HomeMy WebLinkAbout55E - CONTRACT AMEND PUBLIC EMPLOYEES RETIREMENTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JULY 7, 2008
TITLE:
CONTRACT AMENDMENT WITH THE
PUBLIC EMPLOYEES'RETIREMENT
SYSTEM FOR MISCELLANEOUS
MEMBERS
~_ Ct2 ,Cu,..----
CI MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
^ As Recommended
^ As Amended
^ Ordinance on 1 S` Reading
^ Ordinance on 2"d Reading
^ Implementing Resolution
^ Set Public Hearing For_
CONTINUED TO
FILE NUMBER
1. Adopt a Resolution of Intention to approve an amendment to the
contract between the Public Employees' Retirement System and the City
of Santa Ana to provide Section 21354.5, 2.7o @ 55 Full Formula, for
all active local miscellaneous members, to be effective January 1,
2009.
2. Adopt an Ordinance authorizing an amendment to the contract between
the City of Santa Ana and the Public Employees' Retirement System to
be effective October 6, 2008.
DISCUSSION
In accordance with provisions of the Memorandum of Understanding between
the City of Santa Ana and the City's bargaining units for Fiscal Year 2004-
2010, the City agreed to amend its contract with the Public Employees'
Retirement System (Ca1PERS) to provide Government Code Section 21354.5,
2.70 @ 55 retirement formula, for all active local miscellaneous members,
effective January 1, 2009.
The costs to provide the new retirement benefit will be shared by both the
employees and the City of Santa Ana. The miscellaneous members represented
by SEIU, Firemen's Benevolent Association, Police Officers Association,
Fire Management Association, Police Management Association, Santa Ana
Management Association and the Unaffiliated Confidential have agreed to pay
6.30 of the cost of the new benefit. Unrepresented employees participating
in the retirement system will also be required to pay 6.3o toward the cost
of this benefit. The total cost of the new retirement benefit is 7.5900.
55E-1
CalPERS Contract Amendment
July 7, 2008
Page Two
FISCAL IMPACT
On July 1, 2007, all miscellaneous employees began contributing 20 of their
salary toward the future employer cost of the 2.7% @ 55 retirement benefit.
On July 1, 2008, miscellaneous employees will contribute an additional 2%
of their salary, or 4o towards the future employer cost. On July 1, 2009,
miscellaneous employees will contribute an additional 2.30 of their salary
for a total of 6.3o toward the increased employer cost.
The most recent Ca1PERS actuarial valuation estimates that the combined
market actuarial value (i.e., cash value) of the City's current assets on
deposit for both Safety and Miscellaneous employees in the retirement
program totals $975,250,879. Of this amount, $393,599,349 is on deposit
for Miscellaneous employees in the retirement program, which fully funds
the cost of all current benefits at 101.70. The cost for providing this
benefit will be $48,980,129 and the change in the accrued liability will be
$32,818,635. The cost for this benefit is the cost for all employees and
their spouses currently enrolled in the CalPERS retirement program until
the time they die. The accrued liability is that portion of the total cost
that pertains to the employees' past service. These costs are amortized
over a 20-year period.
Based on the lifetime costs stated
begin contributing $4,246,478 and the
this benefit during the calendar year
Enrique J lva
Executiv irec
Personne Services
above, miscellaneous employees will
City will contribute $869,760 toward
2009.
APPROVED AS TO FUNDS AND ACCOUNTS:
~ ~.A1~~ ~ ~ ~f~~~, `{.ten
Francisco Gutierrez
Executive Director
Finance & Management Services
55E-2
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 SANTA ANA
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 21354.5 (2.7% @ 55 Full formula) for
local miscellaneous 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.
By:
Presiding Officer
Title
Date adopted and approved
(Amendment)
CON-302 (Rev. 4/96)
55E-3
1,
Ca1PERS
EXH I B ~T
California
Public.Employees' Retirement System
AME:NF~ME1 'TAO ~ONTRA~T
- - Between the
Board of Administration
•
California Public Employee ~ Retirement System
- - - and~the
C l ty COZ1,I]:C ].1.
