HomeMy WebLinkAbout2009-10 - Authorizing an Amendment to the Contract between the City and the Board of Administration of the California Public Employees’ Retirement System.ORDINANCE NO. 2009-10
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, AUTHORIZING AN
AMENDMENT TO THE CONTRACT BETWEEN THE CITY
AND THE BOARD OF ADMINISTRATION OF THE
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM
NOW THEREFORE, the City Council of the City of Newport Beach, California, HEREBY
ORDAINS as follows:
SECTION 1: That the Amendment to the contract between the City of Newport Beach and
the Board of Administration, California Public Employees' Retirement System is hereby
authorized, a copy of said Amendment being attached hereto, marked "Exhibit", and by
such reference made a part hereof as though set out in full.
SECTION 2: The Mayor of the City of Newport Beach is hereby authorized,
empowered and directed to execute said Amendment for and on behalf of the City.
SECTION 3: If any section, subsection, sentence, clause or phrase of this ordinance is,
for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this ordinance. The City Council
hereby declares that it would have passed this ordinance, and each section, subsection,
clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses and phrases be declared unconstitutional.
SECTION 4: This ordinance shall take effect thirty (30) days after its adoption, and
prior to expiration of fifteen (15) days from the passage thereof shall be published once
in the Daily Pilot, a newspaper of general circulation, published in Costa Mesa and
circulated in the City of Newport Beach, and thenceforth and thereafter shall be in full
force and effect.
SECTION 5: This ordinance was introduced at a regular meeting of the City Council of the
City of Newport Beach, held on the 14th day of April, 2009, and adopted on the 12th day
of May, 2009, by the following vote, to wit:
AYES, COUNCILMEMBERS Henn, Curry, Gardner, Daigle, Mayor Selieb
NOES, COUNCILMEMBERS Rosansky
ABSENT COUNCILMEMBERS Webb
APPROVED AS TO FORM:
ATTE T: n
CITY CLERK
Ai
CAPERS
California
Public Employees' Retirement System
EXHIBIT
AMENDMENT TO CONTRACT
Between the
Board of Administration
California Public Employees' Retirement System
and the
City Council
City of Newport Beach
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 July 1, 1945, and
witnessed April 27, 1945, and as amended effective March 1, 1948, November 1, 1951,
April 1, 1956, October 31, 1970, September 18, 1971, December 11, 1971, September 24,
1977, December 18, 1977, June 17, 1978, March 24, 1979, June 30, 1979, January 12,
1989, December 2, 1989, June 12, 1996, July 12, 2000, August 26, 2000, Jude 15, 2002,
November 30, 2002, November 13, 2004, July 23, 2005, December 22, 2007 and March 15,
2008 which provides for participation of Public Agency in said System, Board and Public
Agency hereby agree as follows:
A. Paragraphs 1 through 14 are hereby stricken from said contract as executed effective
March 15, 2008, and hereby replaced by the following paragraphs numbered 1
through 13 inclusive:
1.
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 55 for local
miscellaneous members and age 50 for local safety members.
2. Public Agency shall participate in the Public Employees' Retirement System
from and after July 1, 1945 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.
PLEASE DO NOT SIG' N `L. JHIBIT ON Y=,
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. Ocean Beach Lifeguards (included as local safety members);
d. 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. POLICE CADETS; AND
b. RESERVE OFFICERS.
5. The percentage of final compensation to be provided for each year of credited
prior and current service as a local miscellaneous member in employment
before and not on or after December 22, 2007 shall be determined in
accordance with Section 21354 of said Retirement Law (2% at age 55 Full).
6. The percentage of final compensation to be provided for each year of credited
prior and current service as a local miscellaneous member in employment on
or after December 22, 2007 shall be determined in accordance with Section
21354.4 of said Retirement Law (2.5% at age 55 Full).
7. 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).
8. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 20421 ( "Local Safety Member" shall include ocean beach
lifeguards of a city as described in Government Code Section 20421).
b. Section 21574 (Fourth Level of 1959 Survivor Benefits).
C. Section 21024 (Military Service Credit as Public Service).
d. Section 21389 (Second Opportunity to Elect 1959 Survivor Benefits).
Legislation repealed said Section effective September 27, 1979. .
e. Section 20965 (Credit for Unused Sick Leave) for local miscellaneous
members only.
