HomeMy WebLinkAbout16-Human Resources ORIGINAL
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
From: LINN LIVINGSTON, DIRECTOR Subject: A RESOLUTION OF
OF HUMAN RESOURCES INTENTION AUTHORIZING AN
AMENDMENT TO THE CONTRACT
Dept: HUMAN RESOURCES BETWEEN THE PUBLIC
EMPLOYEES' RETIREMENT SYSTEM
Date: June 6, 2011 AND THE CITY OF SAN
BERNARDINO ESTABLISHING A
TWO- TIER RETIREMENT BENEFIT
FORMULA FROM 3% @ 50 TO 3% @
55 FOR NEW SAFETY EMPLOYEES.
M/CC Meeting Date: June 20, 2011
Synopsis of Previous Council Action:
On July 21, 2008, the Mayor and Common Council approved an ordinance authorizing
the contract between the Public Employees' Retirement System (PERS) and the City of
San Bernardino to provide a 3% @ 50 retirement benefit for Safety Employees.
Recommended Motion:
Adopt Resolution.
Signatu
Contact person: Linn Livingston Phone: 384-5161
Supporting data attached: Ward:
FUNDING REQUIREMENTS: Amount: FUTURE SAVINGS
Source: (Acct. No.)
(Acct. Description)
Finance:
Council Notes:
Agenda Item No.
i
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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Staff Report
Subject:
A Resolution of Intention authorizing an amendment to the contract between the Public
Employees' Retirement System and the City of San Bernardino establishing a two-tier retirement
benefit formula from 3% @ 50 to 3% @ 55 for new safety employees.
Background:
The City's negotiation team met and conferred with the safety bargaining groups to amend the
Public Employees' Retirement System (PERS) contract to establish a two-tier retirement benefit
formula from 3% @ 50 to 3% @ 55. As per PERS law, the City is required to amend its PERS
contract to implement Section 21363.1 (3% @ 55 full formula). The effective date of the two-tier
formula will be September 1, 2011, all safety employees hired on or after September 1, 2011,
will participate in the 3% @ 55 formula.
The attached Resolution and Schedule of Agency Actions (Exhibit A) authorizes an amendment
of the City contract with PERS (Exhibit B) to provide the 3% @ 55 benefit for all new safety
members. An ordinance will be taken to Mayor and Common Council on July 18, 2011, as per
the Schedule of Agency Actions required by PERS for contract amendment.
Financial Impact:
No cost or savings anticipated for FY 2011-12. The City anticipates a 0.21% (estimated $92,000)
employer rate reduction.
Recommendation:
Adopt Resolution.
2
1 Resolution No
2
RESOLUTION OF INTENTION AUTHORIZING AN AMENDMENT TO T HE
3 CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE CALIFORNI
4 PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO.
5
6 WHEREAS, the Public Employees' Retirement Law permits the participation of public
7 agencies and their employees in the Public Employees' Retirement System by the execution of
contract, and sets forth the procedure by which said public agencies may elect to subjec
8
themselves and their employees to amendments to said Law; and
9
10 WHEREAS, one of the steps in the procedures to amend this contract is the adoption by
11 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 propose
12
in said contract; and
13
14 WHEREAS, the following is a statement of the proposed change:
15 To provide Section 21363.1 (3.0% @ 55 Full formula) for local safety members.
16
NOW, THEREFORE, BE IT RESOLVED that the Mayor and Common Council of the
17
City San Bernardino do hereby give notice of intention to approve an amendment to the contrac
18 between said City and the Board of Administration of the Public Employees' Retirement System
19 a copy of said amendment being attached hereto, as Exhibit "A" and by this reference made
20 part hereof.
21
22
23
24
25
d
's
1 RESOLUTION OF INTENTION AUTHORIZING AN AMENDMENT TO THE
CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE CALIFORNI
2 PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO.
3
4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor an
5 the Common Council of the City of San Bernardino at a meeting thereof, held
6 on day of , 2011, by the following vote,to wit:
7
8 COUNCILMEMBERS: AYES NAYES ABSTAIN ABSENT
9 MARQUEZ
VACANT
10 BRINKER
11 SHORETT
12 KELLEY
13 JOHNSON
MCCAMMACK
14
15
16 Rachel G. Clark, City Clerk
17
The foregoing resolution is hereby approved this day of
18
2011.
