HomeMy WebLinkAboutResolution - 3406 RESOLUTION 3406
RESOLUTION OF INTENTION
f
TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
CITY OF SAN JACINTO
WHEREAS, the Public Employees' Retirement Law permits the participation of public
agencies and their employees in the Public Employees' Retirement System
by the execution of a contract, and sets forth the procedure by which said
public agencies may elect to subject themselves and their employees to
amendments to said Law; and
WHEREAS, one of the steps in the procedures to amend this contract is the adoption
by the governing body of the public agency of a resolution giving notice of
its intention to approve an amendment to said contract, which resolution
shall contain a summary of the change proposed in said contract; and
WHEREAS, the following is a statement of the proposed change:
To provide Section 20475 (Different Level of Benefits).
Section 21354 (2% @ 55 Full formula) is applicable to local
miscellaneous members entering membership for the first
time in the miscellaneous classification after the effective
date of this amendment to contract.
NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency
does hereby give notice of intention to approve an amendment to the
contract between said public agency and the Board of Administration of the
Public Employees' Retirement System, a copy of said amendment being
attached hereto, as an "Exhibit" and by this reference rn(ide a part hereof.
By: ul
Presiding Officer Scott Miller
November 1 , 2011 Title Mayor
Date adopted and approved
(Amendment)
CON-302(Rev.4/96)
CaIPERS
EXHIBIT
California
Public Employees' Retirement System
411111110
Between the
Board of Administration
California PublicEmployees' Retirement System
and the
City Council
City of Saar Jacinto
The Board of Administration, California Public Employees' Retirement System,
hereinafter referred to as Board, and the governing body of the above public agency,
hereinafter referred to as Public Agency, having entered into a contract effective
December 31, 1970, and witnessed November 17, 1970, and as amended effective
September 28, 1973, October 7, 1976, January 13, 1983, January 21, 1988, May 2,
1999, October 21, 2001, June 24, 2002, June 23, 2003 and September 8, 2008 which
provides for participation of Public Agency in said System, Board and Public Agency
hereby agree as follows:
A. Paragraphs 1 through 14 are hereby stricken from said contract as executed
effective September 8, 2008, and hereby replaced by the following paragraphs
numbered 1 through 16 inclusive:
1. All words and terms used herein which are defined in the Public
Employees' Retirement Law shall have the meaning as defined therein
unless otherwise specifically provided. "Normal retirement age" shall
mean age 55 for local miscellaneous members, age 55 for local fire
members, and age 50 for local police members.
2. Public Agency shall participate in the Public Employees' Retirement
System from and after December 31, 1970 making its employees as
hereinafter provided, members of said System subject to all provisions of
the Public Employees' Retirement Law except such as apply only on
election of a contracting agency and are not provided for herein and to all
amendments to said Law hereafter enacted except those, which by
express provisions thereof, apply only on the election of a contracting
agency.
3. Public Agency agrees to indemnify, defend and hold harmless the
California Public Employees' Retirement System (CaIPERS) and its
trustees, agents and employees, the CaIPERS Board of Administration,
and the Califomia Public Employees' Retirement Fund from any claims,
demands, actions, losses, liabilities, damages, judgments, expenses and
costs, including but not limited to interest, penalties and attorneys fees
that may arise as a result of any of the following:
(a) Public Agency s election to provide retirement benefits,
provisions or formulas under this Contract that are different than
the retirement benefits, provisions or formulas provided under
- the Public Agency's prior non-CaIPERS retirement program. -
(b) Public Agency's election to amend this Contract to provide
retirement benefits, provisions or formulas that are different than
existing retirement benefits, provisions or formulas.
(c) Public Agency's agreement with a third party other than
CaIPERS to provide retirement benefits, provisions, or formulas
that are different than the retirement benefits, provisions or
formulas provided under this Contract and provided for under
the California Public Employees' Retirement Law.
(d) Public Agency's election to file for bankruptcy under Chapter 9
(commencing with section 901) of Title 11 of the United States
Bankruptcy Code and/or Public Agency's election to reject this
Contract with the CaIPERS Board of Administration pursuant to
section 365, of Title 11, of the United States Bankruptcy Code
or any similar provision of law.
i
(e) Public Agency's election to assign this Contract without the prior
written consent of the CaIPERS' Board of Administration.
(f) The termination of this Contract either voluntarily by request of
Public Agency or involuntarily pursuant to the Public Employees'
Retirement Law.
(g) Changes sponsored by Public Agency in existing retirement
benefits, provisions or formulas made as a result of
amendments, additions or deletions to California statute or to
the California Constitution.
