Loretta Sanchez Seeks Faster IRS Review of Orange County Pension Plan Changes

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Rep. Loretta Sanchez (D-Garden Grove) is calling on Treasury Secretary Timothy
Geithner
to expedite Internal Revenue Service review of Orange County's proposed changes to its employee pension program–not because she believes the IRS will expose flaws but because she's kinda sorta for it and kinda sorta wants it implemented.

Conservatives across the land are trying to muscle government employees out of pricey public pension programs, but Sanchez is not appealing solely to her supposed Blue Dog Democrat side. Sanchez notes the pension changes are not only backed by the Republican-dominated county Board of Supervisors but the county's largest union and
Governor Arnold Schwarzenegger.
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However, the county has not moved forward with the plan because questions remain about the tax implications employees would face after the changes. That's where the IRS review comes in.

A copy of Sanchez's letter to Geithner follows:

Dear Secretary Geithner:


I am writing to ask for your help on an issue of
great importance to the County of Orange, California. As with many
public entities around the Country, Orange County is working to address
significant financial burdens resulting from the
County's pension obligations. The County and its largest union, Orange
County Employees Association (OCEA), have worked together to propose
changes to its pension structure that would address this concern and
benefit both the County and its employees. This
could be a helpful and necessary step in addressing the significant
pension burdens of many state and local governments while continuing to
provide retirement security to its employees. Governor Schwarzenegger
signed urgency legislation in October 2009 to allow
the County to implement these changes.

As the County of Orange prepared for implementation,
the County became aware of possible negative tax implications for its
13,000 participants and has been diligently working with the Internal
Revenue Service (IRS) Employee Plans Division,
Fran Sloan, as well as Treasury officials, George H. Bostick, Benefits
Tax Counsel, and J. Mark Iwry, Senior Advisor to the Secretary and
Deputy Assistant Secretary (Retirement and Health Policy), who have been
consistently sympathetic to the issues and have
assured the County that they are actively working to provide guidance
addressing the matter.

Almost a year has passed, however, and the County is
unable to proceed with the new program. I am writing to ask for your
assistance in encouraging a swift and positive resolution for this
issue, which I believe will promote financial stability
for the County of Orange, provide greater flexibility to its employees
in their retirement planning, and establish a national model.

Thank you in advance for your help.

Sincerely,

Loretta Sanchez
Member of Congress

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