19
20 Patrick J. Morris, Mayor
City of San Bernardino
21
22 Approved as to form:
23 JAMES F. PENMAN,
City Attorney
24
BY
25
H enda Items:Reso.3.0%@55.2011
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM EffiBIT "A"
Actuarial and Employer Services Branch
Contract Maintenance Unit
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CaIPERS (225-7377) FAX (916)795-3005
SCHEDULE OF AGENCY ACTIONS
FOR PLANNING YOUR AMENDMENT TO CONTRACT
CaIPERS will prepare the documents necessary to amend your contract and provide them
to you within 30 days of receipt of the Contract Amendment Request in our office. The
contracting agency must have a current Amendment Cost Analysis before proceeding with
an amendment to the contract.
1. 05/22/11 ENTER A DATE THAT IS 30 DAYS FROM THE DATE YOU EXPECT CalPERS TO
RECEIVE THE CONTRACT AMENDMENT REQUEST FORM YOU SUBMITTED
OR WILL BE SUBMITTING. This is the date you may expect to receive the
documents from CalPERS that you will need to amend the Contract.
2. 03/18/10 THE DATE AN ACTUARY WILL BE PRESENT TO PROVIDE INFORMATION
REGARDING THE ACTUARIAL IMPACT UPON FUTURE ANNUAL COSTS.
(The presence of an actuary is required if future costs of the benefit changes
exceed'/of 1% of the future annual costs of the existing benefits.)
3. 06/20/11 ENTER THE DATE THE GOVERNING BODY WILL ADOPT THE RESOLUTION
OF INTENTION DOCUMENT. Allow the necessary time after the date you expect to
receive the needed documents from CalPERS (#1 above)to include adoption of the
Resolution of Intention on the Governing Body's meeting agenda. The first reading
of the Ordinance may be held on the same day the Resolution of Intention is
adopted.
4. N/A ENTER THE DATE THE EMPLOYEE ELECTION WILL BE HELD. An employee
election is required only if the employee contribution rate will change. If required,
- s — - this election must follow the Governing Body's adoption of the Resolution of
Intention (#3 above)and must be prior to the Adoption of the Ordinance(#5 below).
5. 07/18/11 ENTER THE DATE THE GOVERNING BODY WILL ADOPT THE-ORDINANCE.
This date-must..be at-1east-20,days-aftbt the`°date the Governing Body adopts the
Resolution of Intenfior�( �'atio�e).
6. 8/22/11 ENTER THE EFFECTIVE DATE OF THE ORDINANCE. This date is usually 30
days,after.the date,the_Governing.Body adopts'the final ordinance(#5 above)unless
an Urgency Ordinance is adopted which establishes an earlier Ordinance effective
date.
7. 09/01/11 ENTER THE EFFECTIVE DATE OF THE AMENDMENT TO CONTRACT. If there
is no change in the employee or the employer contribution rates this date may be as
early as the day after the effective date of the Ordinance(#6 above). if there is a
change in the employee and/or the employer contribution rates, this date must be
the first day of a payroll period and may not be earlier than the day after the effective
date of the Ordinance (date#6).
THIS FORM IS USED FOR PROPERLY PLANNING AND SCHEDULING THE AGENCY ACTIONS TO
AMEND THE CONTRACT WITH CalPERS. CAREFULLY FOLLOWING THE GUIDELINES IN THIS FORM
CAN PREVENT THE NEED TO RESCIND ACTIONS TAKEN BY YOUR GOVERNING BODY AND
REPEATING THE PROCESS AS WELL AS AVOIDING UNNECESSARY DELAYS IN THE AMENDMENT
EFFECTIVE DATE. THIS FORM SHOULD BE COMPLETED AND A COPY RETURNED TO THIS OFFICE
WITH THE CONTRACT AMENDMENT REQUEST. PLEASE CALL YOUR CONTRACT ANALYST AT
(888)225-73771F YOU HAVE QUESTIONS.
