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HomeMy WebLinkAbout1980-10-28; City Council; 6411; Amendment to PERS Contract Miscellaneous Employees- .. ,' CITY OF CARLSBAD AGENDA BILL NO. t!l L/// Initial - DeDt . Hd > DATE : OCTOBER 28, 1980 DEPARTMENT : PERSONNEL 6. Mgr. AMENDMENT TO PERS CONTRACT FOR MISCELLANEOUS EMPLOYEES Statement of the Matter The City agreed to amend its Public Employees Retirement System (PERS) Contract for miscellaneous employees if the employees voted to withdraw from the Social Security System. On August 21, 1980, 80% of covered employees voted to withdraw and the City will be out of the Social Security System as of January 1, 1981. The amendments to the PERS Contract will become effective on January 1, 1981. The following benefits will be added to the existing contract for miscellaneous employees: 1. Post-Retirement Survivor Continuance (Government Code Section 2. One Year Highest Compensation (Government Code Sec. 20024.2) 3. Increase in Ordinary (non-job related) Disability Retirement 4. 1959 Survivor's Benefit (Government Code Sec. 21380-21388) 21263 and 21263.1) Allowance (Government Code Sec. 21298) with increased level of 1959 Survivor's Benefit (Government Code Sec. 21390) rxhibitlprovides a detailed explanation of these changes. The City Council needs to take two actions to implement the proposed amendments to the PERS Contract, adoption of Resolution of Intention (Exhibit 2) and Introduction of the Ordinance amending the Contract. Adoption of the Ordinance would take place on Ncrvembet' 9'3, 1980. Fiscal Impact The City presently contributes an amount equal to 10.186% of salary for PERS retirement for each miscellaneous employee. of the above outlined benefits will increase the City's contribution rate to 15.177%, an increase of 4.991. The dollar cost of the PERS Contract during the remainder of the fiscal year (January to June 1981) without the amendments would be $160,124. amendments the cost will be $238,582, an increase of $78,458. The cost of these amendments will be offset by the elimination of the City's Social Security Contribution of 6.65% of salary effective January 1, 1981, or $104,538 during the remainder of the Fiscal Year. 1. Description of proposed amendments to the PERS Contract. 2. Resolution of Intention, Resolution No. bL33 9 . 3. Ordinance No. 123 The addition By including the above Exhibit Recommendation Adopt Resolution No. bJJp and introduce Ordinance No./ 2 ,? . AGENDA BILL NO. 6411 .- e Page 2 Council Action: 10-28-80 Council adopted Resolution 6339 and introduced Ordinance No. 1234. > Exhibit 1 - Detailed Explanation of Proposed Change to PERS Benefit Program -1959 Survivor Benefit (Section 21380-21388) This optional benefit prcvides the below-listed monthly allowances to beneficiaries of a member who dies prior to retirement. This benefit is an addition to the Basic Death Benefit or the 1957 Survivor Benefit, but would be reduced by the amount of the Industrial Death Benefit, if payable. Spouse with two or more children; or three or more dependent children, alone $430 Spouse with one dependent child; or two dependent children, alone $360 Widow or widower, alone, age 62 or over; dependent mother or dependent father, alone, age 62 or over; or one dependent child $180 The eligibility of a surviving spouse ceases with remarriage. Concurrent coverage under this program and Social Security is pro- hibited by law (Section 213841, but an agency may provide the pro- gram fox the full-formula members of a divided miscellaneous member group. Members in employment on amendment date may elect not to be covered, but the program mandatorily covers all future hires who are not covered under the agency's Social Security program. Employer Cost: Altho'ugh rates will be adjusted on subsequent valuations, the following close approximations of costs are used initially: 1% of payroll for miscellaneous, arid $% of payroll for safety. Employee Cost: $2.00 monthly (noq-refundable). -Increased Level of 1959 Survivor