HomeMy WebLinkAbout09/19/1989, C-5 - AMENDMENT TO CONTRACT BETWEEN THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY OF SAN LUIS OBIS �I�����q��INIIIIIIIII�AIIUIII � r _ MEEi7N DATE
Ipmu�� cio san LUIS osi spo 9-1 -89
ONGs COUNCIL AGENDA REPORT MN NUMBER:
�MM
FROM: Ann McPike, Personnel Directolo,.1''�
SUBJECT: Amendment to contract between the Public Employees' Retirement System
and the City of San Luis Obispo to add the third level of the 1959 Survivor
Benefit.
CAO RECOMMENDATION: Adopt resolution of intent to approve an amendment to the contract
between PERS and the City of San Luis Obispo.
Pass to print an ordinance authorizing amendment to contract with PERS to add
the third level of the 1959 Survivor Benefit.
BACKGROUND:
In a letter from the Public Employees' Retirement System (P.E.R.S.) dated April
13, 1989, the City was informed of two additional options available to its
employees as part of the 1959 Survivor Benefit. The 1959 Survivor Benefit is
available to members who are not covered by Social Security and was structured
to provide a monthly benefit for worker's families where the employee died prior
to retirement. Under the newly available options, the monthly payment level
would be raised to two increased levels as shown.
Standard Increased Third
Survivor Group Level Level Level
Spouse age 62 or older, or
one child alone $180 $225 $350
Spouse with one child, or
two children alone $360 $450 $700
Spouse with two or more children,
or three children alone $430 $538 $840
On May 22 a meeting was held with representatives of the various employee
associations to inform them of the two new options available and discuss the
impact of these options both financially to the City and in future
negotiations. At that meeting all the associations indicated that they would
like to go to the third level of the 1959 Survivor Benefit.
ALTERNATIVES:
1. Amend contract with P.E.R.S. to add the third level of Survivor Benefit.
2. Amend contract with P.E.R.S. to add the second level of Survivor Benefit.
3. Make no changes to the contract with P.E.R.S. so that Survivor Benefit
remains at the standard level.
����i�i�►►Ilulllllfllll1° �����I City Of San LUIS OBISPO
ON A COUNCIL AGENDA REPORT Page 2
FISCAL IMPACT:
If the employer has at least a two years' surplus of assets in its 1959 Survivor
Benefit account, there will be no cost to the employer for the third level of
the Survivor Benefit. P.E.R.S. has indicated to us that our surplus is
sufficient to allow us to go for 3-4 years without any additional cost for the
benefit. At the time that our surplus is reduced below the required amount, the
cost will be $2.50 a month for each covered employee. The $2.50 payment per
employee will be billed annually following the year of coverage. Given the
current number of eligible employees, this charge could result in a cost of
approximately $9600 a year. When we met with the employee associations we made
it clear to them that at such time as our Survivor Benefit account reserves were
reduced so that the City would have to pay a fee for the additional benefit the
cost would be considered part of the employees' total compensation and would
have to be included as part of the negotiations process.
CONCURRENCES:
The City Administrative Officer, City Attorney and Finance Director concur with
the following recommendation.
RECOMMENDATION:
Adopt Resolution of Intent and pass to print an ordinance authorizing amendment
of the contract with P.E.R.S. to provide the third level of the 1959 Survivor
Benefit.
ATTACHMENTS:
Resolution of Intent
Ordinance
Agreement authorizing release of 1959 Survivor Benefits
1
RESOLUTION NO. (1989 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS
OBISPO GIVING NOTICE OF INTENT TO APPROVE AN AMEND-
MENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINISTRA-
TION OF THE PUBLIC EMPLOYEES ' RETIREMENT SYSTEM AND
THE CITY OF SAN LUIS OBISPO.
WHEREAS, the Public Employees ' Retirement Law permits the
participation of the 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 procedure 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 21382 .4 (Third Level of 1959
Survivor Benefits) for local miscellaneous members
and local safety 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 the said governing body and the
Board of Administration of the Public Employees' Retirement System, a
copy of said amendment being attached hereto, as an "Exhibit" and by
Cthis reference made a part hereof.
Resolution No. (1989 Series)
On motion of seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this day of
1989.
MAYOR
ATTEST:
CITY CLERK
APPROVED:
c
City A inistrative Officer
.40
City Atto
Personnel .Director
* * * C O P Y
AMENDMENT TO CONTRACT
.;
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
p OF THE
�`•;i�' CITY OF SAN LUIS OBISPO
The Board of Administration, Public Employees' Retirement System, hereinafter
referred to as Board, and the governing body of 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 and July 23, 1987, which provides for participation of
Public Agency in said System, Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 11 are hereby stricken from said contract as executed
effective July 23, 1987, and hereby replaced by the following paragraphs
numbered 1 through 11 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 60 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 May 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 contract-
ing 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) .
