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HomeMy WebLinkAbout06-19-2012 ph2 resoof intention_pers 2nd tier for fireIA counci lacenOa i epoi t Meeting Date 06/19/1 2 Item Number PH 2 C I T Y O F S A N L U I S O B I S P O FROM : Monica Irons, Human Resources Director Prepared By :Greg Zoeller, Human Resources Manage r SUBJECT :RESOLUTION OF INTENTION AND AN ORDINANCE AUTHORIZING A N AMENDMENT TO THE CONTRACT BETWEEN THE CITY OF SAN LUIS OBISP O AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLI C EMPLOYEES' RETIREMENT SYSTEM TO PROVIDE SECTION 20475 (DIFFEREN T LEVEL OF BENEFITS), SECTION 21363 .1 (3% @ 55 FULL FORMULA) AN D SECTION 20037 (THREE-YEAR FINAL COMPENSATION) FOR LOCAL FIR E SAFETY MEMBERS . RECOMMENDATIO N 1.Adopt a resolution of intention approving an amendment to the contract between the Boar d of Administration of the California Public Employees' Retirement System (Ca1PERS) an d the City Council of the City of San Luis Obispo ; and 2.Introduce and approve the first reading of an Ordinance authorizing an amendment to th e contract between the City Council of the City of San Luis Obispo and the Board o f Administration of the California Public Employees' Retirement System, and authorize staf f to bring back the Ordinance for adoption on July 17, 2012 . 3.Adopt a resolution ceasing to pay and report the value of the employer paid membe r contribution (EPMC) to the California Public Employees Retirement System (Ca1PERS) fo r members of the International Association of Firefighters, Local 3523 hired under the secon d tier formula. DISCUSSION Backgroun d Following adoption of the 2011-13 Financial Plan in June 2011, Council developed labor relation s objectives including pension reform efforts through employees paying the Member Contribution t o Ca1PERS and implementation of a second tier reduced retirement benefit . The 2012-201 5 Memorandum of Agreement (MOA) with the International Association of Firefighters, Local 352 3 (Local 3523), which was adopted by City Council on March 6, 2012, contains a provision to amen d the City's contract with Ca1PERS to provide a second tier reduced retirement formula for swor n Fire Safety employees hired after the effective date of an amended contract with Ca1PERS . Th e agreed contract amendment for the second tier would provide the 3% @ 55 retirement formula t o Fire Safety employees and calculate final compensation on an average of the three highest years . Current Fire and Police Safety employees are covered under the 3% @ 50 formula using the singl e highest year for calculation of final compensation . On May 15, 2012 City Council approved a Letter of Agreement between the City of San Luis Obispo and the San Luis Obispo Fire Battalion Chiefs' Association agreeing, except as otherwise provided, Battalion Chiefs will be covered under the terms and conditions of the 2012-15 Local 3523 Memorandum of Agreement . Therefore, th e Battalion Chief classification will be included in the CaIPERS contract for Fire Safety employees . This agenda report provides the mechanism for the City to implement this new second tie r retirement plan for Fire Safety Employees pursuant to CaIPERS guidelines . A Resolution o f Intention (Attachment 1 & Exhibit) prepared by CaIPERS and an Ordinance which amends th e contract between CaIPERS and the City (Attachment 2) addresses the benefit changes . Government Code Section 7507 requires the future costs of changes in retirement benefits as determined by a n actuary, shall be made public at a public meeting at least two weeks prior to the adoption of an y changes in public retirement plan benefits . The City requested and received a contract amendmen t cost analysis, conducted by the CaIPERS Actuarial and Employer Services Division on this pla n amendment (Attachment 3). The new proposed 3% @ 55 retirement benefit provides a monthly retirement allowance that i s determined by a formula and takes into consideration an employee's age at retirement, years o f service credit and final compensation . The new basic benefit provides for 3 percent of salary fo r each year of service upon retirement at age 55 and compensation is based on the average monthl y pay rate for thirty-six consecutive months of employment . If retirement is earlier than age 55, th e percentage of final compensation decreases . There will be no change to the member contributio n rate of nine percent . Current Fire Safety employees will begin paying 7 .5% of the membe r