270704 WHITE - CITV CLERK COUI1C11 � �
PINK - FINANCE G I TY OF SA I NT PAU L � . � , � �
� CANARY - DEPARTMENT �
BLUE - MAVOR File NO.
Council Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS, the City of Saint Paul realized the necessity of providing a
deferred compensation plan for employees who wished to supplement their
pension benefits and Social Security, or act as a substitute for Social Security
for the many City employees who never worked under the Social Security Act;
and
WHEREAS, the City of Saint Paul established a deferred compensation
plan through the State of Minnesota Retirement System in good faith and according
to long established rules promulgated by the I, R. S. ; and
WHEREAS, the I. R. S, has now published regulations which will void the
deferred compensation plan established by the City and all others throughout
the United States, now therefore be it
RESOLVED, that the Council of the City of Saint Paul go on record to
express its dissatisfaction with the actions of the
I. R. S, staff in publishing this ���t new regulation; and be it
FINALLY RESOLVED, that copies of this Resolution be sent to:
Honorable Bruce Vento, House of Representatives _
The Honorable Muriel Humphrey, The United States Senate
The Honorable Wendell Anderson, The United States Senate
with instructions to do all they can to reverse this regulation of the I.R. S.
COUNCILMEN
Yeas Nays Requested by Department of:
Butler �
—}}�� In Favor
Hunt ' I
Levine _ v __ Against BY
Roedler
Sylvester
Tedesco �� 1 4 �978 Form Approved by City Attorney
Adopted b uncil: Date -
Cert ied Pas�- y Council Sec,yetary BY
By _
Approved by ; ate —
✓ '�' �� 2�0 49� Approved by Mayor for Submission to Council
By � � BY
PUBLISHED MAR Z 5 197$
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59 �
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OFFICERS 'r"^" BOARD OF DtRECTQRS
' �
Paut L,G�oschen,Executive Director , �� Eleeted
Arne U�vi,Assistant Director
- Franeis Hage, Choirman
MINNESOTA S7ATE RETIREMENT SYSTEM �°�`'`°°�r °f Nat"`a� Reso"�`es
Corolyn Andersort, Vice Chatrman
529 Jackson ot lOth Street St� Paul, Minnesota 55101 University of Minnesoto
Telo (612) 296-2761 Robert H. Btanck
Stats H ighway Oepartment
� Karl W.Christey
�spartmsnt of Public Safety
- Berdine Erickson
Rochsster State Hospitol
APPoint�� ,
Lieutsnont Governor
Lyle Farmer, Sf. Poul
Deferred Compensation Participants: a. e. Bordenov�, st. Pa�t
The Internal Revenue Service has recently published a proposed regulation ��
(Sl.bl-16) which will have the effect of voiding the Deferred Campensation
Program. We would like to bring you up to date on the na.ture of the proposal
and outline possible steps which can be taken if you disagree with it.
First, it is important to understand that the proposed rules wi.11 not affect
the money you have already deferred. The regula,tion, as proposed, would how-
ever require that contributions to the plan would be taxed in the year earned
after the effective date of the rules. In other words, the taxes could no
longer be deferred to the year of receipt. This is, apparently, an internal
policy decision on the pa.rt of the Internal Revenue Service, Department of
Treasury, and is being vigorously contested by cities and states who .have
deferred compensation programs, individual parti�ipants, emplo�ee organizations,
etc. .
Interested persons may file written comments and request a public hearing on
the proposed regulation until April k, 1978. If a p�zblic hearing is requssted,
one will be scheduled and it is our understanding that sevaral people have
requested a hear5ng. Once the written and verbal comments have been reviewed,
the Treasury decides whether to issue the regula,tion at all, in amended form,
or as propo3ed. It is importa,nt to� understand that this is solely the decision
of the Treasury - - whether they are convinced tha,t the camm�ents had merit or
not.
�
� a Legisla,tion (HR 1071�6) has been recently introduced in the House of Representa-
�� tives to suspend the operation of this proposed regulation, The intent is to
give the opportunity for a full, public discussion and, hopefully, have Congress� _
reach a legislative solution which will pr�serve deferred cc�npensation programs
for public employees. If you wish to write to your congressm3n or senator with
regard to the entire issue as well as this particular bill, a list of the Minne-
sota Sena,tors and Congressmen is printed on the back of this letter for your
convenience.
We will be following this very closely and making every effort to preserve the
deferred compensation program for public employees. We will keep you advised
of future developments.
Sincerely,
��.,�.�CX�..���!���,�,/ _ � � _
Paul L, Groschen
Executive Director
PLC':dh AN EQUAL OPPORTUNITY EMPLOYER