HomeMy WebLinkAbout18 ADOPTION 2% AT 55 09-20-99 ' AGENDAI
.
DATE:
September 15, 1999
NO. 18
9-20-99
TO:
FROM:
SUBJECT:
WILLIAM A. HUSTON
PERSONNEL SERVICES
Adoption of 2% @ 55 retirement option for miscellaneous members
SUMMARY: Approve Resolution No. 99-81 and Ordinance No. 1221 to authorize
amending the contract with the Public Employees Retirement System to provide
Section 21354 (2% at 55 Full Formula) for miscellaneous members of the City of
Tustin.
RECOMMENDATION:
That the City Council approve Resolution No. 99-81 which gives notice of its intent to
approve an amendment to the Public Employees Retirement System (PERS) for
miscellaneous members to provide Section 21354 (2% @ 55 Full Formula). In addition,
Ordinance No. 1221, which authorizes the Mayor to execute the amendment for and on
behalf of the City is presented for the first reading. PERS requires a minimum of 20
days between the first reading of the ordinance and its adoption. Adoption and second
reading of the ordinance will be agendized for the meeting of October 18, 1999.
FISCAL IMPACT:
Immediate Short term change: The City of Tustin's employer's rate is expected to be
zero for approximately the next five years due to excess assets.
Long term change: Per PERS actuarial, the total dollars needed to fund all future
benefits for current members of the plan increases by $2,824,192. The unfunded
liability also increases to $1,596,853. If the amendment uses up all excess assets and
creates an unfunded liability (i.e. from being ahead of schedule to behind schedule),
this amount 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 will
continue to be amortized separately.
BACKGROUND:
In February of this year the City Council approved the Memorandum of Understanding
with the Tustin Municipal Employees Association and the Tustin Police Support
Services Association. In this document the City agrees to provide to miscellaneous
members of the Public Employees Retirement System (PERS), the 2% @ 55 Option for
their retirement system. The documents presented for approval are those required to
amend the City's contract with PERS.
Bettie Correa
Senior personnel Analyst
S:Correa\CouncilRpts~2%at55CouncilRpt.doc
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ORDINANCE NO.1221
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN,
CALIFORNIA AUTHORIZING AN AMENDMENT TO THE CONTRACT
BETWEEN THE CITY COUNCIL OF THE CITY OF TUSTIN AND THE
BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM.
The City Council of the City of Tustin hereby ordains as follows:
Section 1. That an amendment to the contract between the City
Council of the City of Tustin and the Board of Administration; California Public
Employees' Retirement System is hereby authorized a copy of said
amendment being attached hereto, marked Exhibit, and by such reference
made a part hereof as though herein set out in full.
Section2. The Mayor of the City Council is hereby authorized,
empowered, and directed to execute said amendment for and on behalf of the
the City of Tustin.
Section 3. This ordinance shall take effect thirty (30) days after the
date of its adoption, and prior to the expiration of thirty (30) days from the
passage thereof shall be published at least once in The Tustin Weekly, a
newspaper of general circulation, published and circulated in the City of
Tustin and thenceforth and thereafter the same shall be in full force and
effect.
PASSED AND ADOPTED at a regular meeting of the City Council for
the City of Tustin on this 18th day of October, 1999.
TRACY WILLS WORLEY, Mayor
PAM STOKER, City Clerk
CalPERS
California
Public Employees' Retirement System
EXHIBIT
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees' Retirement System
and the
City Council
City of Tustin
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 August
28, 1967, and witnessed June 28, 1967, and as amended effective October 1, 1969,
June 18, 1979, December 29, 1980, February 26, 1'990, October 5, 1992, December 28,
1992, July 6, 1995, April 5, 1996, June 6, 1996, and March 28, 1997 which provides for
participation of Public Agency in said System, Board and Public Agency hereby agree
as follows:
A:
Paragraphs 1 through 13 are hereby stricken from said contract as executed
effective March 28, 1997, and hereby replaced by the following paragraphs
numbered I through 13 inclusive:
o
Ail 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 55 for local fire
members; and, age 50 for local police members.
.
.
o
.
,
.
o
PLFASE DO rIOT SIGN "EXHIBIT O ' ILY"
Public Agency shall participate in the Public Employees' Retirement_
System from and after August 1, 1967 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.
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);
Co
Employees other than local safety members (herein referred to as
local miscellaneous members).
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. PERSONS COMPENSATED ON AN HOURLY BASIS
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).
The percentage of final compensation to be provided for each year of
credited prior and 'current service as a local fire member shall be
determined in accordance with Section 21366 of said Retirement Law
(One-half pay at age 55 Full).
The percentage of final compensation to be provided for each year of
credited prior and current service as a local police member shall be
determined in accordance with Section 21362 of said Retirement Law (2%
at age 50 Full).
Public Agency elected and elects to be subject to the following optional
provisions:
o
10.
11.
PLEASE DO riOT SIGN "EXHIBIT ON _Y"
so
Section 21571 (Basic Level of 1959 Survivor Benefits) for local fire
members only.
bo
Section 20042 (One-Year Final CompensatiOn) for local police
members and local miscellaneous members only.
C.
