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HomeMy WebLinkAbout05/16/2000, 4 - AMENDMENT OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS) CONTRACT TO PROVIDE MILITARY SERVICE CREDIT AS PUBLIC SERVICE FOR FIRE SAFETY MEMBERS council M.6m 5_,(v_00 j ac Enda RepoRt 4 H� CITY O F SAN LUIS O B I S P O FROM: Ann Slate,Director of Human Resource311- Prepared By: Karen Jenny,Risk Manager j SUBJECT: AMENDMENT OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM(PERS) CONTRACT TO PROVIDE MILITARY SERVICE CREDIT AS PUBLIC SERVICE FOR FIRE SAFETY MEMBERS CAO RECOMMENDATION Adopt a resolution of intention and introduce an ordinance to print approving an amendment to the contract between the Board of Administration of PERS and the City of San Luis Obispo to provide military service credit as public service for fire safety members. DISCUSSION The 1999-2001 Memorandum of Agreement with the International Association of Firefighters, Local 3523 (Firefighters' Union), which was adopted by the Council on February 29, 2000, included provisions to amend the City's contract with PERS to allow military service to be considered public service for retirement purposes for safety members. The San Luis Obispo Fire Battalion Chiefs' Association, who are included in the PERS contract for fire safety employees, concurs with this proposed change in retirement benefits. Government Code Section 21024 allows a contracting agency to consider military service credit as public service for retirement purposes. This provision would allow employees to purchase up to four years of service credit for any continuous active military or merchant marine service prior to employment with the City. The employee is responsible for paying both the employee and employer share of such military service, as well as interest from the employee's date of employment with the City. Since it is not uncommon for the cost to the employee to exceed $5,000 for each year of military service, it is not likely that many employees will take advantage of this benefit. Government Code Section 7507 requires that the change in benefits of the proposed contract amendment be made public at a public meeting at least two weeks prior to the adoption of the final ordinance. The City Clerk will certify compliance on a form provided by PERS. The City amended the PERS contract in 1999 to provide the same benefit to police safety employees. FISCAL IMPACT There is no cost to the City to implement the Military Service Credit as Public Service. Future employer rates may be increased as a result of the additional service credit, but it is not anticipated to be significant. 4-1 Council Agenda Report Amendment of(PERS) Contract to Provide Military Service Credit as Public Service for Fire Safety Members Page 2 ALTERNATIVES Since this change was approved as part of the 1999-2001 MOA, failure to pass this resolution and ordinance would place the City in violation of its agreement with the Firefighters' Union. ATTACHMENTS Resolution of Intention Ordinance Proposed amended contract Certification of Compliance with Government Code Section 7507 4-2 RESOLUTION NO. (2000 Series) RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO WBEREAS, 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 21024 (Military Service Credit as Public Service)for local Fire members. 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 made a part hereof. Upon motion of , seconded by , and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was adopted this day of , 2000. 4-3 Resolution No (2000 Series) Page 2 Mayor,Allen Settle ATTEST: Lee Price, City Clerk APPROVED AS TO FORIVI J-T en _ity Attomey —— 44 Ca1PERS EXHIBIT California Public Employees' Retirement System AMENDMENT TO CONTRACT Between the Board of Administration California Public Employees' Retirement System and the City Council City of San Luis Obispo 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, October 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, 4989, August 8, 1993, November 5, 1999 and January 7, 2000 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 12 are hereby stricken from said contract as executed effective January 7, 2000, and hereby replaced by the following paragraphs numbered 1 through 12 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 and age 50 for local safety members. 2. Public Agency shall participate in the Public Employees' Retirement System from and after July 1, 1952 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. 4-5 3. 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). 4. 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: a. CROSSING GUARDS. 5. The percentage of final compensation to be {provided for each year of credited prior and current service as a local miscellaneous member shall be determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Full). 6. The percentage of final compensation to be provided for each year of credited prior and current service as a local safety member shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 7. Public Agency elected and elects to be subject to the following optional provisions: a. Section 21573 (Third Level of 1959 Survivor Benefits) for local miscellaneous members and local fire members only. b. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local police members only. C. Sections 21624, 21626 and 21628 (Post-Retirement Survivor Allowance) for local safety members only. d. Section 20965(Credit for Unused Sick Leave). e. Section 20042 (One-Year Final Compensation) for local miscellaneous members; for those local fire members entering membership on or prior to July 1, 1986; and for those local police members entering membership on or prior to July 23, 1987. 4-6 f. Section 20475 (Different Level of Benefits). Section 20042 (One- Year Final Compensation) is not applicable to local fire members entering membership after July 1, 1986 and to local police members entering membership after July 23, 1987. 