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HomeMy WebLinkAboutC.C. #5 12-04-89 PERS Re 89-181DATE: .... 12-4--89 Inter Com November 2 9, CONSENT'CALENDAR NO. 5 TO: FROM: SUBJECT: William &. Huston, City Manager administrative Services Department RESOLUTION NO. 89-181--A RESOLUTION OF INTENTION TO AMEND PERS CONTRACT FOR ADMINISTRATIVE AND MANAGEMENT EMPLOYEES· RECOMHENDATION: That City Council adopt Resolution No. 89-181. BACKGROUND= In March of 1988 the City Council unanimously adopted Resolution No. 88-35 relating to the compensation of administrative and management employees. The provision relating to retirement states, "Effective January 3, 1990, the City's contract for Public Employees Retirement System (PERS)benefits for administrative and management employees shall be amended to include the following- · Sworn administrative and management employees--2 per cent at 50 and single highest year; · Ail other administrative and management employees-- single highest year." Since that time, City staff has been working with the staff at PERS to ensure that all the required procedures take place on schedule. It is now appropriate to proceed with the Resolution of Intent. At the next Council meeting an Ordinance which finalizes the action will be introduced. Government Code, Section 20461.5, requires an election by secret ballot among the employees affected whenever an employer amends its contract to provide a benefit which changes the employee's rate of contribution. The sworn members of administrative and management staff fall into this category, since their contribution will increase from 7 to 9 per cent. Such a ballot was taken and a majority of the employees voted in favor of amendment. Government Code, Section 7507, requires the governing body to make public the cost implication of the proposed contract at a public meeting. For local miscellaneous members, the rate.for the agency without the optional benefit is 5.640%. The new rate is 5.955%, thus the change in cost of the optional benefit is 0.315%, (5.955%- 5.640%). Page 2 Applying this percentage to the most current payroll figures for the next 12 months equals $16,091. This percentage increase is the projected actuarial rate to the year 2000, but, as the contract reads, the employer rate is subject to change with future amendments and/or experience or other factors. Likewise, for local safety members in the administrative and management group, the rate for the agency without the optional benefit is 9.770%. The new rate is 16.664%, thus the change in cost of the optional benefit is 6.894%, (16.664%-9.770%). Applying this percentage to the most current payroll figures for the next 12 months equals $139,629. This percentage increase is the projected actuarial rate to the year 2000, but as the contract reads, the employer rate is subject to change with future amendments and/or experience and other factors. One long-time and valued City employee who is affected by this contract amendment has indicated her wish to retire. Adoption of Resolution this evening will allow staff to come back with an Ordinance at the first meeting in January, in order that this long- term employee may retire as scheduled, and that the contract amendment be executed in good faith in accordance with Resolution No. 88-35, a~p~ed unanimously in March of 1988. Royleen A. White, Director Community and Administrative Services RAW:kd Attachments: Resolution No. 89-181 Sample Contract Amendment 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 89-181 RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEESw 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 procedure 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, proposed change: the following is a statement of the To provide Section 20024.2 (One-Year Final Compensation) for local miscellaneous and local police members in the Administrative and Management Group only and 2% @ 50 Full formula (from 1/2 @ 55 Full formula) for local police members in the .Administrative and Management Group. 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 the said governing body and the Board of Administration of the Public Employees' Retirement System, a copy of s'aid amendment being attaChed hereto, as an "Exhibit" and by this reference made a part hereof. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Tustin, California, held on the 4th day of December, 1989. ATTEST: Richard B. Edgar, Mayor , Mary Wyn~ ~ity Clerk ** COPY A~BND~EN~ ~0 CON~AC. BEq~NEEN BOARD OF ADMINISTRATION OF ~ PUBLIC EMPLOYEES' l~I~ SYSTEM CITY COUNCIL OF ~H~ CITY OF TUSTIN The Board of Administration, Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of above public agency, hereinafter referred to as Public Agency, having entered into a contract effective August 1, 1967, and witnessed June 28, 1967, and as amended effective October 1, 1969, June 18, 1979 and December 29, 1980, which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 10 are hereby stricken from said contract as executed effective December 29, 1980, and hereby replaced by the following paragraphs numbered 1 through 12 inclusive: i · 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 60 for local miscellaneous members, age 50 for local police members in the Administrative and Management Group only and age 55 for all other local safety members. · 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); Local Police Officers (herein referred to as local safety members); C. Employees other than local safety members (herein referred to as local miscellaneous members). *** COPY *** e . 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 21251.13 of said Retirement Law (2% at age 60 Full). The percentage of final compensation to be provided for each year of credited prior and current service as local safety members, except local police members in the Administrative and Management Group, shall be determined in accordance with Section 21252.1 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 in the Administrative and Management Group shall be determined in accordance with Section 21252.01 of said Retirement Law (2% at age 50 Full). The following additional provisions of the Public Employees' Retirement Law, which apply only upon election of a contracting agency, shall apply to the Public Agency and its employees: ae Sections 21380 - 21387 (1959 Survivor Benefits) excluding Section 21382.2 (Increased 1959 Survivor Benefits) and Section 21382.4 (Third Level of 1959 Survivor Benefits) for local safety members. b. Section 20024.2 (One-Year Final Compensation) for local miscellaneous members and local police members in the Administrative and Management Group only. · Public Agency, in accordance with Government Code Section 20740, ceased to be an "employer" for purposes of Section 20759 effective on June 18, 1979. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20759, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20759. 10. Public Agency shall contribute to said Retirement System as follows: a· With respect to local miscellaneous members, the agency shall contribute the following percentages of salaries earned as members of said Retirement System: (1) 5.955 percent until June 30, 2000 on account of the liability for current service benefits. (Subject to annual change.) * * * C O P Y * * * be With respect to local safety members, the agency shall contribute the following percentages of sal'aries earned as members of said Retirement Systgm: (1) 16.664 percent until June 30, 2000 on account of the liability for current service benefits. (Subject to annual change.) Ce A reasonable amount, as fixed by the Board, payable in one in- stallment 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. de A reasonable amount, as fixed by the Board, payable in one in- stallment 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. 11. 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. B. 12. 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. ~, This amendment shall be e.~ive on the day of i~ , 19 . BOARD OF ADMINISTRATION PUBLIC EMPLOYEES' RETIP~E~NT SYSTEM BY CHIEF, CON~t~T SERVICES DIVISION CITY COUNCIL OF THE ~'~ CITY OF TUSTIN BY Presiding Officer Witness Date ~ Attest: Clerk '- PERS-CON-702 (AMEAIDMENT) (Rev. 6/88)