June 21st, 2010, 3:39 pm · posted by Jennifer Muir

A new, hybrid pension plan for county employees is still tied up at the Internal Revenue Service, and county staff is asking for more money to resolve the issue.

Under the two-tiered plan, current employees were supposed to be able to choose whether to keep their old benefits, or select a hybrid plan that features a reduced pension but also a defined contribution component, similar to a 401(k).

County officials touted the new option as groundbreaking pension reform — a way to rein in mounting pension costs.

But employees haven’t been able to choose between the pension tiers yet because switching to the new formula would have a negative tax impact. As of the end of April, the county has spent more than $40,000 with a Washington DC law firm that is is working to change IRS’s position on how they’d tax the benefits.

That hasn’t been enough, a staff report says.

So on Tuesday, county supervisors will decide whether to increase the spending limit with Groom Law Group from $50,000 to $100,000.

“In addition to assisting with pursuing IRS guidance, Groom is also providing assistance with respect to possible legislation that may be pursued in an effort to resolve the matter,” a staff report says.

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