contribution in July 2012 and the full 9% member contribution in July 2013 . Employees hire d under the new second tier formula will pay the full 9% member contribution (Attachment 4). FISCAL IMPAC T According to CaIPERS, the employer contribution rate will be 21 .802% of reportable earnings fo r local fire members entering membership for the first time in the fire classification after the effectiv e date of this amendment to contract . Furthermore, this is a reduction of the first tier rate of 39 .910 % for fire safety employees . Actuarial analysis estimates annual retirement costs will be reduced b y approximately $161,000 in about ten years for Fire Safety employees . ALTERNATIVE S Do not approve the resolution and ordinance .This alternative is not recommended since this chang e was approved as part of the 2012-2015 Local 3523 MOA and the Battalion Chiefs' Letter o f Agreement . Failure to pass this resolution and ordinance would place the City in violation of it s agreement with Local 3523 and would not result in the anticipated savings described above . ATTACHMENT S 1.Resolution of intentio n 2.Ordinance amending contract with CaIPER S 2 .1 Ordinance amending contract with CaIPERS - Exhibi t 3.CaIPERS Actuarial Analysi s 4.Resolution ceasing to pay and report the value of EPMC to CaIPERS for Local 352 3 employees hired on or after July 1, 2012 PH2-2 ATTACHMENT 1 RESOLUTION OF INTENTIO N TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN TH E BOARD OF ADMINISTRATIO N CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTE M AND THE CITY COUNCI L CITY OF SAN LUIS OBISP O WHEREAS, the Public Employees' Retirement Law permits the participation of publi c agencies and their employees in the Public Employees' Retirement Syste m by the execution of a contract, and sets forth the procedure by which sai d public agencies may elect to subject themselves and their employees t o amendments to said Law ; an d WHEREAS, one of the steps in the procedures to amend this contract is the adoption b y the governing body of the public agency of a resolution giving notice of it s intention to approve an amendment to said contract, which resolution shal l contain a summary of the change proposed in said contract ; an d WHEREAS, the following is a statement of the proposed change : To provide Section 20475 (Different Level of Benefits). Section 21363 .1 (3% @ 55 Full formula) and Section 2003 7 (Three-Year Final Compensation) are applicable to local fir e members entering membership for the first time in the fir e classification after the effective date of this amendment t o contract . NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agenc y does hereby give notice of intention to approve an amendment to th e contract between said public agency and the Board of Administration of th e Public Employees' Retirement System, a copy of said amendment bein g attached hereto, as an "Exhibit" and by this reference made a part hereof . By : Presiding Officer Title Date adopted and approve d (Amendment) CON-302 (Rev . 4196) PH2-3 ATTACHMENT 1 Ca1PERS EXHIBI T Californi a Public Employees' Retirement Syste m AMENDMENT TO CONTRAC T Between th e Board of Administration California Public Employees' Retirement Syste m and th e City Counci l City of San Luis Obisp o 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 July 1 , 1952, and witnessed June 9, 1952, and as amended effective October 1,1962, Octobe r 3, 1963, October 1, 1974, June 1, 1976, December 1, 1976, December 20, 1978 , January 16, 1980, May 1, 1980, July 1, 1980, July 1, 1983, July 1, 1986, July 23, 1987 , November 16, 1989, August 8, 1993, November 5, 1999, January 7, 2000, July 6, 2000 , September 21, 2001 March 28, 2002, July 18, 2002, January 30, 2003, February 27 , 2003, July 14, 2005 and December 29, 2005 which provides for participation of Publi c Agency in said System, Board and Public Agency hereby agree as follows : A . Paragraphs 1 through 13 are hereby stricken from said contract as execute d effective December 29, 2005, and hereby replaced by the following paragraph s numbered 1 through 15 inclusive : 1 All words and terms used herein which are defined in the Publi c Employees' Retirement Law shall have the meaning as defined therei n unless otherwise specifically provided . "Normal retirement age "shal l mean age 55 for local miscellaneous members, age 50 for local polic e members and for those local fire members entering membership in the fir e classification on or prior to the effective date of this amendment to contrac t and age 55 for local fire members entering membership for the first time i n the fire classification after the effective date of this amendment to contract . PH2-4 ATTACHMENT 1 2.Public Agency shall participate in the Public Employees' RetirementSystem from and after July 1, 1952 making its employees as hereinafte r provided,members of said System subject to all provisions of the Publi cEmployees'Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendment s to said Law hereafter enacted except those, which by express provision s thereof, apply only on the election of a contracting agency . 