HomeMy WebLinkAbout09-Human Resources CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL AC InIGINAL
From: Linn Livingston, Director Subject: A Resolution of Intention
Authorizing an Amendment to the
Contract Between the California
Dept: Human Resources Public Employees' Retirement System
and the City of San Bernardino
Date: August 31, 2011 Establishing a Two-Tier Retirement
Benefit Formula from 2.7% @ 55 to 2%
@ 55 for New Miscellaneous
Employees.
M/CC Meeting Date: September 6, 2011
Synopsis of Previous Council Action:
On August 20, 2007, the Mayor and Common Council approved a Resolution of Intention
and Ordinance authorizing an amendment to the contract between the Public Employees'
Retirement System (PERS) and the City of San Bernardino to provide a 2.7% @ 55
retirement benefit for Miscellaneous employees (Resolution No. 2007-359, Ordinance No.
MC-1255).
Recommended Motion:
Adopt Resolution.
Signature
Contact person: Linn Livingston Phone: 384-5161
Supporting data attached: Ward:
FUNDING REQUIREMENTS: Amount: Future reduction of Employer's Contribution
rate.
Source: (Acct. No.)
(Acct. Description)
Finance:
Council Notes: �so
Agenda Item No.
Af&&4W-,4 4 �-�
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Staff Report
SUBJECT:
A Resolution of Intention authorizing an amendment to the contract between the California
Public Employees' Retirement System and the City of San Bernardino establishing a two-tier
retirement benefit formula from 2.7% @ 55 to 2% @ 55 for new Miscellaneous employees.
BACKGROUND:
Due to the economic downturn, the City has experienced significant revenue shortfalls. As part
of the City's cost-savings measures, the City's negotiation team met and conferred with all
bargaining groups to amend the California Public Employees' Retirement System (CaIPERS)
contracts to establish two-tier retirement benefit formulas.
On September 1, 2011, the City implemented a two-tier retirement formula for new Safety
employees, reducing the formula from 3% @ 50 to 3% @ 55.
Staff now proposes to implement the two-tier retirement formula for new Miscellaneous
employees, reducing the formula from 2.7% @ 55 to 2% @ 55. Miscellaneous employees hired
after the adoption of this amendment will be part of the lower benefit formula.
FINANCIAL IMPACT:
Amending the City's contract with CaIPERS to add the new Miscellaneous pension formula will
reduce the employer's contribution rate by an estimated .24%.
RECOMMENDATION:
Adopt Resolution.
2
I Resolution No
2 RESOLUTION OF INTENTION AUTHORIZING AN AMENDMENT TO THE
CONTRACT BETWEEN THE CITY OF SAN BERNARDINO AND THE BOARD O
3 ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
4 SYSTEM.
5 WHEREAS, the Public Employees' Retirement Law permits the participation of public
6 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
7 themselves and their employees to amendments to said Law; and
8 WHEREAS, one of the steps in the procedures to amend this contract is the adoption by
9 the governing body of the public agency of a resolution giving notice of its intention to approve
10 an amendment to said contract, which resolution shall contain a summary of the change propose
in said contract; and
11
WHEREAS,the following is a statement of the proposed change:
12 To provide Section 21354 (2.0% @ 55 Full formula)for local Miscellaneous members.
13 NOW, THEREFORE, BE IT RESOLVED that the governing body of the abov
14 agency does hereby give notice of intention to approve an amendment to the contract between
15 said public agency and the Board of Administration of the California Public Employees'
Retirement System, a copy of said amendment being attached hereto as Exhibit "A" and by this
16 reference made a part hereof.
17
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25 ///
1 RESOLUTION OF INTENTION AUTHORIZING AN AMENDMENT TO T HIE
CONTRACT BETWEEN THE CITY OF SAN BERNARDINO AND THE BOARD O
2 ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM.
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
JENKINS
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 o
18
, 2011.
