xt71g15t7f1s https://exploreuk.uky.edu/dips/xt71g15t7f1s/data/mets.xml Lexington, Kentucky University of Kentucky 19861122 minutes English University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Minutes of the University of Kentucky Board of Trustees Minutes of the University of Kentucky Board of Trustees, 1986-11-dec22. text Minutes of the University of Kentucky Board of Trustees, 1986-11-dec22. 1986 2011 true xt71g15t7f1s section xt71g15t7f1s 









          Minutes of the Telephone Conference Call Meeting of the
Executive Committee, Board of Trustees, University of Kentucky, Monday,
December 22, 1986.


          At 10:00 A.M. on Monday, December 22, 1986, a telephone
conference call was held with members of the Executive Committee of the
Board of Trustees for the purpose of acting on a recommendation relative
to proposed amendments in the University of Kentucky Retirement Plan.
The following members answered the roll call: Mr. Robert T. McCowan
(Chairman), Mr. William R. Black, Mr. Albert G. Clay, Mr. Tracy Farmer,
and Mr. T. A. Lassetter. Mr. John C. Darsie, Assistant Secretary of the
Board of Trustees, acted as Secretary of the meeting.  President Otis A.
Singletary participated in the call as did Mr. G. Bruce Miller, Director
of Employee Benefits and Risk Management.  Members of the news media had
been notified of the meeting; however, none were in attendance.

          President Singletary explained that the changes which are being
proposed to the Retirement Plan are for the purpose of conforming to
certain requirements of the Tax Reform Act of 1986.  The University has
been advised by Wyatt, Tarrant and Combs that contributions will not be
counted against the new elective deferral limits if the Retirement Plan
is amended to make tax sheltering mandatory for all employee contribu-
tions. The net effect of the proposed changes would be that, as of
January 1, 1987, all new employees enrolling in the Retirement Plan and
all employees currently electing the tax shelter option must have their
retirement contribution tax sheltered.  Current employees who have not
elected the tax shelter option in the past, will not, under the proposed
changes, be subject to the mandatory sheltering provision.  Mr. Miller
then reviewed the proposed amendments to AR II-1.6-1 in detail, following
which President Singletary recommended approval of the proposed amend-
ments. On motion of Mr. Farmer, seconded by Mr. Clay, the amendments
were unanimously approved.  (See PR at the end of the Minutes.)

          There being no further business, the conference call meeting
was adjourned at 10:14 A.M.

                                   Respectfully submitted,



                                   John C. Darsie
                                   Assistant Secretary
                                   Board of Trustees





(The PR which follows is an official part of the Minutes of the Meeting.)

2074




 







                                                       Office of the President
                                                       December 22, 1986








Members, Executive Committee, Board of Trustees:


       PROPOSED AMENDMENTS IN THE UNIVERSITY OF KENTUCKY RETIREMENT PLAN


Recommendation:   that the following proposed amendments in the University of
Kentucky Retirement Plan (AR 11-1.6-1) be approved:

                    [NOTE: Proposed additions are underlined;
                       proposed deletions are brackected.I

Amendment #1 - that the following paragraph be added as a new first paragraph
               in Section I.A.3:

    Notwithstanding any provision to the contrary contained herein, all Group
    I personnel who have satisfied the age and service requirements for
    mandatory participation shall be required to contribute on a salary
    reduction (pre-tax) basis all contributions which are required to be made
    by the participant according to the applicable contributions schedule
    contained herein provided, however, that this provision shall not apply
    to  any   participant  who   prior   to  December   22,   1986,  was   making
    contributions on a salary deduction (after-tax) basis.


Amendment #2 - that the first part of the first sentence following the table
                in Section I.A.3 be changed to read:

    The University shall [deduct] withhold the contribution of the participant
    from regular salary payments, add its contribution, and apply the combined
    sum to the purchase of retirement annuities for the participant as follows:


Amendment #3 - that the following paragraph be added as a new first paragraph
                in Section I.B.3:

    Notwithstanding any provision to the contrary contained herein, all Group
    II personnel who have satisfied the age and service requirements for
    mandatory participation shall be required to contribute on a salary
    reduction (pre-tax) basis all contributions which are required to be made
    by the participant according to the applicable contributions schedule
    contained herein; provided, however, that this provision shall not apply
    to  any   participant  who   prior   to  December   22,   1986.  was   making
    contributions on a salary deduction (after-tax) basis.



1




 






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Amendment #4 - that the first part of the first sentence following the table
               in Section I.B.3 be changed to read:

   The University shall (deduct] withhold the contribution of the participant
   from regular salary payments, add its contribution, and apply the combined
   sum to the purchase of retirement annuities for the participant as follows:


Amendment #5 - that the following paragraph be added as a new first paragraph
               in Section I.C.3:

    Notwithstanding any provision to the contrary contained herein, all Group
    III personnel who have satisfied the age and service requirements for
    mandatory participation shall be required to contribute on a salary
    reduction (pre-tax) basis all contributions which are required to be made
    by the participant according to the applicable contributions schedule
    contained herein; provided, however, that this provision shall not apply
    to  any  participant   who  prior   to  December   22,  1986,  was   making
    contributions on a salary deduction (after-tax) basis.


Amendment #6 - that the first part of the first sentence following the table
               in Section I.C.3 be changed to read:

    The University shall [deduct] withhold the contribution of the participant
    from regular salary payments, add its contribution, and apply the combined
    sum to the purchase of retirement annuities for the participant as follows:





Background for all amendments:     The 1986 Tax Reform Act sets an elective
deferral limit on employee contributions to tax sheltered retirement plans.
In the absence of published IRS regulations, it is the interpretation of the
new tax law by legal counsel hired by the University that, since the
University of Kentucky Retirement Plan permits employees to decide whether
their contributions are on a salary reduction or a salary deduction basis,
individuals tax sheltering under the University's Retirement Plan would have
their tax sheltered retirement contribution count against the current elective
limit of $9,500.  It is also the interpretation of the tax law that, if it is
mandatory   that  all   employee   contributions   be   tax   sheltered,   those
contributions do not count against the elective deferral limit.

These changes in the Retirement Plan will permit those employees who in the
past were not tax sheltering to continue their choice to do so. But, all new
employees enrolling in the University's Retirement Plan as well as those
already tax sheltering would no longer have an option to treat their
contribution as a salary deduction.




 






- 3 -



To meet the requirements of the 1986 Tax Reform Act, these changes in the
University's Retirement Plan should be approved prior to January 1, 1987, if
It is the University's intention that the option for additional deferrals
becomes available for calendar year 1987.














































1739A



Action taken:  Approved    V



Disapproved



Date:     December 22, 1986



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