O
* * * copy
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 fraction 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 21251.13 of said
Retirement Law (2% at age 60 Full) .
6. The fraction 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 21252.01 of said Retirement Law
�. (2.8 at age 50 Full) .
Z
�j7. The following additional provisions of the Public Employees'
�-. Retirement Law, which apply only upon election of a contracting
agency, shall apply to the Public Agency and its employees:
_.i a. Sections 21380 - 21387 (1959 Survivor Benefits) including Section
21382.4 (Third Level of 1959 Survivor Benefits) .
b. Sections 21263, 21263.1 and 21263.3 (Post-Retirement Survivor
1
Allowance) .
C. Section 20862.8 (Credit for Unused Sick Leave) .
d. Section 20024.2 (One-Year Final Compensation) for local
w miscellaneous members; for those local fire members hired prior
�Q to July 1, 1986; and for those local police members hired prior
to July 23, 1987.
e. Section 20461.6 (Reduction of Benefits) , applied to Section
20024.2 for local fire members hired on or after July 1, 1986 and
for local police members hired on or after July 23, 1987.
8. Public Agency, in accordance with Government Code Section 20740,
ceased to be an "employer" for purposes of Section 20759 effective on
June 1, 1976. Accumulated contributions of Public Agency shall be
fixed and determined as provided in Government Code Section 20759, and
accumulated contributions thereafter shall be held by the Board as
provided in Government Code Section 20759.
J* * * COPY
O9. Public Agency shall contribute to said Retirement System as follows:
a. With respect to local miscellaneous members, the agency shall
contribute the following percentages of salaries earned as
members of said Retirement System:
(1) 5.967 percent until June 30, 2000 on account of the
liability for current service benefits. (Subject to annual
change. )
b. With respect to local safety members, the agency shall contribute
the following percentages of salaries earned as members of said
Retirement System:
K.
(1) 16.197 percent until June 30, 2000 on account' of the
liability for current service benefits. (Subject to annual
change. )
C. Public Agency shall contribute .$2.50 per employee, per month on
account of the liability for the 1959 Survivor Program provided
�^ under Section 21382.4 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 beneficiaries of all local
C - } miscellaneous and safety members.
d. A reasonable amount, as fixed by the Board, payable in one in-
stallment 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.
e. A reasonable amount, as fixed by the Board, payable in one in-
stallment 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.
10. 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.
G
/lam /1
* * * COPY
11. 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. contribut.ions 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
19�.
BOARp.OF ADMINISTRATION qq (JCITY COUNCIL
PUBLIC EMPLOYEES' RETIREMEN STEM OF THE
CITY OF, SAN LUIS OBISPO �~
g
BY ^', - BYJ
CHIEF, COQRSERVICES DIVISION Presiding Office s
PUBLIC GEWOYEES' RETIREMENT SYSTEM r
1
Witnessle
Attestt�,
Clerk
PERS-CON-702 (AMENDMENT)
(Rev. 6/88)
ORDINANCE NO. (1989 SERIES)
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO AUTHORIZ-
ING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY
COUNCIL OF THE CITY OF SAN LUIS OBISPO AND THE BOARD
OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES '
RETIREMENT SYSTEM.
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 City
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 All, 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 and
on behalf of said Agency.
Section 3 . A summary of this ordinance, approved by the City
Attorney, together with theayes and noes, shall be published at
least five (5) days prior to its final passage in the
Telegram-Tribune, a newspaper published and circulated in said City,
and the same shall go into effect immediately upon its final
passage. A copy of the full text of this ordinance shall be on file
in the office of the City Clerk on and after the date following
introduction and passage to print and shall be available to any
interested member of the public.
INTRODUCED AND PASSED TO PRINT by the Council of the City of San
Luis Obispo at a meeting held on the day of ,
�-s- 9
Ordinance No. (1989 Series) Page 2
1989, on motion of , seconded by
and on the following roll call voter
AYES:
NOES:
ABSENT:
MAYOR
ATTEST:
/s/John Dunn
CITY CLERK
APPROVED:
City Administrative Officer
City Attorn
i
Fi Director
Personnel Director
Cl
EXHIBIT A
COPY
AMENDMENT To CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PIIBLIC EMPLOYEES'. RETIREMENT SYSTEM
AND THE
(, CITY COUNCIL
OF THE
CITY OF SAN LUIS OBISPO
The Board of Administration, Public. Employees' Retirement System, hereinafter
referred to as Board, and the governing body of 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 .and July 23, 1987, which provides for participation of
Public Agency in said System, Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 11 are hereby stricken from said contract as executed
effective July 23, 1987, and hereby replaced by the following paragraphs
numbered 1 through 11 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 60 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 May 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 contract-
ing 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) .
