Subject: 19543/Pension Contributions/Fire & Police
Date: Fri, 24 Jan 1992 10:55:00 -0500


                               RESOLUTION NO. 19543
                  
                  
                   A RESOLUTION AUTHORIZING THE CITY OF
                   CHATTANOOGA TO ASSUME AND PAY THE EMPLOYEE
                   CONTRIBUTIONS REQUIREMENT FROM FIREMEN AND
                   POLICEMEN AND CITY EMPLOYEES UNDER THE
                   FIREMEN'S AND POLICEMEN'S INSURANCE AND
                   PENSION FUND PLAN AND GENERAL PENSION
                   SYSTEM, RESPECTIVELY.
                  
                  
                                                    
                  
                  
       	    	 WHEREAS, regular firemen and policemen (hereinafter
       referred to as the "Members") employed by the City of Chattanooga 

       (hereinafter referred to as the "City") participate as a 
condition
       of employment in a pension plan (hereinafter referred to as the
       "Plan") established by the City pursuant to the provisions of
       Sections 13.63 through 13.84 of the City Charter and administered 

       by the Board of Directors of the Firemen's and Policemen's
       Insurance and Pension Fund (hereinafter referred to as the
       "Board"); and
       	    	 WHEREAS, all persons employed by the City after February
       1, 1979, and virtually all persons employed since the creation of 

       the General Pension Plan in 1965 (hereinafter also referred to as 

       "Members"), other than fire fighters and police officers
       participating in the Firemen's and Policemen's Insurance and
       Pension Fund, participate as a condition of employment in the
       General Pension System (hereinafter also referred to as the
       "Plan") established by the City pursuant to the provisions of
       Sections 3.35 through 3.50 of the City Charter and administered 
by
       the Board of Trustees of the General Pension System (hereinafter
       also referred to as the "Board"); and
       	    	 WHEREAS, such Members are required to make employee
       contributions toward the cost of the Plan in which they
       participate; and
       	    	 WHEREAS, Section 414(h) of the Internal Revenue Code of
       1986 provides that such contributions may be treated for tax
       purposes as having been made by the employer if certain 
conditions
       are met; and
       	    	 WHEREAS, it is the desire of the Board to improve the
       take-home pay of the participating employee by taking advantage 
of
       the opportunity provided by said Section 414(h);
       	    	 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
       THE CITY OF CHATTANOOGA, TENNESSEE, That the City pick up (i.e.,
       assume and pay) the employee contributions required from Members
       under the Plan; and
       	    	 BE IT FURTHER RESOLVED, That the contributions of the
       Members participating in the Plan picked up by their employer, 
the
       City, shall be designated for all purposes of the retirement
       system as Member contributions, except for the determination of
       tax upon a distribution from the pension system.  These
       accumulated contributions shall become part of the Members'
       accumulated contributions, but accounted for separately from 
those
       previously accumulated; and
       	    	 BE IT FURTHER RESOLVED, That Member contributions picked
       up by the employer shall be payable from the same source as is
       used to pay compensation to a Member, and shall be included in 
the
       Member's salary; and
       	    	 BE IT FURTHER RESOLVED, That the Board hereby specifies
       that such contributions, although designated as employee
       contributions are being paid by the City in lieu of contributions 

       by the Members, so as to be treated as employer contributions in
       determining tax treatment under the Internal Revenue Code other
       than Section 3121(v)(1)(B) of such Code; and
       	    	 BE IT FURTHER RESOLVED, That the Members shall not be
       given the option of receiving such picked-up contributions
       directly instead of having them paid by the City to the Plan; and
       	    	 BE IT FURTHER RESOLVED, That the pick-up of Member
       contributions described herein shall be effective with respect to 

       contributions required on compensation earned after December 31,
       1992, provided the Board has received a favorable decision before 

       that date from the Internal Revenue Service that, under the
       provisions of Section 414(h) of the Internal Revenue Code, such
       contributions shall not be included in the gross taxable income 
of
       the employees until they are distributed or made available to
       them; or, if no such decision is received prior to December 31,
       1992, that such pick-up shall be effective with respect to
       contributions required on compensation earned after the December
       31 coincident with or next following receipt of such decision.
      
       ADOPTED:  July 28, 199209
      
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