HomeMy WebLinkAbout07/17/2001, C6 - AMENDMENT OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS) CONTRACT TO PROVIDE INCREASED SU counaL -o,
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CITY OF SAN LUIS 0 B I S P 0
FROM: Ann Slate,Director of Human Resourcesav",
Prepared By: Karen Jenny, Risk Manager
SUBJECT: AMENDMENT OF CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM(PERS)CONTRACT TO PROVIDE
INCREASED SURVIVOR BENEFITS AND MILITARY SERVICE
CREDIT AS PUBLIC SERVICE FOR MISCELLANEOUS MEMBERS
CAO RECOMMENDATION
Adopt a resolution of intention to amend the contract between the Board of Administration of
PERS and the City of San Luis Obispo to provide the fourth level of the 1959 Survivor Benefits
and military service credit as public service for miscellaneous members and to rescind
Resolution No. 9191 (2001 Series).
DISCUSSION
On June 5, 2001, the Council adopted Resolution No 9191 (2001 Series),which was a resolution
of intention to amend the contract between the Board of Administration of PERS and the City of
San Luis Obispo to provide the fourth level of the 1959 Survivor Benefits and military service
credit as public service for miscellaneous members. At the same time, the Council conducted a
public hearing and introduced an ordinance authorizing the amendment. These were the initial
steps required by PERS to implement these benefits as approved in the 2001-02 Memorandum of
Agreement with the San Luis Obispo City Employees' Association(SLOCEA).
Language was included in that resolution to apply the military service credit to "active and
separated" employees, at the request of a former City employee who wishes to purchase military
service credit. Although we were advised by one section of PERS that this was possible, the
contract amendment unit has advised us that the previous resolution with the addition of the
language to apply military service credit to "active and separated" local miscellaneous members
is unacceptable. Only active employees may purchase service credit once the City's contract with
PERS is amended under Government Code Section 21024. There is no provision for former
employees to access this benefit,despite previous advice from PERS to the contrary.
In order to continue with the implementation of this benefit for active miscellaneous employees,
we must rescind the previous resolution and adopt a new resolution of intention that does not
include the unacceptable language. There must be at least 20 days between the adoption of the
resolution of intention and final adoption of the ordinance, which is now tentatively set for
August 21, 2001.
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Council Agenda Report—Amendment of PERS Contract to Provide Page 2
Increased Survivor Benefits and Military Service Credit as Public Service
for Miscellaneous Members
FISCAL IMPACT
The annual cost to provide the fourth level 1959 Survivor Benefit to 257 miscellaneous members
of the PERS retirement system is estimated to be $15,728. The actuarial valuation from PERS
hasindicated that surplus funds of $64,910 in that account will pay the costs for at least five
years. It is likely that the surplus will fund those costs for several years, since a claim for
benefits as the result of the death of an active employee is rare. 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 isnot anticipated to be significant.
ALTERNATIVES
Since this change was approved as part of the 2001-02 MOA, failure to pass this resolution and
ordinance would place the City in breach of contract with SLOCEA.
ATTACHMENTS
Resolution of Intention
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RESOLUTION NO. (2001 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 AND TO RESCIND
RESOLUTION NO. 9191 (2001 SERIES)
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 21574 (Fourth Level of 1959 Survivor
Benefits) and Section 21024 (Military Service Credit as
Public Service) for local miscellaneous members.
BE IT RESOLVED,by the City Council of the City of San Luis Obispo as follows:
SECTION 1. Resolution No. 9191 (Series 2001) is herewith rescinded.
SECTION 2. 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
Administrationof 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 72001.
Resolution No (2001 Series) Page 2
Mayor Allen Settle
ATTEST:
Lee Price,City Clerk
APPROVED AS TO FORM:
. Jo ens ' Ci ttomey