HomeMy WebLinkAbout05/17/2005, PH3 - RESOLUTION OF INTENTION AND INTRODUCTION OF ORDINANCE TO PROVIDE PRE-RETIREMENT OPTIONAL SETTLEMENT Vf:
council °°° C�;
j acEnaa Report �N
C I T Y OF SAN LUIS O B I S P O
FROM: Monica Irons, Director of Human Resources F
Prepared By: Karen Jenny,Risk Manager, ,
SUBJECT: RESOLUTION OF INTENTION AND INTRODUCTION OF
ORDINANCE TO PROVIDE PRE-RETIREMENT OPTIONAL
SETTLEMENT 2 DEATH BENEFIT FOR MISCELLANEOUS AND
POLICE SAFETY EMPLOYEES
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 the Pre-Retirement Optional Settlement 2 Death Benefit for miscellaneous and police
safety employees.
DISCUSSION
The 2005 Memorandum of Agreement (MOA) with the San Luis Obispo City Employees'
Association (SLOCEA), which was adopted by the Council on January 18, 2005, included a
provision to amend the City's contract with the California Public Employees' Retirement System
(PERS) to provide the Pre-Retirement Optional Settlement 2 Death Benefit for miscellaneous
employees. Association presidents for the remaining employee bargaining groups were
subsequently notified of the City's intent to provide this benefit.
Government Code Section 21548 allows a contracting agency to provide the Pre-Retirement
Optional Settlement 2 Death Benefit for employees. This change will allow the spouse of a
deceased employee, who was eligible to retire from service at the time of death (i.e., age 50 and
at least five years of service), to select a monthly retirement allowance instead of the lump sum
death benefits currently payable.
Government Code Section 7507 requires that the annual costs for 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.
FISCAL IMPACT
PERS recommends the disclosure of the cost for this amendment as follows:
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Council Agenda Report—Pre-Retirement Optional Settlement 2 Death Benefit for
Miscellaneous and for Police Safety Employees
Pie 2
Miscellaneous Plan:
1) Change in the Present Value of Benefits $413,877
2) Change in the Accrued Liability $286,818
3) Change in the Total Employer Rate 0.297%
Safety Plan:
1) Change in the Present Value of Benefits $77,907
2) Change in the Accrued Liability $56,229
3) Change in the Total Employer Rate 0.097%
The increase of 0.297% of payroll for the City's miscellaneous plan will result in an annual cost
increase of$40,800; the increase of 0.097% of payroll for the City's safety plan will result in an
annual cost increase of$7,500. Although this change will be implemented only for police safety
personnel at this time, police and fire employees participate in a combined safety retirement plan.
The change to the employer rate will apply to both police and fire payrolls. This benefit will be
added for Fire safety employees when the contract amendment for the 3% at 50 formula is
effective in December of 2005. These costs will be incorporated into the 2005-07 financial plan.
ALTERNATIVES
Since this change was approved as part of the 2005 MOA with SLOCEA, no alternatives are
presented at this time.
ATTACHMENTS
1. Resolution of Intention
2. Ordinance
GAAgenda Reports\Option 2 Death Benefit.Doc
Attachment L
RESOLUTION NO. (2005 Series)
RESOLUTION OF INTENTION
TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
CITY OF SAN LUIS OBISPO
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 21.548 (Pre-Retirement Optional
Settlement 2 Death benefit) for local miscellaneous
members and local police members.
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 made a part
hereof.
Upon motion of seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
(Amendment)
CON-302(Rev.4/96) c J 2
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Resolution No (2005 Series) Page 2
The foregoing resolution was adopted this day of
, 2005.
Mayor David F. Romero
ATTEST:
Audrey Hooper
City Clerk
APPROVED AS TO FORM:
J at P. Lowell
City Attorney
i
CaIPERS
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, January 7, 2000, July 6, 2000,
September 21, 2001 March 28, 2002, July 18, 2002, January 30, 2003, and February
27, 2003 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 February 27, 2003, and hereby replaced by the following paragraphs
numbered 1 through 14 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 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 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.