4. Employees of Public Agency in the following classes shall become
members of said Retirement System except such in each such class as
are excluded by law or this agreement:
a. Local Fire Fighters (herein referred to as local safety members);
b. Local Police Officers (herein referred to as local safety members);
C. Employees other than local safety members (herein referred to as
local miscellaneous members).
5. In addition to the classes of employees excluded from membership by
said Retirement Law, the following classes of employees shall not become
members of said Retirement System:
NO ADDITIONAL EXCLUSIONS
6. The percentage of final compensation to be provided for each year of
credited prior and current service for local miscellaneous members in
employment before and not on or after September 8, 2008 shall be
determined in accordance with Section 21354 of said Retirement Law,
subject to the reduction provided therein for service prior to December 31,
1982, termination of Social Security, for members whose service has been
included in Federal Social Security (2% at age 55 Full and Modified).
7. The percentage of final compensation to be provided for each year of
credited prior and current service for local miscellaneous members in
employment before and not on or after September 8, 2008 and not
entering membership for the first time in the miscellaneous classification
after the effective date of this amendment to contract shall be determined
in accordance with Section 21354.5 of said Retirement Law, subject to the
reduction provided therein for service prior to December 31, 1982,
termination of Social Security, for members whose service has been
included in Federal Social Security (2.7% at age 55 Full and Modified).
8. The percentage of final compensation to be provided for each year of
credited current service as a local miscellaneous member entering
membership for the first time in the miscellaneous classification after the
effective date of this amendment to contract shall be determined in
accordance with Section 21354 of said Retirement Law (2% at age 55
Full).
9. The percentage of final compensation to be provided for each year of
credited prior and current service as a local fire member shall be
determined in accordance with Section 21369 of said Retirement Law (2%
at age 55 Full).
10. The percentage of final compensation to be provided for each year of
credited prior and current service as a local police member shall be
determined in accordance with Section 21362 of said Retirement Law (2%
at age 50 Full).
11. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 21024 (Military Service Credit as Public Service) for local
miscellaneous members and local police members only.
b. Section 20425 ("Local Police Officer" shall include employees of a
police department who were employed to perform identification or
communication duties on August 4, 1972 and who elected to be
local safety members).
C. Section 21574 (Fourth Level of 1959 Survivor Benefits).
d. Section 20042 (One-Year Final Compensation).
e. Section 20475 (Different Level of Benefits). Section 21354 (2% @
55 Full formula) is applicable to local miscellaneous members
entering membership for the first time in the miscellaneous
classification after the effective date of this amendment to contract.
12. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employee' for purposes of Section 20834 effective on
October 7, 1976. Accumulated contributions of Public Agency shall be
fixed and determined as provided in Government Code Section 20834,
and accumulated contributions thereafter shall be held by the Board as
provided in Government Code Section 20834.
13. Public Agency shall contribute to said Retirement System the contributions
determined by actuarial valuations of prior and future service liability with
respect to local miscellaneous members and local safety members of said
Retirement System.
14. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per covered member on account of the 1959
Survivor Benefits provided under Section 21574 of said Retirement
Law. (Subject to annual change.) In addition, all assets and
liabilities of Public Agency and its employees shall be pooled in a
single account, based on term insurance rates, for survivors of all
local miscellaneous members and local safety members.
b. A reasonable amount, as fixed by the Board, payable in one
installment within 60 days of date of contract to cover the costs of
administering said System as it affects the employees of Public
Agency, not including the costs of special valuations or of the
periodic investigation and valuations required by law.
C. A reasonable amount, as fixed by the Board, payable in one
installment as the occasions arise, to cover the costs of special
valuations on account of employees of Public Agency, and costs of
the periodic investigation and valuations required by law.
15. Contributions required of Public Agency and its employees shall be
subject to adjustment by Board on account of amendments to the Public
Employees' Retirement Law, and on account of the experience under the
Retirement System as determined by the periodic investigation and
valuation required by said Retirement Law.
16. Contributions required of Public Agency and its employees shall be paid
by Public Agency to the Retirement System within fifteen days after the
end of the period to which said contributions refer or as may be prescribed
by Board regulation. If more or less than the correct amount of
contributions is paid for any period, proper adjustment shall be made in
connection with subsequent remittances. Adjustments on account of
errors in contributions required of any employee may be made by direct
payments between the employee and the Board.