C
k * * C 0 P Y
J
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 fraction 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 21251.13 of said
Retirement Law (2% at age 60 Full) .
6. The fraction 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 21252.01 of said Retirement Law
(28 at age 50 Full) .
v
7. The following additional provisions of the Public Employees'
Retirement Law, which apply only upon election of a contracting
agency, shall apply to the Public Agency and its employees:
;`may a. Sections 21380 - 21387 (1959 Survivor Benefits) including Section
21382.4 (Third Level of. 1959 Survivor Benefits) .
b. Sections 21263, 21263.1 and 21263.3 (Post-Retirement Survivor
Allowance) .
=
C. Section 20862..8 (Credit for Unused Sick Leave) .
d. Section 20024.2 (One-Year Final Compensation) for local
!. miscellaneous members; for those local fire members hired prior
4 to July 1, 1986; and for those local police members hired prior
to July 23, 1987.
e. Section 20461.6 (Reduction of Benefits) , applied to Section
20024.2 for local fire members hired on or after July 1, 1986 and
for local police members hired on or after July 23, 1987.
8. Public Agency, in accordance with Government Code Section 20740,
ceased to be an "employer" for purposes of Section 20759 effective on
June 1, 1976. Accumulated contributions of Public Agency shall be
fixed and determined as provided in Government Code Section 20759, and
accumulated contributions thereafter shall be held by the Board as
provided in Government Code Section 20759.
i
9. Public Agency shall contribute to said Retirement System as follows:
a. With respect to local miscellaneous members, the agency shall
contribute . the following percentages of salaries earned as
members of said Retirement .System:
(1) 5.967 percent until June 30, 2000 on. account of the
liability for current service benefits., (Subject to annual
change. )
•.,•b. With respect to local safety members, the agency shall contribute
-S~• the following percentages of salaries earned as members of said
Retirement System:
L_
��. (1) 16.197 percent unt:il. June 30, 2000 on account of the
liability for current service benefits. (Subject to annual
change. )
�'..l
c_. Public Agency shall contribute $2.50 pe'i employee, per month on
account of the liability for the 1959 Survivor Program provided
under Section 21382.4 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 beneficiaries of all local
miscellaneous and safety members.
d. A reasonable amount, as fixed by the Board, payable in one in-
stallment .within 60 daysof 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.
e. A reasonable amount, as fixed by the Board, payable in one, in-
stallment 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.
10. 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.
C
` � * * COPY * * * v
11. 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 effec ive on the day of
9_
BOARD OF ADMINISTRATION ejle' CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMEid:SYSTEM OF THE
CITY OF SAN LUIS OBISPQ
J
BY BY
CHIEF, CONTRACT VICES DIVISION Presiding Office `s
PUBLIC EMPLOY RETIREMENT SYSTEM
Witness Dat-e:
Attest: �
ed
f�Y rk
PERS-CON-702 (AMENDMENT)
(Rev. 6/88)
�s_/*4tl
t
AGR_ U24E_ @IT
AUTHORIZING THE RELEASE OF
1959 SURVIVOR BENEFITS ASSETS AND LIABILITIES
INTO THE
THIRD LEVEL 1959 SURVIVOR BENEFIT POOL
BETWEEN THE
BOARD OF ADMINISTRATION
OF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
OF THE
CITY OF SAN LUIS' OBISPO
WHEREAS, the City Council of the City of San Luis Obispo has adopted a
Resolution of Intention to include in its contract with the Board of
Administration, Public Employees' Retirement System, pursuant to
Government Code Sections 21380-21387, including Government Code
Section 21382.4, the Third Level of 1959 Survivor Benefits for local
miscellaneous members and local safety members; and
WHEREAS, Government Code Section 21382.4, requires all assets and liabilities
of all contracting agencies subject to this section, and their
employees who are covered by this section, to be pooled into a single
account;
NOW THEREFORE BE IT AGREED:
Accumulated and/or future contributions required of the City of San
Luis Obispo and its covered employees are to be released, pursuant to
the provisions of Government Code Section .21382.4, to a single account
referred to herein as the. Third Level 1959 Survivor Benefits Pool.
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT SYSTEM OF THE
CITY OF SAN LUIS OBISPO
BY BY
CHIEF, CONTRACT SERVICES DIVISION Presiding Officer
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Date
C0505 (Rev. 4/89)
`, J