Social Security Elected OfficialsMEMORANDUM
March 31, 2003
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:Social Security Coverage for Part-Time Elected Officials
The City received a February 12, 2003 request from IPERS relative to Social Security
Coverage for Part-Time Elected Officials. A determination is required by the City
Council regarding the option of providing both social security and IPERS coverage or
retaining the current policy of providing either social security or IPERS.
If the City Council opts to provide both social security and IPERS, City Council action is
needed and all members will be required to participate. The City Council must also
choose a starting date for this coverage, if the Council does not opt for a change at this
time, coverage could be pursued at a later date.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:Michael Van Milligen, City Manager
FROM:Ken TeKippe, Finance Director
SUBJECT: Social Security Coverage for Part-Time Elected Officials
DATE:March 24, 2003
Enclosed is a February 12, 2003 request from IPERS relative to Social Security
Coverage for Part-Time Elected Officials. A decision should be made at the April 7,
2003 City Council Meeting to meet the 60 day deadline. Questions 2, 3, and 4 of the
letter should be answered non-applicable. Question 1 should be answered after a
determination by the City Council is made regarding the option of providing social
security and IPERS coverage or retaining the current policy of providing either social
security or IPERS. Currently all of our elected officials participate in IPERS (3.70%
withholding). All elected officials are required to participate in Medicare which results in
1.45% withholding.
The current annual budget impact for providing social security coverage in addition to
IPERS will be $8,000 x 6.20% withholding ($496) for each council member ($2,976
total) and $11,000 x 6.20% withholding for the mayor ($682) for a total $3,658 City
match.
According to Jim Burke from IPERS, the mayor or another elected official should sign
the form. If the City Council opts to provide both social security and IPERS, City
Council action is needed and all members will be required to participate. Wording for
the City Council action is being finalized by IPERS, as well as, the process that will
need to be followed. The start date can be determined by the City Council action (i.e.
January 1, 2004 or perhaps the beginning of the quarter may be appropriate). If the
council does not opt for a change at this time, coverage could be pursued at a later
date.
If you have any questions relative to this issue, please feel free to contact me. Thank
you.
KT/jg
Enclosure
CC:Randy Peck, Personnel Manager
Barry Lindahl, Corporation Counsel
Thomas J. Vilsack
GOVERNOR
Sally J. Pederson
LT. GOVERNOR
February 12, 2003
IPERS
CITY OF DUBUQUE
KENNETH TEKIPPE, FINANCE DIRECTOR
50 W 13TH ST
CITY HALL
DUBUQUE, IA 52001
RE: Social Security Coverage for Part-time Elected Officials
Dear KENNETH TEKIPPE:
As the result of recent changes in Iowa law, IPERS must contact all employers of part-
time elected officials regarding Social Security coverage. We apologize in advance for
the length of this letter. We believe some detailed explanation of the current situation
will help employers better understand the need for the information you are asked to
provide to IPERS at this time.
The original agreement between the State of Iowa and the Social Security
Administration (SSA) by which Social Security coverage was extended to Iowa's public
employees (the "218 Agreement''), excluded Iowa's part-time elected officials from
Social Security coverage. However, in 1991, the Social Security Act was amended to
provide mandatory Social Security coverage for nearly all employees, including most
part-time elected officials, unless the employee was covered under a retirement plan
like IPERS. If the retirement plan exception applied, mandatory coverage ended.
A problem arose when part-time elected officials were covered by IPERS, but the
employer did not end Social Security coverage. IPERS received many requests from
covered employers for authorization to provide both IPERS and Social Security
coverage to their part-time elected officials. In response to these requests, IPERS
agreed to pursue a modification to the 218 Agreement to allow dual coverage.
The Iowa Legislature adopted voluntary coverage for elected officials in 2002. The
amendment was drafted to permit employer-by-employer adoption of this dual
coverage. The next step was to request approval from SSA. IPERS finally received
approval for the employer-by-employer adoption process from the Social Security
Administration on December 19, 2002.
The approval process requires each employer of part-time elected officials to hold a
referendum IF the employer desires to retain prior dual coverage for part-time elected
officials, or to beqin dual coverage.
