DEFERRED COMPENSATION

AND

THE ECONOMIC GROWTH AND TAX RELIEF RECONCILLIATION ACT OF 2001

The provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) have resulted in changes to 457 Deferred Compensation Plans. To accommodate these changes, contractors will be providing amendments to your existing plan document or making a restated plan document including the EGTRRA changes and options available.

Pursuant to the Deferred Compensation Rules, contactors are required to submit any plan amendments to the Division for approval prior to implementation (N.J.A.C. 5:37-2.1 and N.J.A.C. 5:37-3).

Local governments with existing deferred compensation plans must amend their plan documents to maintain compliance with the requirements of the Internal Revenue Code and protect the assets of their employees. Whether the amendment is in the form of new pages to be added to the existing plan document or a completely restated plan document, the local government must adopt the changes by resolution (N.J.A.C. 5:37-4.3). Upon passage of the implementing resolution by the governing, a certified copy must be forwarded to the Division.

The Division has prepared a sample resolution for your use.

If you have questions regarding the scope and nature of the changes to deferred compensation resulting from the EGTRRA, please contact you deferred compensation provider directly. For other inquiries, please contact the Division at 609.292.7842.

Certified copies of the amendatory resolutions should be mailed to:

Division of Local Government Services

Deferred Compensation EGTRRA Amendments

PO Box 803

Trenton NJ 08625-0803

24.10.01

SAMPLE RESOLUTION

FOR ADOPTING CHANGES REQURIED BY

THE ECONOMIC GROWTH AND TAX RELIEF RECONCILLIATION ACT OF 2001

TO AN EXISTINBG DEFERRED COMPENSATION PLAN

DEFERRED COMPENSATION PLAN

WHEREAS, the [Local Government] (hereinafter referred to as the “Employer) by resolution adopted a Deferred Compensation Plan (hereinafter referred to as the “Plan”) effective [date initial plan adopted] for the purpose of making available to eligible employees the accrual of tax benefits under a Section 457 Deferred Compensation Plan; and

WHEREAS, the Economic Growth and Tax Relief Reconciliation Act of 2001 amended Section 457 of the Internal Revenue Code (the “Code”); and

WHEREAS, the Employer desires its Plan to conform with the changes in the Code brought about by the Economic Growth and Tax Relief Reconciliation Act of 2001; and

IF ADOPTING AMENDMENTS TO AN EXISTING PLAN DOCUMENT

WHEREAS, such amendments shall supersede the provision of the Plan to the extent those provisions are inconsistent with the provision of this amendment.

NOW, THEREFORE BE IT RESOLVED that the Employer hereby adopts the attached Amendment to Deferred Compensation Plan Document [Plan Identifier] to be part of and incorporated into its existing Deferred Compensation Plan Document.

IF ADOPTING A RESTATED PLAN DOCUMENT

WHEREAS, the Employer desire to adopt a restated Plan that conforms with the changes in the Code resulting from the Economic Growth and Tax Relief Reconciliation Act of 2001; and

WHEREAS, such revised Plan shall supersede the previously adopted Plan;

NOW, THEREFORE BE IT RESOLVED that the Employer hereby adopts the attached revised Plan [Plan Identifier].

BE IT FURTHER RESOLVED that a certified copy of this resolution shall be forwarded to the Director of the Division of Local Government Services.

24.10.01