HomeMy WebLinkAbout20181824.tiffRESOLUTION
RE: APPROVE PERA 415 REPLACEMENT BENEFIT ARRANGEMENT AND AUTHORIZE
CHAIR TO SIGN
WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS, the employees of the Department of Public Health and Environment are
members of the Colorado Public Employees Retirement Association (PERA), and
WHEREAS, the Internal Revenue Code (IRS) Code Section 415(b) imposes a dollar limit
on the benefit amount a pension plan can pay a retiree, and
WHEREAS, the Internal Revenue Code (IRS) Code Section 415(m) allows PERA to use
a Replacement Benefit Arrangement (RBA) to provide relief for a member who exceeds the 415(b)
limit, and
WHEREAS, the Replacement Benefit Arrangement (RBA) will not have any financial
impact on Weld County to accommodate a member who exceeds the 415(b) limit, and
WHEREAS, the Director of Finance and Administration is recommending that Weld
County approve the attached PERA Replacement Benefit Arrangement (RBA) and authorize the
Chair to sign the RBA, and
NOW, THEREFORE, BE IT RESOLVED by the Board of Weld County Commissioners
that the attached PERA Replacement Benefit Arrangement (RBA) be, and hereby is, approved
and the Chair is authorized to sign said RBA.
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 11th day of June, A.D., 2018.
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
ATTEST: datifdA) ..eito;ok,
Weld County Clerk to the Board
unty Attorney
Date of signature: 0? /A-/8
Steve Moreno, Chair
EXCUSED
Barbara Kirkmeyer, Pro -Tern
Sean P. C•nway
Mike Freeman
Cc : F I (uw)) ACT (Esc), CACB8)
v7-23 —l8
2018-1824
PE0032
NEFI RRANGEMENT
INTRODUCTION
Internal Revenue Code (I RC) Section 415(b) imposes
a dollar limit on the benefit amount a pension plan
can pay from tax -deferred trust funds Colorado PERA
cannot pay a retiree any benefit amount that exceeds
this federal tax limit
Currently, this limit is set at $220,000 ($18,333 per
month) for retirees who are age 62 or older This dollar
amount is actuarially decreased for retirees younger
than age 62 Any tax -paid contributions or tax -paid
service credit purchases in a member's account will
also affect these limits
Since PERA members may retire as early as age 50 with
a larger percentage of Highest Average Salary (HAS): a
few highly paid members may exceed this limit
For example, a PERA member who retires at age 50
is limited to an annual benefit of 599,839. A PERA
member who retires at age 55 is limited to an annual
benefit of $136,842. See the table on page 6, prepared
by PERA's actuary, for the dollar limits at various ages
This table is for those retiring in 2018, those retiring in
later years may nave higher limits
While 415(b) imposes a timit on a member's benefit,
Section 415(m) allows PERA to use a replacement
benefit arrangement (RBA) to provide relief for a
member who exceeds the 415(b) limit PERA has
adopted an RBA The governing document is contained
in this booklet It may be amended from time to time to
comply with future changes in the federal tax laws or
their interpretations
COLORADO
PERkro
PROCEDURES
Prior to retirement, you may estimate whether your
benefit may be affected by the 415(b) Limit as follows.
1 Request a retirement estimate from PERA Provide
PERA with your best assumptions and estimates for
your retirement date, salary until retirement, etc.
2 Compare the estimated Option 1 (PERA benefit
structure) or Option A (Denver Public Schools IDPSI
benefit structure) amount (single -life option) to the
amount in the enclosed table for your anticipated
age at retirement If you plan to select Option 2
or 3 (PERA benefit structure) or P2 or P3 (DPS benefit
structure) (joint -life options) at retirement and name
your spouse as your cobeneficiary, then compare
the Option 2 or 3 or Option P2 or P3 amount to the
enclosed table for your anticipated age at retirement
3 If your estimated benefit, using step 2 above, is less
than the amount in the table, your benefit may not
exceed the 415(b) limit and PERA will pay you the
entire amount of your benefit directly
4 If your estimated benefit, using step 2 above, is more
than the amount in the table, your benefit may
exceed the 415(b) limit. Further analysis by PERA's
actuary is required to determine if your actual benefit
at retirement exceeds the 415(b) limit
The actuary must determine the portion of your benefit
resulting from tax -paid contributions and tax -paid
purchases of service The tax -paid portion is added to
the 415(b) Limit for your retirement age and the total
becomes the new limit
The 415(b) process considers cost -of -living
increases to be made without jeopardizing
your benefits.
