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^ North Dakota Public Employees Retirement System ~~4~,'. ... 4?0 East Broadway, Suite 505 . Box 1657 ~ ~ ~~ Bismarck, North Dakota 58502-1657 Sparb Collins Executive Director (701) 328-3900 1-800-803-7377 ," ~¡::(',(ì\)BeðX: (701) 328-3920. EMAIL: NDPERS@state.nd.us. discovernd.com/NDPERS ct>-SS CO\ \'/\ ' " " V"" ~nn¡l~n'J eïwMemorand u m S3:)~f\OS3b \.,. ,;." 1J.,;I\jJ :.>\.:iv~ 2004-4 """',C' . TO: Defined Benefit Plan Participating Political Subdivisions FROM: Rebecca Fricke, Benefit Services Specialist NDPERS Benefits Division DATE: March 5, 2004 SUBJECT: Pre-tax Purchase Employer Agreement NDPERS has recently received approval from the IRS to allow individuals that purchase service in the NDPERS Defined Benefit Plan to make monthly payroll deductions on a pre-tax basis. NDPERS is currently in the process of modifying our database and forms to accommodate this new option and hope to have it available to employees to utilize on May 1, 2004. However, in order for NDPERS to offer this provision to the employees of your political subdivision, the IRS requires that we obtain an employer agreement that verifies your election to offer this option. This agreement is enclosed for your review. As you will notice, the IRS language requires that this option be referred to as an "employer pick-up". This does not mean that the employer will be required to pay the purchase payment for the employee. This language allows the employee to have their monthly purchase payment deducted from their earnings before federal withholding is computed. An employer may only purchase service credit on behalf of its employees under limited circumstances and only in accordance to NDCC 54-52-27 and NDCC 54-52-29. By completing and returning the attached agreement, you are authorizing NDPERS to offer any employees from your agency that elect to purchase service credit to have payments made on a monthly basis as a pre-tax (tax-deferred)