E-Help 10/20/2006

1.  Accountant job descriptions (Plano)
2.  Police Dept staffing levels (Plano)
3.  Local Government News source
4.  Mutual Fund Cost Calculator
5.  Health Insurance Survey for municipalities w/ 5,000-10,000 or 5-15 employees (Zeigler)
6.  Commercial Sweep Bank Account (Forsyth)
7.  Responses to Confidential Employee for Sales Tax (Grayslake)
8.  Treasurers Institute Nov 12-16

“Thanks again to everyone that has contributed information in the past.  If you have questions, please feel free to send me your request.  If you are responding to a request, please send your response to the requester and include me as a “cc”.  Thanks again!”

Michael Peterson
mpeterson@villageofgrayslake.com

www.imtausa.org
www.aptusc.org

ACCOUNTANT JOB DESCRIPTIONS

I am in need of accountant job descriptions (i.e., Accountant I, Accountant II, Senior Accountant, Assistant to the Treasurer, Finance Director, Assistant Finance Director, Budget Officer, payroll clerk, accounts payable clerk, etc.) and salary ranges.  If anyone has this info, could you please e-mail it to me.  Thanks for your assistance.

Janet Goehst, City Treasurer
City of Plano
planotreasurer@comcast.net

POLICE DEPT STAFFING LEVELS

I am in need of municipality staffing for police departments as well as the municipality’s population or if growing rapidly, your best population estimate.  Could you break it down by title?  Example:  1 – Chief, 2 Ltns, 4 Srgts, 15 patrol officers and of course, the number of record clerks and their shifts.  If you have salary ranges for each position that would also be helpful, but primarily, the headcount is needed the most. 

Thank you to all.
Janet Goehst, City Treasurer
City of Plano
planotreasurer@comcast.net

LOCAL GOVERNMENT NEWS SOURCE
www.localgovnews.org

MUTUAL FUND CALCULATOR

Many mutual funds have costs that lower your investment returns. 

Shop around and use mutual fund cost calculator at www.sec.gov/investor/tools.shtml to compare many of the costs of owning different funds before you buy.

HEALTH INSURANCE COVERAGE

(for population 1,000-5,000 or for 5-15 employees)

     Our municipality currently has 10 employees that are covered by insurance.  The city pays 100% of the health and dental premium for the employee.  The city has always maintained a high deductible (currently $2000.00/yr.) in which they reimburse the employee for their deductible as used.  Two years ago the city approved 100% dependent coverage in which only 3 employees qualify and utilize this.  One employee has a dep child covered, the second has a spouse & child and the third has a spouse and two children covered.  The costs of their dep coverage varies drastically.  We are in the process of renewing our insurance and the cost increase is approx. 25%.

These are my questions.

1. What kind of benefits packages do other municipalites of similar size offer to their   
    employees.  (population = 1669 w/ 10 full-time employees)
2. What percentage of premiums are covered by the municipality vs. employee.
3. What is your policy of dependent coverage, who pays for this and at what percent.
4. If you do offer dependent coverage do you offer any benefit to those who do not 
    utilize the dependent coverage.  If so how did you determine the amount offered.

Thanks in advance to those that respond to this question.
Jennifer Menz, Treasurer
City of Zeigler
zctreas02@yahoo.com

COMMERCIAL SWEEP BANK ACCOUNT

            Does anyone currently use a Commercial sweep bank account? I have been talking with two different banks and are getting mixed information. One Bank said, "they can sweep the bank account everyday if needed." Bank two said, "they are limited to six sweeps on the bank account in a months time according to Federal regulations."

            If anyone who could enlighten me on regulations, pro's or con's of a commercial sweep bank accounts I would appreciate the information!!!!!

