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HomeMy WebLinkAboutAmendment-2001-011Afk4o�, Ca1PERS A-2001-0 11 California Public Employees' Retirement System 411400 - Between the Board of Administration California Public Employees' Retirement System and the City Council City of Santa Anna 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, i963, 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 and July 5, 2000 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 5, 2000, and hereby replaced by the following paragraphs numbered 1 through 12 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 and age 50 for local safety members. 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 taw, 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 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 safety member shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 7. Public Agency elected and elects to be subject to the following optional provisions: a. Sections 21624 and 21626 (Post -Retirement Survivor Allowance). b. Section 21024 (Military Service Credit as Public Service), Statutes of 1974 for those local miscellaneous members and local safety members entering membership prior to October 1, 1981. C. Section 20475 (Different Level of Benefits Provided for New Employees). Section 21024 (Military Service Credit as Public Service), Statutes of 1974, is not applicalbe to local miscellaneous members and local safety members entering membership after October 1, 1981. d. Section 20042 (One -Year Final Compensation). e. Section 20903 (Two Years Additional Service Credit). f. Section 21573 (Third Level of 1959 Survivor Benefits). g. Section 21548 (Pre -Retirement Optional Settlement 2 Death Benefit). h. Section 21024 (Military Service Credit as Public Service), Statutes of 1976 for local safety members. 8. 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. 9. 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. 10. 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 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. 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. 11. 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. 12. 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 9 b day of vInAzk / BOARD OF ADMINISTRATION CITY COUNCIL PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF SANTA ANA olrrl .. BY ,; %74 A a,. -f7 BY -z K E H W. MARZION, CHIVF PRES15 G OFFI ER ACTU IAL & EMPLOYER SERVICES DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM /-- GO Witness Date Attest: f Clerk Attorney, 1 roved AMENDMENT City M qesopr PERS-CON-702A (Rev. 8\96) CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM Actuarial and Employer Services Division Public Agency Contract Services P.O. Box 942709 Sacramento, CA 94229-2709 (916) 326-3420 CERTIFICATION OF FINAL ACTION OF GOVERNING BODY I hereby certify that the City of Santa Ana City Council (governing body) of the (public agency) adopted on February 5 2001 by an affirmative vote of a majority (date) of the members of said Governing Body, NS -2459 - Ordinance (Ordinance or ftsuhAorr) No. NS -2459 approving the attached contractual agreement between the Governing Body of said Agency and the Board of Administration of the California Public Employees' Retirement System, a certified copy of said Ordinance (Ordinance or Resolution) in the form furnished by said Board of Administration being attached hereto. Clerk/Secretary /I lerk/SecretaG/I C erk of the Council Title Date �7__ s - PERS -CON -5 (Rev. 1/96) A-2001-0 11 1,, Ca1PERS California Public Employees' Retirement System Between the Board of Administration California Public Employees' Retirement System andthe City Council City of Santa Anna 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 and July 5, 2000 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 5, 2000, and hereby replaced by the following paragraphs numbered 1 through 12 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 and age 50 for local safety members. 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 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 safety member shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 7. Public Agency elected and elects to be subject to the following optional provisions: a. Sections 21624 and 21626 (Post -Retirement Survivor Allowance). b. Section 21024 (Military Service Credit as Public Service), Statutes of 1974 for those local miscellaneous members and local safety members entering membership prior to October 1, 1981. C. Section 20475 (Different Level of Benefits Provided for New Employees). Section 21024 (Military Service Credit as Public Service), Statutes of 1974, is not applicalbe to local miscellaneous members and local safety members entering membership after October 1, 1981. d. Section 20042 (One -Year Final Compensation). e. Section 20903 (Two Years Additional Service Credit). f. Section 21573 (Third Level of 1959 Survivor Benefits). g. Section 21548 (Pre -Retirement Optional Settlement 2 Death Benefit). h. Section 21024 (Military Service Credit as Public Service), Statutes of 1976 for local safety members. 8. 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. 9. 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. 10. 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 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. 