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 in
employment before and not on or after January 30, 2003 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 miscellaneous member in
employment on or after January 30, 2003 shall be determined in
accordance with Section 21354.5 of said Retirement Law (2.7% at age 55
Full).
7. 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 21362.2 of said Retirement Law
(3% at age 50 Full).
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PLEASE DO NOT SILvN "EXa —
8. 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 21363.1 of said Retirement Law
(3% at age 55 Full).
9. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 21573 (Third Level of 1959. Survivor Benefits) for local fire
members only..
b. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local
miscellaneous members and 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 and local police members, and for those
local fire members entering membership on or prior to July 1, 1986.
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.
g. Section 20903 (Two Years Additional Service Credit) for local
miscellaneous members only.
h. Section 21024 (Military Service Credit as Public Service).
i. Section 21548 (Pre-Retirement Optional Settlement 2 Death
Benefit) for local miscellaneous members and local police members
only.
10. 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.
PLEASE DO NOT SIGN
11. 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.
12. 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 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 and local miscellaneous 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 bylaw.
13. 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.
3A
14. 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
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMEfOSTEM CITY OF SAN LUIS OBISPO
BY BY
LORI MCGARTLAND, A(Jt; G CHIEF PRESIDING OFFICER
ACTUARIAL & EMPLOY<ER�SERVICES DIVISION
PUBLIC EMPLOYEES
�6ETIREMENT SYSTEM
Gv
Witness Date,'
Attesf
Clerk
AMENDMENT ER#0319
PERS-CON-702A(Rev.6\02)
3 - 9
Attachment 2
ORDINANCE NO. (2005 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.
NOW, THEREFORE, 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 2005, AND FINALLY ADOPTED by
the Council of the City of San Luis Obispo on the day of
2005, on the following roll call vote:
AYES:
NOES:
ABSENT:
Ordinance No. (2005 Series)
Page 2
Mayor David F. Romero
ATTEST:
Audrey Hooper
City Clerk
APPROVED AS TO FORM:
Jon well
City Attorney
CaIPERS
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, January 7, 2000, July 6, 2000,
September 21, 2001 March 28, 2002, July 18, 2002, January 30, 2003, and February
27, 2003 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 February 27, 2003, and hereby replaced by the following paragraphs
numbered 1 through 14 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 55 for local fire
members, and age 50 for local police members.
3 - Ia-
I
T0iv
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.
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 in
employment before and not on or after January 30, 2003 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 miscellaneous member in
employment on or after January 30, 2003 shall be determined in
accordance with Section 21354.5 of said Retirement Law (2.7% at age 55
Full).
7. 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 21362.2 of said Retirement Law
(3% at age 50 Full).
i
PLEASE DO NOT
8. 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 21363.1 of said Retirement Law
(3% at age 55 Full).
9. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 21573 (Third Level of 1959 Survivor Benefits) for local fire
members only.
b. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local
miscellaneous members and 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 and local police members, and for those
local fire members entering membership on or prior to July 1, 1986.
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.
g. Section 20903 (Two Years Additional Service Credit) for local
miscellaneous members only.
h. Section 21024 (Military Service Credit as Public Service).
i. Section 21548 (Pre-Retirement Optional Settlement 2 Death
Benefit) for local miscellaneous members and local police members
only.
10. 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.
1 `"f
='LLASEDONOT SIGN
11. PublicAgency 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.
12. 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 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 and local miscellaneous 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.
13. 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.
fS
14. 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
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF SAN LUIS OBISPO
BY 4., BY
LORI MCGARTLAND, ACTING CHIEF PRESIDING OFFICER
ACTUARIAL & EMPLOYER,-SERVICES DIVISION
PUBLIC EMPLOYEES.' RETIREMENT SYSTEM
Witness Date
Attest:
Clerk
AMENDMENT ER#0319
PERS-CON-702A(Rev.8102)
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