Benefit (Section 21390) This option allows a public agency to provide 25% higher I-eve1.s of 1959 survivor benefits than the normal levels provided under Section 21380-21388. The benefit levels become $538, $450 qnd $225, respectively (See IIA). The increased benefits would apply to current and future benefici- aries, and could be provided any time after, or simultaneously with, providing Sections 21380-21388 in the contract. Employer Cost: Simultaneous with providimg Sections 21380-8; same as regular provisions (See IIA). After providing Sections 21380-8: Valuation required; increase of approximately 0.1% to 0.2% in current 1959 Survivor rate. Employee Cost: 'There is no increase in the $2.00 monthly charge required by Sections 21380-21388, the basic 1959 Survivor Benefit. Page 2, Exhibit 1 . -Increase in __-- Ordinary (Non- Job-Related) Dj.siihility --"I__-- Retirement - Allowances (Section 21298) This benefit applies to future ordinary disability retirements of miscellaneous inembers and of noii-joOb--Lelated disability retire- ments of safety members. The current- statutory level of disability retirement benefits for members with at least five years of credited service (1.8% of final compensation for each year of service, with a 33-1/38 maximum) would be ra.ised to a. minimum benefit of 30% of fj-nal compensation for five years of service and be increased 1% of final compensation for each additional year of servi.ce to a maximum benefit of 50% of final zompensa.ti.on. Under no circumstances may the disabilj-ty retirement allowance be more than the serv:i..cz retirement allowance if the melnber were t.o continue in empiopent 2nd retire at age 60. Employer Cost: Valuation required. Rough estimate: &% - 3/4% of payroll for miscellaneous and/or safety groups. Employee Cost: Eone. -Post-Retirement Survivor Continumce ----- (Sections 21263 and 21263.1) ----.I__. ----I- The Past-Reti.rement Survivor Continuance benefit provides thzt upon the death of a member after retirawat for service or d.is(.biii.t.:. an c;!.?.cwa~ce shal 1 be con.ti.Jiiied to the surviving spouse until death or remarriage, or tc surviving children or dependent parents as descri-bed below. The surviving spouse mnst be mrrid. to the merilber fcr on2 yea]: prior .to the member's rctiremefit and Se married conkinuously to t.he date of the retired inember's death.. Should there he children under the age'of 3.8 but no surviv:j-ng spouse (or if the spouse later dies of remarries), the a3.1.0~.7ance shall be continued to the eligib.le chilGren collectively un:til all have reached age 3.8 or have marri.ed. S.1.iould there be no el.igible spouse and nij eligl-hle children ~nder the ac;e of 18, a surviving parent or parents coil-tiir>uously dcixndcnt upon the retired raeniber for support may receive a continuous allowance throughout their lives. If at effective c1at.e of retireicent the member has n3 eligible spouse, eligible children or el-iyi.ble dependent parents, and elected an opti.ona1 settlement by naming anctl'icr beneficiary, no survivor allowance shall he paid under this benefit. ' The allowance to the survivor(s) of a mer.iter who retires 1_---- after the employer includes Sections 21263 and 21263.1 in its ccntract is determined as f ollclws : 1. -- One-Frter -- of the retired member's unmoiiif 3-ed allowance based ~XI. scrvice subject to the modific:~i:i(>i~ for Social Security; and 2. -_l___.l_ Onc-half of the retired mcmbcr' s u::modi f j cd allowa.iice hased on service not subjcct to the nicdj iicacion €or Social Sccurj ty. For members already retired who chose Option 2, 3, or 4, allow- ances would be increased 15%. For members already retired who chose Option 1 or the Unmodified Allowance, allowance would not be survivor continuance allowance upon the retiree’s death. ’ increased, but their eligible beneficiary would receive the Employer Cost: Valuation required. Rough Estimate: 3- 6% of payroll for safety groups; 1-4 - 2% for miscellanious modified fo,rnula groups and 2 - 3% for miscellaneous