GAL     Salary Deductions                                                                                                   GAL

 

 

All deductions from an employee's paycheck shall be in accordance with the provisions found in the current master contract and/or as directed by the employee and in accordance with business office practices.

 

Fund Drives

 

United Foundation and the Foundation for Excellence - Walled Lake Schools are the only fund drives authorized by the board among district employees.

 

Tax-Sheltered Annuities

 

The district assists those of its employees wishing to participate in a tax-sheltered annuity arrangement on a voluntary salary reduction basis.

 

The district maintains a list of suppliers of annuities and custodial accounts which purport to satisfy the requirements for exclusion from federal income tax under Section 403(b) of the Internal Revenue Code of 1986 (the “Code”).  In making these suppliers and their products available, the district does not warrant any supplier or product and each employee electing to participate in a tax-sheltered annuity arrangement and selecting a supplier and product does so at that employee’s exclusive risk.

 

The board’s policy with respect to tax-sheltered annuities is:

 

  1.   Each electing employee shall enter into a salary reduction agreement with the district on a form provided by the district.

 

  2.   Each tax-sheltered arrangement shall be funded exclusively through voluntary salary reductions.

 

  3.   After the district has paid the salary reduction contributions with respect to any electing employee over to the agent representing the tax-sheltered arrangement selected by that employee, the district, its board of education and its employees and agents shall have no further responsibility or liability with respect to such contributions.

 

  4.   An electing employee may make more than one change in such employee’s salary reduction amount during any calendar year as long as the salary reduction agreement covers only compensation of the employee not yet made available to the employee.

 

  5.   The salary reduction contributions of any electing employee shall never exceed the limit on elective contributions under Section 402(g)(1) of the Code for taxable years beginning in such calendar year; provision must be made for payment of employee’s social security and Medicare taxes and for MIP contributions, if any.

 

 6.   All employees of the district  may elect to have the district make salary reduction contributions pursuant to a salary reduction agreement.

 

  7.   The annual compensation of each electing employee of the district taken into account under any tax-sheltered arrangement for any year may not exceed $200,000, as adjusted for increases in the cost of living as promulgated by the Secretary of the Treasury.

 

  8.   Amounts contributed by the district to a custodial account, which satisfies the requirements of Section 401(f)(2) of the Code, shall be treated as amounts contributed by the district for an annuity contract for its employee if:

a.     the amounts are to be invested in regulated investment company stock to be held in that custodial account, and

b.     under the custodial account no such amounts may be paid or made available to any distributee before the employee dies, attains age 59½, separates from service, becomes disabled (within the meaning of Section 72(m)(7) of the Code) or encounters financial hardship.

 

  9.   With respect to any annuity contract distributions attributable to contributions made pursuant to a salary reduction agreement (within the meaning of Section 402(g)(3)(c) of the Code), they may be paid only:

a.     when the employee attains age 59½, separates from service, dies, or becomes disabled (within the meaning of Section 72(m)(7), or

b.     in the case of hardship.

 

Such contract may not provide for the distribution of any income attributable to such contributions in the case of hardship.

 

10.   Requirements similar to the requirements of Sections 4019(a)(9) and 401(a)(31) of the Code and requirements similar to the incidental death benefit requirements of Section 401(a) of the Code must be met with respect to any annuity contract (or custodial account or retirement income account).

 

Eligible 457 Plan (Annuity Contract)

 

The district assists those of its employees wishing to participate in an annuity contract arrangement on a voluntary salary reduction basis.

 

The district maintains a list of suppliers of annuities and custodial accounts which are intended to satisfy the requirements for exclusion from federal income tax under Section 457(b) of the Internal Revenue Code of 1986 (the “Code”).  In making these suppliers and their products available, the district does not warrant any supplier or product and each employee electing to participate in an annuity contract arrangement and selecting a supplier and a product does so at that employee’s exclusive risk.


 

The board’s policy with respect to annuity contracts is:

 

  1.   Each electing employee shall enter into a salary reduction agreement with the district on a form provided by the district;

 

  2.   Each annuity contract arrangement shall be funded exclusively through voluntary salary reductions;

 

  3.   An electing employee may make more than one change in such employee’s salary reduction amount during any calendar year, as long as the salary reduction agreement covers only compensation of the employee  for the month following the month in which the change is made;

 

  4.   The salary reduction contributions of any electing employee shall never exceed the limit on elective contributions under Section 457(b) and 414(v) of the Code for taxable years beginning in such calendar year; provision must be made for payment of employee’s social security and Medicare taxes, MIP contributions, 403(b) salary reduction contributions, 457(b) contributions, cafeteria plan contributions and all other required and elective withholding.

 

  5.   All employees of the district may elect to have the district make salary reduction contributions pursuant to a salary reduction agreement.  If an employee is covered under a collective bargaining agreement, participation is as provided under the collective bargaining agreement or through the collective bargaining process. 

 

  6.   The annual compensation of each electing employee of the district taken into account under any annuity contract or custodial account for any year may not exceed $200,000, as adjusted for increases in the cost of living as promulgated by the Secretary of the Treasury;

 

  7.   Amounts contributed by the district to an annuity contract or a custodial account which satisfies the requirements of Section 401(f) of the Code, shall be excluded from gross income if:

 

a.  the amounts are to be invested in regulated investment company stock to be held in             a custodial account, or an annuity contract of a licensed insurance company, and

 

b.  under the custodial account or annuity contract no such amounts may be paid or made available to any distributee before the employee dies, attains age 70½, has a severance from employment, or incurs an unforeseeable emergency.


 

  8.   Requirements similar to the requirements of Section 401(a)(9) of Section 401(a) of the Code must be met with respect to any annuity contract (or custodial account or retirement income account).

 

 

 

LEGAL REF:    Internal Revenue Code of 1986, Sec. 403(b), Sec. 401(a), Sec. 401(a)(9), Sec. 401(a)(31), Sec. 401(f), Sec. 401(f)(2), Sec. 402(g)(1), Sec. 402(g)(3)(C), Sec. 414(v), Sec. 415(c), Sec. 3121(b)(10), Sec. 72(m)(7), Sec. 457(b).

 

 

(P 4175, P 8100)

Adopted:  7/1/93

Revised  12/16/99, 1/9/03, 1/4/07, 5/16/13