HomeMy WebLinkAbout22924 RESOLUTION NO. 22924
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, DECLARING ITS
INTENTION TO APPROVE AN AMENDMENT TO
CONTRACT BETWEEN THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM AND THE CITY
COUNCIL OF THE CITY OF PALM SPRINGS.
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 20475 (Different Level of Benefits). Section 21363.1 (3%a@755
Full formula) is applicable to local police members entering membership for the first time
in the police classification after the effective date of this amendment to contract.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY
RESOLVE AS FOLLOWS:
SECTION 1. The City Council of the City of Palm Springs does hereby give
notice of its 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 Exhibit A and by this reference
made a part hereof, as on file in the office of the City Clerk.
PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS 18T" DAY OF MAY, 2011.
DAVID H. REArw', 0T MANAGER
AIIEST:
MES THOMPSON, CITY CLERK
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. 22924 is a full, true and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on this 18th day of May, 2011, by
the following vote:
AYES: Councilmember Foat, Councilmember Hutcheson, Councilmember
Mills, Mayor Pro Tern Weigel, and Mayor Pougnet.
NOES: None.
ABSENT: None.
ABSTAIN: None.
tME�S THOMPSON, CITY CLERK
C Palm Springs, California
uaimc3
EXHIBIT
California
Public Employees' Retirement System
AM NDMEN T TO CONTRACT
Between the
Board of Administration
Califoxnia Public Employees ' Retirement System
and the
City Colancil
City of Palm Springs
48011.
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, 1957, and witnessed December 3, 1956, and as amended effective July 14,
1965, January 14, 1973, January 1, 1975, September 5, 1976, July 10, 1977, October
15, 1978, April 29, 1979, February 27, 1983, July 1, 1984, June 29, 1986, April 18,
1998, August 23, 1998, April 18, 1999, August 19, 2001, April 28, 2002, May 25, 2003
and January 4, 2004 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 January 4, 2004, and hereby replaced by the following paragraphs
numbered 1 through 15 inclusive:
1. All words and terrns 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 55 for local miscellaneous members ; age 50 for local fire members
and those local police members entering membership in the police
classification on or prior to the effective date of this amendment to
contract, and age 55 for local police members entering membership for
the first time in the police classification after the effective date of this
amendment to contract.
s
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2. Public Agency shall participate in the Public Employees' Retirement
System from and after January 1, 1957 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. Public Agency agrees to indemnify, defend and hold harmless the
California Public Employees' Retirement System (CaIPERS) and its
trustees, agents and employees, the CaIPERS Board of Administration,
and the California Public Employees' Retirement Fund from any claims,
demands, actions, losses, liabilities, damages, judgments, expenses and
costs, including but not limited to interest, penalties and attorneys fecs
that may arise as a result of any of the following:
(a) Public Agency's election to provide retirement benefits,
provisions or formulas under this Contract that are different than
the retirement benefits, provisions or formulas provided under
the Public Agency's prior non-CaIPERS retirement program.
(b) Public Agency's election to amend this Contract to provide
retirement benefits, provisions or formulas that are different than
existing retirement benefits, provisions or formulas.
(c) Public Agency's agreement with a third party other than
CaIPERS to provide retirement benefits, provisions, or formulas
that are different than the retirement benefits, provisions or
formulas provided under this Contract and provided for under
the California Public Employees' Retirement Law.
(d) Public Agency's election to file for bankruptcy under Chapter 9
(commencing with section 901) of Title 11 of the United States
Bankruptcy Code and/or Public Agency's election to reject this
Contract with the CaIPERS Board of Administration pursuant to
section 365, of Title 11, of the United States Bankruptcy Code
or any similar provision of law.
(e) Public Agency's election to assign this Contract without the prior
written consent of the CaIPERS' Board of Administration.
(f) The termination of this Contract either voluntarily by request of
Public Agency or involuntarily pursuant to the Public Employees'
Retirement Law.
(g) Changes sponsored by Public Agency in existing retirement
benefits, provisions or formulas made as a result of
amendments, additions or deletions to California statute or to
the California Constitution. 7
4. 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).
5. 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:
NO ADDITIONAL EXCLUSIONS
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 April 28, 2002 shall be determined
in accordance with Section 21354 of said Retirement Law, subject to the
reduction provided therein for service prior to December 31, 1974,
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 April 28, 2002 shall be determined in accordance
with Section 21354.5 of said Retirement Law, subject to the reduction
provided therein for service prior to December 31, 1974, termination of
Social Security, for members whose service has been included in Federal
Social Security (2.7% at age 55 Full and Modified).
8. The percentage of final compensation to be provided for each year of
credited prior and current service as a local fire member and those local
police member entering membership in the police classification on or prior
to the effective date of this amendment to contract shall be determined in
accordance with Section 21362.2 of said Retirement Law (3% at age 50
Full).
