HomeMy WebLinkAbout11/12/2002, C11 - CORRECTION TO THE AMENDMENT OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS) CONTRACT TO PR council 11-12-02
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C I T Y OF SAN LUIS O B I S P O
FROM: Ann Slate,Director of Human Resources
SUBJECT: CORRECTION TO THE AMENDMENT OF CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM (PERS)CONTRACT TO
PROVIDE 2.7%AT 55 RETIREMENT FORMULA FOR
MISCELLANEOUS MEMBERS
CAO RECOMMENDATION
Adopt a resolution authorizing a correction to the amendment to the contract between the Board
of Administration of PERS and the City of San Luis Obispo to provide the 2.7%at 55 retirement
formula for miscellaneous members.
DISCUSSION
PERS staff notified City staff on Monday, October 28, 2002, that the recent amendment to the
PERS contract needs to be corrected. On September 3, 2002 the City Council amended their
contract with PERS to provide a new benefit formula for the miscellaneous employees. The
amendment included language provided to the City by PERS that indicated that the new formula
was applicable to all local miscellaneous employees, which includes those employees who have
City time in PERS, including those who are no longer with the City and have yet to retire. PERS
did this because legislation was pending to make the new formula applicable to all inactive and
active employees who had not yet retired. That legislative proposal is no longer being
considered and the new formula is applicable to only those local miscellaneous employees in
employment on or after the amendment effective date.
Adoption of this resolution clarifies that the contract is in accordance with the Government Code
by indicating that the new formula applies only to the local miscellaneous members employed by
the City on or after the amendment effective date. It does not change the effective date of the
original amendment effective date,which is January 30, 2003.
PERS has requested that the City Council adopt this resolution at the earliest possible meeting.
This resolution must be adopted prior to the City Council taking action to amend the PERS
contract to provide for a new benefit formula, 3% at 50, for police. The Council will also be
considering the 3% at 50 benefit formula for police as a later item during the public hearing
portion of this meeting.
Failure to adopt this resolution will result in the City's contract with PERS continuing to contain
unclear language that may lead to some confusion in the future interpretations of benefits. PERS
has asked the City of San Luis Obispo as well as 50 other local agencies to correct their
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Council Agenda Report—Correction of an amendment to the PERS Contract to Provide 1.7%at
SS Retirement Formula for Miscellaneous Members Page 2
amendments to be in compliance with the current State retirement law. This needs to happen
before the PERS contract can be further amended to provide the agreed upon 3% at 50 formula
for police employees.
FISCAL IMPACT
There is no cost associated with correcting the amendment.
ATTACHMENTS
Resolution
G:\agenda reports\Correction to the Amendment to PERS contnWdOr 2.7 at 55%.doc
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ATTACHMENT 1
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RESOLUTION NO. (2002 Series)
RESOLUTION AUTHORIZING A CORRECTION TO THE 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
WHEREAS, the City Council of the City of San Luis Obispo and the Board of
Administration of the Public Employees' Retirement System entered into a contract effective
July 1, 1952 providing for the participation of Public Agency in the Public Employees'
Retirement System; and
WHEREAS, this contract has been amended many times since July 1, 1952, most
recently on September 3, 2002; and
WHEREAS, due to an inadvertence,paragraph"5"of the contract reads:
"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% @ 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 the City of San Luis Obispo's actuarial valuation and
employer contribution rates in future years.];" and
WHEREAS, the legislative proposal is no longer being considered and so the contract
language is no longer applicable; and;
WHEREAS, Section 20472 of the Government Code provides that corrections may be
made through amendments approved by the adoption of suitable resolutions by the contracting
parties;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Luis
Obispo does hereby authorize a convection to the amendment to the contract effective January 30,
2003 as follows:
A. Paragraph 5 of said contract shall be changed as follows: "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% @ age 55 Full);"and
B. Paragraph 6 of said contract shall be added as follows: "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
Cts - 3
A1TACHMM 1
Resolution No (2002 Series) Page 2
be determined in accordance with Section 21354.5 of said Retirement Law (2.7%
@ age 55 Full);" and
C. Paragraph numbers "6 through 13;" shall be renumbered paragraph numbers "7
though 14."
NOW, THEREFORE, BE IT FURTHER RESOLVED that the Mayor of the City of San
Luis Obispo is hereby authorized, empowered, and directed to execute said amendment for and
on behalf of the City of San Luis Obispo.
Upon motion of , seconded by >
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 12th day of November 2002.
Mayor Allen Settle
ATTEST:
Lee Price, City Clerk
APPROVED AS TO FORM:
*efG. gens hCiAttorney
G Aagenda nrPorts\Con=tion to the Amendment to PERS contractfor 2.7 at 55%.doc