Section 20042 (One -Year Final Compensation).
g. Section 21548 (Pre- Retirement Option 2W Death Benefit).
h. Section 20516 (Employees Sharing Cost of Additional Benefits):
Section 21354.4 (2.5% @ 55 Full formula) for local miscellaneous
members.
The employee cost sharing contributions are not to exceed 2.420 %.
The maximum employee cost sharing contribution is the normal cost
plus the increase in the accrued liability due to the benefit improvement
amortized over 20 years. In no event shall the employee cost sharing
contribution attributable to the unfunded liability remain in effect beyond
December 31, 2027. Thereafter, in any given contribution year, the
maximum employee cost sharing contribution cannot exceed .838% of
payroll.
9. Public Agency, in accordance with Government Code Section 20790, ceased
to be an "employer" for purposes of Section 20834 effective on September 24,
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.
10. 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.
11. 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.
12. 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.
13. 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 effectit*vlhe day of
BOARD OF ADMINISTRATIO�\\��\ CITY COUNCIL
PUBLIC EMPLOYEES' WT ENT SYSTEM CITY OF NEWPORT BEACH
BY
" -ON-
Cz \a®
LORI M
LAND, CHIEF
EM
SERVICES DIVISION
PU
EMPLOYEES' RETIREMENT SYSTEM
AMENDMENT ERN 6D
PERS - CON -702A (Rev. 1 0105)
M
PRESIDING OFFICER
Witness Date `CJ\
AttestS�Q�i��
Qti�P
Clerk
Attachment III
3. The City will amend its PERS contract to provide for the 3% @ 50
retirement formula to be in effect no later than December 31, 2008.
E. Retiree Health Benefits Program
Back ground
In 2005, the City and all Employee Associations agreed to replace the
previous "defined benefit" retiree medical program with a new "defined
contribution" program. The process of fully converting to the new program
will be ongoing for an extended period. During the transition, employees
and (then) existing retirees have been administratively classed into one
of four categories. The benefit is structured differently for each of the
categories. The categories are as follows:
a. Category 1 - Employees newly hired after January 1, 2005.
b. Category 2 - Active employees hired prior to January 1, 2005,
whose age plus years of service as of January 1, 2005 was less
than 50 (46 for public safety employees).
C. Category 3 - Active employees hired prior to January 1, 2005,
whose age plus years of service was 50 or greater (46 for public
safety employees) as of January 1, 2005.
d. Category 4 - Employees who had already retired from the City prior
to January 1, 2005, and were participating in the previous retiree
medical program.
2. Program Structure
This is an Integral Part Trust (IPT) Medical Expense Reimbursement
Program Plan (MERP).
a. For employees in Category 1, the program is structured as follows:
Each employee will have an individual MERP account for bookkeeping
purposes, called his or her "Employee Account." This account will
accumulate contributions to be used for health care expense after
separation. All contributions to the plan are either mandatory employee
contributions or City paid employer contributions, so they are not
taxable to employees at the time of deposit. Earnings from investment
of funds in the account are not taxable when posted to the account.
Benefit payments are not taxable when withdrawn, because the plan
16
Attachment IV
CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: June 30, 2007
SAFETY PLAN FOR CITY OF NEWPORT BEACH
Employer Number: 60
Benefit Description: Section 21362.2, 3% @ 50 Full Fortnula for Local Safety Members (Safely Lifeguards Only)
Actuarial Cost Estimates in General
What will this amendment cost? Unfortunately, there is no simple answer. There are two major reasons for the
complexity of the answer:
First, all actuarial calculations, including the ones in this cost estimate are based on a lot of assumptions
about the future — demographic assumptions about the percentage of your employees that will terminate,
die, become disabled, and retire in each future year, and economic assumptions about what salary
increases each employee receives and the most important assumption: what the assets at CaIPERS will
earn for each year into the future until the last dollar is paid to current members of your plan. While
CaIPERS has set these assumptions as our best estimate of the real future of your plan, it must be
understood that these assumptions are very long term predictors and will surely not be realized each year
as we go forward. For example, the asset earnings fw the past 15 years at CaIPERS have ranged from
-7.2% to 20.1 %, yet the 15 year compound return has been 10.4 %, well above our assumption.
