01-14-1985 Council Packet - Laserfiche WebLink

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ITS -I. I'FrA RFNEI'ITS, FINANCI NC, AND AMII NIS'I'I ^l ION A) (coal'd) has now is!"'otially achieved lull lotulin , ryar' and employee r.' contributions should be r,do,ed to an amount suffieleut to pay normal costs. The PERA police and fire fund is now essentially fully funded. Furthermore, the employer (taxpayers) thr .ugh payment of more than 50 percent of contributions to this fund is creating a surplus not needed for pension 1•urposes. S. ''be LMC requests the L!jk-islature to defer state taxation of employee PERA cunt:ibutlnns until Funel,es are received and to exclude the PENA amount trim the employees gross income. Recently, the Internal Revenue Service ruled that employee contributions to LRA anal .Amilar public pen:ion av-+rmr are not subject to federal income tax ontributton during the year In wb they are contributed to the system, but rather are taxable in the year In •.hich the employee actually receives the benefit. This ruling is consistent with the manner In which municipal employer contributions are taxed. Since the employee does not have use of the contribution in the ,year it is made and the Federal government has deferred taxation until the benefits are received. police and fire funds only 1f: 1) savings will accrue to the city, in the vo'nion of the state actuary as will as in the opinion of the affected munt..ipel=.ty and 2) all ac.ual funding liabilities as calculated by a utate actuary which are transferred to or assumed by PERA are Immediately r-imbu,nrd to PERA by the transferttni, ctty. PPS-2. RESIDENCY REQUIREMENTS (A) The League supports the r any restrictive,; mi cities' authority tt impose residency requlrementx __lt;' Prra;ae 1. -- PPS- '. VGLIINTFFR AMBULANCE RBTiREMLNI (B) M.S. 356.24 shouli be amended to permit cities to contribute to contribution rr deferred nm,pensatit. ^fans for city volunteers and e Ong a�blic or non-profit adxan .t^rattve apparatus sepeiete edttea themsa'lv.s are a •: t.:. The r=•horlt`v should permit vesti,w . to :xceed five years and r,.,tal levies should he availeble to fl retiremeni irograms.