HomeMy WebLinkAbout08.D- City Manager RESOLUTION (ID#2178) DOC ID: 2178 B
C CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Budget
From: Andrea Travis-Miller M/CC Meeting Date: 12/17/2012
Prepared by: Heidi Aten, (909) 384-5122
Dept: City Manager Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing the
Implementation of the Public Employees' Pension Reform Act of 2013 (PEPRA) and Related
Public Employees' Retirement Law (PERL) Amendments Which Shall Become Applicable and
Effective January 1,2013.
Financial Impact:
While the implementation of new retirement formulas for new members hired on or after January
1, 2013,may vary from agency to agency, Ca1PERS has estimated that the PEPRA formula
changes will, over a thirty(30)year period,result in a reduction of the City's normal cost
savings of approximately 5%for Miscellaneous employees payroll and approximately 6.2%for
Safety employees payroll. Further,the PEPRA requires that new employees hired on or after
January 1, 2013,pay 50%of the normal contributions of their CalPERS benefit which is
approximately 9.30%for Miscellaneous employees and 13.989%for Safety employees.
G Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
November 26, 2012 - The Mayor and Common Council adopted the Pendency Plan, Resolution
2012-27. This Plan established the Fiscal Year 2012/13 and Fiscal Year 2013/14 General Fund
Budgets and incorporated, by reference, the Pre-Pendency Plan including the 9-Point Adjustment
Plan adopted on September 5, 2012 and the revised Fire Department adjustments adopted on
October 1, 2012.
Background:
The Pendency Plan adopted by Council on November 26, 2012, seeks to balance the General
Fund through a number of cost reduction strategies including new, lower pension benefit levels;
this entails the full implementation of a 50%normal cost sharing split between the employee and
the City in accordance with the stated goals of recent legislation under the California Public
Employees' Pension Reform Act(PEPRA).
PEPRA provides new retirement formulas for miscellaneous and safety employees administered
by the California Public Employee Retirement System (Ca1PERS). The new retirement formulas
are intended to apply to employees hired on or after January 1, 2013. The stated goal of the
PEPRA is to implement 50% full cost sharing for all employees, not just new hires, as soon as
possible or no later than January 1, 2018.
The PEPRA defines a"new member" as any of the following: 1) a new hire who is brought into
Ca1PERS membership for the first time on or after January 1, 2013, and who has no prior
membership in any California public retirement system; 2) a new hire who is brought into
Updated: 12/13/2012 by Georgeann"Gigi"Hanna B 1111 p�
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CalPERS membership for the first time on or after January 1, 2013, and who is not eligible for
reciprocity with another California public retirement system; or 3) a member who first
established CalPERS membership prior to January 1, 2013, and who is rehired by a different
CalPERS employer after a break in service of greater than six months.
Currently the retirement formulas for Miscellaneous employees is 2.7% @ 55 (Tier I) and 2% @
55 for employees hired after October 4, 2011 (Tier II). For Safety employees the current
retirement formulas are 3% @ 50 (Tier I) and 3% @ 55 for employees hired after September 1,
2011 (Tier II). By adopting this Resolution, the new the retirement formulas authorized by the
PEPRA will be 2% @ 62 for Miscellaneous employees and 2.7%@ 57 for Safety employees and
shall be implemented for new members. Further, the PEPRA requires that a three-year
compensation period, rather than the single highest year, be used to calculate the retirement
benefits of all new employees hired on or after January 1, 2013, contributing to the reduction in
the City's benefit costs.
City Attorney Review:
SupportinP Documents:
reso 2178 (PDF)
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Updated: 12/13/2012 by Georgeann"Gigi"Hanna B Packet Pg. 308
S.D.a
RESOLUTION NO.