• Second, the very nature of actuarial funding produces the answer to the question of amendment cost as -
the sum of two separate pieces:
1. The increase in Normal Cost (i.e., the increase in future annual premiums in the absenoe of
surplus or unfunded liability) expressed as a percentage of total alive payroll, and
2. The increase in Past Service Cost (i.e., Accrued Uability — representing the current value of the
increased benefit for all past service of current members) which is expressed as a lump sum dollar
amount
The cost is the sum of a percent of future pay and a lump sum dollar amount (the sum of an apple and an
orange if you will). To communicate the total cost, ether the increase in Normal Cost (i.e., future percent
of payroll) must be converted to a lump sum dollar amount (in which case the result Is caged the increase
In the present value of benefits), or the Past Service Cost (i.e., the lump sum) must be converted to a
percent of payroll (in which case the result is the Increase in the employers rate). Converting the Past
Service Cost lump sum to a percent of payroll requires a specific amortization period. So, the new
employer rate can be coRiputed in many different ways depending on how long one will take to pay for It.
And don't forget the first bullet point above; all of these results depend on all of the assumptions being
exactly realized.
Rate VolatUlty
As is stated above, the cost estimates supplied in this communication are based on a number of assumptions about
very long term demographic and economic behavior. Even if these assumptions are exactly realized (terminations,
deaths, disabilities, retirements, salary growth, and investment return) there will be differences on a year to year
basis. This year to year difference between actual experience and the assumptions is called gains and losses and
serve to raise or lower the employers rates from year to year. So, the rates will bounce around, especially due to the
ups and downs of investment returns.
The volatility in annual employer rates may be affected by this amendment. The reason is that higher beneft and
earlier retirement ages require the accumulation of more assets per member earlier In their career. Rabe volatility
Can be measured by the ratio of plan assets to active member payroll. Higher asset to payroll ratios produce more
volatile employer rates. To see this, consider two plans, am with amts that are 4 tines alive member payroll, and
the otter Vft assets that are 8 UMes active member payroll. In a given year, see what happens when assets rise er
fag 10% above or below the actuarial assafimpgon. For the Plan with a ratio of 4, this 10 percent gain or loss in
ash Is the same in dollars as 48% of payroll; and for the plan with a ratio of 8, this is equivafert to 80% of payroll.
If this gain or loss is spread over 20 years (and we oversimplify, by Ignoring interest on the gain or loss), them the
first plans rate changes by 2% of pay white the second plant rate changes by 4"!0 of pay.
November 19, 2008 Page 1
CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: June 30, 2007
SAFETY PLAN FOR CITY OF NEWPORT BEACH
Employer Number: 60
Benefit Description: Section 21362.2, 3% @ SO Full Formula for Local Safety Members (Safety Lifeguards Only)
When a plan is amended, liability changes but assets do not. In addition, the desired state is to be 1009/b funded
(i.e., to bring assets to equal accrued liability). Therefore, we disclose the ratio of accrued4bbility to payroll rather
than assets to payroll as a measure of the plan's potential future rate volatility. The highefte ratio, the more
volatile the future rate may be. The table below contains these measures of potential future rate volatility.
As of June 30, 2007 Current Plan Post - Amendment
Accred Liability $ 308,551,677 $ 309,338,753
Payroll 25,034,573 25,034,573
Volatility Index 12.3 12.4
It should also be noted that these ratios tend to stabilize as the plan matures. That is, all plans with no past service
start their lives with zero assets and zero accrued liability — and so asset to payroll ratio and liability to payroll rats of
zero. However, as time goes by these ratios begin to rise and then tend to stabilize at some content amount as the
plan matures. Higher benefit levels and earlier expected retirements produce higher constant future ratios. For
example, our miscellaneous plans have average ratios that range from 2.6% for 2% @ 60 plans to 5.1% for 2.7% @
55 plans. For safety plans, the ratios range from 5.2% for 2% @ 55 plans to 9.3% for 3% @ 50 plans.
Present Value of Projected Benefits
The table below shows the change In the total present value of benefits for the proposed plan amendment. The
present value of benefits represents the total dollars needed today to fund all future benefits for current members of
the plan (i.e., without regard to future employees). The difference between this amount and current plan assets
must be paid by future employee and employer contributions. As such, the change in the present value of benefits
due to the plan amendment represents the "cost" of the plan amendment
However, for plans with excess assets some or all of this °cost° may already be covered by current excess assets.
