HomeMy WebLinkAbout1985-09-03; City Council; 8318; Retirement contributions paymentAB# fS/f
MTG.22.L-
DEPT.FTN
RECOMMENDED ACTION:
TITLE:
PAYMENT OF RETIREMENT CONTRIBUTIONS
FOR WIFORM ALLOWANCE AND HOLIDAY PAY
(ROSE vs HAYWARD)
Adopt Resolution No. g/$6 authorizing the payment of retirement
contributions for uni orm lowance and holiday pay pursuant to the direction of -. the Court under Rose vs. Hayward.
ITEM EXPLANATION
On December 18, 1981, the California Court of Appeal held that uniform
allowances and holiday pay provided to any City employee were compensation and
should be included in a computation of retirement benefits (ROSE vs HAYWARD).
This decision was codified by the Legislature on September 1, 1983 by amending
$20022 of the Government Code to include these special types of compensation in
the definition of wages subject to Public Employees Retirement System (PERS)
contributions.
Under the court decision, the City must pay PERS contributions on uniform
allowances and holiday pay provided to employees between December 18, 1981 and
the present. In addition, the City must determine the mount of compensation of
this type paid to retired employees during their final compensation period (the
final three years of employment upon *ich all retirement benefits are based)
and pay the appropriate amount to PERS.
Based on a review of the present and past records, the City's obligation under
this decision totals $107,588.24 on compensation of $359,967.99.
Total City PERS Employee PERS
Compensation Contribution Contribution
Active Employees $249,334.73 $ 78,610.01 $ 7,210.38
Retired Employees 110,633.26 28,978.23 9,957.00
TOTAL $359,967.99 $107,588.24 $1 7,167.38
The City began including these types of compensation under PERS in hly, 1983.
The above figures represent the costs associated with payments made between
December 18, 1981 and 3uly 1, 1983 for active employees, and the final compensation period for individuals retired prior to December 18, 1981.
Staff is requesting authorization to pay PERS a total of $107,588 in contributions which will be funded by a transfer from the Contingency Account,
and $7,210 in employees contributions which will be funded through an agreement
with the appropriate employee association.
FISCAL IWACT
The cost of this assessment will be substantial and cannot be funded from the
existing budget. Staff is asking Council to approve a contingency transfer in
the amount of $107,588 to cover these costs.
existing contingency account balance from $1 .I million to about $1 .O million.
This transfer will reduce the
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EXHIBITS
1. Detailed PERS contribution calculations on file with the Finance Director.
2. Memo from Public Employees Retirement System ordering inclusion of uniform
allowance and holiday pay in definition of canDensation.
3. Resolution No. 81 19 6 , authorizing the payment of retirement contributions
for uniform allowance and holiday pay.
a
F%hone ( 9 16 ) 4 4 5-6 47 6
MJW4-m
STAE aXI??ACI'ING PUBLIC ASENCIES
STATE COLLEGES 6 UNIVERSITIES
13:
Government Code Section 20022, which defines curpensation reportable
to PES, has ben amended by the passage of Assembly Bill 1826, (Chapter 639 of 1983). will take effect irrmdiately.
This revised version of the definition of ccnpensation reaffi'm existing PERS administrative interpretations of reportable carpensation,
identifies new forms of reportable axperkation, and codifies into the law the results of the Fbse vs. Hayward court decision concernixq uniform allowances and holidq pay. Also Coverrpnent me Section 20022 1y3w vests we PDS Board of Administration with the authority to determine whether '
payments not specifically identified in the law are carpensation reportable to PERS.
?his bill was declared to be urgency legislation, therefore, it
October 17, 1983
CIRCULAR LETTER NUMBER.
