HomeMy WebLinkAboutResolutions - 2019.03.14 - 30993MISCELLANEOUS RESOLUTION #19041 March 14, 2019
BY: Commissioner Helaine Zack, Chairperson, Finance Committee
IN RE: AUTHORIZE REIMBURSEMENT OF PART TIME NON-ELIGIBLE EMPLOYEES SUBJECT TO
IRS TAX PENALTY
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen;
WHEREAS the Oakland County Employees Retirement System was established on January 1, 1946 under
the authority of Section 12a of Act No. 156, Public Acts of 1851 (MCL 46.12a); and
WHEREAS the Oakland County Board of Commissioners adopted an amended Oakland County
Employees Retirement System Restated Resolution on June 23, 1994 for the purpose of adding an
alternative Defined Contribution (DC) retirement plan to the Defined Benefit (DB) plan; and
WHEREAS to ensure compliance with applicable law, several provisions in the Restated Plan System were
taken directly from relevant sections of state law; and
WHEREAS Section 22 of the Restated Plan, "Re-employment by County; Effect on Pension Payments"
was a restatement of the provisions of MCL 46.12a (28)(b),(b)(1), and (A); and
WHEREAS MCL 46.12a (28) (b),(b)(i), and (A) state:
"(b) Payment of the pension or retirement benefit to the retirant continues without change in amount or
conditions by reason of employment by the county from which the retirant retired if all of the following
requirements are met:
(i) The retirant meets 1 of the following requirements:
(A) For any retirant, is employed by the county for not more than 1,000 hours in any 12-month period;" and
WHEREAS the application to establish the Defined Contribution (DC) Plan, with the Restated Plan
documents, was submitted and approved by the Treasury Department of the United States as a Qualified
Plan and as a Tax-Exempt Trust as provided for under Sections 401(a), 404 and 501(a) of the Internal
Revenue Code; and
WHEREAS relying on MCL 46,12a the County implemented what is now a long-standing practice of hiring
full-time merit system employees after their retirement to fill at-will, part time 1000-hour non-eligible
positions; and
WHEREAS the validity of the County's method of implementing this practice while allowing the retirees to
draw from their various retirement accounts has been called into question; and
WHEREAS the County has approached the IRS seeking guidance and the active assistance of the IRS
with regard to the remediation of any deficiencies existing with regard to the County's practice; and
WHEREAS during the pendency of the IRS review it is apparent that some 56 county retirees will likely be
exposed to adverse tax consequences for tax year 2018 for non-Deputy part-time employees through
8131/18 and for Deputy part-time employees through 12/31/18 as a result of the County's practices; and
WHEREAS the Board of Commissioners and County Executive Administration wish to ensure that impacted
County retirees suffer no adverse tax consequences arising from the questioned County practices; and
WHEREAS to that end the Board of Commissioners and County Executive propose to pay any 10% penalty
any interest thereon, and to gross this amount up to cover any taxes on this amount for questioned DB and
DC distributions for tax year 2018; and
WHEREAS to insure complete and transparent remediation of any retirement plan or operational
deficiencies the Board of Commissioners and County Executive Administration shall immediately undertake
a comprehensive review of the retirement system and its operations with a view toward insuring all
continuing operations are in complete compliance with all existing state and federal rules and regulations.
NOW THEREFORE BE IT RESOLVED that the Board Chair is authorized to appoint a committee charged
with reviewing and recommending changes designed to improve the Oakland County Retirement Plan(s)
operations, organization and compliance.
BE IT FURTHER RESOLVED that the Oakland County Board of Commissioners authorizes the expenditure
from the Fringe Benefit Fund of $306,763.03 to reimburse the fifty-six (56) PTNE employees identified
above as subject to a 10% IRS tax penalty due to withdrawals from their Defined Benefit or Defined
Contribution Plans during 2018.
FINANCE COMMITTEE VOTE:
Motion carried unanimously on a roll call vote.
Chairperson, on behalf of the Finance Committee, I move the adoption of the foregoing resolution.
Commissioner HeldKe Zack, District 18
Chairperson, Finance Committee
coA IT
COUNTY MICHIGAN oAKLANO couNTY EXECUTIVE L BROOKS PATTERSON
HUMAN RESOURCES
Jorclie Kramer, Director
TO:
FROM:
DATE:
RE:
David Woodward, Chairperson - Board of Commissiopers
Jordie Kramer, Director of Human Resources 0
Laurie VanPett, Director of Management and Bu
cr
get
March 85 2019
Required Re:porting for State of Michigan .PA 202 of 2017
V(441- (Pte.)1L`
Attached is a copy of the 2018 annual report that. will be submitted to the State of Michigan,
Treasury Department, regarding the funding levels of the County's pension and retiree health
care.
program. This is a requirement of PA 202 of2017 'and l.s dueto the State within six months
after the: end of the fiscal year. The local unit of government is required to s.01Tiit th.eteport to
the local governing. body, but. does not require a formal 'vote of approval or resolution. Please
'forward this report to the Board of Commissioners as an informational item. NO further action
is required.
If you have any 'questions please contact either Silvia Frank, Retirement Administrator at 248-
858-5215 or Lynn Sonkiss, Fiscal Services Officer at 248-858-0940. Thank you.
ccjile
Retirement and Deferred. Compensation Board
2190 Pontiac Lake Road I County Executive Building 41W I Waterford, MI 48328 I FaX (248) 452-9172
OakGov,com
-7/Inet
Resolution #19041
March 14, 2019
Moved by Miller seconded by KowaII the resolutions on the amended Consent Agenda be adopted (with
accompanying reports being accepted).
AYES: Jackson, Kochenderfer, KowaII, Kuhn, Long, Luebs, Markham, McGillivray, Middleton,
Miller, Nelson, Powell, Quarles, Spisz, Taub, Weipert, Woodward, Zack, Gershenson,
Hoffman. (20)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions on the amended Consent Agenda were adopted
(with accompanying reports being accepted).
GERALD D. POISSON
CHIEF DEPUTY COUNTY EXECUTIVE
ACTING PURSUANT TO MCL 45,5594(7)
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and
accurate copy of a resolution adopted by the Oakland County Board of Commissioners on March 14, 2019,
with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at
Pontiac, Michigan this 14ti, day of March, 2019.
Lisa Brown, Oakland County