3.Public Agency agrees to indemnify, defend and hold harmless th e California Public Employees' Retirement System (CaIPERS) and it s trustees, agents and employees, the CaIPERS Board of Administration , and the California Public Employees' Retirement Fund from any claims , demands, actions, losses, liabilities, damages, judgments, expenses an d costs, including but not limited to interest, penalties and attorneys fee s 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 tha n the retirement benefits, provisions or formulas provided unde rthePublicAgency's prior non-CaIPERS retirement program . (b)Public Agency's election to amend this Contract to provid e retirement benefits, provisions or formulas that are different tha n existing retirement benefits, provisions or formulas . (c)Public Agency's agreement with a third party other tha n CaIPERS to provide retirement benefits, provisions, or formula s that are different than the retirement benefits, provisions o r formulas provided under this Contract and provided for unde r 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 State s Bankruptcy Code and/or Public Agency's election to reject thi s Contract with the CaIPERS Board of Administration pursuant t o section 365, of Title 11, of the United States Bankruptcy Cod e or any similar provision of law . Public Agency's election to assign this Contract without the prio r written consent of the CaIPERS' Board of Administration . The termination of this Contract either voluntarily by request o f Public Agency or involuntarily pursuant to the Public Employees ' Retirement Law . Changes sponsored by Public Agency in existing retiremen t benefits, provisions or formulas made as a result o f amendments, additions or deletions to California statute or t o the California Constitution . (e ) (f) (g ) PH2-5 ATTACHMENT 1 Employees of Public Agency in the following classes shall becom e members of said Retirement System except such in each such class a s 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 a s local miscellaneous members). 5 . In addition to the classes of employees excluded from membership b y said Retirement Law, the following classes of employees shall not becom e members of said Retirement System : a .CROSSING GUARDS . The percentage of final compensation to be provided for each year o f credited prior and current service as a local miscellaneous member i n employment before and not on or after January 30, 2003 shall b e determined in accordance with Section 21354 of said Retirement La w (2% at age 55 Full). 7.The percentage of final compensation to be provided for each year o f credited prior and current service as a local miscellaneous member i n employment on or after January 30, 2003 shall be determined i n accordance with Section 21354 .5 of said Retirement Law (2 .7% at age 5 5 Full). 8.The percentage of final compensation to be provided for each year o f credited prior and current service as a local police member and for thos e local fire members entering membership in the fire classification on o r prior to the effective date of this amendment to contract shall be determined in accordance with Section 21362 .2 of said Retirement La w (3% at age 50 Full). 9.The percentage of final compensation to be provided for each year o f credited current service as a local fire member entering membership fo r the first time in the fire classification after the effective date of thi s amendment to contract shall be determined in accordance with Sectio n 21363 .1 of said Retirement Law (3% at age 55 Full). 