Dinribution:
100- 136
II,N,V,VI,X, &l XI1
Items PEE- has considered as carpensation in the past and KIW reaffirm3 in statute are; disability or worker's conpensation Payments to
safety &rs in accordance with Sections 4800 and 4850 of the Labor Code, special capenstion for performing normaly required duties such as bonuses (for duties performed on a regular work shift), educatioml imentive pay, mintenance and noncash payments, out of class pay, markmnship pay,
hazard pay, motorcycle pay, POST certificate pay, split shift differential and substitute differential in Sections 45196 and 88196 of the Fducation Code. "wo new items of ampnsation identified in -1826 are paramedic pay and emergency medical technician pay.
special cohnpensstion usiq pay de "09" and contribution code "06".
which concerned holiday pay and uniform allowance (refer to Circular
Letter Number 100-227 dated December 22, 1982) I to the definition of ampensation in Government Code %tion 20022. Holiday pay should be
reported for both miscellaneous and safety employees who are regularly scheduled to work without regard to holidays (i.e., water, power, public
safety, etc.). miscellanms and safety employees.
pay should be reprted as instructed in Circular Letter Number 100-227 as special canpensation using pay code "09" and contribution &e "06".
"bese payments are reported as
AB-1826 has added the results of the mse vs. Hayward court decision,
Uniform allcwance is also reportable canpensation for both
Both uniform allmame and holiday
ftms which in the past PERS has not considered reportable corrpensation are rn reaffirmed in the law as excluded fran wages reported
to Pm. vacation or c;arrpensating time off upon termination of qloyment, final
settlement pay, lcrmp sum sick leave payment, payment for overtime including pay in lieu of vacation or holiday, special carpensation for
The excluded items are the follcwixq; payment for 1u-r~ sum
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Amended Defintion of Ompensation Subject 'lb Retirement Cbntributions (mtinued)
, .. .
additional services outside regular duties, such as stand-by pay, call-back pay, axrt duty, auknobile allowance, and bonuses for duties performed after regular wrk shift.
These new amemts to the law are applicable to current and future
wages. still governed by the court directives in the Ibse vs. Hayward decision and the reporting procedures outlined in our Circular Letter 100-227 dated December 22, 1982.
Retroactive adjustments to unifon allowance and holiday pay are
If you have additional questions on this subject, please oontact our
Payroll Audits Unit at (916) 322-4448.
I
lOBEUI' D. WALTON, CHI=
DMSICN
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RESOLUTION NO. 8166
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA AUTHORIZING THE PAYMENT OF
PUBLIC EMPLOYEES RETIREMENT SYSTEM CONTRIBUTIONS
COVERING UNIFORM ALLOWANCE AND HOLIDAY PAY FOR
ACTIVE AND RETIRED EMPLOYEES AND TRANSFERING FUNDS.
WHEREAS, the California Court of Appeals has determined that payments
to employees for uniform allowance and holidays are to be included in computing
compensation subject to retirement contributions; and
WHEREAS, the State Legislature, acting upon this decision, has revised
Government Code Section 20022 defining compensation by the addition of uniform
allowance and holiday pay in the types of compensation included in determining
PERS retirement contributions; and
WHEREAS,the court's decisio3 requires that the City make retroactive
payments to PERS for the period December 18, 1981 to the present for any
active employees and for the final compensation period as defined by our PERS
contract for retired employees; and
WHEREAS, the City share of such retroactive payments to PERS will
total $107,588.24; and
WHEREAS, budgeted retirement contributions are insufficient to fund
this additional cost.
NOW, THEREFORE, be it resolved by the City Council of the City of
Carlsbad as follows:
1. That the Finance Director is directed to pay the total of
$107,588.24 to the Public Employees Retirement System.
2. That a contingency transfer in the amount of $107,588.24 is hereby
approved to be distributed to the necessary retirement accounts to fund this
payment.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
on the 3rd day of *Pte , 1985, by the following vote, to wit:
AYES: Council Members Casler, Lewis, Kulchin, Chick axd Pettine
NOES : None
ABSENT:
ATTEST :
L ALETHA L. RAUTENKRANZ, City Cl&k
(SEAL)