HomeMy WebLinkAbout20 CALPERS RETIREMENT & RETIREE MEDICAL PROGRAMS• Agenda Item 20
~~~~ ,~k..~~ ~ AGENDA REPORT Reviewed:
Finance Director N/A
MEETING DATE: MARCH 15, 2011
TO: HONORABLE MAYOR AND COUNCIL MEMBERS
VIA: DAVID C. BIGGS, CITY MANAGER
FROM: KRISTI RECCHIA, DIRECTOR OF HUMAN RESOURCES
SUBJECT: CALPERS RETIREMENT & RETIREE MEDICAL PROGRAMS
SUMMARY:
The City has contracted with Bartel Associates to conduct our GASB 45 Actuarial
Valuation regarding our Other Post Employment Benefits (OPEB) which specifically
includes our Retiree Health Program. Additionally, the City contracted with Bartel
Associates to provide a comprehensive review of our retirement program in several key
areas. Mr. John Bartel will provide a presentation to the City Council on his review and
analysis.
RECOMMENDATION:
That the City Council receive Mr. Bartel's presentation and have the opportunity to ask
questions and provide direction to staff to obtain additional information, if needed.
FISCAL IMPACT:
None.
BACKGROUND:
Retirement costs are a significant component of compensation paid on behalf of our
employees. In recent years, we have seen these costs continue to escalate. The City
contracts with CaIPERS to provide retirement benefits to our full-time and part-time
benefitted employees. The City is concerned about future CaIPERS contribution rates
as it is anticipated that our rates will continue to increase. Bartel Associates was asked
to complete a comprehensive review of CaIPERS actuarial information and provide the
City with information on the following:
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• The City's projected Miscellaneous and Safety CaIPERS contribution rates
through 2016/17, including the projected impact of anticipated discount rate
decreases for the June 30, 2010 valuation
• Safety 3%@50 contract amendment cost analysis
• Alternatives to reduce employer costs
• The impact of establishing alternative benefit formulas (two tier) and estimate
City savings
The Governmental Accounting Standards Board (GASB) requires local government
employers to conduct an actuarial valuation of the costs associated with Other Post
Employment Benefits (OPEB). In the City of Tustin, our Retiree Medical Program is our
only OPEB obligation. Near the end of 2010, the City's Finance Department contracted
with Bartel Associates to complete our GASB 45 Actuarial Valuation. The primary
objectives of the valuation are to:
• Recognize the cost of benefits in periods when the related services are received
by the employer
• Provide information about the actuarial accrued liabilities for promised benefits
associated with past services and whether and to what extent those benefits
have been funded
• Provide information useful in assessing potential demands on the employer's
future cash flows
Mr. John Bartel will provide an overview of his review of our retirement program and the
findings in the GASB 45 actuarial valuation. The presentation is informational and
intended to educate and inform the City Council on the City's retirement and retiree
health care programs.
Approved for Forwarding By:
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Kristi Recchia
Director of Human Resources
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avid C. Biggs
City Manager