2018-1824
December 2017
Colorado Public Employees Retirement Association
1301 Pennsylvania Street • Denver; Colorado 80203 • 1-800-759-PERA (7372) • www.copera org
For federal tax purposes, PERA needs actual retirement
information to analyze whether your benefit exceeds
the 415(b) limit At retirement, PF RA will have its
actuary perform this analysis with your exact benefit
information If your benefit does not exceed this
limit, PERA will pay you the entire amount of your
benefit directly
If PE RA's actuary determines that your benefit exceeds
the 415(b) limit at retirement, PERA will pay you the
maximum amount permitted by the tax limit. Also,
PERA will work with your previous employer to
establish an RBA with that employer After the previous
employer agrees to participate in the RBA, PERA will
pay your previous employer the difference between
your PERA benefit amount (as determined under state
law), without regard to the 415(b) tax limit and the
415(b) limit, your previous employer then will pay you
this difference
The RBA requires the cooperation of your employer
who will need to sign PERA's Qualified Replacement
Benefit Arrangement Adoption Agreement, which is
included in this booklet
Shortly before you decide to retire, make certain you
have a current retirement estimate and also the most
current information about the RBA You may direct
your questions to a PERA Benefits Counselor at
1-800-759-7372 PERA also urges you to consult with
your own tax professional who is familiar with your
particular facts and circumstances, including any plans
other than PERA-sponsored plans in which you may
have participated
PERKS QUALIFIED REPLACEMENT
BENEFIT ARRANGEMENT
The purpose of this Arrangement is to provide
additional payments to the Benefit Recipients of PERA
when the benefits paid under the Pension Plan are
reduced due to the limitations imposed by Section 415
of the Internal Revenue Code of 1986. as amended.
This Arrangement is intended to constitute a qualified
governmental excess benefit arrangement as that term
is defined in Code Section 415(m)
2
The Arrangement shalt be effective as of January 1, 1999,
and shall apply to Members of PERA who retire with
an effective date of retirement or who die on or after
January 1, 1999
Article 1 —Definitions
(Note. C. R. S refers to Colorado Revised Statutes )
1.01 "Arrangement" means PE RA's Qualified
Replacement Benefit Arrangement, as set forth
herein and as amended or modified from time
to time
1.02 "Association" or "PERA" means the Public
Employees' Retirement Association, as
established under the provisions of Article 51 of
Title 24, C. R S.
1.03 "Benefit Recipient" means any individual
who is a benefit recipient under
Section 24-51-101(8), C R S
1.04 "Benefit" means a benefit under the Pension
Plan, as that term is defined under the
provisions of Article 51 of Title 24, C R S
1.05 "Board" means the Board of Trustees of PERA
as established under the provisions of Article 51
of Title 24, C R.S
1.06 "Code" means the Internal Revenue Code
of 1986, as amended (and corresponding
provisions of any subsequent federal tax laws)
and the regulations thereunder
1.07 "Effective Date" means January 1, 1999
1.08 "Eligible Member" means a Member who retires
with an Effective Date of retirement on or after
the Effective Date, or who dies on or after the
Effective Date
1.09 "Employer" means an Employer with respect to
its employees who are Members of PERA and
with respect to Benefits paid by PERA under
the provisions of Article 51 of Title ?4, C R S ,
provided that the employer signs an adoption
agreement in the form specified by the Board
1.10 "Restricted Benefit" means the maximum
Benefit permitted to be paid to a Benefit
Recipient from the Pension Plan, as limited
by Code Section 415, in accordance with
Section 24-51-611, C R S
"Member" means any individual who is a
Member of PERA, as that term is defined under
the provisions of Article 51 of Title 24, C R S
1.12 "Participant" means any Benefit Recipient who
is eligible to participate in the Arrangement in
accordance with Section 2 01.
1.13 "Pension Plan" means the defined benefit
plan for PERA Members established under the
provisions of Article 51 or Title 24, C.R.S., and
qualified under Code Section 401.
