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\B $ 17,558 TITLE:
IIITG. 3/23/04 AMENDMENT TO CALIFORNIA PUBLIC EMPLOYEES’
DEPT. HR RETIREMENT SYSTEM (CALPERS) CONTRACT
IMPACTING LOCAL MISCELLANEOUS MEMBERS
DEPT. Hfi
1. Adopt Resolution No. 2004-094 , a resolution of intention to approve an amendment
to the contract between the Board of Administration of the California Public Employees’
Retirement System (CalPERS) and the City of Carlsbad.
2. Introduce Ordinance No. NS- 701 amending the CalPERS contract impacting local
miscellaneous members.
3. Adopt Resolution No. 2004-095 authorizing the one percent (1%) employee
retirement contribution that results from implementation of the 3% 060 benefit to be
deducted from each employee’s salary on a pre-tax basis.
ITEM EXPLANATION:
On February 4,2003, the City Council adopted Resolution No. 2003-033 approving a
Memorandum of Understanding (MOU) with the Carlsbad City Employees’ Association
(CCEA). The term of the MOU is five (5) years and will expire on December 31,2007. By
approving this MOU, the City Council authorized the City to initiate an amendment of the
City’s contract with CalPERS to provide the 3% at 60 retirement benefit (Section 21354.3)
for all CCEA represented employees effective the pay period inclusive of January 1,2005.
On March 4,2003, the City Council adopted Resolution No. 2003-054 and Resolution No.
2003-055 authorizing the implementation of the 3% @ 60 retirement benefit for all
Management and non-sworn CPOA represented employees effective the pay period inclusive
of January 1,2005.
Under the City’s current retirement contract with CalPERS, CCEA-represented employees,
management employees and non-sworn police employees are combined into one
“miscellaneous” contract.
The City Council would need to take two actions to implement the proposed revisions to the
retirement contract: (1) adopt a Resolution of Intention and, (2) introduce the Ordinance to
amend the contract. Adoption of the final Ordinance cannot be earlier than 20 days after
adoption of the Resolution of Intention. Therefore, adoption of the final Ordinance is
scheduled for April 13, 2004. The effective date of the Ordinance would be May 13,2004.
The effective date of the contract amendment would be December 20,2004.
There are two rates associated with the cost to the City for the CalPERS retirement benefit: 1)
the employer contribution rate and 2) the employee contribution rate. As a result of
implementing the 3% @ 60 retirement benefit, the employee contribution rate will increase
from seven percent (7%) to eight percent (8%). The City will continue to pay seven percent
(7%) and the employee will pay the additional one percent (1%). The resulting one percent
Page 2 of AB # 17,558
(1%) employee contribution will be deducted from each employee’s salary on a pre-tax basis
by implementing provisions of section 414(h)(2) of the Internal Revenue Code (IRC).
FISCAL IMPACT:
Implementation of the 3% @ 60 retirement benefit for local miscellaneous employees will
increase the City’s CalPERS employer contribution rate for all miscellaneous employees by
an estimated 9.726% (from 6.938% to 16.664%) as of the effective date of the contract
amendment. Using current payroll costs, this represents an annual cost of approximately
$2,484,000.
All the long-range forecasts that were presented to the City Council during the 2003/2004
budget presentations reflected the fiscal impact of this benefit. Future fiscal year impacts will
be reflected during the annual budget process. .
EXHIBITS:
1. Resolution No. 2004-094 , including Exhibit A
2. Ordinance No. -
3. Resolution No. 2004-095
DEPARTMENT CONTACT: Debbie Porter, (760) 602-2441, dport@ci.carlsbad.ca.us
Resolution No. 2004-094
RESOLUTION OF INTENTION
TO APPROVE AN AMENDMENT TO CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
CITY OF CARLSBAD
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 21 354.3 (3% @ 60 Full and Modified
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 hereof.
By: 4- yd
Pres i g Officer, Ramona Finnila
Mavor Pro Ten
March 23, 2004
Date adopted and approved
(Amendment)
CON-302 (Rev. 4/96)
Title
CalPERS EXHIBIT A
California
Public Employees' Retirement System
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees' Retirement System
and the
City Council
City of Carlsbad +-
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
January 1, 1956, and witnessed December 23, 1955, and as amended effective July 1,
1957, January 1, 1959, March 5, 1959, March 18, 1975, April 1, 1975, August 18, 1977,
June 21, 1980, January 1, 1981, June 21, 1982, November 22, 1982, June 26, 1989,
November 16, 1990, July 3, 1992, November 3, 1993, June 30, 1995, June 3, 1996,
January 1, 1997, June 14, 1997, June 25,2001 and December 22,2003 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 December 22, 2003, and hereby replaced by the following paragraphs
numbered I through 14 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 and age 50 for local safety
members.