Cities and Counties Schedule of Agency Actions (rev.6/09)
I
E%H IBIT "B"
CAPERS
California
Public Employees' Retirement System
4001-MNUz=NVWMNEWNWI�
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees ' Retirement System
and the
City Council
City of San Bernardino
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 March
1, 1945, and witnessed February 6, 1945, and as amended effective November 1, 1949,
September 1, 1951, January 1, 1952, July 1, 1954, February 1, 1965, February 24,
1969, March 8, 1971, October 1, 1973, October 28, 1974, March 17, 1975, April 28,
1975, November 10, 1975, July 6, 1977, January 7, 1985, May 27, 1985, September 16,
1988, August 27, 1990, August 1, 1996, July 3, 1997, January 1, 1998, August 1, 1998,
November 1, 1999, June 1, 2001, July 1, 2001, January 1, 2008, and January 1, 2009
which provides for participation of Public Agency in said System, Board and Public
Agency hereby agree as follows:
A. Paragraphs 1 through 14 are hereby stricken from said contract as executed
effective January 1, 2009, and hereby replaced by the following paragraphs
numbered 1 through 16 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 50 for local safety
members entering membership in the safety classification on or prior to
the effective date of this amendment to contract, and age 55 for local
safety members entering membership for the first time in the safety
classification after the effective date of this amendment to contract.
2. Public Agency shall participate in the Public Employees' Retirement
System from and after March 1, 1945 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. Public Agency agrees to indemnify, defend and hold harmless the
California Public Employees' Retirement System (CaIPERS) and its
trustees, agents and employees, the CaIPERS Board of Administration,
and the California Public Employees' Retirement Fund from any claims,
demands, actions, losses, liabilities, damages, judgments, expenses and
costs, including but not limited to interest, penalties and attorneys fees
that may arise as a result of any of the following:
(a) Public Agency's election to provide retirement benefits,
provisions or formulas under this Contract that are different than
the retirement benefits, provisions or formulas provided under
the Public Agency's prior non-CaIPERS retirement program.
(b) Public Agency's election to amend this Contract to provide
retirement benefits, provisions or formulas that are different than
existing retirement benefits, provisions or formulas.
(c) Public Agency's agreement with a third party other than
CaIPERS to provide retirement benefits, provisions, or formulas
that are different than the retirement benefits, provisions or
formulas provided under this Contract and provided for under
the California Public Employees' Retirement Law.
(d) Public Agency's election to file for bankruptcy under Chapter 9
(commencing with section 901) of Title 11 of the United States
Bankruptcy Code and/or Public Agency's election to reject this
Contract with the CaIPERS Board of Administration pursuant to
section 365, of Title 11, of the United States Bankruptcy Code
or any similar provision of law.
(e) Public Agency's election to assign this Contract without the prior
written consent of the CaIPERS' Board of Administration.
(f) The termination of this Contract either voluntarily by request of
Public Agency or involuntarily pursuant to the Public Employees'
Retirement Law.
(g) Changes sponsored by Public Agency in existing retirement
benefits, provisions or formulas made as a result of
amendments, additions or deletions to California statute or to
the California Constitution.
4. 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).
5. 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 HIRED ON OR AFTER JANUARY 1, 1952;
b. LIBRARY PAGES HIRED ON OR AFTER MARCH 17, 1975;
C. LIFEGUARDS;
d. SENIOR LIFEGUARDS;
e. SUPERVISING LIFEGUARDS;
f. RECREATION INTERNS;
g. RECREATION AIDES;
h. RECREATION LEADERS;
L SENIOR RECREATION LEADERS;
j. RECREATION SPECIALIST;
k. LOCKER ATTENDANTS;
I. VEHICLE OPERATORS; AND
M. EXTRA RELIEF HEAVY LABORERS (EXTRA BOARD).
6. Prior to January 1, 1975, those members who were hired by Public
Agency on a temporary and/or seasonal basis not to exceed 6 months
were excluded from PERS membership by contract. Government Code
Section 20336 superseded this contract provision by providing that any
such temporary and/or seasonal employees are excluded from PERS
membership subsequent to January 1, 1975. Legislation repealed and
replaced said Section with Government Code Section 20305 effective July
1, 1994.
