I am addressing this e-mail to Retired Fire Fighters Association (RFA) Executive Members and Joe Healy of the District of Columbia.  It concerns a letter, dated January 23, 2012, that I received from Member Services of the DC Retirement Board (DCRB) on January 27, 2012.  The letter reads as follows:

 

Dear Mr. Samuel Malachi:

 

This letter is to inform you of an upcoming change that may affect the monthly annuity you receive from either the District of Columbia Police Officers and Firefighters' Retirement Plan or the District of Columbia Teachers' Retirement Plan.

 

Beginning March 1, 2012, you may notice a change in the District of Columbia (DC) income tax amount that is withheld from your monthly annuity.  Under the "Retirement Distribution Withholding Emergency Act of 2011" (A-19-265), which was passed by the DC Council in late December 2011, DCRB is required to withhold DC income taxes at the highest DC income tax rate of 8.95% on annuity payments made to DC residents beginning January 1, 2012.  This mandatory withholding applies to pension distributions that are subject to federal withholding.  If your annuity payment is not subject to federal withholding, this tax will not apply to you.

 

DCRB will implement this change with your February annuity payment, which will be paid to you on March 1, 2012.

 

For additional information regarding this change in DC tax withholding, please review the "OTR Tax Notice 2011-9" news statemtn found on the Office of Tax and Revenues website at http://otr.cfo.dc.gov or contact their Customer Service Administration at (202) 727-4TAX (4829).

 

If you have any further questions, please contact the DCRB Member Services Center at (202) 343-3272.

 

Sincerely,

 

District of Columbia Retirement Board

Benefits Department

 

The above letter has generated enough concern from members of the Retired Police Association (AORP) that the following e-mail has been sent to their membership to give some incite in this matter:

 

From:    AORPHotsheet@laborcops.com

Sent:    Friday, February 03, 2012

Subject:  D.C. PENSION TAX WITHHOLDING INCREASE

 

After speaking with Councilmember Jack Evans' Office, I am happy to report that he did not draft the emergency legislation which increased the withholding rate for DD government pensioners to the maximum rate of 8.95%.  The Mayor's Chief Financial Officer (CFO) sent the bill which increased it, to the City Council in December as a "clarification" of earlier legislation affecting pensioners who were taking lump sum payments out of their annuities.

 

It was not Jack's intention to levy this increase on our members.  The CFO forwarded this piece as a "technical amendment" with a financial impact statement which there was no cost associated with the new bill.  The City Council was not aware that the CFO intended to use the "clarification" to order the increase in the withholding rate on pensioners drawing an annuity from the District Government, who reside in the City.

 

Councilmember Jack Evans and Councilmember Michael Brown plan to introduce legislation in the City Council next Tuesday, to address this issue.  They are moving quickly and plan to stop this unfair action as fast as they can.  I have been assured that if further action is necessary, they will move additional legislation to ensure this action has been reversed permanently.  I believe the other members of the City Council will support the reversal of the Mayor's December 2011 bill.

 

Many members of the AORP have contact their City Council representatives to express their displeasure with this action.  It is have a positive affect.  Please remember to be polite and professional when you call your elected representatives.  ALSO, remember the source of this legislation is the Mayor.  Be sure to call him.

 

I will keep you posted as more information develops.

 

Gary

 

As noted, I received the letter from DCRB on January 27, 2012.  I received a copy of the e-mail from a retired policeman friend today.  If our association, as a body, is interested in supporting the reversal of this indicated bill and have contacts in the police retired association, I suggest that we start contacting those contacts to express our inquiry and displeasure ASAP.  The tax increase, as I understand it, will affect DC annuitants only.  Many of our members, including myself, are DC annuitants.

 

It is my intention to attend the RFA Meeting on Monday, February 6th.  However, I am having a medical procedure done to my left knee at 10:30 am on Monday, February 6th.  If there are not any prohibitive after-affects, I'll be in attendance.  I thought that I would submit this information to you FYI.

 

I do not have a DC Councilmember.  Mr. Harry Thomas, Jr. submitted his resignation.  I am sure that you know about that issue.  I have written two letters, ie, Mr. Eric Stanchfield, Executive Director of DCRB and Office of Tax and Revenue Customer Service.  As of the information about the retired police organization, I will submit a letter to Mayor Vincent Gray personally.

 

Samuel Malachi