HomeMy WebLinkAboutItem 5.4 Employee Retirement Program (2) eitjofDttIK,W
AGENDA STATEMENT -1 Z O -(p D
Meeting Date: November 8, 1982
SUBJECT Employee Retirement Program
EXHIBITS ATTACHED : Resolution of Intention; Summary of Major Provisions; Contract;
Ordinance; Actuarial Valuation dated September 28, 1982
RECOMMENDATION 1 ) Adopt Resolution of Intention -
4 2) Introduce Ordinance
•
FINANCIAL STATEMENT: Annual estimated cost $7,887; sufficient funds have been budgeted.
DESCRIPTION In August of this year, the City Council authorized Staff to
initiate retirement coverage for employees under the Public Employee's
Retirement System (PERS). Since that time, PERS has conducted an
actuarial valuation which developed the employer contribution rate
to the retirement system and projects the annual cost to the City.
The employer rate for the City of Dublin will be 7.138%. This is
the projected actuarial rate to the year 2007; however, the employer's
rate is subject to change with future amendments and/or experience
and other factors. The estimated annual cost to the City of Dublin
utilizing the most current payroll figures available is $7,887. The
employee contribution rate will be 7% of employee earnings exclusive
of overtime.
In order to complete the membership process, the City must adopt a
Resolution of Intention to contract with PERS and adopt an Ordinance
authorizing the adoption and execution of a contract between the City
and PERS.
It is Staff's recommendation that the City Council adopt the attached
Resolution of Intention and introduce the attached Ordinance.
COPIES TO:
TTFM N(1 ��5 • T
0
RESOLUTION NO.
RESOLUTION OF INTENTION
TO APPROVE A CONTRACT BETWEEN THE
BOARD OF ADMINISTRATION OF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
OF THE
CITY OF DUBLIN
WHEREAS, the Public Employees' Retirement Law permits the participation of
public agencies in the Public Employees' Retirement System, making
their employees members of said System, and sets forth the procedure
by which participation may be accomplished; and
WHEREAS, one of the steps required in the procedure is the adoption by the
Governing Body of the Public Agency of a resolution giving notice of
intention to approve a contract for such participation between said
Governing Body and the Retirement System Board of Administration,
which resolution shall contain a summary of the major provisions of
the proposed retirement plan; and
WHEREAS, attached is a summary of the major provisions of the proposed plan:
NOW, THEREFORE, BE IT RESOLVED, that the Governing Body of the above agency
gives, and it does hereby give notice of intention to approve a
contract between said Governing Body and the Board of Administration
of the Public Employees' Retirement System, providing for participation
of said agency in said Retirement System, a copy of said contract and
a copy of the summary of the major provisions of the proposed plan
being attached hereto, as an "Exhibit", and by this reference made a
part hereof.
BY
(Name)
(Title)
Ret. Form 122
(Date adopted and approved)
SUMMARY OF MAJOR PROVISIONS
2% @ 60 (1/50) Retirement Program
Local Miscellaneous Members
SERVICE RETIREMENT
The earliest retirement is age 50; the normal retirement age is 60; and the
compulsory retirement age is 70. An employee may retire any time between these
, ages, 50 and 70, provided he meets the minimum requirements that he either have
five years of service or have attained the compulsory retirement age of 70.
3 The monthly income is determined by age at retirement, years of credited
service, and "final compensation". The basic benefit will be 2% of "final
compensation" for each year of credited service upon retirement at age 60. If
retirement is earlier than age 60 the percentages of "final compensation" for
each year of service are decreased. If retirement is deferred beyond age 60,
the percentages of "final compensation" for each year of service increases to
age 63.
"Final compensation" is the average monthly salary (full-time rate excluding
overtime) earned either during (1 ) the final 36 consecutive months unless
member specifically requests another 36 consecutive month period, or (2) if
provided by your agency by contract amendment, during the final 12 consecutive
months unless member specifically requests another 12 consecutive month
period.
DISABILITY RETIREMENT
An employee becoming disabled to the extent that he is incapable of performing
his duties shall be eligible for disability retirement provided he has at least
five years of service. The monthly retirement allowance is 1 .80% of "final
compensation" for each year of service with a minimum guarantee of one-third of
final compensation for most employees who have rendered at least 10 years of
service. (If provided by your agency, the benefit would be a minimum of 30% of
final compensation for five years of service and 1% of final compensation for
each additional year of service to a maximum benefit of 50% of final compensa-
tion). The disability retirement allowance shall under no circumstances exceed
the service retirement allowance payable upon retirement for service at age 60
if employment could be continued to that age.