4
PLEASE DO NOT SIGN "EXHIBIT ONLY"
2. Public Agency shall participate in the Public Employees' Retirement
System from and after January 1, 1956 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.
3. 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).
4. 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. SENIOR INSTRUCTOWLIFEGUARD HIRED AFTER NOVEMBER
3, 1993.
5. This contract shall be a continuation of the contract of the Carlsbad
Municipal Water District, hereinafter referred to as "Former Agency". The
accumulated contributions, assets and liability for prior and current service
under the Former Agency's contract shall be merged pursuant to Section
20508 of the Government Code. Such merger occurred February 17, 1992.
6. The percentage of final compensation to be provided for each year of
credited prior and current service for local miscellaneous members in
employment before and not on or after the effective date of this
amendment to contract shall be determined in accordance with Section
21354 of said Retirement Law, subject to the reduction provided therein
for service on and after June 1, 1958, the effective date of Social Security
coverage, and prior to December 31, 1980, termination of Social Security,
for members whose service has been included in Federal Social Security
' (2% at age 55 Full and Modified).
7. The percentage of final compensation to be provided for each year of
credited prior and current service for local miscellaneous members in
employment on or after the effective date of this amendment to contract
shall be determined in accordance with Section 21354.3 of said
Retirement Law, subject to the reduction provided therein for service on
and after June 1, 1958, the effective date of Social Security coverage, and
prior to December 31, 1980, termination of Social Security, for members
whose service has been included in Federal Social Security (3% at age 60
Full and Modified).
8. The percentage of final compensation to be provided for each year of
credited prior and current service as a local safety member shall be
determined in accordance with Section 21362.2 of said Retirement Law
(3% at age 50 Full).
9. Public Agency elected and elects to be subject to the following optional
provisions:
a.
b.
C.
d.
e.
f.
g.
h.
Sections 21624, 21626 and 21628 (Post-Retirement Survivor
Allowance).
Section 20425 ("Local Police Officer" shall include employees of a
police department who were employed to perform identification or
communication duties on August 4, 1972 and who elected to be
local safety members).
Section 20965 (Credit for Unused Sick Leave).
Section 20042 (One-Year Final Compensation).
Section 2 1427 (Improved Nonindustrial Disability Allowance) for
local miscellaneous members only.
Section 21 024 (Military Service Credit as Public Service), Statutes
of 1976.
Section 21573 (Third Level of 1959 Survivor Benefits) for local
miscellaneous members and local police members only.
Section 21583 (Second Opportunity to Elect 1959 Survivor
Benefits).
PLEASE DO NOT SIGN "EXHIBIT ONLY
I. Section 20434 ("Local Fire Fighter'' shall include any officer or
employee of a fire department employed to perform firefighting, fire
prevention, fire training, hazardous materials, emergency medical
services, or fire or arson investigation services as described in
Government Code Section 20434).
j. Section 21574 (Fourth Level of 1959 Survivor Benefits) for local fire
members only.
IO. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
August 18, 1977. 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.
11. 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.
12. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per covered member on account of the I959
Survivor Benefits provided under Section 21 573 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 and local police members.
b. Contributions required per covered member on account of the 1959
Survivor Benefits provided under Section 21 574 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 fire 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.
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.
13. 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.
14. 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 be effective on the day of I
BOARD OF ADMINISTRATION ,+ CITY COUNCIL
PUBLIC EMPLOYEES’ RETIREMENT SY CITY OF CARLSBAD
x c)
BY BY
KENNETH W. PRESIDING OFFICER
ACTUARIAL & EMPLOYE VICES DIVISION
PUBLIC EMPLOYEES’
Witness Date
Attest:
C le r k,$\V 4Y QL
AMENDMENT ER# 338
PERS-CON-7OZA (Rev. 8\02)
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ORDINANCE NO. NS-701
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING AN AMENDMENT
TO THE CONTRACT BETWEEN THE CITY COUNCIL AND
THE BOARD OF ADMINISTRATION OF THE CALIFORNIA
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
WHEREAS, the City Council authorized the City to initiate an amendment of
the City’s contract with CalPERS to provide the 3% at 60 retirement benefit (Section
21 354.3) for all local miscellaneous employees effective the pay period inclusive of
January 1,2005; and
NOW, THEREFORE, the City Council of the City of Carlsbad ordains as
follows:
SECTION 1 : That an amendment to the contract between the City Council of
the City of Carlsbad and the Board of Administration of the California Public
Employees’ Retirement System is hereby authorized, a copy of said amendment
marked “Exhibit A to Resolution No. 2004-094
SECTION 2: The Mayor of the City of Carlsbad is hereby authorized,
empowered, and directed to execute said amendment for and on behalf of said
Agency.
