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Home My WebLink About09/03/2002, C2 - FINAL PASSAGE OF ORDINANCE NO. 1421 TO IMPLEMENT 2.7% AT 55 RETIREMENT FORMULA FOR MISCELLANEOUS ME J council MWI°°� F4* oz AD acEn0A nEpoRt CITY OF SAN LUIS OBISPO FROM: Ann Slate, Director of Human Resources IN" Prepared By: Karen Jenny,Risk Manager,',(a SUBJECT: FINAL PASSAGE OF ORDINANCE NO. 1421 TO IMPLEMENT 2.7% at 55 RETIREMENT FORMULA FOR MISCELLANEOUS MEMBERS OF CALPERS CAO RECOMMENDATION Grant final passage to Ordinance No. 1421. DISCUSSION On August 22, 2002, the Council voted 3-0 to introduce Ordinance No. 1421 to print, which authorizes an amendment to the City's contract with the California Public Employees' Retirement System to implement the 2.7% at 55 retirement formula for miscellaneous employees. Ordinance No. 1421 is now ready for final passage and will become effective thirty days after the date of its final passage. ATTACHMENT 1. Ordinance No. 1421 G:\Agenda ReportsWisc.2.7%At 55 Ordinance Final Report.Doc Attachment 1 ORDINANCE NO. 1421 (2002 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 I", 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 20th day of August, 2002, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the day of 2002, on the following roll call vote: AYES: NOES: ABSENT: C,2-2 Mayor Allen Settle ATTEST: Lee Price, City Clerk APPROVED AS TO FORM: frG. /geVk CV Attorney �IR 3 Exhibit 1 Ca1PERS California Public Employees' Retirement System AMENDMENT TO CONTRACT Between the Board of Adirninistration California Public Employees' Retirement System and tune City Council City of San Luis Obispo 40$- 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 and July 18, 2002 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 13 are hereby stricken from said contract as executed effective July 28, 2002, and hereby replaced by the following paragraphs numbered 1 through 13 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, age 55 for local fire members, and age 50 for local police members. `f 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 shall be determined in accordance with Section 21354.5 of said Retirement Law (2.7% at age 55 Full). [Note that a future legislative proposal is being considered which could amend Government Code Section 21354.5 to make the 2.7% at 55 benefit formula applicable to both active members and inactive members who have not yet retired. If enacted, this amendment could have an effect on your agency's actuarial valuation and employer contribution rates in future years.] 6. 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 of said Retirement Law (2% at age 50 Full). 7. 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). i C�-S 8. 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 Provided for New Employees). 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), Statutes of 1976. 9. 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. 10. 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. 11. 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. 62-G _ 1 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. 12. 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. 13. 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 30th day of January 2003 BOARD OF ADMINISTRATION CITY COUNCIL PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF SAN LUIS OBISPO BY BY KENNETH W. MARZION, CHIEF PRESIDING OFFICER ACTUARIAL & EMPLOYER SERVICES DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM Witness Date Attest: Clerk AMENDMENT PERS-CON-702A(Rev.8\96) X0,2- 7