full formula groups. Employee Cost: None. This benefit is subject to the 30 day waiting period referred to in our introductory statement. -One-Year - Highest Compensation (Section 20024.2) The period for determining average salary when retirement allow- ances are computed would change from the current 36 highest paid consecutive months to the 12 highest paid consecutive months. Applicable only to members retiring after the effective date of this benefit in the contract. Employer Cost: Valuation required. Rough estimate: 1 - 13% of payroll for miscellaneous groups; 1% - 2% for safety groups. Employee Cost: Acme. IC RESOLUTION N0.6339 PI EESOLUTIOM Or" INTEKTIOB TO APP30'I.E AIJ ANEXDiOXT TO CONTRACT BET!E;EFI THE PUBLIC EKPLOYEES' RETIREPENT S'IST3i.I AND THE CITY COUEJCIL OF THE CITY OF CARLSBBD I BOARD GT XDXINISTRATION OP THE . . . .- YiiEREAS, the Public Employees' Retirment Lax permits the particj-pation of public agencies and their employees in the Public Eqloyees' Retirement System by the execution of a contract, 2nd sets forth t3e procedure by which said public agencies may elect to subject -:hers- selves and their employees to amendments to mid Lax; and - . \!HEREAS, one of the steps in the procedure to amend this contract is the adoption by the legisletivc body of the public agency of a resolu- tion giving notice of its intention to approve an anendment to said contract, which resolution shall contain a sumary of the change proposed in said contract; and P WHEREAS, the following is a statement of the proposed chznge: To provide Section 21251.13 (2% 0 60 Full) due to Social. Security ternination, Section 20024.2 (Gne-year final :. compensation), Section 21 263/21263.1 (Post-retirement . survivor allowance), Section 21 298 (Increased non-industrial disability allo:mnce), Section 21 380-21 383 (1959 Survivors Program), 2nd Section 21 330 (Increased 1959 SurvivorL; benefits), all for local miscellaneous members. 1 MOW, THEREFORE, RE IT RESOLVED, that tha governing body of the above agency gives, and it does hereby give notice of intention to approve an mendment to the contract between the said governing body and the Board of Administration of the Public Employees' Eetirenent System, a copy of said amendment baing attached hereto, as an "Exhibit" and by this reference made a part hereof. Mayor ( TIFLT- Ret. Form 122 L I i I I I I t 1 ! I i j I I i , j I i I ! i I i i ! I 1 Attachment 'A' .to Ordinance -:112.3 4 .: -_ c .. .! . The Board of Administration, Public Employees' Retirezent System, herein- .. k-- after refeyred to as lloi-ird, and the governing body of above public agency, hereinafter referred to :IS Public Agency, having entcrcd into ccntract, tIiidc:- 'date of Dcccmber 23, 1355, effective Janunry 1, 1955, and as amended effective July 1, 1957, January 1, 1959, 'ihrch 5, 1353, rarch 10, 1375, April I, 1315, Plupist 18, 1377, and June 21, 1980, which provides for p?rticipntion of Public . Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs. 1 through 10 Ere hereby stricken from said contract 2s cxccuted ' effectivc June 21, 13e9, and hereby replaced by the following para,yap?is . numbered 1 through 10 inclusive: - 1. i 2. 3. f All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therefn unl.ess otherdisc specifically provided. "Wornal retirement nee" shall mean ae2 60 for local a!iscellaneous nnd age 55 for focal safety members. Public Afyncy shall pzrticipate in the Public 1Sntployees' T!c?tir.t?mt-.rit, System frox an6 after January I, 1356 making its ercpI.oyee3 as hcreinnf ter provid.ed, nerabers of sajd System subject to all provisicns of the Public Zr!:p].oyees' Retirement Lnv except such 2s ap?ly only on election of n contracting :!gcncy an:! are not prcviried for herein end to all nne'ndinents to said Law hereafter enacted except such 3s by express provi.cions thereof apply only on the election of contrsctinfi agencies. Rnployccs of Public Agency in the fblllovini: cl.nsses shnll l~ccoa~c menbcrs of said Retirement Systcrn exccpt such jn each such clar;:; as are cxcluc?cd hy law or this ngrecmcnt: .a. .. . 