HomeMy WebLinkAbout05.d. Amend and restate Cafeteria Plan documents to meet Internal Revenue Code requirementsCentral Contra Costa Sanitary District
' BOARD OF DIRECTORS �t
POSITION PAPER
Board Meeting Date: December 20, 2012
subject: ADOPT AMENDED AND RESTATED SECTION 125 CAFETERIA PLAN
DOCUMENTS TO MEET NEW CHANGES IN INTERNAL REVENUE SERVICE
CODE
Submitted By Initiating Dept. /Div.:
Thea Vassallo CPA, Finance Manager Administrative / Finance & Accounting
REVIEWED AND R COMMENDED FOR BOARD ACTION:
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T. Vassallo
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Ann Parrell
General Manager
ISSUE: Board approval is required to adopt revisions to the District's Cafeteria Plan
documents.
RECOMMENDATION: It is recommended that the Board adopt the revisions to the
District's Cafeteria Plan documents to meet new Internal Revenue Service (IRS) Code
requirements.
FINANCIAL IMPACTS: None
ALTERNATIVES /CONSIDERATIONS: None. These revisions are required by the IRS
and if the revisions are not approved by the Board, the District's Cafeteria Plan would
be in violation of the IRS Code.
BACKGROUND: Per the existing Memoranda of Understanding, the three employee
groups receive a fixed amount each month to spend on a variety of benefit options
offered in the Cafeteria Plan. This Cafeteria Plan is governed by Section 125 of the
IRS Code. The Plan allows employees the option of spending their monthly benefit
allowance on a variety of taxable and non - taxable benefits.
The law firm of Trucker Huss, who specializes in benefit law, has been asked to review
the Cafeteria Plan documents annually to ensure compliance with any changes in IRS
Code. The Internal Revenue Service has issued new regulations which become
effective January 1, 2013.
Effective January 1, 2013, the following change is required:
• The total amount of annual salary reduction that can be credited to a
participant's Health Flexible Spending Arrangement (FSA) will be reduced from
$5,000 to $2,500.
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POSITION PAPER
Board Meeting Date: December 20, 2012
subject. ADOPT AMENDED AND RESTATED SECTION 125 CAFETERIA PLAN
DOCUMENTS TO MEET NEW CHANGES IN INTERNAL REVENUE SERVICE
CODE
A copy of the updated Cafeteria Plan documents are available in the Secretary of the
District's office.
RECOMMENDED BOARD ACTION: It is recommended that the Board amend and
restate the District's Cafeteria Plan documents to meet new Internal Revenue Service
Code requirements effective January 1, 2013.
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