WHEREAS, the Police Department Employees of the Village of Capitan, with few exceptions, are members of the Public Employees Retirement Association of New Mexico; and

    WHEREAS, members have mandatory PERA contributions deducted from their compensation and paid to PERA; and

    WHEREAS, members must pay federal income tax on the mandatory PERA contributions deducted from their compensation; and

    WHEREAS, Section 414(h) of the Internal Revenue Code provides for the exclusion of such contributions from current income if the contributions are picked up by the members’ employer; and

    WHEREAS, the Governing Body of the Village of Capitan has the authority to establish the compensation plan(s) for employees of the Village of Capitan;

    NOW, THEREFORE, BE IT RESOLVED by the State of New Mexico, acting by and through the Public Employees Retirement Association, that the Village of Capitan, as employer, shall pick-up the member contributions required of all PERA members in its employ. The picked-up member contributions shall be treated as employer contributions for the purpose of determining tax treatment under the Internal Revenue Code. Member contributions picked up shall not be included in the employee’s gross income for tax purposes until such time as the picked-up contributions are distributed by refund or annuity payments.

    The Village of Capitan shall pick up the member contributions from funds established and available in the payroll account, which funds would otherwise have been designated as member contributions, deducted from the member’s salary and paid to PERA. Member contributions picked up pursuant to this resolution shall be treated for all other purposes the same as member contributions made prior to the effective date of this resolution.


Village of Capitan
Resolution 2008-40
Page 2 of 2


    The Village of Capitan will ensure that it has the expertise and equipment to implement the change in payroll records and the preparation of W-2 forms at the end of each calendar year.

    Adoption of this resolution is applicable to, and incorporates by reference, the Village of Capitan’s resolution that adopted the following Coverage Plans:  Municipal Police Plan I.


PASSED, APPROVED AND ADOPTED BY THE GOVERNING BODY OF THE VILLAGE OF CAPIOTAN ON THIS 9th DAY OF DECEMBER, 2008.



                            ________________________
                        Sammy L. Hammons, Mayor


Attest:


________________________________
Kay Strickland, Village Clerk