7. 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 1, 2008 shall be
determined in accordance with Section 21354 of said Retirement Law
(2% at age 55 Full).
8. 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 1, 2008 shall be determined in
accordance with Section 21354.5 of said Retirement Law (2.7% at age 55
Full).
9. The percentage of final compensation to be provided for each year of
credited prior and current service as a local safety member entering
membership in the safety classification on or prior to the effective date of
this amendment to contract shall be determined in accordance with
Section 21362.2 of said Retirement Law (3% at age 50 Full).
10. The percentage of final compensation to be provided for each year of
credited current service as a local safety member entering membership for
the first time in the safety classification after the effective date of this
amendment to contract shall be determined in accordance with Section
21363.1 of said Retirement Law (3% at age 55 Full).
11. Public Agency elected and elects to be subject to the following optional
provisions:
a. Sections 21624, 21626 and 21628 (Post-Retirement Survivor
Allowance).
b. Section 21222.1 (One-Time 5% Increase - 1970). Legislation
repealed said Section effective January 1, 1980.
C. Section 20042 (One-Year Final Compensation).
d. Section 21024 (Military Service Credit as Public Service).
e. Section 21222.2 (One-Time 5% Increase - 1971). Legislation
repealed said Section effective January 1, 1980.
f. Section 21319 (One-Time 15% Increase for Local Miscellaneous
Members Who Retired or Died Prior to July 1, 1971). Legislation
repealed said Section effective January 1, 2002.
1'! '" + t 4 R �t t/j ►. I'r rA
g. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local
miscellaneous members and local fire members only.
h. Section 20903 (Two Years Additional Service Credit) for local
miscellaneous members only.
i. Section 21635 (Post-Retirement Survivor Allowance to Continue
After Remarriage) for local fire members only.
j. Section 20475 (Different Level of Benefits). Section 21363.1 (3%
@ 55 Full formula) is applicable to local safety members entering
membership for the first time in the safety classification after the
effective date of this amendment to contract.
12. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
April 28, 1975. 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.
13. 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.
14. 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.
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.
15. 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.
16. 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 SAN BERNARDINO
BY BY
DARRYL WATSON, CHIEF PRESIDING OFFICER
CUSTOMER ACCOUNT SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Witness Date
Attest:
Clerk
AMENDMENT ER#61
PERS-CON-702A
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF GOVERNING BODY'S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the
of the
(governing body)
(public agency)
on
(date)
Clerk/Secretary
Title
PERS-CON-12 (rev. 1/96)
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
(888) CalPERS (225-7377)
SUMMARY OF MAJOR PROVISIONS
3% @ 55 Formula (Section 21363.1)
Local Safety Members
SERVICE RETIREMENT
To be eligible for service retirement, a member must be at least age 50 and have five years of
CalPERS credited service. If provided by the employer's contract, mandatory retirement age for
local safety members is age 60.
The monthly retirement allowance is determined by age at retirement, years of service credit and
final compensation. The basic benefit is 3% of final compensation for each year of credited
service upon retirement at age 55. If retirement is earlier than age 55, the percentage of final
compensation decreases for each quarter year of attained age to 2.40% at age 50. The allowance
is limited to 90% of final compensation.
Final compensation is the average monthly pay rate during the last consecutive 36 months of
employment, or 12 months if provided by the employer's contract, unless the member designates a
different period of 36 or 12 consecutive months when the average pay rate was higher. Certain
items of special compensation earned during your final compensation period will be included in
your final compensation, in accordance with Board regulations.