1.14 "Retiree" means any individual who is a retiree
under Section 24-51-101(39). C.R.S.
1.15 "Unrestricted Benefit" means the benefit that
would be payable to a Benefit Recipient from
the Pension Plan if the limits of Code Section
415 were not applicable in accordance with
Section 24-51-611, C R S
Article 2 —Eligibility and Payments
2.01 Eligibility to Receive Payments
If. at the time an Eligible Member becomes a
Retiree or dies or at any time thereafter, the
Unrestricted Benefit of the Benefit Recipient
under the Pension Plan exceeds the Restricted
Benefit payable to the Benefit Recipient
at that time, the Benefit Recipient shall
become a Participant and shall be entitled to
receive payments under this Arrangement, in
accordance with the terms hereof, except
as otherwise provided in the Employer's
Adoption Agreement.
2.02
203
2.04
2.05
BENEFITARRA' ENT
Amount of Payments
A Participant shall receive payments under this
Arrangement equal to the difference between
his Unrestricted Benefit and his Restricted
Benefit, provided that the amount of payments
so determined shall be subject to change
and to such adjustments as PERA deems
appropriate, from time to time.
Form and Timing of Payments
Payments under this Arrangement shall be paid
by the applicable Employer to each Participant
at the same time and in the same form and
manner as Benefits are provided to such
Participant under the Pension Plan Any election
made by an Eligible Member with regard to the
distribution of Benefits under the Pension Plan,
including the designation of a cobeneficiary
or a named beneficiary as defined in Section
24-51-101(10) and (33), C R S , shall be equally
applicable to and binding on such Eligible
Member in connection with payments under
this Arrangement
Effect on Pension Plan
Any Benefit payable under the Pension
Plan shall be paid solely in accordance with
the terms and provisions thereof and shall
be subject to the Section 415 and other
applicable tax limitations, nothing in this
Arrangement shall operate or be construed
in any way to modify, amend or affect the
Benefits payable thereunder.
Tax Withholding
All payments under this Arrangement shall
be subject to and reduced by applicable
federal, state and local income, payroll and
estate tax withholding requirements and all
other applicable deductions required by this
Arrangement or by law
3
Replacement
RANGEMENT
Article 3 Administration
3.01 Administrator
PERA shall be the Administrator of the
Arrangement and shall be responsible for the
supervision and control of the operation and
administration of the Arrangement, except as
otherwise provided herein. PERA shall have the
exclusive right and full discretion to construe
and interpret the Arrangement and to decide
any and all questions of fact, actuarial valuation
interpretation, definition or administration
arising thereunder or in connection with
the administration of the Arrangement
The interpretation and construction of
any provisions of the Arrangement by the
Administrator and its exercise of any discretion
granted under the Arrangement shall be binding
and conclusive on all persons who at any time
have or claim to have any interest whatever
under this Arrangement
3.02 Contributions and Payments
(a) As soon as administratively feasible
following the receipt of Employer
contributions, PERA shall segregate from
each Division's contributions the portion
of the contributions necessary to make
the payments due to Benefit Recipients
in that Division for the next payment
period and any applicable expenses
under this Arrangement. Notwithstanding
the foregoing, if PERA determines, in
its sole discretion, that the allocation of
contributions to the Arrangement would
jeopardize the actuarial soundness of the
Pension Plan, PERA shall cease to segregate
contributions for the Arrangement and
shall notify the participating Employers and
affected Benefit Recipients.