As of June 30, 2007
Current Plan
Post - Amendment
Total Assets at Market Value (MVA)
$ 292,102,211
$
292,102,211
Actuarial Value of Assets (AVA)
250,062,262
250,062,262
AVA / MVA
85.6%
85.6%
Present Value of Projected Benefits (PVB)
$ 364,567,961
$
365,332,822
Actuarial Value of Assets (AVA)
250.062.262
250,062262
Present Value of Future Empleyer and
Employee Contifbufiens (PV$ — ANA)
Change to PVB
764,861
Accnled Liability
It is not required, nor necessarily desirable, to have accumulated assets sufficient to cover the total print value of
benefits until every member has left employment. Irttead, like actuarial funding process calculates a regular
contribution schedule of employee eoWbutons and employer oontnb*ons (called normal costs) which are designed
to accumulate with interest to equal the total present value of benefits by the time every member has left
employrnent As of each June 30, the actuary calculates the "desirable" level of plan wets as of that point In time
by subtracting the present value of scheduled future employee CoWbutions and future employer normal Colts from
the total present value of benefits. The resulting "desirable" level of assets is called the acaued%raMW-
November 19, 2008 Page 2
CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: June 30, 2007
SAFETY PLAN FOR CITY OF NEWPORT BEACH
Employer Number! 60
Benefit Description: Section 213622, 3% 0 SO Full Formula for Local Safety Members (Safety Lifeguards OnIY)
A plan with assets exactly equal to the plan's accrued liability is simply "on schedule" in funding that plan, and only
future employee contributions and future employer normal costs are needed. A plan with assets below the accrued
liability is "behind schedule ", or is said to have an unfunded liability, and must temporarily increase contributions to
get back on schedule. A plan with assets in excess of the plan's accrued liability is "ahead of schedule ", or is said to
have excess assets, and can temporarily reduce future contributions. A plan with assets (AVA) in excess of the total
present value of benefits is called super- funded, and neither future employer nor employee contributions are
required. Of course, events such as plan amendments and investment or demographic gains or losses can charge a
plan's condition from year to year. For example, a plan amendment could cause a plan to move all the way from
being super- funded to being in an unfunded position.
The changes in your plan's accrued liability, unfunded accrued liability, and the actuarial values of assets funded ratio
as of June 30, 2007 due to the plan amendment are shown in the table below.
As of June 30, 2007 Current Plan Post- Amendment
Entry Age Normal Accrued Liability (AL) $ 308,551,677 $ 309,338,753
Actuarial Value of Assets (AVA) 250,062,262 250,062,262
Unfunded Liability /(Excess Assets) (UAL = AL — S 58,489,415 $ 59,276,491
AVA)
Funded Ratio (AVA / AL) 81.0% 80.8%
Chanae to AL 787,076
Total Employer Contribution Rate
While the table above gives the changes in the accrued liability and funded status of the plan due to the amendment,
there remake the questlon of what will happen to the employer contribution rate because of the change in plan
provisions.
CaIPERS policy is to implement rate changes due to plan amendments Immediately on the effective date of the
change in plan benefits. This change is displayed as the "Change to Total Employer Rate" on the following page. If
the contract amendment effective date is on or before June 30, 2009, the change in the employer contribution rate
should be added to the employer's current rate. In general, the poky also provides that the change In unfunded
liability due to the plan amendment Will be separately amortized over a period of 20 years from the effective date of
the amendment and all other components of the plan's unfurled IlablAly /eircess assets will continue to be amortized
separately.
However, your actuary may choose to apply different rules to plans with a current employer contaibution rate of zero.
The pre - amendment excess assets in these plans were sufficient to oaVer the employers normal wst for one or more
years into the future. A plan amendment will use up some or all of the pre - amendment excess assets. In order to
maintain our goal of providing rates that are relatively stable, why taking hito account (mown or ergoected future
events, you actuary may decide to spread any remaining excess ads mw a sho number of years. This is
known as a "fresh start" and will, in no case, be less than 5 years. You may call your actuary to discuss further
alternative financing options. If the amendment uses up all eicoess; assets and creates an w*Rded mobility (i.e.,
from being ahead of schedule to behind sclhedule), the'total post- anmxkent unfunded k'alxilty may be amortized
over 20 years.