Iowa Public Employees' Retirement System
7401 Register Drive · EO. Box 9117 · Des Momes, IA 50306-9117 · Phone 515-281-0020 · 800-622-3849
Benefits FAX 515-281-0053 · Legal & Investments Management FAX 515-281-0045 · Operations Fax 515-281-0055
info@ipers.state.ia.us · wwv~state.ia.us/ipers
Letter re: Social Secudty Coverage for Part-time Elected Officials
Page 2
If an employer does not act to ratify prior dual coverage, prior Social Security
contributions are considered to be in error and must be corrected. Tax years
before 1999 are closed due to limitations set by SSA and IRS, so those
employers and employees who are entitled to refunds of erroneous prior Social
Security contributions will not be able to recover contributions made for previous
years. Corrected income tax reporting forms will have to be prepared for
employers in those situations. Preparation of corrected tax reporting documents
and refund requests will be the employer's responsibility with information
provided by the IRS.
We are now at the point where you, the employer, are asked to provide IPERS
with information about how you have coordinated IPERS and Social Security
coverage for your part-time elected officials, and what your plans are for future
coordination of such coverage.
Please complete the questionnaire on pages 3 and 4, sign as indicated, and
return the form in the enclosed envelope. This form is to be completed and
signed by an officer. Once IPERS has received all the responses, the Employer
Relations Team will compile the answers and notify the employers of the next
steps required under the new law.
Your response to this letter must be received within 60 days from the date of this
letter. Failure to cooperate in a timely manner may result in IPERS' referral of the
matter to the Social Security Administration and the Internal Revenue Service for
further review.
If you have any questions, please contact IPERS at one of the telephone
numbers listed on page one, and ask for a member of the Employer Relations
Team. Thanks for your assistance with this project.
IPERS' Employer Relations Team
This question is for:
EMPLOYERS WHO HAVE PROVIDED ONLY SOCIAL SECURITY OR IPERS
COVERAGE TO PART-TIME ELECTED OFFICIALS.
__ This employer DOES NOT desire to provide both Social Security and IPERS
coverage for its part-time elected officials. No corrections are necessary
because the employer's payroll practice has been to discontinue mandatory
Social Security contributions for part-time elected officials who choose IPERS
coverage.
The employer DOES desire to provide both Social Security and IPERS
coverage for its part-time elected officials and hereby requests more information
from IPERS about referendum and other requirements necessary to approve
such dual coverage in the future. No corrections are necessary, because the
employer's payroll practice has been to discontinue mandatory Social Security
contributions for pad-time elected officials who choose IPERS coverage.
This question is not applicable for this employer.
This question is for:
EMPLOYERS THAT PROVIDED BOTH SOCIAL SECURITY COVERAGE AND
IPERS COVERAGE TO PART-TIME ELECTED OFFICIALS AFTER THE
OFFICIALS COMMENCED IPERS PARTICIPATION.
__ The employer DOES NOT desire to provide both Social Security and IPERS
coverage to its part-time elected officials. The employer understands that
corrected income tax reporting documents must be filed for tax years beginning
with 1999 for all such individuals, and that the employer has sole responsibility
for filing such corrected reports and for taking the additional steps necessary to
obtain the applicable refunds of member and employer Social Security
contributions.
__ The employer .DOES desire to provide both Social Security and IPERS
coverage to its part-time elected officials, and hereby requests more information
from IPERS about referendum and other requirements necessary to approve
such dual coverage. Employer understands that, once approved through the
referendum process, coverage will apply to all prior and future Social Security
coverage for such officials.
This question is not applicable for this employer.
3
This question is for:
EMPLOYERS THAT PROVIDED BOTH SOCIAL SECURITY COVERAGE AND
IPERS COVERAGE TO SOME BUT NOT ALL PART-TIME ELECTED
OFFICIALS AFTER THE OFFICIALS COMMENCED IPERS PARTICIPATION.
__ The employer has provided mandatory Social Security coverage and IPERS
coverage for some, but not all, of its part-time elected officials. Please attach
explanation.
This question is not applicable for this employer.
4. This question is for:
EMPLOYERS WHO HAVE NEVER PROVIDED ANY COVERAGE FOR PART-
TIME ELECTED OFFICIALS UNDER EITHER THE MANDATORY SOCIAL
SECURITY COVERAGE PROVISIONS OR IPERS,
__ The employer has never provided mandatory Social Security coverage or
IPERS coverage to its pad-time elected officials. Please attach explanation.
This question is not applicable for this employer.
By signing and returning this form the officer represents that the officer has the
authority to complete the form, or has been duly authorized by the employer's
operating body to complete the form as submitted to IPERS.
Name of official Date
Title
31305 CITY OF DUBUQUE