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a?.PuNr1; CGUNIT <br /> BOXRD 0 CQµusslomf�_-:Zs Action P.g=nda <br /> J1FET.CIG I7lTc July 6, 1982 <br /> Sujec�: Tax Sheltering of Member Contributions to the Retirement System <br /> Effective July 1, 1982 <br /> pY t: Personnel Public H irzgw yes K no <br /> y <br /> At nent(s): Yes, 2 pages _ Iriioraiation Confect: Beverly Murrell Whitehea. <br /> Phone Ntc 732-6181 ext. 516 <br /> PURPOSE: To consider, a provision which will allow employees' contributions to the <br /> Local Governmental Employees' Retirement System (6%.of annual compensation) <br /> to be paid out of gross salary before Federal and State withholding taxes <br /> are computed and deducted. (Federal and State withholding taxes only. <br /> Social Security taxes will continue to be deducted from gross salary.) <br /> NEED: With the anticipated increase health insurance rates,tax sheltering of <br /> retirement contributions will offset part of the change in withholding. <br /> IMPACT: There is no additional cost to the County to make this available to <br /> employees. The effect of the provision is to shelter the employees <br /> contribution from income taxes until after the employee retires. There <br /> is no additional cost to Orange County, and results in an increase in <br /> employees take-home pay of 2% to 4%. At retirement, an employee will <br /> have to pay Federal and State income tax on all amounts received over <br /> and above the contributions made prior to the date of election to tax <br /> shelter the contributions. This tax sheltering arrangement is not <br /> applicable to any employees who are members of the Law Enforcement <br /> Officers' Benefit and Retirement Fund. <br /> RECOMMENDATION(S): <br /> Adoption of the attached resolution authorizing a tax shelter of <br /> employees' contributions payable as members of the North Carolina <br /> Local Governmental Employees' Retirement System, as recommended by <br /> the County Manager. <br />