CC Resolution No. 4668 ~ ~
RESOLUTION N0. 4668
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
PROTESTING PROPOSED REGULATIONS BY INTERNAL REVEINE SER-
VICE AFFECTING TAX BENEFITS OF DEFERRED COt~ENSATION
PROGRAMS
WHEREAS, in good faith and reliance upon a ruling by the Internal Revenue
Service dated December 16, 1975 that amounts deferred pursuant to provisions
of "A Comprehenaive Deferred Compensation Program" will not be includable in
gross income of a participant in the Program until such amounts are paid
or otherwise made available the City of Cupertino formally adopted such Program;
WHEREAS, the deferred compensa[ion program has been and is now being
used by participants as a long range plan for retirement purposes to augment
potential benefits receivable from a group re[irement plan;
WHEREAS, the deferred compensation program has been and is now a product
and condition of a memorandum of understanding resulting from employer-employee
labor relations negotia[ions; and
WHEREAS, the discontinuance or loss of tax benefits derived from a previ-
ously approved deferred compensation program would effectively destroy the
program to the detriment of the City and to its employees:
.10W, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CUPER-
TINO [hat the Internal Revenue Service reconsider its posi[ion and not im-
plement Che propoaed regulations affecting the tax benefits of deferred com-
pensation programs for the following reasons:
a. Implementation will cause an undue hardship on par[icipants who
have relied on a previous IRS commitment for planning self-sufficiency
during retirement years;
h. Implementation will negate successful efforts by the City to recruit
and retain better qualified employees through a diminishing of favor-
able employment considerations;
c. Implementation will place an added financial burden on [he City and
its taxpayers through supplemental employer payroll costs; and,
d. Implementation will create unnecessary obstacles in arriving at
successful employer-employee labor relations nego[ia[ions.
BE IT FURTHER RESOLVED that the City Manager so advise Che Internal Revenue
Service of this Resolution and to convey to this State's Senators and this
District's Representative the concerns of this City Council as to the adverse
effecta such implementation would have.
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Resolution No. 4668
PASSED AND ADOPTED at a regular meeting of the City Council of the City
of Cupertino this 6th day of March , 1978, by the following vote:
Vote Members of the Citv Council
AYES: .Tackson, Nellis, 0'Keefe, Frolich
NOES: None
ABSENT: Meyers
ABSTAIN: None
APPROVED:
G
Mayor, City of Cupertino
ATTEST:
City Clerk
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