4. 5. 6. i *I &- Il~c fraction of laneou:; mente rs final compcnsz~tion to 't?c provi:led for local misccl- for each year of credited prior and current service shull be that provided in Section 2t?51.t5 subject to the reduction provided therein for service on or after June 1, 1958 and prior to December 31, 1990 for rnembcrs vhosc scrvicc hs bwn includcd in Federal Social Sccarity. The freetion of final compensation to be provided for each yenr of credited prior and current service as a local sofety amber shall be determined in nccordance with Section 21252.1 of said Betircnient Law (One-naif pay at age 55). The folloeing additional provisions of the Public Employees' Retire- ment Law which apply ocly upon election of a contracting agency shall - apply to the Public Agency and its ernployees: a. b. C. d. e. f. e- 11. Section 20952.5 (Age 50 voluntary retiremnt) for local safety minbers only. ' Sections 21 263/21263.1 (Post-retirement survivor zllowance). Section 20020 ("Local policemen shall include persons who are enployed to perforiil identification and corimunication duties in the Police Department. F~O are not now local safety members and who were in such employrcent on Auf;ust 4, 1372 and who elcct safety membership xithin 60 days of the effective date. of this amendmcnt"). Section 20862.0 (Unused sick leave credit), for loca misccl- . c laneous rccmbers. 3 Sections 21380-21388 (1959 Survivors Pmgrarri). Section 20024.2 (One-year fins! compensati on), for local nisccl- lincous n;en?)ers. Section 21 293 (Increased non-itidustrial di$::nhility nllouance), for 7 ocnl mj scellnncous members. Scc tj on 21 390 (Increascd 1953 Survivors .benefits), for 3 ocnl niisce 1l;tncou s tncmbcrs. .* .- .. * I. . .c 1' '* & .. c - I ., .. 9- 10. Public Apncy shall contribntc to said RcLircincni SYS~CIR ns follcws: I Rh b. C. d. I With respect to miscellaneous rnernbcrs, thc agency shall con- tribiitc the followinc percentngos of monthly salazries eamc6 as miscellaneous members of said Retirement System: (1) 0.026 percent until June 30, 2000 on nccount of the liability for prior serviie benefits. 14.151 percent on account of the liability for current service benefits. 1.000 percent on account of the liability for the 1359 Survivor Program. (2) (3) .. With respect to local safety members, the agency shall contribute the following percentages of monthly salaries eRrned as local safety members of said Retirenent System: (1) 0.018 percent until June 30, 2000 on account of the liability for prior service benefifs. 17.668 percent on account of the liability for current service benefits. i c (2) (3) 0.500 percent on account of the IiEbility for the 1953 Survivor Program. A rcasoiiablc mount per annum, as fixed by the Board. to cover the costs of adrninistcring said System as it qffccts th3 enployuzs of Public PI&:cncy, not including thc costs of special valuations or of the periodic investigation and valuations required by law, A reasonable amount 2s fixed by the Ooard, poyablc in one instzll- ment ns the occasions arise, to cover the costs of special valua- tions on accoiinL of employees of Public Accncy, and costs of thc periodic investiption and valu:! tions required by lav. ? ,c attached to said contract arid Sha13 be effective on .... .. . the - ' day of 9 19-.-* Witness our hends the say of IW_* BQARD OF ADMINISTRATIO;? CIlT c0u~:cXL YUXiLIC EKPLOYEES' RRTIRRYZXT SYSTE1.I 'OF THE CITY OF CbRLSBAD I c 3 1 2 3 4 5 6 7 a 9 10 11 12 13 34 15 16 17 la 19 20 21 22 29 24 25 26 27 28 AN OP?INAHCE Of;' THE CITY COUNCIL OF THE CITY OF CAHLSEAD, THE C3PJTXACT BXTSVEEN CITY COUi"JC1L AND THE aQXRD CALIFOTt"1A AUTH9TIIZING AN AMEXDMENT TO OF' ADHIEISTRLTI@II OF THE CALIFORNIA PUBLIC EMPLOYEES ' RETIREMENT SYSTEM. The 3t.y Council of the City of Carlsbad does ordain as follows : SECTION 1. That an amendment to the Contract between the City Council of tbe City of Carlsbad and the Board of Pihinistration, California