10.Public Agency elected and elects to be subject to the following optiona l provisions : a .Section 21573 (Third Level of 1959 Survivor Benefits) for local fir e members only. Section 21574 (Fourth Level of 1959 Survivor Benefits) for loca l miscellaneous members and local police members only . PH2-6 ATTACHMENT 1 c.Sections 21624, 21626 and 21628 (Post-Retirement Survivo r Allowance) for local safety members only . d.Section 20965 (Credit for Unused Sick Leave). e.Section 20042 (One-Year Final Compensation) for loca l miscellaneous members, local police members and for those loca l fire members entering membership on or prior to the effective dat e of this amendment to contract . f.Section 20903 (Two Years Additional Service Credit) for loca l miscellaneous members only . Section 21024 (Military Service Credit as Public Service). Section 21548 (Pre-Retirement Option 2W Death Benefit). 1. Section 20475 (Different Level of Benefits). Section 21363 .1 (3% @ 55 Full formula) and Section 20037 (Three-Year Fina l Compensation) are applicable to local fire members enterin g membership for the first time in the fire classification after the effective date of this amendment to contract . 11.Public Agency, in accordance with Government Code Section 20790 , ceased to be an "employer" for purposes of Section 20834 effective o n June 1, 1976 . Accumulated contributions of Public Agency shall be fixe d and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board a s provided in Government Code Section 20834 . 12.Public Agency shall contribute to said Retirement System the contribution s determined by actuarial valuations of prior and future service liability wit h respect to local miscellaneous members and local safety members of sai d Retirement System . 13.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 21573 of said Retiremen t Law. (Subject to annual change .) In addition,all assets an d liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of al l local fire members . b.Contributions required per covered member on account of the 195 9 Survivor Benefits provided under Section 21574 of said Retiremen t Law. (Subject to annual change .)In addition,all assets an d liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of al l local police members and local miscellaneous members . PH2-7 ATTACHMENT 1 c.A reasonable amount, as fixed by the Board, payable in on e installment within 60 days of date of contract to cover the costs o f administering said System as it affects the employees of . Public Agency, not including the costs of special valuations or of th e periodic investigation and valuations required by law. d.A reasonable amount, as fixed by the Board, payable in on e installment as the occasions arise, to cover the costs of specia l valuations on account of employees of Public Agency, and costs o f the periodic investigation and valuations required by law . 14.Contributions required of Public Agency and its employees shall b e subject to adjustment by Board on account of amendments to the Publi c Employees' Retirement Law, and on account of the experience under th e Retirement System as determined by the periodic investigation an d valuation required by said Retirement Law . 15.Contributions required of Public Agency and its employees shall be pai d by Public Agency to the Retirement System within fifteen days after th e end of the period to which said contributions refer or as may be prescribe d by Board regulation . If more or less than the correct amount o f contributions is paid for any period, proper adjustment shall be made i n connection with subsequent remittances . Adjustments on account o f errors in contributions required of any employee may be made by direc t payments between the employee and the Board . B .This amendment shall be effective on the day of BOARD OF ADMINISTRATION CITY COUNCI L PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF SAN LUIS OBISP O BY KAREN DE FRANK, CHIE F CUSTOMER ACCOUNT SERVICES DIVISIO N PUBLIC EMPLOYEES' RETIREMENT SYSTEM Witness Date Attest : Clerk AMENDMENT CaPPERS ID #757462851 5 PERS-CON-702A BY PRESIDING OFFICER PH2-8 ORDINANCE NO . (2012 Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISP O AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CIT Y COUNCIL OF THE CITY OF SAN LUIS OBISPO AND THE BOARD O F ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMEN T SYSTE M WHEREAS,the City of San Luis Obispo has contracted with the California Publi c Employees' Retirement System (Ca1PERS) for retirement benefits for its sworn Fire Safet y employees since July 1, 1952 ; and WHEREAS,over the years, the City has amended its retirement benefit structure t o reflect changes as negotiated during the meet-and-confer process with