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. 11. 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. 12. 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 k day of vI out,�- :moo BOARD OF ADMINISTRATION CITY COUNCIL PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF SANTA ANA BY BY KENNETH W. MARZION, CHIEF PRESI . G OFFICER ACTUARIAL & EMPLOYER SERVICES DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM J -- -- d Witness Date Attest: Clerk T ft%nt City ;Attorney AMENDMENT ani PERS-CON-702A (Rev. 8\96) CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: NNE 30,1999 SAFETY PLAN FOR CITY OF SANTA ANA EMPLOYER NUMBER 137 Benefit Description: 21362.2,3% @ 50 Full Formula The table below shows the change in the total present value of benefits for the proposed plan amendment. The present value of benefits represents the total dollars needed today to fund all future benefits for current members of the plan, i.e. without regard to future employees. The difference between this amount and current plan assets must be paid by future employee and employer contributions. As such, the change in the present value of benefits due to the plan amendment represents the "cost" of the plan amendment. However, for plans with excess assets some or all of this "cost" may already be covered by current excess assets. The Ca1PERS Board adopted a resolution providing a one-time increase in the actuarial value of assets to 95% of market value for the calculation of the employer rate when a rate plan adopts a contract amendment that increases the present value of benefits. This resolution applies only to plans that (1) file a resolution of intention to amend their plan with CalPERS before June 30, 2001 and that (2) amend their contract with an effective date on or before June 30, 2002. If a plan amends more than once during the window period, only the first qualifying amendment will result in the asset increase to 95% of market value. Therefore, if your plan previously adopted an amendment which increased the actuarial value of assets to 95% of market value, no increase in assets will be shown in the tables below. If your plan's actuarial value of assets was not previously increased to 95% of market value, the tables below show the effect on its assets due to this one-time change in actuarial method (i.e., the 95% market value of assets). It is not required, nor necessarily desirable, to have accumulated assets sufficient to cover the total present value of benefits until every member has left employment. Instead, the actuarial funding process calculates a regular contribution schedule of employee contributions and employer contributions (called normal costs) which are designed to accumulate with interest to equal the total present value of benefits by the time every member has left employment. As of each June 30, the actuary calculates the "desirable" level of plan assets as of that point in time by subtracting the present value of scheduled future employee contributions and future employer normal costs from the total present value of benefits. The resulting "desirable" level of assets is called the accrued liability. A plan with assets exactly equal to the plan's accrued liability is simply "on schedule" in funding that plan, and only future employee contributions and future employer normal costs are needed. A plan with assets below the accrued liability is "behind schedule", or is said to have an unfunded liability, and must temporarily increase contributions to get back on schedule. A plan with assets in excess of the plan's accrued liability is "ahead of schedule", or is said to have excess assets, and can temporarily reduce future contributions. A plan with assets in excess of the total present value of benefits is called super -funded, and neither future employer nor employee contributions are required. Of course, events such as plan amendments and investment or demographic gains or losses can change a plan's condition from year to December 8, 2000 Page 1 of 3 1:19 PM Change Due to Post -Amendment Pre -Amendment Plan Amendment Post Method & Method Change Change Total Present Value of Benefits $ 449,965,380 $ 46,014,620 $ 495,980,000 Actuarial Value of Plan Assets 472,514,555 0 472,514,555 Present Value of Future Employer and Employee Contributions $ (22,549,175) $ 46,014,620 $ 23,465,445 It is not required, nor necessarily desirable, to have accumulated assets sufficient to cover the total present value of benefits until every member has left employment. Instead, the actuarial funding process calculates a regular contribution schedule of employee contributions and employer contributions (called normal costs) which are designed to accumulate with interest to equal the total present value of benefits by the time every member has left employment. As of each June 30, the actuary calculates the "desirable" level of plan assets as of that point in time by subtracting the present value of scheduled future employee contributions and future employer normal costs from the total present value of benefits. The resulting "desirable" level of assets is called the accrued liability. A plan with assets exactly equal to the plan's accrued liability is simply "on schedule" in funding that plan, and only future employee contributions and future employer normal costs are needed. A plan with assets below the accrued liability