2.43.2205 TREATING SALARY DEFERRALS UNDER A CAFETERIA PLAN AS COMPENSATION – BACKGROUND
(1) Pretax deductions allowed by state and federal law are included in compensation as that term is defined in the following statutes:
(a) 19-3-108, MCA (PERS);
(b) 19-5-101, MCA (JRS);
(c) 19-6-101, MCA (HPORS);
(d) 19-7-101, MCA (SRS);
(e) 19-8-101, MCA (GWPORS);
(f) 19-9-104, MCA (MPORS); and
(g) 19-13-104, MCA (FURS).
(2) Under federal law, pretax deductions that may be included in the definition of compensation include elective contributions under an IRC section 125 cafeteria plan, but only to the extent the amounts would be includible in gross income but for IRC section 125(a). See IRC section 415.
(3) The board is required to administer PERS, JRS, HPORS, SRS, GWPORS, MPORS, and FURS in a manner required to satisfy the applicable qualification requirements for a qualified governmental plan, as provided in the IRC. Therefore, the board adopts this subchapter to ensure that only elective contributions that would be includible in gross income but for the fact they were made under a bona fide cafeteria plan under IRC section 125 will be included as compensation for purposes of PERS, JRS, HPORS, SRS, GWPORS, MPORS, and FURS.
History: 19-2-403, MCA; IMP, 19-2-1001, 19-2-1005, 19-2-1010, 19-3-108, 19-5-101, 19-6-101, 19-7-101, 19-8-101, 19-9-104, 19-13-104, MCA; NEW, 2005 MAR p. 2241, Eff. 11/11/05; AMD & TRANS, from ARM 2.43.905, 2008 MAR p. 2467, Eff. 12/1/08.