Section 21574 (Fourth Level of 1959 Survivor Benefits) for local
police members only.
do
Section 21024 (Military Service Credit as Public Service), Statutes
of 1976 for local miscellaneous members and local police members
only.
e°'
Section 21573 (Third Level of 1959 Survivor Benefits) for local
miscellaneous members only.
Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
June 18, 1979. 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 Governme.nt Code Section 20834.
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.
Public Agency shall also contribute to said Retirement System as follows:
ao
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, ali 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.
bo
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 police members.
C.
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.
do'
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.
12.
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.
13.
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 ~effective on the
BOARD OF ADMINISTRA~N'
BY ck"?\G~' '
KENNETH W.~I~"I~ZION, CHIEF
ACTUARIA~.~'EMPLOYER SERVICES DIVISION
PUBLICEI~OYEES' RETIREMENT SYSTEM
day of ., 19
CITY COUNCIL
CITY OF TUSTIN
BY .,.~
PRESIDING
Witness Date
Attest:
Clerk
AMENDMENT
PERS-CON-702A (Rev. 8~6)
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RESOLUTION NO. 99-81
RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO
CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE
PUBLIC EMPLOYEE'S RETIREMENT SYSTEM AND THE CITY COUNCIL
OF THE CITY OF TUSTIN
WHEREAS, the Public Employees' Retirement Law permits the
participation of public agencies and their employees in the Public Employees'
Retirement System by the execution of a contract, and sets forth the
procedure by which said public agencies may elect to subject themselves and
their employees to amendments to said Law; and
WHEREAS, one of the steps in the procedures to amend this contract
is the adoption by 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 proposed in said contract;
and
WHEREAS, the following is a statement of the proposed change:
To provide Section 21354 (2% @ 55 full formula) for local
miscellaneous members.
NOW THEREFORE, BE IT RESOLVED that the governing body of the
above agency does hereby give notice of intention to approve an amendment
to the contract between said public agency and the Board of Administration of
the Public Employees' Retirement System, a copy of said amendment being
.attached hereto, as an "Exhibit "and by this reference made a part of hereof.
PASSED AND ADOPTED by the City Council of the City of Tustin at a
regular meeting held on the 20th day of September, 1999.
Tracy Wills Worley, Mayor
Pam Stoker, City Clerk
CalPERS
California
Public Employees' Retirement System
EXHIBIT
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees~ Retirement System
and the
City Council
City of Tuskin
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 August
28, 1967, and witnessed June 28, 1967, and as amended effective October 1, 1969,
June 1'8, 1979, December 29, 1980, February 26, 1990, October 5, 1992, December 28,
1992, July 6, 1995, April 5, 1996, June 6, 1996, and March 28, 1997 which provides for
participation of Public Agency in said System, Board and Public Agency hereby agree
as follows:
A,
Paragraphs I through 13 are hereby stricken from said contract as executed
effective March 28, 1997, and hereby replaced by the following paragraphs
numbered 1 through 13 inclusive:
.
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 55 for local fire
members; and, age 50 for local police members.
. .
PL SE DO NOT SIGN "EXHIBIT 0, LY"
.
.
o
.
o
.
o
Public Agency shall participate in the Public Employees' Retirement
System from and after August 1, 1967 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.
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).
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. PERSONS COMPENSATED ON AN HOURLY BASIS
The percentage of final compensation to be provided for each year of
credited prior and current service as a local miscellaneQus member shall
be determined in accordance with Section 21354 of said Retirement Law
(2% at age 55 Full).
The percentage of final compensation to be provided for each year of
credited prior and current service as a local fire member shall be
determined in accordance with Section 21366 of said Retirement Law
(One-half pay at age 55 Full).
The percentage, of final compensation to be provided for each year of
credited prior and current service as a local police member shall be
determined in accordance with Section 21362 of said Retirement Law (2%
at age 50 Full).
Public Agency elected and elects to be subject to the following optional
provisions:
o
10.
11.
.a.
bo
Co
do
e,
PLEASE DO NOT SIGI' I "EXHIBIT ONLY"
Section 21571 (Basic Level of 1959 Survivor Benefits) for local fire
members only.
Section 20042 (One-Year Final Compensation) for local police
members and local miscellaneous members only.
Section 21574 (Fourth Level of 1959 Survivor Benefits) for loCal
police members only.
Section 21024 (Military Service Credit'as Public Service), Statutes
of 1976 for local miscellaneous members and local police members
only.
Section 21573 (Third Level of 1959 Survivor Benefits) for local
miscellaneous members only.
public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
June 18, 1979. 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.
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.
Public Agency shall also contribute to said Retirement System as follows:
ao
bo
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.
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 police members.
Co
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.
d.
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.
12.
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.
13.
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 ~effective on the~
BOARD OF ADMINISTR~..~--~N
PUBLIC EMPLOYEES..'~I~rlREMENT SYSTEM
KENNETH W.~i~I~'I~ZION, CHIEF
ACTUARIA.I~.~'EMPLOYER SERVICES DIVISION
PUBLICBM:I~OYEES' RETIREMENT SYSTEM
day of ,19
CITY COUNCIL
CiTY OF TUSTIN .,,~,,~.O~,,
BY
PRESIDING .~(~I"C E R
Witness Date
Attest:
Clerk
AMENDMENT
PERS-CON-702A (Rev. 8L96)