is "behind schedule", or is said to have an unfunded liability, and must temporarily increase contributions to get back on schedule. A plan with assets in excess of the plan's accrued liability is "ahead of schedule", or is said to have excess assets, and can temporarily reduce future contributions. A plan with assets in excess of the total present value of benefits is called super -funded, and neither future employer nor employee contributions are required. Of course, events such as plan amendments and investment or demographic gains or losses can change a plan's condition from year to December 8, 2000 Page 1 of 3 1:19 PM CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: NNE 30, 1999 SAFETY PLAN FOR CITY OF SANTA ANA EMPLOYER NUMBER 137 Benefit Description: 21362.2,3% @ 50 Full Formula year. For example, a plan amendment could cause a plan to move all the way from being super -funded to being in an unfunded position. The changes in your plan's accrued liability, unfunded accrued liability, and the funded ratio as of June 30, 1999 due to the plan amendment are shown in the table below. While the tables above give the changes in the "cost" and funded status of the plan due to the amendment, there remains the question of what will happen to the employer contribution rate because of the change in plan provisions. CaIPERS policy is to implement rate changes due to plan amendments immediately on the effective date of the change in plan benefits. In general, the policy also provides that the change in unfunded liability due to the plan amendment will be separately amortized over a period of 20 years from the effective date of the amendment and all other components of the plan's unfunded liability/excess assets will continue to be amortized separately. However, special rules have to be applied to plans with a current employer contribution rate of zero. The pre -amendment excess assets in these plans were sufficient to cover the employer's normal cost for one or more years into the future. A plan amendment will use up some or all of the pre -amendment excess assets. If there is still excess assets (i.e. if the plan is still ahead of schedule) after the plan amendment, the remaining excess assets were spread over the greater of 5 years or the number of years for which the excess assets would keep the employer rate equal to zero. If the amendment uses up all excess assets and creates an unfunded liability (i.e. from being ahead of schedule to behind schedule), the post -amendment unfunded liability was amortized over 20 years. The table below shows the immediate short-term change in your plan's employer contribution rate due to the plan amendment. Rate Component Pre -Amendment Change Due to Post -Amendment Pre -Amendment Plan Amendment Post Method Change Normal Cost 13.067% & Method Change 17.762% Accrued Liability $ 366,269,832 $ 42,645,475 $ 408,915,307 Assets 472,514,555 0 472,514,555 Unfunded Liability Funded Ratio $ 42,645,475 $ (106,244,723) 129.0% $ (63,599,248) 115.6% While the tables above give the changes in the "cost" and funded status of the plan due to the amendment, there remains the question of what will happen to the employer contribution rate because of the change in plan provisions. CaIPERS policy is to implement rate changes due to plan amendments immediately on the effective date of the change in plan benefits. In general, the policy also provides that the change in unfunded liability due to the plan amendment will be separately amortized over a period of 20 years from the effective date of the amendment and all other components of the plan's unfunded liability/excess assets will continue to be amortized separately. However, special rules have to be applied to plans with a current employer contribution rate of zero. The pre -amendment excess assets in these plans were sufficient to cover the employer's normal cost for one or more years into the future. A plan amendment will use up some or all of the pre -amendment excess assets. If there is still excess assets (i.e. if the plan is still ahead of schedule) after the plan amendment, the remaining excess assets were spread over the greater of 5 years or the number of years for which the excess assets would keep the employer rate equal to zero. If the amendment uses up all excess assets and creates an unfunded liability (i.e. from being ahead of schedule to behind schedule), the post -amendment unfunded liability was amortized over 20 years. The table below shows the immediate short-term change in your plan's employer contribution rate due to the plan amendment. Rate Component Pre -Amendment Change Due to Plan Amendment & Method Change Post -Amendment Post Method Change Normal Cost 13.067% 4.695% 17.762% Unfunded/Excess Asset Cost 1959 Survivor (13.067)% 0.000% (4.695)% 0.000% (17.762)% 0.000% Total Employer Rate 0.000% (0.000)% 0.000% Amortization Period 36 Years 8 Years December 8, 2000 Page 2 of 3 1:19 PM CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: NNE 30, 1999 SAFETY PLAN FOR CITY OF SANTA ANA EMPLOYER NUMBER 137 Benefit Description: 21362.2,3% @ 50 Full Formula Note that the change in normal cost in the table above may be much more indicative of the long term change in the employer contribution rate due to the plan amendment. The plan's unfunded liability/excess asset cost shown in the table above is a temporary adjustment