(b) Contributions segregated for payments and
expenses under the Arrangement shall he
separately accounted for and shall be used
exclusively for payments and expenses under
the Arrangement
4
3.03
3.04
(c) Within a reasonable period of time before
each payment date, PERA shall distribute
to each participating Employer the gross
amount necessary, as determined by
PERA, to satisfy such Employer's liability for
amounts due on such payment date under
the Arrangement
(d) The Employer from whom the Eligible
Member retired or who employed the
Eligible Member at his death shall be solely
responsible for paying any amounts received
from PERA and due to the Benefit Recipient
under the terms of the Arrangement. PERA
shall have no obligation to pay any amounts
due under the terms of the Arrangement
(e) The Employer shall be responsible for
satisfying all tax withholding, payroll tax
payments, other applicable tax payments
and reporting requirements applicable to the
Arrangement, if any, and shall be responsible
for administering all payments due under
the Arrangement
Plan Unfunded
The payments under this Arrangement shall not
be funded Nothing contained herein shall be
construed as providing for assets to be held in
trust for the Participants PERA reserves the right
in the future to establish and fund one or more
trusts for the purpose of paying some or all of
the amounts promised to Participants under
the Arrangement
Appeal Procedure
If a dispute involving the interpretation of this
Arrangement arises, the Administrator s decision
shall be final, conclusive, and binding unless it is
appealed and resolved in accordance with the
administrative review procedures set forth in the
Board rules
Article 4 --Amendment and Termination
4.01 Amendment and Termination
The Board reserves the right to amend or
terminate the Arrangement at any time and
from time to time Such amendment or
termination may be retroactive to the ex*.ent
that the Board deems such action necessary,
in its sole discretion, to maintain the tax -
qualified status of the Pension Plan or the
status of this Arrangement as a qualified
excess benefit arrangement as defined in Code
Section 415(m) or to avoid jeopardizing the
actuarial soundness of the Pension Plan In
addition, the Arrangement may be amended
or terminated to eliminate all payments with
respect to any Member or other individual
who has not become eligible to participate
in the Arrangement as of the date of such
amendment or termination by reason of
retirement or death in accordance with
Section 2 01 The Board reserves the right
to modify this Arrangement as it relates to a
specific Employer by written agreement of the
Board and such Employer as evidenced in the
Adoption Agreement of that Employer
Article 5 —General Provisions
5.01 Applicable Law
All questions pertaining to the validity.
construction, and administration of the
Arrangement shall be determined in conformity
with the laws of the state of Colorado, except to
the extent federal law preempts state law
BENEFI
II II t
Replacement
5.02 Construction
(a) The titles and headings of the Articles
and Sections in this instrument are for
convenience only In case of ambiguity or
inconsistency, the text rather than such titles
or headings shall control.
(b) If any provision of the Arrangement or the
application thereof to any circumstance
or person is invalid, the remainder of the
Arrangement and the application of such
provision to other circumstances or persons
shall not be affected thereby.
5.03 Nonalienation
Benefits under this Arrangement shall not be
subject to alienation or legal process,
except to the extent permitted under
Section 24-51-212, C.R S
5.04
5 05
No Enlargement of Employment Rights
The establishment of the Arrangement shall not
confer any legal rights upon any employee or
other person for a continuation of employment,
nor shall it interfere with the rights of the
Employer to discharge any employee and to
treat the employee without regard to the effect
which that treatment might have upon the
employee as a Participant in the Arrangement.
Information Required By Arrangement
Benefit Recipients, other individuals and
Employers shall furnish to the Administrator
such evidence, data, and information as
the Administrator considers necessary or
desirable for the purpose of administering
the Arrangement
5
Rep emen
RRANGEMENT
COLORADO PERA 2018 SECTION 415(b) LIMITS
Retirement
Age
(Years)
0
50 99,839
51 106,176
52 112,999
53 120,351
54 128,280
55 136,842
56 146,084
57 156,059
58 166,850
59 178,544
60 191.237
61 205,026
62 220.000
63 220,000
64 220,000
65 220,000
66 220,000
67 220,000
68 220.000
69 220,000
70 220,000
1
100,367
106,744
113,611
121,012
128,994
137,612
146,915
156,958
