(A) Due to changes in federal law, and in order to comply with certain requirements of the Internal Revenue Service regarding the tax qualified status of the Retirement Plan of the town, it is necessary to amend the definition of compensation contained in the Plan.
(B) The Retirement Plan of Granite, as adopted by this section, is amended only by adding the following language to the definition of compensation in the Plan:
COMPENSATION means wages for federal income tax withholding purposes, as defined under Code § 3401(a), plus all other payments to an employee in the course of the employer’s trade or business, for which the employer must furnish the employee a written statement under Code §§ 6041,
6051 and 6052, but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or services performed (such as the exception for agricultural labor in Code § 3401(a)(2)). The employer in its joinder agreement may specify modifications to the definition of COMPENSATION, for purposes of contribution allocations under the Plan. For purposes of determining an employee’s compensation, any election by such employee to reduce his regular cash remuneration under Code §§ 125, 402(e)(3), 402(h), 403(b) or 132(f) shall be disregarded.
For Plan years beginning after December 31, 2008, (i) an individual receiving a differential wage payment, as defined by Code § 3401(h)(2), shall be treated as an employee of the employer making the payment, (ii) the differential wage payment shall be treated as compensation, and (iii) the Plan shall not be treated as failing to meet the requirements of any provision described in Code § 414(u)(1)(C) by reason of any contribution or benefit which is based on the differential wage payment.
(1) Limitations. Notwithstanding anything herein to the contrary, for Plan years commencing after December 31, 1988 and before January 1, 1994, the annual compensation of each participant taken into account under the Plan for any Plan year shall not exceed $200,000, as adjusted by the Secretary at the same time and in the same manner as under § 415(d) of the Code except that the dollar increase in effect on January 1 of any calendar year is effective for Plan years beginning in such calendar year and the first adjustment to the $200,000 limitation is effective January 1, 1990. For years beginning on or after January 1, 1994, the annual compensation limit of each participant taken into account for determining all benefits provided under the Plan for any determination period shall not exceed $150,000, as adjusted for the cost-of-living in accordance with § 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living adjustment in effect for a calendar year applies to any determination period beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA ‘93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.
The annual compensation of each participant taken into account in determining benefit accruals in any Plan year beginning after December 31, 2001, shall not exceed $200,000. ANNUAL COMPENSATION means compensation during the Plan year or such other consecutive 12-month period over which the compensation is otherwise determined under the Plan (the determination period). For purposes of determining benefit accruals in a Plan year beginning after December 31, 2001, compensation for any prior determination period shall be $200,000. The $200,000 limit on annual compensation shall be adjusted for cost-of-living increases in accordance with § 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.
If compensation for any prior determination period is taken into account in determining an employee’s benefits accruing in the current Plan year, the compensation for that prior determination period is subject to the applicable annual compensation limit in effect for that prior determination period.
(Ord. 200, passed 6-24-96; Am. Ord. 213, passed 8-13-01; Am. Ord. 215, passed 4-14-03; Am. Ord. 225, passed 3-10-09; Am. Ord. 227, passed 10-14-14)