to the employer contribution to "get the plan back on schedule". This temporary adjustment to the employer rate varies in duration from plan to plan. For example, a plan with initial excess assets being amortized over a short period of time will typically experience a large rate increase when excess assets are fully amortized. While a plan amendment for such a plan may produce little or no increase in the employer contribution rate now, the change in normal cost due to the plan amendment will become fully reflected in the employer contribution rate as soon as initial excess assets are fully amortized. If your agency is requesting cost information for two or more benefit changes, the cost of adopting more than one of these changes may not be obtained by adding the individual costs. Instead, a separate valuation should be done to provide a cost analysis for the combination of benefit changes. If the proposed plan amendment applies to only some of the employees in the plan, the rate change due to the plan amendment still applies to the entire plan, and is still based on the total plan payroll. Please note that the cost analysis provided in this document may not be relied upon once the CalPERS actuarial staff have completed the next annual valuation, that is, the annual valuation as of June 30, 2000. If you have not taken action to amend your contract, and we have already mailed the June 30, 2000 annual valuation report, you must contact our office for an updated cost analysis, based on the new annual valuation. This actuarial valuation for this proposed plan amendment is based on the participant, benefits, and asset data used in the June 30, 1999 annual valuation, with the benefits modified if necessary to reflect what is currently provided under your contract with CaIPERS, and further modified to reflect the proposed plan amendment. Descriptions of the actuarial methodologies, actuarial assumptions, and plan benefit provisions may be found in the appendices of the June 30, 1999 annual report. Please note that the results shown here are subject to change if any of the data or plan provisions changes from what was used in this study. It is our opinion that the valuation has been performed in accordance with generally accepted actuarial principles, in accordance with standards of practice prescribed by the Actuarial Standards Board, and that the assumptions and methods are internally consistent and reasonable for this plan, as prescribed by the CalPERS Board of Administration according to provisions set forth in the California Public Employees' Retirement Law. fw —tt-,� /4-1-1c/11-01 Kung-pei Hwang, A.S.A., M.A.A.A. Senior Pension Actuary, CalPERS Fin Process Ids: Annual -49488 December 8, 1:19 PM Base -53557 Proposal -53558 3 of 3 R8QUEST FOR COUNCIL ACTION ydecation la CITY COUNCIL MEETING DATE: JANUARY 2, 2001 TITLE: AMEND THE CITY'S CONTRACT WITH THE PUBLIC EMPLOYEE'S RETIREMENT SYSTEM TO PROVIDE MILITARY SERVICE CREDIT AS PUBLIC SERVICE 6/ CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended`'' ❑ As Amended j� Ordinance on 1st Readi J8( Ordinance on 2nd Res'd29$V m�1�j Implementing Resolution;,,,,t6*, C,12^ RECOMMENDED ACTION ,�- -'L N- 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 21024, Military Service Credit as Public Service for local safety members. 2. Adopt an Ordinance authorizing an amendment to the contract between City of Santa Ana and Public Employees' Retirement System. WHIR016P13111901 The Military Service Credit as Public Service Benefit allows a member to purchase up to four years of service credit for any continuous active military or merchant marine service prior to employment. This benefit adds years of service to a member's retirement calculation and ultimately results in an improved retirement benefit. In accordance with provisions of the current Memorandum of Understanding between the City of Santa Ana and the Police Officers' Association (POA), the City agreed to amend its contract with the Public Employees' Retirement System to provide the Military Service Credit as Public Service benefit for local safety members as soon as practical. Page 195 Resolution Authorizing Military Buyback January 2, 2001 Page 2 FISCAL IMPACT There is no fiscal impact to the City with this action as the employer cost and employee cost is paid by the employee. J Execai� rector, Personn Services EJA/LEL/ck I:docs/bendocs/rfcas/rfca - military buy back 55.A. Page 196 RESOLUTION NO. 2001-003 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA GIVING NOTICE OF ITS INTENTION TO APPROVE AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF SANTA ANA AND THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: 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 procedures by which any such public agency may elect to subject themselves and their employees to amendments to said Law. B. One of the steps of such procedure to amend a contract between the public agency and PERS is the adoption by the governing board of the public agency of a resolution giving notice of its intention to approve an amendment of its contract with PERS, which resolution by law shall contain a summary of the changed proposed to said contract. C. The following is a summary statement of a proposed change in the contract between the City of Santa Ana and PERS: To provide Section 21204 (Military Service Credit as Public