each bargaining group ; and WHEREAS,the City is amending its contract with Ca1PERS to provide for the 3%@ 55 Retirement Formula and three year average final compensation for its sworn Fire Safet y employees hired after this contract amendment with Ca1PERS ; and WHEREAS,the City is amending its contract with Ca1PERS to provide that, pursuant t o Government Code Section 20471, there must be at least a 20-day period between the adoption o f the Resolution of Intention and the adoption of the final Ordinance . NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Lui s Obispo as follows : SECTION 1 .That an amendment to the contract between the City Council of the City o f San Luis Obispo and the Board of Administration, California Public Employees' Retiremen t System is hereby authorized, a copy of said amendment being attached hereto, marked Exhibit , and by such reference made a part hereof as though herein set out in full . SECTION 2 .The Mayor of the City of San Luis Obispo is hereby authorized , empowered, and directed to execute said amendment for an on behalf of said Agency . SECTION 3 .A summary of this ordinance, together with the names of Counci l members voting for and against, shall be published at least five (5) days prior to its final passage, in The Tribune, a newspaper published and circulated in this City . This ordinance shall go int o effect at the expiration of thirty (30) days after its final passage . PH2-9 INTRODUCED at a regular meeting of the City Council held on this 19 th day of June , 2012, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the 17 th day of July 2012, on the following vote : AYES : NOES : ABSENT : Mayor Jan Marx ATTEST : Sheryll Schroede r Interim City Cler k APPROVED AS TO FORM : J . Christine Dietric k City Attorney ATTACH M Ca1PERS EXHIBI T California Public Employees' Retirement Syste m AMENDMENT TO CONTRAC T Between th e Board of Administratio n California Public Employees' Retirement Syste m and th e City Counci l City of San Luis Obisp o 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 July 1 , 1952, and witnessed June 9, 1952, and as amended effective October 1, 1962, Octobe r 3, 1963, October 1, 1974, June 1, 1976, December 1, 1976, December 20, 1978 , January 16, 1980, May 1, 1980, July 1, 1980, Jul' 1, 1983, July 1, 1986, July 23, 1987 , November 16, 1989, August 8, 1993, November 5, 1999, January 7, 2000, July 6, 2000 , September 21, 2001 March 28, 2002, July 18, 2002, January 30, 2003, February 27 , 2003, July 14, 2005 and December 29, 2005 which provides for participation of Publi c Agency in said System, Board and Public Agency hereby agree as follows : A . Paragraphs I through 13 are hereby stricken from said contract as execute d effective December 29, 2005, and hereby replaced by the following paragraph s numbered 1 through 15 inclusive : 1 . All words and terms used herein which are defined in the Publi c Employees' Retirement Law shall have the meaning as defined therei n unless otherwise specifically provided . "Normal retirement age" shal l mean age 55 for local miscellaneous members, age 50 for local polic e members and for those local fire members entering membership in the fire classification on or prior to the effective date of this amendment to contrac t and age 55 for local fire members entering membership for the first time i n the fire classification after the effective date of this amendment to contract . PH2-11 ATTACHMENT 1 2.Public Agency shall participate in the Public Employees' Retiremen t System from and after July 1, 1952 making its employees as hereinafte r provided, members of said System subject to all provisions of the Publi c Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendment s to said Law hereafter enacted except those, which by express provision s thereof, apply only on the election of a . contracting agency . 