167,825
179,602
192,386
206,274
220,000
220.000
220,000
220,000
220.000
220.000
220,000
220,000
2
100,895
107,313
114,224
121,673
129,707
138,382
147.746
157,857
168,799
180,659
193,535
207,522
220,000
220,000
220,000
220,000
220,000
220,000
220,000
220,000
This table is provided by PE RA's actuary
3
101,423
107,881
114,837
122,334
130,421
139,152
148,577
158.757
169,774
181,717
194,684
208,769
220,000
220,000
220,000
220,000
220,000
220,000
220,000
220,000
4
101,951
108,450
115,449
122,994
131,134
139,923
149,409
159,656
170,748
182,775
195,833
210,017
220,000
220,000
220,000
220,000
220,000
220,000
220,000
220,000
Months
5
102,479
109,019
116,062
123.655
131,848
140,693
150,240
160,555
171,723
183,833
196,982
211,265
220,000
220,000
220,000
220,000
220.000
220,000
220,000
220,000
6
103,007
109.587
116,675
124,316
132,561
141,463
151,071
161,454
172,697
184,890
198,131
212,513
220,000
220,000
220,000
220,000
220,000
220,000
220,000
220,000
7
103,535
110,156
117,288
124,977
133,275
142,233
151,902
162,354
173,672
185,948
199.280
213/61
220,000
220,000
220,000
220,000
220,000
220,000
220,000
220,000
8
104,063
110,724
117,900
125,637
133,988
143,003
152.734
163,253
174.646
187,006
200,430
215,009
220,000
220,000
220,000
220,000
220,000
220,000
220.000
220,000
9
104,592
111,293
118.513
126,298
134,702
143,773
153,565
164,152
175,621
188,064
201,579
216,256
220,000
220,000
220,000
220,000
220.000
220,000
220.000
220,000
10
105,120
111.861
11`126
126,959
135,415
144,543
154,396
165,052
176.595
189,121
202.728
217,504
220,000
220,000
220,000
220,000
220,000
220,000
220,000
220,000
11
105,648
112,430
' 19 739
127,620
136.129
145,314
155,227
165,951
177,569
190.179
203,877
218,752
220,000
220,000
220,000
220,000
220,000
220,000
220,000
220,000
This booklet provides general information about the effect of Internal Revenue Code Section 415(b) limits on PERA benefits Your rights, benefits, and obligations as a
PERA member are governed by Title 24, Article 51 of the Colorado Revised Statutes, and the Rules of the Colorado Public Employees' Retirement Association, which
take precedence over any interpretations in this booklet
6
General
information
Arbpti'on of
Arranzernent
Agreement to be
Bound by Terms
of Arrangement
dbl)natons_ of
Employer
PERks Qualified Replacement Benefit
Arrangement Adoption Agreement
Colorado Public Employees' Retirement Association
PO Box 5800, Denver, Colorado 80217.5800
1-800-759-PERA (737?) • Fax: 303-863-3727 • www copera.org
0% COLORADO
PERA.
Employer 61.1,172 . /44/c.1
Employer Address
Employer Contact
Employer No.
Please Print
1 1 o 861.6
/jco 6reee ee �i la .4,
Street
/et SZ))
City State
ny (le
�. r rte -(w7 t 0
1)1‘5° / 3 Telephone Number ( 9
ZIP Code
1/4; e rrrr
The undersigned Employer hereby adopts Colorado PERA's Qualified Replacement Benefit Arrangement ("Arrangement")
with respect to employees of the Employer who are Members of PERA and with respect to benefits paid by PERA under the
provisions of Article 51 of Title 24, Colorado Revised Statutes. The signatories represent that they have the authority to sign
this Agreement and bind the Employer to the terms hereof The signatories further represent that they and the Employer have
taken all actions necessary to effectuate the terms of this Agreement, including but not limited to obtaining any approval
required by the Employer's board or other body.
The Employer agrees to be bound by the terms of the Arrangement, as the same may be amended from time to time. The
Employer further agrees to be bound by all actions, decisions, and interpretations of PERA or the Board of Trustees of PERA,
in connection with the administration of the Arrangement.
The Employer acknowledges that it shall be solely responsible for paying any amounts received from PERA and due under
the terms of the Arrangement to the Benefit Recipients for the Eligible Members who retired from the Employer or who died
while employed by the Employer
The Employer agrees to pay to each such Benefit Recipient on each payment date the amount remitted to the Employer by
PERA to satisfy the Employer's obligation to each such Benefit Recipient, reduced by all applicable federal, state and local
income, payroll and estate tax withholding amounts, if any.
The Employer acknowledges that it shall be solely responsible for satisfying all tax withholding, payroll tax payments, other
applicable tax payments, and reporting requirements applicable under the Arrangement, if any
ti
AGREED, oy�,this Al(4
day of --T u en- , ZO /
Sign Here 4 By
5/25-rba (REV 12 U)
On Behalf of
Signature
fe Thee,fice)
e
(d.„4 Boa 2
Name
d
Title(
�eZGai Ty` Cr, C%
Employer Name
ale lc/ 4,46,71 TP
1€/e/
Cy. ,fl (S• 5 �ay/�, 1Z S
�,1
Esther Gesick
From:
Sent.