City of Santa Ana
._
- - 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,
. 1947, and witnessed November 25, 1946, and ~ as amended effective October 1, 1951,
- February 1, :1954, September 1, 1956; July 1, 1959, November 1, 1960, September 1,
1963, Aprf_ 1', 1964, February 1, 1965, January 16, 1969, November 1, 1970, June 1,
1974, December 16, 1976, December 1, 1978, October 1, 1981, July 1, 1984,
December 1, 1984, July 1, 1985, February 1, 1990,. July 1, 1990, December 5, 1991,
April 15,.1993, Juno 16, 1994, aanuary 1, 1995, December 5, 1995, July 5, 2000, March
8, 2001, July 1, 2001, April 5, 2002, November 7, 2002 and July 1, 2007 which
- -provides for participation of Public Agency in _said System, Board and Public Agency
hereby agree as follows:
A. Paragraphs 1 through 12 are hereby stricken from said contract as executed
effective July 1, 2007, and hereby replaced by the following paragraphs
numbered 1 through 13 inclusive:
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 50 for local safety
members.
55E-4
e' :.'R ~
;'..t ~' :i .za3 i .r.
2. Public Agency shad! participate in the Public Employees' Retirement
System from and after July 1, 1947 making its employees as heret-Wafter
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 fierein and to alt amendments
to said Law hereafter enacted except those, which by express provisions
thereof, ap-ply 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 refen'ed 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:
NO ADDITIONAL EXCLUSIONS
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 the effective date of this
amendment to contract 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 the effective date of this amendment. to contract
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 safety member shall be
determined in accordance with Section 21362.2 of said Retirement Law
(3% at age 50 Full).
55E-5
`. f r
. ... » d .. ... k~ '1 t. ~vd 3 G s : N ,...-1 i 5 -. L+ 9 ~.
- ~ F ~ ~ .. a
8. Public Agency elected and elects to be subject to the following optional
provisions:
a. Sections 21624 and 21626 (Post-Retirement Survivor Allowance).
b. Section 20042 (One-Year Final Compensation).
c. Section 20903 (Two Years Additional Service Credit).
d. Section 21548 (Pre-Retirement Option 2W Death Benefit).
e. Section 21024 (Military Service Credit a Public Service).
f. Section 20965 (Credit for Unused Sick Leave).
g. Section 21574~(Fourth Level of 1959 Survivor Benefits).
9. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
December 16, 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 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 miscellaneous members and local safety members.
b. 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.
55E-6
c. 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. I# more or less than the correct amount of
contributions is paid for any period, proper adjustmen# 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 ori, th'e day of ,
,e ~~.
BOARD OF ADMfNISTRATION
PUBLIC EMPLOYEES' RETIREMEI~~ SYSTEM
L ~,a
BY ~. ~~
~';,:.,
LORI MCGARTLAND, CH[EF~°~~-:,"
EMPLOYER SERVICES DIVISION
,.. ,,.
PUBLIC EMPLOYEES' RET[REMENT SYSTEM
AMENDMENT ER# 0137
PERS-CON-702A (Rev. 10\05)
CITY COUNCIL ~- .~ "
CITY OF SANTA ANA.``
~,
BY ~,a y
PRESIDING °OF'fICER
,~.~~~.
~,. _ ~ ~'~
:Y•
c ~
`~
Witriess Date
Attest:
Clerk
55E-7
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF SANTA ANA AUTHORIZING AN AMENDMENT TO THE
CONTRACT BETWEEN THE CITY OF SANTA ANA AND
THE BOARD OF ADMINISTRATION OF THE PUBLIC
EMPLOYEES' RETIREMENT SYSTEM.
THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS:
Section 1: The City Council of the City of Santa Ana hereby finds, determines
and declares as follows:
A. The Public Employees' Retirement Law permits the participation of public
agencies and their employees in the Public Employees' Retirement
System ("PERS") 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. Such a contract
currently exists between the City of Santa Ana and the Board of
Administration of the California Public Employees' Retirement System.
B. In accordance with provisions of the current Memorandums of
Understanding between the City of Santa Ana and its miscellaneous
employee PERS members represented by the Service Employees
International Union, the Fireman's Benevolent Association, the Santa Ana
Police Officers Association, the Fire Management Association, the Police
Management Association, and the Santa Ana Management Association,
as well as the employment resolution governing the Unaffiliated
Confidential Unit, for fiscal years 2004-2010, the City agreed to amend its
contract with the Public Employees Retirement System to provide
Government Code Section 21354.5, 2.7% @ 55 Full Formula benefits for
all active focal members effective January 1, 2009. A copy of said
proposed amendment is attached hereto as Exhibit "A" and by this
reference made a part hereof.