3.Public Agency agrees to indemnify, defend and hold harmless th e California Public Employees' Retirement System (CaIPERS) and it s trustees, agents and employees, the CaIPERS Board of Administration , and the California Public Employees' Retirement Fund from any claims , demands, actions, losses, liabilities, damages, judgments, expenses an d costs, including but not limited to interest, penalties and attorneys fee s 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 tha n the retirement benefits, provisions or formulas provided unde r the Public Agency's prior non-CaIPERS retirement program . (b)Public Agency's election to amend this Contract to provid e retirement benefits, provisions or formulas that are different tha n existing retirement benefits, provisions or formulas . (c)Public Agency's agreement with a third party other than CaIPERS to provide retirement benefits, provisions, or formula s that are different than the retirement benefits, provisions o r formulas provided under this Contract and provided for unde r 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 State s Bankruptcy Code and/or Public Agency's election to reject thi s Contract with the CaIPERS Board of Administration pursuant t o section 365, of Title 11, of the United States Bankruptcy Cod e or any similar provision of law . (e)Public Agency's election to assign this Contract without the prio r written consent of the CaIPERS' Board of Administration . (f)The termination of this Contract either voluntarily by request o f Public Agency or involuntarily pursuant to the Public Employees ' Retirement Law . (g)Changes sponsored by Public Agency in existing retiremen t benefits, provisions or formulas made as a result o f amendments, additions or deletions to California statute or to the California Constitution . PH2-12 ATTACHMENT 1 4 .Employees of Public Agency in the following classes shall becom e members of said Retirement System except such in each such class a s 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 a s local miscellaneous members). 5 . In addition to the classes of employees excluded from membership b y said Retirement Law, the following classes of employees shall not becom e members of said Retirement System : a .CROSSING GUARDS . 6 . The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member i n employment before and not on or after January 30, 2003 shall b e determined in accordance with Section 21354 of said Retirement La w (2% at age 55 Full). 7 . The percentage of final compensation to be provided for each year o f credited prior and current service as a local miscellaneous member i n employment on or after January 30, 2003 shall be determined i n accordance with Section 21354 .5 of said Retirement Law (2 .7% at age 5 5 Full). The percentage of final compensation to be provided for each year o f credited prior and current service as a local police member and for thos e local fire members entering membership in the fire classification on o r prior to the effective date of this amendment to contract shall b e determined in accordance with Section 21362 .2 of said Retirement La w (3% at age 50 Full). 9.The percentage of final compensation to be provided for each year o f credited current service as a local fire member entering membership fo r the first time in the fire classification after the effective date of thi s amendment to contract shall be determined in accordance with Sectio n 21363 .1 of said Retirement Law (3% at age 55 Full). 10.Public Agency elected and elects to be subject to the following optiona l provisions : a.Section 21573 (Third Level of 1959 Survivor Benefits) for local fir e members only. b.Section 21574 (Fourth Level of 1959 Survivor Benefits) for loca l miscellaneous members and local police members only . PH2-13 ATTACHMENT 1 c.Sections 21624, 21626 and 21628 (Post-Retirement Survivo r Allowance) for local safety members only . d.Section 20965 (Credit for Unused Sick Leave). e.Section 20042 (One-Year Final Compensation) for loca l miscellaneous members, local police members and for those loca l fire members entering membership on or prior to the effective dat e of this amendment to contract . f.Section 20903 (Two Years Additional Service Credit) for loca l miscellaneous members only . g .Section 21024 (Military Service Credit as Public Service). h.Section 21548 (Pre-Retirement Option 2W Death Benefit). i.Section 20475 (Different Level of Benefits). Section 21363 .1 (3 % @ 55 Full formula) and Section 20037 (Three-Year Fina l Compensation) are applicable to local fire members enterin g membership for the first time in the fire classification after th e effective date of this amendment to contract . 11 . Public Agency, in accordance with Government Code Section 20790 , ceased to be an "employer" for purposes of Section 20834 effective o n June 1, 1976 . Accumulated contributions of Public Agency shall be fixe d and determined as provided in Government Code Section 20834, an d accumulated contributions thereafter shall be held by the Board a s provided in Government Code Section 20834 . 