To:
Subject:
Attachments.
Don Warden
Friday, June 1, 2018 1 59 PM
Esther Gesick
FW PERA Replacement Benefit Arrangement
Resolution for PERA 415 RBA docx, PERA 415 limits (002) pdf
Will you put the attached resolution and PERA agreement on the BOCC agenda for Monday, June 11th, when I am there?
The email below explains it
Thanks, and have a great weekend'
Donald D Warden
Director of Finance and Administration
Finance and Administration
PO Box 758
1150 O Street
Greeley, CO 80632
tel 970-356-4000 Extension 4218
email dwarden@co weld co us
Confidentiality Notice This electronic transmission and any attached documents or other writings are intended only for
the person or entity to which it is addressed and may contain information that is privileged, confidential or otherwise
protected from disclosure If you have received this communication in error, please immediately notify sender by return
e-mail and destroy the communication Any disclosure, copying, distribution or the taking of any action concerning the
contents of this communication or any attachments by anyone other than the named recipient is strictly prohibited
From. Don Warden
Sent: Friday, June 01, 2018 1 44 PM
To: Steve Moreno <smoreno@weldgov corn>, Sean Conway <seanconwayweld@gmail corn>, Mike Freeman
<mfreeman@weldgov corn>, Barbara Kirkmeyer <bkirkmeyer@weldgov corn>, Julie Cozad <Jcozad@weldgov corn>
Cc: Bruce Barker <bbarker@weldgov corn>, Barb Connolly <bconnolly@weldgov corn>
Subject. PERA Replacement Benefit Arrangement
Since you are all at CCI next week I wanted to run by you something PERA needs from us I plan putting it on the BOCC
agenda on Monday, June 11th when I am there to explain it more fully and answer questions
We have been contacted by PERA indicating there will be a Weld County Department of Public Health and Environment
former employee (Trevor Jincek we are assuming) retiring at age 50 The Internal Revenue Code (IRS) Code Section 415
(b) imposes a dollar limit on the benefit amount a pension plan can pay a retiree The amount is limited by the benefit
amount and the age a person takes the benefit In this case because of the benefit amount and retiring at the early age
of 50 the amount PERA can pay from its trust exceeds the IRS amount until the retiree reaches a higher age actuarially
However, the Internal Revenue Code (IRS) Code Section 415 (m) allows PERA to use a replacement benefit arrangement
1
(RBA) to provide relief for a member who exceeds the 415 (b) limit, in other words to pay the difference between the
benefit earned and the limit
The way the RBA works PERA would pay a portion of the benefit up to the IRS limit allowed, and then through the RBA
Weld County would pay the difference to the retiree Weld County would then withhold the amount paid from the PERA
contribution Weld County makes each month As a result, the replacement benefit arrangement (RBA) will not have any
financial impact on Weld County to accommodate a member who exceeds the 415 (b) limit
We have had a RBA in place for the Weld County Retirement Plan for nearly 20 years, but have never needed to have
one for any PERA retiree I am recommending that Weld County approve the attached PERA replacement benefit
arrangement (RBA) and authorize the Chair to sign the RBA
If any of you have question let me know and we can talk I will plan on having the resolution and RBA on the June 11th
BOCC agenda, unless I hear otherwise from any of you
Thanks, and have a great weekend and CCI Conference'
Donald D Warden
Director of Finance and Administration
Finance and Administration
PO Box 758
1150 O Street
Greeley, CO 80632
tel 970-356-4000 Extension 4218
email dwarden@co weld co us
Confidentiality Notice This electronic transmission and any attached documents or other writings are intended only for
the person or entity to which it is addressed and may contain information that is privileged, confidential or otherwise
protected from disclosure If you have received this communication in error, please immediately notify sender by return
e-mail and destroy the communication Any disclosure, copying, distribution or the taking of any action concerning the
contents of this communication or any attachments by anyone other than the named recipient is strictly prohibited
2
Hello