Public Employees' Xietirement System is hereby authorized, a copy of said amendment being attached hezeto, niarkel "2zFbit A", and by such refererxe made a part hezeof as tho?lS? herein set out in full. ' SECTION 2. T:?e Mayor of the City of Carlsbad is hereby authorized, enpwered, and directed tocexecute said amendment for and on behzlf of said Agency. - .I --1_ SECTION 3. Thi.s Ordinance shall take effect 30 days after the date of its adogtion, and prior to the expiration of 15 da.ys from the adostion thereof shall be published at least once in the Carlsbad Jo-zr,tl a newspaper of general circulation, published zzd circclzted in the City of Carlsbad and thenceforth and thereaftzr t2-e sme shall be in full force and effect, PASSED, ..U??XVZD, ANI ADOPTED at a regular meeting of the City Couxcll of tkt City of Carlsbad, California on the 18thday of November , 1930 by the following vote, to wit: AYES: Council Members Packard, Casler, Anear, Lewis and Kulchin NOES : None .n .. , ’*- . -2 f . .. . . .--- Attacknent ‘PA’ to Ordinance #1234 The Bcard of Administration, Fublic Enployees’ Retirement System, herein- after referred to as 33ard, and the governing body of above public agency, hereinafter referred to as Public Agency, having entered into a contract under. date of December 23, 1‘155, effective January 1, 1956, and RS amended effc.ctive July 1, 1957, January 1, 1953, ??arch 5, 1959, Yarch’ 19, 19‘75, Aprj-1 1, 1375, Auast 18, 1977, and June 21, 1980, which provides for participation of Public Agency in said System, 3oard and Fublio Agency hereby agree as follows: A,. Paragrsphs 1 through 10 are hereby strickqn frorri said contract as executed effective June 21, 1960, and hereby replaced by the following Faracraphs numbered 1 tkrough 10 inclusive: 1. 2. 3. All words and terms used herein which 3re defind in the Pilblic Employees’ Retirement Law shall have the meaning 8s defined therein un 1 e s s o t he 17r’ i s e s p c c i f i ca 1 ly p rovi d ed . mean age 60 for local miscellaneous znr! age 55 for local safety members. ‘‘YJ o r”p..q 1 re t i re me n t r? g c “ s h a 13 Public Apcnry shall psrticipate in the Public Employees‘ HPtiremc.nt System from end after January 1, 1056 making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees’ Retirement Law except such as appiy only on election of a contracting agency and are not prcvided for heyein and to all amendments to said Law hereaftpr enacted except such as by express provisions thereof apply only on the election of conLrsctinE agencies. 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 Firemen (herein referred to as local safety members); b. Local Policemen (herein referred to as local snfety mcmbcrr;); c. Employees other than local safety members (herein referred to 3s local miscellaneous wmbers). ,I In addition to the classes of employpcs excludw3 from membership by said Retiremtmt Law, the followinf: cl?sscs of‘ employees shall not become mcmbcrs of said Retirement System: NO AD~ITI ON AI, EXCLUS I oris 4. 5. 6. 7. The fraction of final compensation to be provided for local miscel- laneous members for each year of credited prior and current service shall be that provided in Section 2i25l .13 subject to tht- reduction provided therein for service on or after June 1, 1958 an6 prior to December 71, 1980 for members whose service has been included in Federal Social Security. The fraction of final compknsation to be provided for each year of credited prior and current service as a local safety member shall be determined in accordance with Section 21252.1 of said Retiremefit Law (One-naif pay at age 55). The following additional provisions of the Public Employees' Retire- ment Law which apply only upon election of a contracting agency shall apply to the Public Agency and its employees: a. b. C. d. e. f. g* h. Section 20952.5 (Age 50 voluntary retirement) for local safety Embers only. Sections 21263/21263.1 (Post-retirement survivor allowance). Section 20020 ("Local policemen shall include persons who .Ire employed to perform 5dentification"and communication duties in the Police Departnent vho are not no3 local safety members an? who were in such employment on Augus', 4, 1972 and who elect safety memberzhip within 60 days of the effective date of this amendnent"). Section 20862.8 (Unused sick leave' credit), for local miscel- laneous members. Sections 21 350-21 388 ( 1959 Survivors Program). Section 20024.2 (One-year final compensation), for local miscel- laneous members. Section 21 298 (Increased non-industrial disability allowance), for local miscellaneous members. Section 21700 (Increased 1959 ?urvivors benefits), for local miscellaneous members. Public Apency, in accordance with Section 20740, Govprnnent Cone, ceased to lie nn "employer" for purpor,os of Chnpter 6 of thc.: Public Employees'. Retirement Lnw Pffcictive on flurust 18, lCr77. Accumulated contributions of Public Agency as of the aforementioned date shall be fixed and ric't.crmined RS provi cied in Section 20759, Government Co(?c, and accumulated contributior?~ as of thp aforementioncd date. itnd contributions thermf'er mdt? shall bP held by the Eonrd RS providc?d in Section 7075c1, Govcmmmt Codc. .. -. . .. . - . - . 8. ' Public Agency shall contribute tc said Retirement System as follows: E. With respect to miscellaneous members, the agency shall con- tribute the following percentages of monthly salaries earned as miscellaneous Irembers of said Retirement System: (1) 0.026 percent until June 30, 2000 on account of the liability for prio? service benefits. (2) 14.151 percent on account of' the liability for current service benefits. (3) 1.000 percent on account of the liability for the 1959 Survivor Program. b. With respect to local safety members, the agency shall contrlbute the foliowing percentages of monthly salaries earned as local safety members of said Retirement system: (1) 0.018 percent until June 30, 2000 on account of the liability for prior service benefits. (2) 17.808 percent on account of the liability for current service benefits. -. * (3) 0.500 percent on account of the liability for the 1953 Survivor Program. c. A reasonable amount ptr annum, as fixed by the 9oard to ccves the costs of administering said System as it affects tke employees of Public Agency, not including the costs of special veluaticns or of the periodic investigation arid valuations required by laiJ. d. A reasonable amount as fixed by the Eoard, payable in one i-nstall- ment as the occasions arise, to cover the-costs of special valua- tions on account of empioyees of Public Acency, and costs of the peri0di.c: investigation and valuations required by law. 9. Contributions required of Public Agency and its employecs sh~111 be subject tcj adjustment hy Board on account of amendments to the Public Employees' Retirement Law, and on nccount of thr-. experience under the Retirement System as determined by tho periodic investig2.tion and valuation required by said Retirement Law. 10. Contrihuti.ons required of Public ARency ar.d its employees shall be paid by Dublic Agency to the Retirement System within thirty days after the en,? of the period to which said contributions refer or .?s may be prescribed by Roard regulntion. If more or 1es.s than the correct amount of contributions is paid for any period, proper adjustment shall be mnde in conr?ection xith srihsequent rmi ttanccs, or adjustments on account of errors in contributions required of any employee mfiy t,e made by direct cash payments between the employer: and the Board. PRyments by Public Ap?r!cy to TJoard may be made in the fom of warrants, bank checks, bank drnfts, certified checks, m0nt.y orciers or cash. .. L . .. , , \ . B. This amendment shall be attached to said contract and shall be effective on the day of 9 19-. Witness our hends the day of ? '9; BOARD OF ADFINISTXATION CITY COUNCIL PUELIC EIfJ"J'OYEES' RF?lRY?)XF:F!T SYSTEM OF THE CITY OF CARLSBAD BY RY c__ Carl J. Blechinger, Executive Officer Presiding Officer Approved a3 to form: - - .. Attest: ..