12, Public Agency shall contribute to said Retirement System the contribution s determined by actuarial valuations of prior and future service liability wit h respect to local miscellaneous members and local safety members of sai d Retirement System . 13 .Public Agency shall also contribute to said Retirement System as follows : a.Contributions required per covered member on account of the 195 9 Survivor Benefits provided under Section 21573 of said Retiremen t Law . (Subject to annual change .) In addition, all assets an d liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of al l local fire members . b.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 an d liabilities of Public Agency and its employees shall be pooled in a single account, based on term insurance rates, for survivors of al l local police members and local miscellaneous members . PH2-14 ATTACHMENT 1 c.A reasonable amount, as fixed by the Board, payable in on e installment within 60 days of date of contract to cover the costs o f administering said System as it affects the employees of Publi c Agency, not including the costs of special valuations or of th e periodic investigation and valuations required by law. d.A reasonable amount, as fixed by the Board, payable in on e 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 . 14.Contributions required of Public Agency and its employees shall b e subject to adjustment by Board on account of amendments to the Publi c Employees'Retirement Law, and on account of the experience under th e Retirement System as determined by the periodic investigation an d valuation required by said Retirement Law . 15.Contributions required of Public Agency and its employees shall be pai d by Public Agency to the Retirement System within fifteen days after th e end of the period to which said contributions refer or as may be prescribe d by Board regulation . If more or less than the correct amount o f contributions is paid for any period, proper adjustment shall be made i n 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 o f BOARD OF ADMINISTRATION CITY COUNCI L PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF SAN LUIS OBISP O BY KAREN DE FRANK, CHIE F CUSTOMER ACCOUNT SERVICES DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM Witness Date Attest : Cler k AMENDMENT CaIPERS ID #757462851 5 PERS-CON-702A BY PRESIDING OFFICER PH2-15 ATTACHMENT 3 California Public Employees' Retirement Syste m Actuarial Offic e P .O . Box 94270 9 Sacramento, CA 94229-270 9 TTY: (916) 795-3240 (888) 225-7377 phone ■ (916) 795-2744 fa x www.calpers.ca .gov February 14, 201 2 CALPERS ID : 757462851 5 Employer Name : QTY OF SAN LUIS OBISP O Rate Plan : SAFETY PLAN (Fire or Police Employees ) Re : New Second Tier Plan (Section 20475 : Different Level of Benefits Provided for New Employees ; Section 21363 .1 3% @ 55 Full Formula with Section 20037 Three-Year Final Compensation) Dear Requester : In the tables below, we show your 2011-2012 and 2012-2013 employer contribution rates before and after opening a second tier . Of the rate components shown below, the first two are specific to the pool to which the plan belongs and others ar e specific to your agency. However, the Phase out of Normal Cost Difference will normally be 0% beginning with rate s 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 an d payroll in the first tier will (after several years) gradually decline . The Amortization of Side Fund rate component is th e 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 24 years from Jun e 30, 2012. Therefore, in determining the 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 I s (17 .164%+2 .730%) - (15 .725%+1 .754%) = 2.415%.Based on the 2009 valuation, the ultimate employe r annual dollar savings would then be 2 .4% times the second tier fiscal year payroll . The Risk Pool's Payment on Amortization Bases is a temporary adjustment to the pool's contribution to "get the poo l 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 Pla n 3% @ 50 with 1-year FAC 3% @ 55 with 3-year FAC fo r newly hired member s 2011-2012 Employer Contribution Rate : Risk Pool's Net Employer Normal Cost 17 .164%15 .725% Risk Pool's Payment on Amortization Bases 5.927%4.583 % One-Year Final Compensation 1 .021%0.000 % PRSA 50%1 .709%1 .754% Phase out of Normal Cost Difference 0.102%0.000 % Amortization of Side Fund 12.978%0.000 % Total Employer Contribution Rate 38.901%22 .062% 2011-2012 Employee Contribution Rate 9 .000%9 .000% California