9- Section 20903 (Two Years Additional Service Credit). h. Section 21024 (Military Service Credit as Public Service), Statutes of 1976 for local safety members only. 8. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer' for purposes of Section 20834 effective on June 1, 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. 9. 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. 10. 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 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 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 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 police members. C. 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. d. 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. 4-7 11. 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. 12. 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 effectivA.vbn the day of , BOARD OF ADMINISTRATION CITY COUNCIL PUBLIC EMPLOYEES' RETIREMBW SYSTEM CITY OF SAN LUIS OBISPO BY �� BY KENNETH W. MARZION, CHIR F PRESIDING OFFICER ACTUARIAL & EMPLOYEAERVICES DIVISION PUBLIC EMPLOYEES' IREMENT SYSTEM e` Witness Date Attest: Clerk AMENDMENT PERS-CON-702A(Rev.8198) 4-S ORDINANCE NO. (2000 Series) . AN ORDINANCE OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE COUNCIL OF THE CITY OF SAN LUIS OBISPO AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM 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 an ordinance authorizing the amendment and directing the Mayor to execute said amendment. BE IT ORDAINED by the Council of the City of San Luis Obispo as follows: SECTION 1. That an amendment to the contract between the Council of the City of San Luis Obispo and the Board of Administration, California Public Employees' Retirement 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 is hereby authorized, empowered and directed to execute said amendment for and on behalf of the City of San Luis Obispo. SECTION 3. A summary of this ordinance, approved by the City Attorney, together with the names of the Council members voting for and against it, shall be published at least five days prior to its final passage, in the Tribune, a newspaper published and circulated in this City. This ordinance will go into effect at the expiration of thirty(30) days after its final passage. INTRODUCED on the day of 2000, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the day of 2000,on the following roll call vote: AYES: NOES: ABSENT: 4-/ Ordinance No.— _ _(2000 Series) pie 2 - Mayor Al ea:Settle ATTEST- Lee Price,City Clerk --- -- - APPROVED AS TO FORM- - G. rg n, ty Attorney a � 440 Ca1PERS EXHIBIT California Public Employees' Retirement System AMENDMENT TO CONTRACT Between the Board of Administration California Public Employees' Retirement System and the City Council City of San Luis Obispo 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, October 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 and January 7, 2000 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 12 are hereby stricken from said contract as executed effective January 7, 2000, and hereby replaced by the following paragraphs numbered 1 through 12 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 and age 50 for local safety members. 2. Public Agency shall participate in the Public Employees' Retirement System from and after July 1, 1952 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. 4-11 S N0 t.IBITlit 3. 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). 4. 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: a. CROSSING GUARDS. 5. The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member shall be determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Full). 6. The percentage of final compensation to be provided for each year of credited prior and current service as a local safety member shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 7. Public Agency elected and elects to be subject to the following optional provisions: a. Section 21573 (Third Level of 1959 Survivor Benefits) for local miscellaneous members and local fire members only. b. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local police members only. C. Sections 21624, 21626 and 21628 (Post-Retirement Survivor Allowance) for local safety members only. d. Section 20965 (Credit for Unused Sick Leave). e. Section 20042 (One-Year Final Compensation) for local miscellaneous members; for those local fire members entering membership on or prior to July 1, 1986; and for those local police members entering membership on or prior to July 23, 1987. 1 4-12 RJe1vq 14 iv f. Section 20475 (Different Level of Benefits). Section 20042 (One- Year Final Compensation) is not applicable to local fire members entering membership after July 1, 1986 and to local police members entering membership after July 23, 1987. g. Section 20903 (Two Years Additional Service Credit). h. Section 21024 (Military Service Credit as Public Service), Statutes of 1976 for local safety members only. 8. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer' for purposes of Section 20834 effective on June 1, 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. 9. 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. 10. 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 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 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 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 police members. C. 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. d. 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. 4-13 11. 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. 12. 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 effectivon the day of BOARD OF ADMINISTRATION .. � CITY COUNCIL PUBLIC EMPLOYEES' RETIREMEW SYSTEM CITY OF SAN LUIS O.BISPO Jr BY BY KENNETH W. MARZION, C F PRESIDING OFFICER ACTUARIAL & EMPLOYEERVICES DIVISION PUBLIC EMPLOYEES' IREMENT SYSTEM Witness Hate Attest: Clerk AMENDMENT PERS-CON-702A(Rev.8M) 4-14