DISABILITY RETIREMENT
Members substantially incapacitated from performing the usual duties for the position for his/her
current employer would be eligible for disability retirement provided they have at least five years of
service credit. The monthly retirement allowance is 1.8% of final compensation for each year of
service. The maximum percentage for members who have between 10.000 and 18.518 years of
service credit is one-third of their final compensation. If the member is eligible for service
retirement the member will receive the highest allowance payable, service or disability. If provided
by the employer's contract, the benefit would be a minimum of 30% of final compensation for the
first five years of service credit, plus 1% for each additional year of service to a maximum benefit
of 50% of final compensation.
INDUSTRIAL DISABILITY RETIREMENT
Members permanently incapacitated from performing their duties, as defined above under
Disability Retirement, and the disability is a result of a job-related injury or illness may receive an
Industrial Disability Retirement benefit equal to 50% of their final compensation. If provided in the
employer's contract and the member is totally disabled, the disability retirement allowance would
equal 75% of final compensation in lieu of the disability retirement allowance otherwise provided.
If the member is eligible for service retirement, the service retirement allowance is payable. The
total allowance cannot exceed 90% of final compensation.
PRE-RETIREMENT DEATH BENEFITS
Basic Death Benefit: This benefit is a refund of the member's contributions plus interest and up to
six months' pay (one month's salary rate for each year of current service to a maximum of six
months).
PERS-CON-53(rev.6/07)
1957 Survivor Benefit: An eligible beneficiary may elect to receive either the Basic Death Benefit or
the 1957 Survivor Benefit. The 1957 Survivor Benefit provides a monthly allowance equal to one-
half of the highest service retirement allowance the member would have received had he/she
retired on the date of death. The 1957 Survivor Benefit is payable to the surviving spouse or
registered domestic partner until death or to eligible unmarried children until age 18.
1959 Survivor Benefit: (If provided by the employer's contract and the member is not covered
under social security.) A surviving spouse or registered domestic partner and eligible children may
receive a monthly allowance as determine by the level of coverage. This benefit is payable in
addition to the Basic Death Benefit or 1957 Survivor Benefit. Children are eligible if under age 22
and unmarried.
Pre-Retirement Option 2W Death Benefit: (If provided by the employer's contract.) The spouse or
registered domestic partner of a deceased member, who was eligible to retire for service at the
time of death, may to elect to receive the Pre-Retirement Option 2W Death Benefit in lieu of the
lump sum Basic Death Benefit. The benefit is a monthly allowance equal to the amount the
member would have received if he/she had retired for service on the date of death and elected
Option 2W, the highest monthly allowance a member can leave a spouse or registered domestic
partner.
Special Death Benefit: A surviving spouse, registered domestic partner, or eligible children or step
children may receive a monthly allowance equal to one-half of the final compensation. If the cause
of death is due to external violence or physical force while on the job, and there are eligible
surviving children in addition to a spouse or registered domestic partner, the allowance may be
increased to a maximum of 75%.
COST-OF-LIVING ADJUSTMENTS
The cost of living allowance increases are limited to a maximum of 2% compounded annually
unless the employer's contract provides a 3, 4, or 5% increase.
DEATH AFTER RETIREMENT
The lump sum death benefit is $500 (or $600, $2,000, $3,000, $4,000 or $5,000 if provided by the
employer's contract) regardless of the retirement plan chosen by the member at the time of
retirement.
TERMINATION OF EMPLOYMENT
Members who have separated from employment may elect to leave their contributions on deposit
or request a refund of contributions and interest. Those who leave their contributions on deposit
may apply at a later date for a monthly retirement allowance if the minimum service and age
requirements are met. Members who request a refund of their contributions terminate their
membership and are not eligible for any future benefits unless they return to CalPERS
membership.
EMPLOYEE CONTRIBUTIONS
Local safety members covered by the 3% @ 55 formula contribute 9% of reportable earnings.
Those covered under a modified formula (coordinated with Social Security) do not contribute on
the first $133.33 earned.
The employer also contributes toward the cost of the benefits. The amount contributed by the
employer for current service retirement benefits generally exceeds the cost to the employee. In
addition, the employer bears the entire cost of prior service benefits (the period of time before the
employer provided retirement coverage under CaIPERS). All employer contribution rates are
subject to adjustment by the CaIPERS Board of Administration.
PERS-CON-53(rev_6/07)