salary on the W-2 form for tax purposes
will be reduced by the amount of the employes' contributions.
The form that your official action takes is immaterial, as long as it
constitutes an official, authorized act of the employer relative to salary
and wages.
Employer actions cannot be made retroactively. To reduce uncertainty
about the potential loss of the tax exempt status of employe contributions,
if you choose to make the "pick-up" under IRC Section 414(h) on behalf
of your employes, you must do so prior to January 1, 1995, even if the
effective date of your action will be January 1, 1995. Employes' reported
salary for federal and state income tax purposes should, as of the effective
date 6f the action, be reduced by the amount of the employes'
contributions. W-2 forms should reflect the reduced amount, and should
not state the actual salary or identify the employe contributions as a
deduction.
Your official action to pick up- employe contributions under Internal
Revenue Code Section 4i4(1)(z) must uniformly apply to all employes of
your agency or district who are employed within a similar group of
employe positions. Before creating sub-groups of employes, please seek
the advice of your legal counsel.
. In order for PERS to process your January 1995 employe contribution
payments as tax exempt, we must receive your written notice of official
action, executed prior to January 1, 1995, no later than Friday, January .6,
1995.
Employes' PERS contributions will be 6% of the employes' gross
monthly wage. The employer contribution that your agency, district, or
municipality will make to PERS will be based on the employes' gross
monthly wages. For example, if an employe's gross monthly wage is
$1,000, and the employer chooses to "pick-up" the employe contribution
as described in this letter, the employe contribution paid by the employe
will be $60 (6% of $1,000). The required employer contribution will be
based on a gross monthly salary of $1,000.
® If you have questions about the information in this brief, please call your
Employer Coordinator, or call the PERS Membership unit at
' 12 1-503-229-6445.
In compliance with the Americans with Disabilities Act, this document can be provided in alternate formats. Iv
request an alternate format please call your PERS representative at V 1-503-229-5524.
CrM. 'a 1-503-229-6451)
November 19942 Emp ioy er Brief
Issue 94-5
Issue: 94-5 - November 1994
U of Unused Sick Leave to Increase Retirement Benefits
- The passage of Ballot Measure 8 has created many question about how
certain parts of the Measure will be administered by PERS. The
information that we share in this brief is based on advice we have
received from the Attorney General's office. This information is intended
to be used by PERS in administration of the retirement system; it is not
intended to replace employers' reliance on the advice of their own legal
counsel.
Measure S prohibits any increase of retirement benefits due to unused sick
leave for employes who retire on and after January 1, 1995.
We have informed you and your employes that in order for ari employe to
retain the right to use unused sick leave to increase retirement benefits,
the employe needs to:
Be eligible to retire on December 31, 1994.
Terminate their PERS qualifying position on or before
December 31, 1994.
File an application to begin retirement benefits, no later than
December 31, 1994.
Employes who wish to have PERS apply unused hours of sick leave to
increase retirement benefits should make sure to take these steps.
W. heth-er PERS members have. an employment right to sick leave
accumulated during the time of their contract will probably be decided
in the courts,. However, PERS will be prohibited by Ballot Measure 3
from using sick leave to increase retirement benefits after
December 31, 1994.
condnuecd on page 2 r
4
Issue 34-5
Until then, the responsibility for retaining records of employe's unused
sick leave accruals as of December 31, 1994, is the employer's. The
responsibility to track any subsequent usage that lessens the December 31
1994, accrual is also the employcr's. Do not report these hours to PERS .40
now. If we need the information in the future, we will request it from you
at tint time.
Please discontinue reporting unused hours of sick leave on the PERS
Notice of Separation for all employes who terminate on and after
January 1, 1995.
- - 1f you have questions about the information in this brief, please call your
Employer Coordinator, or the Membership Unit at IT 1-503-229-6445.
TO
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v~ ~S - C3 I Cmrs, -r--Z
In compliance with the Americans with Disabilities Act, this document can be provided in alternate formats.
request an alternate format.please call your PERS representative at IT 1-503-229-5824
(TTY: c3° 1-503-229-6451).
Novemher 1994 2 Employer Brief