9. The percentage of final compensation to be provided for each year of
credited current service as a local police member entering membership
for the first time in the police classification after the effective date of this
amendment to contract shall be determined in accordance with Section
21363.1 of said Retirement Law (3% at age 55 Full).
10. Public Agency elected and elects to be subject to the following optional
provisions:
a. Sections 21624, 21626 and 21628 (Post-Retirement Survivor ,
Allowance).
v
b. Section 21024 (Military Service Credit as Public Service).
C. Section 20042 (One-Year Final Compensation).
d. Section 20965 (Credit for Unused Sick Leave) for local fire
members only.
e. Section 21574 (Fourth Level of 1959 Survivor Benefits).
f. Section 20475 (Different Level of Benefits). Section 21363.1 (3%
@ 55 Full formula) is applicable to local police members entering
membership for the first time in the police classification after the
effective date of this amendment to contract.
11. Public Agency, in accordance with Government Code Section 20790,
ceased to be an "employer" for purposes of Section 20834 effective on
September 5, 1976. 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.
12. 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.
13. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per covered member on account of the 1959
Survivor Benefits provided under Section 21574 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 safety members.
b. 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.
C. 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.
14. 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 9
valuation required by said Retirement Law.
15. 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 ,
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF PALM SPRINGS
BY BY
DARRYL WATSON, CHIEF PRESIDING OFFICER
CUSTOMER ACCOUNT SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Witness Date
Attest:
Clerk
AMENDMENT ER#355
PERS-CON-702A
10
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
(888) CaIPERS (225-7377)
SUMMARY OF MAJOR PROVISIONS
3% @ 55 Formula (Section 21363.1)
Local Safety Members
SERVICE RETIREMENT
To be eligible for service retirement, a member must be at least age 50 and have five years of
CalPERS credited service. If provided by the employer's contract, mandatory retirement age for
local safety members is age 60.
The monthly retirement allowance is determined by age at retirement, years of service credit and
final compensation. The basic benefit is 3% of final compensation for each year of credited
service upon retirement at age 55. If retirement is earlier than age 55, the percentage of final
compensation decreases for each quarter year of attained age to 2.40% at age 50. The allowance
is limited to 90% of final compensation.
Final compensation is the average monthly pay rate during the last consecutive 36 months of
employment, or 12 months if provided by the employer's contract, unless the member designates a
different period of 36 or 12 consecutive months when the average pay rate was higher. Certain
items of special compensation earned during your final compensation period will be included in
your final compensation, in accordance with Board regulations.
DISABILITY RETIREMENT
Members substantially incapacitated from performing the usual duties for the position for his/her
current employer would be eligible for disability retirement provided they have at least five years of
service credit. The monthly retirement allowance is 1.8% of final compensation for each year of
service. The maximum percentage for members who have between 10.000 and 18.518 years of
service credit is one-third of their final compensation. If the member is eligible for service
retirement the member will receive the highest allowance payable, service or disability. If provided
by the employer's contract, the benefit would be a minimum of 30% of final compensation for the
first five years of service credit, plus 1% for each additional year of service to a maximum benefit
of 50%of final compensation.
INDQ$TRIAL DISABILITY RETIREMENT
Members permanently incapacitated from performing their duties, as defined above under
Disability Retirement, and the disability is a result of a job-related injury or illness may receive an
Industrial Disability Retirement benefit equal to 50% of their final compensation. If provided in the
employer's contract and the member is totally disabled, the disability retirement allowance would
equal 75% of final compensation in lieu of the disability retirement allowance otherwise provided.
If the member is eligible for service retirement, the service retirement allowance is payable. The
total allowance cannot exceed 90% of final compensation.
PRE-RETIREMENT DEATH BENEFITS
Basic Death Benefit: This benefit is a refund of the member's contributions plus interest and up to
six months' pay (one month's salary rate for each year of current service to a maximum of six
months).
�l
1957 Survivor Benefit: An eligible beneficiary may elect to receive either the Basic Death Benefit or
the 1957 Survivor Benefit. The 1957 Survivor Benefit provides a monthly allowance equal to one-
half of the highest service retirement allowance the member would have received had he/she
retired on the date of death. The 1957 Survivor Benefit is payable to the surviving spouse or
registered domestic partner until death or to eligible unmarried children until age 18.
1959 Survivor Benefit: (If provided by the employer's contract and the member is not covered
under social security.) A surviving spouse or registered domestic partner and eligible children may
receive a monthly allowance as determine by the level of coverage. This benefit is payable in
addition to the Basic Death Benefit or 1957 Survivor Benefit. Children are eligible if under age 22
and unmarried,
Pre-Retirement Option 2W Death Benefit: (If provided by the employer's contract.) The spouse or
registered domestic partner of a deceased member, who was eligible to retire for service at the
time of death, may to elect to receive the Pre-Retirement Option 2W Death Benefit in lieu of the
lump sum Basic Death Benefit. The benefit is a monthly allowance equal to the amount the
member would have received if he/she had retired for service on the date of death and elected
Option 2W, the highest monthly allowance a member can leave a spouse or registered domestic
partner.