In no case may the annual contribution with regard to a positive unfunded liability be less than the amount which
would be required to amortize that unfunded liability, as a level percent of pay, over 30 years. The table on the
following page shows the change in your plan's employer contribution rate due to the plan amendment for fiscal year
2009 -2010.
November 19, 2,008 Page 3
CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: June 30, 2007
SAFETY PLAN FOR CITY OF NEWPORT BEACH
Employer Number: 60
Benefit Description: Section 21362.2, 3% @ 50 Full Formula for Local Safety Members (Safety I.Meguards Orly)
As of 3une 30, 2007 Current Plan Post-Amendment
2009 -2010 Employer Rate
Payment for Normal Cost 15.251% 15.376%
Payment on Amortization Bases 13.509% 13.779%
Total Employer Rate 28.760% 29.155%
Change to Normal Cost 0.125%
Change to Total Employer Rate 0.395%
Current Amortization Bases' Multiple Bases
Amendment Amortization Base
- Fresh Start 2 N/A
- Multiple Base a 20-year
2009 -2010 Employee Rate
Total Employee Rate 9.000% 9.000%
Change to Total Employee Rate 0.000%
Estimated Employer Rate 28,3% 28.8%
Projection Amortization Base Multiple Base Multiple Base
1 — Details of the current amortization base are drown on page 13 of June 30, 2007 annual valuation report. If you have adopted any other
subsequent anendnents, the current amortl2atlon base is the sdiedule after these adepled amerdmeau.
2 - N a faed number of years is shown, it means that the aurent unfunded aduariat aakaty is projected and amorpaed curer this ford number of
years. This amortization replaces the amortization schedule shown in your June 30, 2007 annual valuation and any other subsequent amendments
you have adopted.
3 • If 20 -year is shown, It means that the dhange in Willy due to plan amendments is amotimd separately over a 20-year period. This amordeton
schedule is in additon to the amonlzation sdmdute shown in the June 30, 2007 annual valuation and arty other subsequent amendments you have
adopted.
In the above table, the Information shown iWesents the actual irdU Doatribulion rate daat will apply during fiscal
year 2009 -2010 if yeti adopt the amendment, However, these firATes do not Incorpefift the investment mWm in
2007 -2098. The e9likkiled employer rye mown for 2010 -2011 Incarporaitim t114s; aitarrh aud assumes no
demographic gains or losses. The rate of return used for the post-amendment analysis was -5.1 %. Dire to tuning
and availability of data, the annual valuation projected an employer rate using a rate of return of -2.5 %. If the
investment rate of return of -5.1% had been available at the time of the aaxadal wkm*n, the pratted employer
contribution rate shown in the annual valuation report would be apprtaxiahatety 0.1% hkpw.
Note that the change in normal cost in the table above may be nwch mare intticative of the long term change in the
employer Comhibution rate due to the plan amendment. The plan's payment on am oration bases shown in the
table above is a temporary adjustment to the employer contribullon to 'get the plan back on schedule ". This
temporary a*ar AW to the employer rate varies in duration from plan to plan. For example, a plan with RAW
excess ads being amortized over a short period of time will types eirperMM a IBW rare Increase when excess
assets are fully amortized. While a plan amendment fur such a plan may produce little or no increase in the
employer contribution rate now, the change in normal cost due to the plan amendment will become fully reflected in
the employer eon(tibudom rate as soon as ifthial excess assets are fully armoriiaed.
November 19, 2008 Page 4
CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: June 30, 2007
SAFETY PLAN FOR CITY OF NEWPORT BEACH
Employer Number. 60
Benefit Description: Section 21362.2, 3% @ S6 Full Formula for Local Safety Members (SaleppAWIVillar& Ordy?
Disclosure
If your agency is requesting cost information for two or more benefit changes, the cost of adoplingoAlIft than one of
these changes may not be obtained by adding the individual costs. Instead, a separate vaktrAbbnAltitist be done to
provide a cost analysis for the combination of benefit changes. If the proposed plan amendRUMV15fies to only
some of the employees in the plan, the rate change due to the plan amendment still applies to the an, and is
still based on the Baal plan payroll.
Any mandated benefit improvements not included in the June 30, 2007 annual valuation have not iYAMnoorporated
into this cost analysis.