DEATH BENEFITS
Death Before Retirement
Basic Death Benefit: This benefit is a refund of the member's
contributions plus interest and up to six month's pay (the sum of one
month's salary rate for each year of current service to a maximum of
six months).
CONTRACT
BETWEEN THE
BOARD OF ADMINISTRATION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
OF THE
PIP CITY OF DUBLIN
• se
In consideration o iovenants and agreement hereafter contained and on
the part of both parties t3"b0 ept and performed, the governing body of above
public agency, hereafter referM4t9 as "Public Agency", and the Board of
Administration, Public Employees' RAVement System, hereafter referred to as
"Board", hereby agree as follows: �8
0
1 . All wards and terms used herein whi €"'re 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.
2. Public Agency shall participate in the Public Employees' Retirement
System from and after 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 such as by
express provisions thereof apply only on the election of contracting
agencies.
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. Employees other than local safety members (herein referred to as
local miscellaneous members) .
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:
ELECTED OFFICIALS
4. The fraction 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) .
5. Public Agency, in accordance- with Section 20759.1 Government Code,
shall not considered an "employer" for purposes of Chapter 6 of the
Public Em � Retirement Law. Contributions of the Public Agency
shall be fix�r etermined as provided in Section 20759, Government
Code, and such cone+ions hereafter made shall be held by the Board
as provided in Section 10 �, Government Code.
#f
6. Public Agency shall contribute i14 ,4.d Retirement System as follows: •
1
a. With respect to miscellaneous memb`g ,r4he agency shall contri-
bute the following percentages of monthly salaries earned as
miscellaneous members of said Retirement System:
•
(1 ) 0.073 percent until June 30, 2007 on account of the
liability for prior service benefits.
(2) 7.065 percent on account of the liability for current
service benefits.
b. 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.
c. 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.
7. Contributions required of Public Agency and its employees shall be 1
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.
8. Contributions required of Public Agency and its employees shall be
paid by Public Agency to the Retirement System within thirty 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, or
adjustments on account of errors in contributions required of any
employee may be made by direct cash payments between the employee and
the Board. Payments by Public Agency to Board may be made in the form
of warrants, bank checks, bank drafts, certified checks, money orders
or cash.
•
Witness our hands the day of , 19
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT SYSTEM OF THE
CITY OF DUBLIN
•
pt
BY 4S BY
f,n
CARL J. BLECHINGER, EX OAT T4 OFFICER Presiding Officer
rs/CA ,'
yo
Approved as to form: �yjB/ike e s t:
o ,
- L /e//f p.,
2
C. thia G. B semer, Legal Office, Date Clerk
PERS CON-702 •
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DUBLIN
AUTHORIZING THE ADOPTION AND EXECUTION
OF A CONTRACT BETWEEN THE CITY OF DUBLIN
AND THE BOARD OF ADMINISTRATION OF THE
• CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
THE CITY COUNCIL OF THE CITY OF DUBLIN DOES ORDAIN AS FOLLOWS :
Section 1. ADOPTION OF CONTRACT
The adoption of the Contract, a copy of
which is attached hereto as "Exhibit A" and incorporated
herein, between the City Council of the City of Dublin and
the Board of Administration of the California Public Employees '
Retirement System is hereby authorized.
Section 2 . EXECUTION OF CONTRACT
The Mayor of the City of Dublin is hereby
authorized, empowered and directed to execute said Contract
for and on behalf of the City of Dublin.
Section 3. EFFECT; POSTING
This Ordinance shall take effect thirty (30)
days after the date of its adoption, and prior to the expira-
tion of fifteen (15) days from the passage thereof, the City
Clerk of the City of Dublin shall cause this Ordinance to be
posted in at least three (3) public places in the City of
Dublin in accordance with Section 38933 of the Government
Code of the State of California.
PASSED AND ADOPTED by the City Council of the City
of Dublin on this day of , 1982 , by the
following votes :
AYES:
NOES :
ABSENT:
Mayor
Attest:
By
City Clerk
• STATE OF CALIFORNIA—BOARD OF ADMINISTRATION
EDMUND G. BROWN JR., Governor
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
1416 NINTH STREET, P.O. BOX 1953 �Wa
SACRAMENTO, CALIFORNIA 95809 „
Telephone (916322-6689
September 28, 1982 4.
Mr. Richard Ambrose Sp 2 ` F L7
City Manager Cit 1982
City of Dublin Op
Post Office Box 2340 41/4/4!
Dublin, CA 94568
r±J Dear Mr. Ambrose:
4: We are transmitting with this letter our actuarial report on the valuation con-
ducted to determine the contributions necessary by your agency for participa-
tion in the Public Employees' Retirement System providing 2% @ 60 Full formula
and 100% prior service for local miscellaneous members.
