HomeMy WebLinkAboutCC AG PKT 2003-02-24 #G AGENDA REPORT ® mo o ®
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DATE: February 24, 2003 e
TO: Honorable Mayor and City Council
FROM: John B. Bahorski, City Manager
SUBJECT: PERS Contract Amendment - 3% @ 50
SUMMARY OF REQUEST:
That Council adopt the attached Resolution of Intention to amend the California Public
Employees' Retirement System contract to provide Section 21362.2 (3% @ 50 formula)
to the City's sworn employees.
BACKGROUND:
The City has a three year contract with the Police Management Association (Captains,
Sergeants and a non - safety Records Supervisor) and the Police Officers Association
(Corporals, Officers). Pursuant to the provision of Article IX. Retirement, Section 2, of
the POA MOU and a similar provision in the SBPMA MOU, the City is to amend the
California Public Employees' Retirement System contract to provide Section 21362.2
(3% @ 50 formula) for safety members by the end of this fiscal year.
To fulfill the obligations of this contract, Ca1PERS requires a resolution of intention to be
adopted giving notice of the City's intention to approve an amendment to the PERS
contract to adopt the 3% @ 50 formula. Once the resolution of intention has been
adopted, the Ordinance authorizing the PERS contract amendment will be brought to
Council at the March 24, 2003 meeting (at least 20 days after adoption of the resolution
of intention).
FISCAL IMPACT:
Government Code 7507 requires that the future annual costs of the proposed contract
amendment be made known. Currently, the City is contributing 24.24% of each safety
employees' salary into the PERS retirement system. With the contract amendment, that
contribution will change to 39.582 %. In year 2004 /05, the contribution is estimated to be
50.8% due to the losses incurred in the PERS investments for FY 2001/02 which impacts
future contribution rates. The change in the total employer rate due to the amendment is
an additional 12.061%.
AGENDA ITEM C
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3% @50 Report —Page2
February 24, 2003
Attached is the PERS disclosure of contract amendment costs. Currently the City pays
$704,486 annual for the 2% @ 50 retirement costs for safety employees. With the
contract amendment, the City would contribute $1,079,118 the following year and in year
04/05 the City would contribute $1,384,932. These costs would be paid by the City over
multiple years until the assets in the safety PERS retirement account cover the benefits
provided.
RECOMMENDATION:
Pursuant to contract obligations with Police Officers Association and the Police
Management Association, adopt the Proposed Resolution of Intention to amend the City's
contract with the Public Employees Retirement System to provide Section 21362.2 (3%
@ 50 formula) to the City's sworn full -time employees.
Attachment: PERS Disclosure of Contract Amendment Costs
PERS DISCLOSURE OF CONTRACT AMENDMENT COSTS
1) Change in the Prevent Value of Benefits $2,428,039
2) Changed in the Accrued Liability $2,232,209
3) Change in the Total Employer Rate 12.061%