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2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE IMPLEMENTATION OF THE PUBLIC
3 EMPLOYEES' PENSION REFORM ACT OF 2013 (PEPRA) AND RELATED
PUBLIC EMPLOYEES' RETIREMENT LAW (PERL) AMENDMENTS WHICH
4 SHALL BECOME APPLICABLE AND EFFECTIVE JANUARY 1,2013.
5 WHEREAS, the City of San Bernardino ("City") has contracted with the California
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Public Employees' Retirement System ("CALPERS") to provide for the establishment of
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retirement benefits for its Miscellaneous and Safety Employees; and, a
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9 WHEREAS, the retirement formula for current Miscellaneous Employees is generally a
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10 described as 2.7% @ 55 (Tier 1) and 2% @ 55 for employees hired after October 4, 2011 a
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(Tier II); and, m
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12 WHEREAS, the retirement formula for current Safety Employees is generally c
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described as 3% @ 50 (Tier 1) and 3% @ 55 for employees hired after September 1, 2011
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15 (Tier II); and,
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16 WHEREAS, on January 1, 2013, the Public Employees' Pension Reform Act of 2013 w
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17 ("PEPRA") will become effective; and, N
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1s WHEREAS, the PEPRA provides for new retirement formulas for Miscellaneous and
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Safety employees who are hired on or after January 1, 2013, and who will be covered by
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21 CalPERS agreements and also provides for reciprocity rights to certain employees who have E
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22 prior employment with a public entity and prior membership in a retirement system covered
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23 by the PEPRA; and,
24 WHEREAS, under the PEPRA, a new member employee includes any of the
25 following: 1) a new hire who is brought into Ca1PERS membership for the first time on or
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27 after January 1, 2013, and who has no prior membership in any California public retirement
28 system; 2) a new hire who is brought into Ca1PERS membership for the first time on or after
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1 January 1, 2013, and who is not eligible for reciprocity with another California public
2 retirement system; or, 3) a member who first established CalPERS membership prior to
3 January 1, 2013, and who is rehired by a different CalPERS employer after a break in service
4 of greater than six months.
5 WHEREAS,the Mayor and Common Council desire to adopt a resolution to authorize
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new retirement formulas for new members as defined above, commonly referred to as 2% @ c
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62 for Miscellaneous Employees (authorized by Government Code Section 7522.20) and
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9 2.7% @ 57 for Safety Employees(authorized by Government Code Section 7522.25); and, a
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10 WHEREAS, the Mayor and Common Council desire to adopt a resolution a
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implementing all provisions of the PEPRA including the requirement that all new employees �
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hired on or after January 1, 2013, will be required to pay at least fifty percent (50 1/o) of the c
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total normal costs for their CalPERS defined benefit plan. a
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15 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: a a.
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SECTION 1. The Mayor and Common Council of the City of San Bernardino n
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18 hereby authorizes that the CalPERS defined benefits formulas specified in Government Code n
Section 7522.20 and Section 7522.25 shall become effective on January 1, 2013, for 0
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20 employees hired on or after that date.
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SECTION 2. The Mayor and Common Council of the City of San Bernardino hereby 0
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23 authorizes that all applicable provisions of the PEPRA be implemented for all new employees
24 hired on or after January 1, 2013, including, without limitation,that all new members hired on
25 or after January 1, 2013, will be required to pay at least fifty percent (50%) of the total normal
26 costs for their CalPERS defined benefit plan.
27 SECTION 3. This Resolution shall be effective as to all City employees hired on or
28 after January 1, 2013, whether represented b bar
P y gaining units and covered under provisions
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1 of a Memorandum of Understanding ("MOU"), and/or covered under a salary resolution, and
2 shall include all new employees hired after January 1, 2013 into classifications currently
3 included under the City's contract with CalPERS.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
1 SAN BERNARDINO AUTHORIZING THE IMPLEMENTATION OF THE PUBLIC
2 EMPLOYEES' PENSION REFORM ACT OF 2013 (PEPRA) AND RELATED
PUBLIC EMPLOYEES' RETIREMENT LAW (PERL) AMENDMENTS WHICH
3 SHALL BECOME APPLICABLE AND EFFECTIVE JANUARY 1,2013.
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5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
6 and Common Council of the City of San Bernardino at a meeting
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7 thereof, held on the_day of ,2012, by the following vote, to wit:
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Council Members: AYES NAYS ABSTAIN ABSENT a
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10 MARQUEZ
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11 JENKINS
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12 VALDIVIA R
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13 SHORETT v
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KELLEY a
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JOHNSON w
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17 MCCAMMACK
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19 Georgeann Hanna, City Clerk d
20 The foregoing Resolution is hereby approved this day of 2012. w
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23 Patrick J. Morris, Mayor
City of San Bernardino
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Approved as to form:
25 JAMES F. PENMAN,
26 City Attorney
27 By:
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