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Home My WebLink About55E - RESO - AMEND PARS TRUST PLANREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: AUGUST 24, 2011 CLERK OF COUNCIL USE ONLY: TITLE: APPROVED ? As Recommended ADOPT A RESOLUTION TO AMEND THE PARS TRUST El Amended El Or dinance on 15t Reading PLAN TO INCLUDE INCUMBENT POLICE OFFICERS ? Ordinance on 2nd Reading ASSOCIATION (POA) PRESIDENT ? Implementing Resolution ? Set Public Hearing For_ () ?J? CITY MANAGER RECOMMENDED ACTION CONTINUED TO FILE NUMBER Adopt a resolution to amend the Public Agency Retirement Services ("PARS") Trust fund to allow the incumbent POA President to participate under the plan. DISCUSSION The City created a PARS Trust Plan on April 18, 2011, to provide a stipend for twenty-five (25) POA retirees that were denied reportable compensation under the California Public Employee Retirement System (CaIPERS) for salary increases they received in exchange for participating in an unpaid furlough program. A similar situation has occurred with the incumbent POA President who has been denied reportable compensation for a special assignment pay premium ("Union Pay") he was receiving as the POA President. The incumbent POA President began receiving Union Pay effective September 16, 2007, as part of his compensation, and this premium was reported to CaIPERS accordingly. However, during a recent audit by CaIPERS, the City was notified that the Union Pay premium did not meet the definition of compensation. Therefore, the City and POA negotiated an alternate method of providing a stipend to the incumbent POA President that will reflect the actual salary he would have received upon retirement. The City proposes to amend the current plan document with the Public Agency Retirement Services ("PARS") Trust fund to include the incumbent POA President. No additional retirees will be eligible to participate in the supplementary retirement plan. 55E-1 Amendment to the PAR Trust Plan AUGUST 24, 2011 Page 2 FISCAL IMPACT First year costs are estimated to be $26,000 and ongoing annual costs are estimated to increase in subsequent years at the rate of 2% per year. The lump sum cost for purchasing this annuity is estimated at about $570,000. Funds are available under the liability account (08009051-62300). The cost of this supplemental retirement program will be offset by a corresponding reduction in the City's PERS rate. APPROVED AS TO FUNDS AND ACCOUNTS: Y Kathie Go zalez Executive Director Personnel Services Agency Francisco Gutierrez Executive Director Finance & Management Services Agency 55E-2 Js8/10/12 RESOLUTION NO. X A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING THE PARS TRUST SUPPLEMENTARY RETIREMENT PLAN TO INCLUDE CURRENT POLICE UNION PRESIDENT PAY BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1: The City Council of the City of Santa Ana hereby finds, determines, and declares as follows: A. Effective April 18, 2011, the City of Santa Ana adopted a supplemental retirement plan with the Public Agency Retirement System ("PARS") (the "Plan"). The Plan's purpose was to provide a stipend for twenty-five (25) Police Officer Association ("POK) retirees that were denied PERSable compensation under the California Public Employee Retirement System (CaIPERS) for salary increases they received in exchange for participating in an unpaid furlough program. B. The Plan provided that "The Employer shall have the right to amend, modify or terminate this Plan at any time". C. A recent CaIPERS audit determined that the special assignment pay received by the POA president did not meet the definition of compensation and would not be considered reportable compensation in the calculation for PERS retirement benefits. D. The City proposes to amend The Plan with PARS to include the incumbent POA President so as to provide the level of benefits he would have received had PERS not determined the Union Pay to be not-reportable. No additional retirees will be eligible to participate in the supplementary retirement plan. Section 2: The City Council of the City of Santa Ana hereby approves the following amendments to the PARS Trust Plan originally approved April 18, 2011: A. Section 1.1 "Eligibility for Benefits", is hereby amended to add an additional Benefit Tier, to read in full as follows: Tier I An Employee shall be eligible to receive Retirement Benefits under this Plan if he or she: 55E-3 (a) Is and Employee of the Employer represented by the Police Officers Association on or after July 1, 2009; (b) is at least fifty (50) years of age and has completed at least five (5) years of continuous employment with the Employer immediately preceding the last day of employment with the Employer; (c) received a salary increase on July 1, 2009 and/or January 1, 2010, which was not recognized by CalPERS for purposes of computing Final Pay; (d) has terminated employment with the Employer and concurrently retired under CalPERS on or before December 31, 2010, and remains in retired status under CaIPERS; and (e) has applied for benefits under this Plan. Tier II An Employee shall be eligible to receive Retirement Benefits under this Plan if he or she: (a) is an Employee of the Employer serving as the Union President for the Police Officers Association on July 1, 2011; (b) is at least fifty (50) years of age and has completed at least five (5) years of continuous employment with the Employer immediately preceding the last day of employment with the Employer; (c) received a Union Pay Premium which was not recognized by CaIPERS for purposes of computing Final Pay; (d) has terminated employment with the Employer and concurrently retired under CalPERS on or before December 31, 2011, and remains in retired status under CaIPERS: and (e) has applied for benefits under this Plan. B. Article VII, Section 7.1, "Definitions" is hereby amended to change the definition of Benefit Final Pay, to read in full as follows: "Benefit Final Pay" means the salary increase granted on July 1, 2009 and/or January 1, 2010 or the Union Pay Premium, which was not recognized by CalPERS for purposes of computing Final Pay. 55E-4 Section 3: Except as hereby amended all existing terms and conditions of the PARS Trust Plan shall remain in full force and effect. Section 4: The City Council certifies that the City of Santa Ana will comply with applicable Federal, State, and/or local laws, rules, and regulations. Section 5: This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of September 2011. Miguel A. Pulido Mayor APPROVED AS TO FORM: By: Joseph Straka Interim City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2011- to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Council City of Santa Ana 55E-5 55E-6