Miscellaneous Members: 2% @ 60 Full Formula
Liquidating your prior service on June 30, 2007, your agency's miscellaneous
prior service contribution rate will be 0.073%. Your agency's miscellaneous
current service rate will be 7.065%. The total miscellaneous contribution rate
will be 7.138%. The data submitted for the actuarial valuation indicates that
the annual miscellaneous payroll amounts to $93,096 and the 7.138% rate applied
to this would produce an annual cost of $6,645. There will also be a uniform
miscellaneous employee contribution rate of 7% of all regular salary exclusive
of overtime.
The contribution rates shown in this report are based on the data submitted by
your agency with respect to your present employees. Should there be a
significant change in the composition of your employees before you have
established your retirement contract it may be necessary to redetermine your
contribution rate. After your retirement contract is established, your
contribution rate will periodically be re-established.
We would like to point out that this System requires contracting agencies to
pay an administrative change of $200.00 designed to cover initial administra-
tive costs associated with contracting with the System. For agencies providing
prior service, there is an additional charge of $25.00 per member to cover the
cost of the prior service calculation.
We also want to point out that the Retirement Law gives each member of this
system the right to claim credit for service rendered to the State or any other
public agencies covered by this system. This means that persons now or
hereafter employed by your agency who have previously been in the employ of the
State or one of our contracting public agencies may have the right to a benefit
based on service to such other agencies. Such benefit would be in addition to
any benefit earned by service to your agency and would be calculated in
accordance with the benefit formula provided under this system's contract with
such other agency. The cost of this benefit would be borne by the contracting
agency to which service had been rendered to the extent that such cost exceeds
the contributions, if any, made by the employee during his service to that
agency. If the employee's service to the other agency was prior to the date of
its contract with this system, no contributions would be required of the
employee. Former employees of your agency who might now or hereafter be
employed .by the State or any agencies which now or hereafter are under contract
with this system would have a corresponding right to claim credit for service
a rendered to your agency. The cost of any benefits which might result from such
[: claim would be borne by your agency.
"
1:. The enclosed Form CON-8A must be returned to us if you desire to initiate the
further steps necessary for participation in the Public Employees' Retirement
System. Please note that we have indicated the formulae under which the actu-
arial valuations were conducted. When you complete the Anticipated Schedule
(dates) of Agency Actions under Part "E" of Form CON-8A, allow at least three
weeks from the date your Form CON-8A reaches the Retirement System to the date
set for your governing body's adoption of the Resolution of Intention. That
resolution must meet certain specific requirements under the Retirement Law and
must also carry with it as an attachment a copy of the contract proposal.- It
is necessary, therefore, that this document be drawn by the Retirement System
office.
You will be billed at a later date for the services involved in the conduct of
this valuation.
If you have any questions regarding the enclosed material, please do not
hesitate to contact us.
Yours truly,
Ellen H. Baltezore, hief
Contracts Division
EHB/KMD:ddw
da-.
Enclosures
•
cc: San Francisco Area Office
4:0 ACTUARIAL VALUATION REPORT (:,
FOR PARTICIPATION IN THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
1982 ACTUARIAL ASSUMPTIONS
CITY OF DUBLIN
Combined
Miscellaneous Fire Police Fire & Polic
A. VALUATION SPECIFICATIONS
1. Projected •contract date 11/1/82
2. Formula 2% @ 60 Full
3. Normal retirement age Age 60
l' • 4. Final compensation average 3 Years
1"s 5. Optional benefits: •
+'. NONE •
tl
B. VALUATION DATA
1. Number of actives 3
2. Annual payroll $93,096
C. AGENCY CONTRIBUTIONS REQUIRED
1. For prior service:
a. Present value $1,429
b. Contributions (as 7.
of member payroll) 0.073%
c. Prior service funding
period to 6/30/2007
2. For current service (as 7. •
of member payroll):
a. For retirement
benefits 6.9517.
is b. For death benefits 0.114%
fl
0 c. Total 7.0657.
D. TOTAL AGENCY CONTRIBUTIONS (as
of member payroll)
1. Sum of prior service and
current service 7.1387.*
2. Annual dollar amount based
on member payroll $6,645
*This rate will increase during the first years of contract
FEE: $172.00 with PERS if the agency maintains about the same work force
DATE 9/28/82 as they had in their initial actuarial valuation. This is '
caused by the fact that the actuarial assumptions used in
the valuation for employee withdrawals assume a relatively high rate of turnover during the first
five years of employment. If an agency's work force consists almost entirely of relatively new
employees and most of those employees stay with the agency, then the actuarial assumption of
high turnover during the early years of employment is not realized and the employer contribution
rate gradually increases. KISUK YANG, CHIEF ACTUARY