C. The Service Retirement benefit calculated for service earned by this group
of members (applying to active members only) is a monthly allowance
equal to the product of the 2.7% @ 55 benefit factor, years of service, and
final compensation.
Section 2: That an amendment to the contract between the City of Santa Ana
and the Board of Administration of the Public Employees' Retirement System is
hereby authorized in accordance with the terms of Exhibit "A".
Ordinance No. NS-
55E-8 Page 1 of 3
Section 3: That the Mayor and Clerk of the Council of the City of Santa Ana are
authorized, empowered and directed to execute said amendment for an on
behalf of the City of Santa Ana.
Section 4: If any section, subsection, sentence, clause, phrase or portion of this
ordinance is for any reason held to be invalid or unconstitutional by the decision
of any court of competent jurisdiction, such decision shall not affect the validity of
the remaining portions of this ordinance. The City Council of the City of Santa
Ana hereby declares that it would have adopted this ordinance and each section,
subsection, sentence, clause, phrase or portion thereof irrespective of the fact
that any one or more sections, subsections, sentences, clauses, phrases, or
portions be declared invalid or unconstitutional.
ADOPTED this day of
Miguel A. Pulido
Mayor
APPROVED AS TO FORM:
Joseph W. Fletcher
City Attorney
By:
Joseph A. Straka
Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
Ordinance No. NS-
Page 2 of 3
55E-9
I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached
Ordinance No. to be the original ordinance adopted by the City Council of the City of
Santa Ana on and that said ordinance was published in
accordance with the Charter of the City of Santa Ana.
Date:
Patricia E. Healy
Clerk of the Council
City of Santa Ana
Ordinance No. NS-
55E-1 ~ Page 3 of 3
i,
Ca1PERS
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 Santa Ana
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,
1947, and witnessed November 25, 1946, and as amended effective October 1, 1951,
February 1, 1954, September 1, 1956, July 1, 1959, November 1, 1960, September 1,
1963, April 1, 1964, February 1, 1965, January 16, 1969, November 1, 1970, June 1,
1974, December 16, 1976, December 1, 1978, October 1, 1981, July 1, 1984,
December 1, 1984, July 1, 1985, February 1, 1990, July 1, 1990, December 5, 1991,
April 15, 1993, June 16, 1994, January 1, 1995, December 5, 1995, July 5, 2000, March
8, 2001, July 1, 2001, April 5, 2002, November 7, 2002 and July 1, 2007 which
provides for participation of Public Agency in said System, Board and Public Agency
hereby agree as follows:
A. Paragraphs 1 through 12 are hereby stricken from said contract as executed
effective July 1, 2007, and hereby replaced by the following paragraphs
numbered 1 through 13 inclusive:
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 50 for local safety
members.
55E-11
2. Public Agency shall participate in the Public Employees' Retirement
System from and after July 1, 1947 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:
NO ADDITIONAL EXCLUSIONS
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 the effective date of this
amendment to contract 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 the effective date of this amendment to contract
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 safety member shall be
determined in accordance with Section 21362.2 of said Retirement Law
(3% at age 50 Full).
55E-12
8. Public Agency elected and elects to be subject to the following optional
provisions:
a. Sections 21624 and 21626 (Post-Retirement Survivor Allowance).
b. Section 20042 (One-Year Final Compensation).
c. Section 20903 (Two Years Additional Service Credit).
d. Section 21548 (Pre-Retirement Option 2W Death Benefit).
e. Section 21024 (Military Service Credit as Public Service).
f. Section 20965 (Credit for Unused Sick Leave).
g. Section 21574 (Fourth Level of 1959 Survivor Benefits).
9. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
December 16, 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 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 miscellaneous members and local safety members.
b. 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.
55E-13
c. 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 day of
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF SANTA ANA
BY BY
LORI MCGARTLAND, CHIEF,: ` PRESIDING OFFICER
EMPLOYER SERVICES DIVISr~ON
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Witness Date
Attest:
Clerk
AMENDMENT ER# 0137
PERS-CON-702A (Rev. 10\05}
55E-14