Rhonda L. Stewart
Forsyth Village Treasurer
Forsyth, IL. 62535
rstewart@forsythvillage.us

IRS RULING ON DISABILITY PENSIONS FOR 55 & OLDER 

I spoke with Mike Langenfeld of the Division of Insurance this morning.  He said he heard rumblings that the IRS may have ruled that duty disability pensions are no longer tax free after age 55.   He stated that he also heard that this was due to the IRS winning a case in 2001 or 2002 setting this into law.  He stated the Division of Insurance does not get involved in this since it is an IRS law, but that he suggested I look into it.  Had I not spoken to him on another matter this morning, I don't know how I would have gotten wind of this. 

I was wondering if any of the IMTA membership was aware of this ruling and if they are following it.  This is the first I have heard of this. 

It concerns me that if it is law - how would we find out about it???? 

I would appreciate hearing from anyone who knows about this.
Thanks so much!
Linda L. Buss
Freeport
lbuss@cityoffreeport.org

RESPONSE:
Apparently this issue started with a participant of a police pension fund had been audited by the IRS and the field auditor either raised question of the taxability of his duty disability pension or told him/her that it would become taxable.  This beneficiary contacted his Pension Fund raising the question, who in turn contacted Division of Insurance for information.  DOI then in turn mentioned it to Linda Buss who brought the question back to IMTA.

There is no recent change in Federal Tax Code or Rulings that causes a Duty Disability Pension under an IL Police or Fire Pension Fund to become taxable at a specific age.  This was confirmed by our friend Ted Knapp at the IRS as well as by inquiries by Mike Langenfeld at DOI.

The current tax exempt treatment for a Duty Disability is based on both State Statutes and earlier 1993 IRS letter ruling that such duty disability payments are in the nature of a Worker’s Compensation Act payment and thus exempt from tax.  Specific reference also to 5 ILCS 345/1.  This same tax treatment is transferred to a surviving beneficiary.  It should also be noted that recommended practice is that a Duty Disability recipient not receive a 1099-R at year end for the exempt benefits, provided that there was no income tax withheld (by way of participant election, since withholding is not required from a tax exempt source) or other reason for issuing the 1099-R to the beneficiary.

It is noted that there apparently are provisions that a disability pension would become taxable at the age of retirement for the pension plan that applies to private pension plans (not governmental retirement plans) that designate a retirement age.

The only places where I could find age 55 coming into play with an IL Police Pension was this was the date that pension increases begin for a regular retirement pension.  However, Disability recipients have an option to elect the Disability Pension Option (DPO – 40 ILCS 5/3-116.1) under IL Pension Code.  Under this provision, a Disability recipient at age 50 or older and with at least 20 years of combined active service and receiving disability can elect to convert to a regular retirement at ½ the salary at the date of retirement on disability.  This would be the same regular retirement benefit that would be received by an officer with 20 years of service retiring at age 50 (40 ILCS 5/3-111).  This request must be made in writing to the Pension Board and is not revocable.  If a Disability recipient elects the DPO, the recipient would begin receiving increases to the pension at age 55 (3% annually compounded thereafter) instead of at age 60 (flat 3% of original pension annually).  A Duty Disability recipient must review their individual situation to determine whether the DRO election would be beneficial to them.

Clearly, if a participant was receiving a Non-Duty Disability, taxability is not an issue, since the Non-Duty Disability was already taxable as it would be under the DPO election (i.e. no change in taxability). 

However, if the participant is receiving a Duty Disability, making the DPO election effectively changes the nature of the benefit from a Disability payment in the nature of a Worker’s Compensation Act to a regular retirement pension.  As such, the pension would then be considered taxable. Under this case, the pension would be taxable from the point in which that election went into effect and not age 55.

Brad L. Bettenhausen
Treasurer/Finance Director
Village of Tinley Park
bbettenhausen@tinleypark.org
 Webmaster comments: “You da man Brad!  Thanks for all your support and assistance!”

TREASURER’S INSTITUTE
Nov 12-16 at Holiday Inn, Urbana (217.328.7900)
Registration forms were mailed and a copy is available online.

The IMTI brochure is online at http://www.eiu.edu/~adulted/noncredit/06IMTIbrochure.pdf