Service) for local safety members. D. The Military Service Credit as Public Service Benefit allows an employee who is a member of the PERS to purchase up to four (4) years credit for any continuous active military or merchant marine service prior to employment with a covered public agency such as the City of Santa Ana. E. In accordance with provisions of the current Memorandum of Understanding between the City and the Police Officers' Association, the City agreed to amend its current contract with PERS to provide the Military Service Credit as a public service benefit as soon as practical. F. There is no fiscal impact to the City by this ordinance as the employer cost Resolution No. 2001-003 Page 1 of 2 ORDINANCE NO. NS -2459 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF SANTA ANA AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM THE CITY COUNCIL OF THE CITY OF SANTA ANA ORDAINS AS FOLLOWS: SECTION 1: The City Council hereby finds, determines and declares as follows: A. The Military Service Credit as Public Service Benefit allows an employee who is a member of the California Public Employees' Retirement System (PERS) to purchase up to four (4) years credit for any continuous active military or merchant marine service prior to employment with a covered public agency such as the City of Santa Ana. B. In accordance with provisions of the current Memorandum of Understanding between the City and the Police Officers' Association, the City agreed to amend its current contract with PERS to provide the Military Service Credit as a public service benefit as soon as practical. C. There is no fiscal impact to the City by this ordinance as the employer cost and the employee cost is paid by the employee. SECTION 2: That an amendment to the contract between the City Council of the City of Santa Ana and the Board of Administration of the California Public Employees' Retirement System is hereby authorized, in accordance with the terms of Exhibit A to this Ordinance which is attached hereto and by this reference made a part hereof. SECTION 3: That the City Attorney is hereby directed to prepare and the Mayor and Clerk of the Council are hereby authorized, empowered and directed to execute said amendment for and on behalf of the City of Santa Ana. ADOPTED this 5th day of February, 2001. ATTEST: Patricia E. Healy Clerk of the Council Ordinance No. NS -2459 Page 1 of 2 CaIPERS California Public Employees' Retirement System EXHIBITA ]Between the ]Board of Administration California Public Employees' Retirement System andthe City Council City ®f Santa Anna 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 and July 5, 2000 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 5, 2000, and hereby replaced by the following paragraphs numbered 1 through 12 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 and age 50 for local safety members. Page 201 55.A. PLEASE DO NOT SIGN "EXHIBIT ONL 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 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 safety member shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 7. Public Agency elected and elects to be subject to the following optional provisions: a. Sections 21624 and 21626 (Post -Retirement Survivor Allowance). b. Section 21024 (Military Service Credit as Public Service), Statutes of 1974 for those local miscellaneous members and local safety members entering membership prior to October 1, 1981. 55.A. Page 202 ;'LEASE DO NOT SIGN "EXHIBIT ONL, C. Section 20475 (Different Level of Benefits Provided for New Employees). Section 21024 (Military Service Credit as Public Service), Statutes of 1974, is not applicalbe to local miscellaneous members and local safety members entering membership after October 1, 1981. d. Section 20042 (One -Year Final Compensation). e. Section 20903 (Two Years Additional Service Credit). Section 21573 (Third Level of 1959 Survivor Benefits). g. Section 21548 (Pre -Retirement Optional Settlement 2 Death Benefit). h. Section 21024 (Military Service Credit as Public Service), Statutes of 1976 for local safety members. 8. 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. 9. 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. 10. 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 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. 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. /� Page 203 55.A. 11. 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. 12. 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 KENNETH W. MARZION, CHIEF ACTUARIAL & EMPLOYER SERVI PUBLIC EMPLOYEES' RETIREME AMENDMENT PERS-CON-702A (Rev. 8\96) PRESIDIN\%q R N EM Witness Date Attest: Clerk 55.A. Page 204 'CALIFORNIA PUBLIC _AVIPLOYEES' RETIREMENT SYSTtiVI Actuarial and Employer Services Division Public Agency Contract Services P.O. Box 942709 Sacramento, CA 94229-2709 (916) 326-3420 CERTIFICATION OF COMPLIANCE WITH GOVERNMENT CODE SECTION 7507 I hereby certify that in accordance with Section 7507 of the Government Code the future annual costs as determined by the System Actuary and/or the increase in retirement benefit(s) have been made public at a public meeting of the City Council (governing body) City of Santa Ana of the (public agency) on O©_which is at least two weeks prior to the adoption of the (date €ieselHt'aig / Ordinance. Clerk/Secretary " Title Date PERS-CON-12A (rev. 1/96)