EFFECTIVE DATE: This ordinance shall be effective thirty days after the
date of its adoption; and the City Clerk shall certify the adoption of this ordinance
and cause it to be published at least once in a newspaper of general circulation in
the City of Carlsbad within fifteen days after its adoption.
Ill
Ill
//I
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INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City
Council on the day of March 23, 2004, and thereafter
PASSED AND ADOPTED at a regular meeting of the City Council of the City
of Carlsbad on the day of , by the following vote, to wit:
AYES:
NOES:
ABSENT:
CLAUDE A. LEWIS, Mayor
ATTEST:
LORRAINE M. WOOD, City Clerk
(SEAL)
Ordinance No. NS-701 page 2 I I?
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RESOLUTION NO. 2004495
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING THE ONE
PERCENT (1 %) CALPERS EMPLOYEE CONTRIBUTION FOR
LOCAL MISCELLANEOUS EMPLOYEES TO BE DEDUCTED
ON A PRE-TAX BASIS.
WHEREAS, the City of Carlsbad has the authority to implement the
provisions of section 414(h)(2) of the Internal Revenue Code (IRC); and
WHEREAS, the Board of Administration of the California Public Employees’
Retirement System adopted its resolution re section 414(h)(2) IRC on September
18, 1985; and
WHEREAS, the Internal Revenue Service has stated in December 1985, that
the implementation of the provisions of section 414(h)(2) IRC pursuant to the
Resolution of the Board of Administration would satisfy the legal requirements of
section 414(h)(2) IRC; and
WHEREAS, the City of Carlsbad has determined that even though the
implementation of the provisions of section 414(h)(2) IRC is not required by law, the
tax benefit offered by section 414(h)(2) IRC should be provided to its local
miscellaneous employees who are members of the California Public Employees’
Retirement System.
NOW, THEREFORE, BE IT RESOLVED by the City Council for the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That the City of Carlsbad will implement the provisions of section
414(h)(2) Internal Revenue Code by making employee contributions pursuant to
California Government Code section 20691 to the California Public Employees’
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Retirement System on behalf of its local miscellaneous employees who are
members of the California Public Employees’ Retirement System. “Employee
contributions” shall mean those contributions to the California Public Employees’
Retirement System which are deducted from the salary of employees and are
credited to individual employee’s accounts pursuant to California Government Code
section 20691.
3. That contributions made by the City of Carlsbad to the California Public
Employees’ Retirement System, although designated as employee contributions,
are being paid by the City of Carlsbad in lieu of contributions by the local
miscellaneous employees who are members of the California Public Employees’
Retirement System.
4. That employees shall not have the option of choosing to receive the
contributed amounts directly instead of having them paid by the City of Carlsbad to
the California Public Employees’ Retirement System.
5. That the City of Carlsbad shall pay to the California Public Employees’
Retirement System the contributions designated as employee contributions from the
same source of funds as used in paying salary.
6. That the amount of the contributions designated as employee
contributions and paid by the City of Carlsbad to the California Public Employees’
Retirement System on behalf of an employee shall be the entire contribution
required of the employee by the Public Employees’ Retirement Law (California
Government Code sections 20000, et seq.).
I//
Ill
Resolution No. 2004-095 page 2 /a-
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7. That the contributions designated as employee contributions made by the
City of Carlsbad to the California Public Employees’ Retirement System shall be
treated for all purposes, other than taxation, in the same way that member
contributions are treated by the California Public Employees’ Retirement System.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council of the City of Carlsbad on the 23rd day of March, 2004; by the following vote,
to wit on behalf of the City:
AYES: Council Members Lewis, Finnila, Hall and Packard.
NOES: None
ABSENT: Council Member Kulchin.
CLVE A. LEWIS, Mayor
Ramona Finnila, Mayor Pro Tem
ATTEs2
mAIN M. WOOD, City Clerk P
(SEAL)
Resolution No. 2004-095 page 3
~
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 7507
I hereby certify that in accordance with Section 7507 of the Government Code
the future annual costs as determined by the System Actuary and/or the increase
in retirement benefit(s) have been made public at a public meeting of the
City Council of the
(governing body)
City of Carlsbad
(public agency)
on March 23rdl 2004 which is at least two weeks prior to the adoption of the
(date)
Resolution / Ordinance. , f)
Cr tXy, Lorraine M. Wood f!
City Clerk
Title
Date March 24, 2004
PERS-CON-12A (rev. 1/96)
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
CERTIFICATION OF GOVERNING BODY'S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the
City Council of the (governing body)
City of Carlsbad
(public agency)
on March 23rd, 2004
(date)
I
% ,---. - '\ CIeridSecret+y, Lorraine M. Wood
City Cler&/
Title
PERS-CON-12 (rev. 1/96)