Public Employees' Retirement Syste m www,calpers.ca .gov Ca1PERS PH2-1 6 ATTACHMENT 3 SArt: t Y PLAN OF THE CITY OF SAN LUXS OBXSPO (CALPERS ID : 7574628515) February 201 2 Page 2 For 2012-2013 the percentage savings is (17 .245%-i•2 .735%) -(15.524%+1 .745%)= 2 .711%.Based on the 2010 valuation, the ultimate employer annual dollar savings would then be 2 .7% times the second tier fisca l year payroll . The Risk Pool's Payment on Amortization Bases is a temporary adjustment to the poo l's contribution to "get the poo l back on schedule". This temporary adjustment varies in amount and duration from pool to pool . As of June 30, 2010 Existing Plan New Second Tier Pla n 3% @ 50 with 1-yea r FAC 3% @ 55 with 3-year FAC fo r newly hired members 2012-2013 Employer Contribution Rate : Risk Pool's Net Employer Normal Cost 17,245%15 .524% Risk Pool's Payment on Amortization Bases 6 .436%4 .533 % One-Year Final Compensation 1.025%0 .000% PRSA 50%1 .710%1 .745% Phase out of Normal Cost Difference 0,051%0 .000 % Amortization of Side Fund 13 .443%0 .000 % Total Employer Contribution Rate 39 .910%21 .802% 2012-2013 Employee Contribution Rate 9.000%9 .000% To initiate an amendment to the contract, please follow the Contract Amendment Report process on MyCa1PERS with our Retirement Contract Services Unit, indicating your wish to contract for Section 20475 (Different Level of Benefits) an d 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 publi c 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 i s also required within five days of receipt of the analysis, to provide a copy of the analysis to the public agency . The June 30, 2010 Section 2 Risk Pool actuarial valuation report applicable to your new second tier plan can be viewe d on the following website : http://www.calpers.ca .gov/index jsp?bc=/employer/actuarial-gasb/risk-pooling/valuation-reportsxm l If you have questions, please call (888) CaIPERS (225-7377). BARBARA J . WARE, FSA, MAA A Enrolled Actuary Senior Pension Actuary, CaIPERS PH2-1 7 RESOLUTION NO . (2012 Series ) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO CEASIN G TO PAY AND REPORT THE VALUE OF EMPLOYER PAID MEMBE R CONTRIBUTIONS FOR INTERNATIONAL ASSOCIATION . OF FIREFIGHTERS , LOCAL 3523 HIRED UNDER SECOND TIER RETIREMENT AND SUPERSEDIN G PREVIOUS RESOLUTIONS IN CONFLIC T WHEREAS,the Council of the City of San Luis Obispo has the authority to implemen t Government Code Section 20636(c) (4) pursuant to Section 20691 ; and WHEREAS,the Council of the City of San Luis Obispo has ratified a Memorandum o f Agreement with the International Association of Firefighters, Local 3523 which no longer provide s for the normal member contributions to be paid by the employer and reported as additiona l compensation for employees hired after implementation of second tier contract amendment wit h Ca1PERS ; an d WHEREAS,one of the steps in the procedures to implement Section 20691 is the adoptio n by the Council of the City of San Luis Obispo of a Resolution to no longer pay and report the valu e of said EPMC ; and WHEREAS,the governing body of the City of San Luis Obispo has identified th e following conditions for the purpose of its election to no longer pay EPMC ; • Zero percent of the normal contributions will be paid as EPMC, and the same zer o percent (value) of compensation earnable {excluding Government Code Sectio n 20636(c)(4)} will be reported as additional compensation for all employees of th e International Association of Firefighters, Local 3523 hired after the implementatio n of second tier contract amendment with Ca1PERS . NOW, THEREFORE, BE IT RESOLVED,that the Council of the City of San Lui s Obispo hereby : SECTION 1 . Elects to no longer pay the member contribution and therefore no longe r report EPMC as additional compensation for all employees of the International Association o f Firefighters, Local 3523 hired after the implementation of second tier contract amendment wit h CaIPERS . SECTION 2 .Directs that prior resolutions relating to International Association o f Firefighters, Local 3523 compensation and benefits are hereby superseded to the exten t inconsistent with this resolution . Upon motion of , seconded by PH2-18 , and on the following vote : AYES : NOES : ABSENT : The foregoing resolution was adopted this 19th day of June, 2012 . Mayor Jan Mar x ATTEST: Sheryll Schroeder, Interim City Cler k APPROVED AS TO FORM : J . Christine Dietric k City Attorney PH2-19 Page intentionally left blank .