19
20 Patrick J. Morris, Mayor
21 City of San Bernardino
22 Approved as to form:
23 JAMES F. PENMAN,
City Attorney
24
25 By: ,
1/0/Agenda Items:Reso.2.0 @55
Ca1PERS
EXHIBIT A
California
Public Employees' Retirement System
1 44111001
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, January 1, 2009 and
September 1, 2011 which provides for participation of Public Agency in said System,
Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 16 are hereby stricken from said contract as executed
effective September 1, 2011, and hereby replaced by the following paragraphs
numbered 1 through 17 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
September 1, 2011, and age 55 for local safety members entering
membership for the first time in the safety classification after September 1,
2011.
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 and not entering membership for
the first time in the miscellaneous classification 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).
9. The percentage of final compensation to be provided for each year of
credited current service as a local miscellaneous member entering
membership for the first time in the miscellaneous classification after the
effective date of this amendment to contract shall be determined in
accordance with Section 21354 (2% at aqe 55 Full).
10. 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 September 1, 2011
shall be determined in accordance with Section 21362.2 of said
Retirement Law (3% at age 50 Full).
11. 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 September 1, 2011 shall be
determined in accordance with Section 21363.1 of said Retirement Law
(3% at age 55 Full).
12. 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.
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
September 1, 2011.
Section 21354 (2% @ 55 Full formula) is applicable to local
!?miscellaneous members entering membership for the first time in
the miscellaneous classification after the effective date of this
amendment to contract.
13. 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.
14. 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.
15. 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 fire 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.
16. 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.
17. 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 EMPLQY�ES' RETIREMENT SYSTEM CITY OF SAN BERNARDINO
BY ;'� BY
DARRYL WATSON, CHIEF.` . PRESIDING OFFICER
CUSTOMER ACCOUNT SERVI°CES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
o .,
=y
rCr '1
Witness Date
�Y.
Attest:
Clerk
AMENDMENT ER#61
PERS-CON-702A
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
(888) CalPERS (225-7377)
SUMMARY OF MAJOR PROVISIONS
2% @ 55 Formula (Section 21354)
Local Miscellaneous Members
SERVICE RETIREMENT
To be eligible for service retirement, a member must be at least age 50 and have five years of
CaIPERS credited service. There is no compulsory retirement age.
The monthly retirement allowance is determined by age at retirement, years of service credit
and final compensation. The basic benefit is 2% 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 1.426% at age 50. If
retirement is deferred beyond age 55, the percentage of final compensation increases for each
quarter year of attained age to 2.418% at age 63.
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.
DISABILITY RETIREMENT
Members substantially incapacitated from performing the usual duties for the position for his/her
current employer, and from performing the usual duties of the position for other CalPERS
covered employers (including State agencies, schools, and local public agencies), and where
similar positions with these other employers with reasonably comparable in pay, benefits, and
promotional opportunities are not available, 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
If provided by the employer's contract, 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-50(Rev. 1/05)
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 Optional Settlement 2 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 Optional Settlement 2
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 Optional Settlement 2, the highest monthly allowance a member can
leave a spouse or registered domestic partner.
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
Miscellaneous members covered by the 2% @ 55 formula contribute 7% 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 CalPERS). All employer contribution rates
are subject to adjustment by the CalPERS Board of Administration.
PERS-CON-50(Rev. 1/05)
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
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 7507
1 hereby certify that in accordance with Section 7507 of the Government Code
the future annual costs as determined by the System Actuary for the
increase/change in retirement benefit(s) have been made public at a public meeting
of the
of the
(governing body)
(public agency)
on which is at least two weeks prior to the adoption of the
(date)
Resolution / Ordinance.
Adoption of the retirement benefit increase/change will not be placed on the consent
calendar.
Clerk/Secretary
Title
Date
PERS-CON-12A(rev. 1/96)
r
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 COMPLIANCE WITH
GOVERNMENT CODE SECTION 20475
1 hereby certify that the of the
(governing body)
(public agency)
has fully discharged all of the obligation imposed by Chapter 10 (commencing with
r�-- Section 3500) of Division 4 of Title 1, Government Code.
By
Title
Witness
Date
PERS-CON-30(Rev. 1/96)