Please note that the cost analysis provided in this document may not be relied upon after August 1, 2009. If you
have not taken action to amend your contract, by this date, you must contact our office for an updated cost analysis,
based on the new annual valuation.
Descriptlons of the actuarial methodologies, actuarial assumptions, and plan benefit provisions may be found in the
appendices of the June 30, 2007 annual report. Please note that the results shown here are subject to change if any
of the data or plan provisions change from what was used In this study.
Certification
This actuarial valuation for the proposed plan amendment is based on the participant, benefits, and asset data used
in the June 30, 2007 annual valuation, with the benefits modified if necessary to reflect what is currently provided
under your contract with CaIPERS, and further modified to reflect the proposed plan amendment. The valuation has
been performed in accordance with standards of practice prescribed by the Actuarial Standards Board, and the
assumptions and methods are internally consistent and reasonable for this plan, as prescribed by the CaIPERS Board
of Administration according to provisions set forth in the California Public Employees' Retirement Law.
Richard Santos, ASA, MAAA
Senior Pension Actuary, CalPERS
Fin Prooess Ids: Annual- 318076 Base - 321835 Proposal- 321836
November 19, 2008 Page 5
CONTRACT AMENDMENT COST ANALYSIS -VALUATION BASIS: June 30, 2007
SAFETY PLAN FOR CITY OF NEWPORT BEACH
Employer Number Go
Beneflt Description: SeWon 21362.2, 3% @ 50 Pull Formula for Local Safety Members (Safety Lifeguards only)
Summary of Plan Amendments Valued
COVERAGE GROUP 76001
Pre - Amendment
• The Service Retirement benefit calcuiated for service earned by this group of members 6 a monthly
allowance equal to the product of the 3% @ 55 benefit factor, years of service, and final compensation.
(Final compensation is reduced by $133.33 per month for members with a modified formula). The
benefit factors for retirement at integral ages are shown below:
Retirement 3% at 55
Age Facer
50
2.400%
51
2.520%
52
2.640%
53
2.760%
54
2.880%
55 and older
3.000%
Post- Amendment
The Service Retirement benefit calculates for service earned by this group of members is a monthly
allowance equal to the product of the 3% @ 50 benefit factor, years of service, and final compensation.
(Final compensation Is reduced by $133.33 per month for members with a modified formula). The
benefit factors for retirement at iril e" ages are shorn below:
Retirement
3% at 50
Age
Faft
50
3.000%
51
3.000%
52
3.000%
53
3.000%
54
3.000%
55 and older
3.000%
November 18, 2008 Page 6
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229 -2709
(888) CalPERS (225 -7377)
CERTIFICATION
OF
FINAL ACTION OF GOVERNING BODY
I hereby certify that the City Council of the
(governing body)
of Newport Beach
(public agency)
adopted on May 12 2009 , by an affirmative vote of a majority
(date)
of the members of said Governing Body,
Ordinance
(Ordinance or Resolution)
No. 2009 -10 approving the attached contractual agreement between the
Governing Body of said Agency and the Board of Administration of the California Public
Employees' Retirement System, a certified copy of said Ordinance
(Ordinance or Resolution)
in the form furnished by said Board of Administration being attached hereto.
Date May 13, 2009
PERS -CON -5 (Rev. 1/96)
(
Clerk/Secretary
Title
Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby
certify that the whole number of members of the City Council is seven; that the foregoing ordinance,
being Ordinance No. 2009 -10 was duly and regularly introduced on the 14th day of April, 2009, and
adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held
on the 12th day of May, 2009, and that the same was so passed and adopted by the following vote, to
wit:
Ayes: Henn, Curry, Gardner, Daigle, Mayor Selich
Noes: Rosansky
Absent: Webb
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 13th day of May, 2009.
(Seal)
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City Clerk
City of Newport Beach, California
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
I, LEILANI I. BROWN, City Clerk of the City of Newport Beach, California, do hereby certify
that Ordinance No. 2009 -10 has been duly and regularly published according to law and the order of
the City Council of said City and that same was so published in The Daily Pilot, a daily newspaper of
general circulation on the following date, to wit: May 16, 2009.
2009.
( �I
In witness whereof, I have hereunto subscribed my name this day of
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City Clerl
City of Newport Beach, California