Special Death Benefit: A surviving spouse, registered domestic partner, or eligible children or step
children may receive a monthly allowance equal to one-half of the final compensation. If the cause
of death is due to external violence or physical force while on the job, and there are eligible
surviving children in addition to a spouse or registered domestic partner, the allowance may be
increased to a maximum of 75%.
COST-OF-LIVING ADJUSTMENTS
The cost of living allowance increases are limited to a maximum of 2% compounded annually
unless the employee's contract provides a 3, 4, or 5% increase.
DEATH AFTER RETIREMENT
The lump sum death benefit is $500 (or $600, $2,000, $3,000, $4,000 or $5,000 if provided by the
employer's contract) regardless of the retirement plan chosen by the member at the time of
retirement.
TERMINATION OF EMPLOYMENT
Members who have separated from employment may elect to leave their contributions on deposit
or request a refund of contributions and interest. Those who leave their contributions on deposit
may apply at a later date for a monthly retirement allowance if the minimum service and age
requirements are met. Members who request a refund of their contributions terminate their
membership and are not eligible for any future benefits unless they return to CaIPERS
membership.
EMPLOYEE CONTRIBUTIONS
Local safety members covered by the 3% @ 55 formula contribute 9% of reportable earnings.
Those covered under a modified formula (coordinated with Social Security) do not contribute on
the first$133.33 earned.
The employer also contributes toward the cost of the benefits. The amount contributed by the
employer for current service retirement benefits generally exceeds the cost to the employee. In
addition, the employer bears the entire cost of prior service benefits (the period of time before the
employer provided retirement coverage under CaIPERS). All employer contribution rates are
subject to adjustment by the CalPERS Board of Administration.
12
DC01Q_f'nM.K4/ro„ Al/171
Actuarial Office
P.O. Box 1494
Sacramento,CA 95812-1494 ;
TTY for Speech and Hearing Impaired-(916)795-3240
CaIPERS (888)CaIPERS(or 888-225-7377) FAX(916)795-3005
December 21, 2010
Employer Number:0355
Employer Name : (:1 I Y OF PALM SPRINGS
Rate Plan: SAFELY PLAN
Re: New 3%@ 55 Safety Police Second Tier within a Non-pooled Plan(Section 20475: Different Level of Benefits
Provided for New Employees)—For Police Only
Dear Requestor:
As requested,employer contribution rate information on your proposed second tier follows.
If you are aware of others Interested In this Information(i.e.payroll staff,county court employees,
port districts,etc.),please inform them.
The Information is based on the June 30,2009 annual valuation.
CaIPERS offers a choice of two options In Implementing a second tier within a non-pooled pension plan. Under both
options,If the employee contribution rate changes,that change would take place immediately. The first option,our
standard method,reduces the employer rate slowly over time as new employees are hired with second tier lower
benefits,which have a lower employer contribution rate.The second option is to temporarily have a different
employer contribution rate for new employees as determined by the appropriate risk pool's rates in combination with
the first tier plan's current unfunded liability rate.This option will provide more immediate rate relief. Details on both
methods are provided below and an election form can be found at the end of this letter.
Standard Method
Under the standard method,there will be no immediate employer contribution rate impact from this amendment.
Ultimately,however,your employer normal cost will decrease. If the mix of active member entry ages were the
same for both the current continuing first tier employees and the new second tier employees,the ultimate decrease
would be 1.4%.
This rate reduction will occur gradually,beginning on July 1, 2013,if there are second tier employees hired on or
before June 30, 2011, For fiscal years 2013/2014 and beyond,the projected cumulative amount of rate reduction
you can expect from introducing a second tier is equal to the ratio of your second tier payroll to your total plan
payroll two and a half years earlier. For example if 1/10 of your safety police members were In second tier on June
30,2011 and the ultimate erpec&d no mal cost decrease was 1.496,the cumulative rate reduction you can expect
by the 2013/2014 fiscal year would be 1/10 x 1.4%=0.14%.
To initiate an amendment to the contract, please complete the attached election form and mail or FAX(916)795-
3005 the form with a letter to the Contracts Maintenance Unit,indicating your wish to contract for Section 20475
(Different Level of Benefits)and identifying the group(s)to which the benefit reduction applies.
In sections 20463(b)and(c),the California Public Employees'Retirement Law requires the governing body of a
public agency within five days of receipt of the contract amendment cost analysis,to provide each employee
organization with a copy of the analysis. If this cost analysis was requested by an employee organization,the
employee organization is also required within five days of receipt of the analysis,to provide a copy of the analysis to
the public agency.
If you have questions,please 11(888),CalPERS(225-7377).
RICHARD SANTOS,CFA,ASA, MAAA
Senior Pension Actuary,CaIPERS
California Public Employees'Retirement System
www.calners.ca.aov