B. This amendment shall be effective on the ' day of
BOAR0Q3F,ADMINISTRATION CITY COUNCIL
PUBLIC EM ,., YEES' RETIREMENT SYSTEM CITY OF SAN JACINTO
i �3r BY fry, _ Bx
DARRYL WATSON, C AA SIDING OFFICER
CUSTOMER ACCOUNT f�(ICES DIVISION
PUBLIC EMPLOYEES' RETrkf,!RENT SYSTEM
Witness Date:'+^
Attest:
Clerk
AMENDMENT CaIPERS ID#1099253767
PERS-CON-702A
California Public Employees'Retirement System
Actuarial Office
P.O. Box 1494
Sacramento,CA 95812-1494
TTY:(916)795-3240
(888)225-7377 phone• (916)795-2744 fax
www.calpers.ca.gov
August 22,2011
Employer Number: 839
Employer Name:CITY OF SAN JACINTO
Rate Plan: MISCELLANEOUS PLAN
Re: New Second Tier Plan(Section 20475:Different Level of Benefits Provided for New Employees;Section 21354 2%
@ 55 Full Formula)
Dear Requestor:
In the table below,we show your 2011-2012 employer contribution rates before and after opening a second tier.
Of the five rate components, the first three are specific to the pool to which the plan belongs and the last two are
specific to your agency. However,the Phase out of Normal Cost Difference will be 0%beginning with rates established
for 2011-2012,so it has no impact from that time on.
The Side Fund will continue to be paid off by the first tier plan since all the past service on which it is based belongs to
those current members who will continue in the first tier. The scheduled dollar amounts payable will continue as
before. However, because newly hired members will be covered by the second tier, the number of members and
payroll in the first tier will (after several years)gradually decline. The Amortization of Side Fund rate component is the
dollars needed to pay off the side fund divided by the payroll. So as long as the Side Fund remains,the first tier rate
will increase as its payroll decreases. The first tier side fund is scheduled to be paid off after 11 years from June
30, 2011.
Therefore, in determining Ike employer contributions savings,Amortization of Side Fund should be excluded. For your
agency, the ultimate annual employer savings equals the difference between the Normal Cost and Surcharges rates
times the second tier payroll. For 2011-2012 the Normal Cost and Surcharges percentage savings is(9.887%+0.649%)
-(7.684%+0.5200k) =2.332%. The employer annual dollar savings is about 2.3%of the second tier fiscal
year payroll. An additional component to the difference in rates is the Risk Pool's Payment on Amortization Bases.
However,over the long run,this component should trend to zero for both pools. Thus the additional 2.4%savings
from this component is only short-term and should not be considered a permanent decrease to the rate.
The Risk Pool's Payment on Amortization Bases is a temporary adjustment to the pool's contribution to"get the pool
back on schedule".This temporary adjustment varies in amount and duration from pool to pool.
As of June 30, 2009 Existing Plan New Second Tier Plan
2.7%@ 55 2%@ 55 for newly hired
members
2011-2012 Employer Contribution Rate:
Risk Pool's Net Employer Normal Cost 9.887% 7.684%
Risk Pool's Payment on Amortization Bases 4.226% 1.855%
One-Year Final Compensation 0.649% 0.520%
Phase out of Normal Cost Difference 0.000% 0.000%
Amortization of Side Fund 4.885% 0.000%
Total Employer Contribution Rate 19.647% 10.059%
2011-2012 Employee Contribution Rate 8.000% 7.000%
The employee rate reduction of 1%would begin immediately after you hire your first employee and last indefirYtely.
California Public Employees'Retirement System
www.calpers.co.gov
MISCELLANEOUS PLAN OF THE CITY OF SAN JACINTO(EMPLOYER# 839)
July 2011
Page 2
To initiate an amendment to the contract, please complete the attached election form and mail or FAX(916)795-3005
the form with a letter to the Contracts Maintenance Unit, indicating your wish to contract for Section 20475(Different
Level of Benefits)and identifying the group(s)to which the benefit reduction applies.
In sections 20463(b)and(c),the California Public Employees`Retirement Law requires the governing body of a public
agency within five days of receipt of the contract amendment cost analysis,to provide each employee organization with
a copy of the analysis. If this cost analysis was requested by an employee organization, the employee organization is
also required within five days of receipt of the analysis,to provide a copy of the analysis to the public agency.
The June 30,2009 Section 2 Risk Pool actuarial valuation report applicable to your new second tier plan can be viewed
on the following website:
htW:LLtww taloers ca gov/index isD?br—r mooyerrxryuarial gashtd k 000ling/valuation r�
If you have questions, pease call(888)CalPERS(225-7377).
RICHARD SANTOS,CFA,ASA, MAAA
Senior Pension Actuary,CalPERS