HomeMy WebLinkAbout05 - PERS Employer Paid ContributionsCITY OF
1 NEWPORT BEACH
City Council Staff Report
April 8, 2014
Agenda Item No. 5.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Terri L. Cassidy, Deputy City Manager /Human Resources Director -(949) 644 -3303,
tcassidy @newportbeachca.gov
PREPARED BY: Maggie Williams - Dalgart, Senior Human Resources Analyst
PHONE: 949 - 644 -3337, mwilliams- dalgart@newportbeachca.gov
TITLE: Adoption of a Resolution for the Reporting of Employer Paid Member Contributions
for the California Public Employees' Retirement System
ABSTRACT:
On January 22, 2013, the City Council adopted Resolution No. 2013 -11 to eliminate reporting
the value of the Employer Paid Member Contribution (EPMC) to the California Public
Employees' Retirement System (PERS) as special compensation, based
on adopted agreements with the City Employees Association (CEA), Professional and Technical
Employees Association (Prof Tech), Employees League (League), and the Key & Management
Compensation Plan, and part-time unit. The City was recently advised by PERS, following an
audit of contract resolutions, that as a matter of procedure a supplemental Resolution to the one
adopted in January 2013 is needed for the purpose of clarifying payment of the EPMC. If
adopted by the City Council, the Resolution will be filed with PERS.
RECOMMENDATION:
Approve Resolution No. 2014 -28, A Resolution of the City Council of the City of Newport Beach
for Employer Paid Member Contributions, to properly record the Employer Paid Member
Contribution for employees in the following Miscellaneous groups: City Employees Association,
Professional and Technical Employees Association, Employees League, the Key &
Management group, and the part-time unit.
FUNDING REQUIREMENTS:
There are no additional funding requirements associated with this recommendation.
DISCUSSION:
In January 2013, the City and its Miscellaneous bargaining units (CEA, Prof Tech, and League)
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agreed to the terms of successor Memoranda of Understanding (MOU) to the labor contracts
that expired in 2012. Included in the MOUs were agreements that employees share in the cost
of funding the City's pension obligation by contributing an additional 4.35% to the 8% they were
already paying (for a total of 12.35°/x). By the end of the contract, this 12.35% employee
payment will represent roughly a 45% contribution toward the total cost of the retirement
benefit. A provision of that agreement also provides that a portion of PERS the City pays on
behalf of the employee (2.42% of the "Member Contribution ") no longer be reported as "special
compensation" for the purpose of calculating retirement benefits. Resolution No. 2011 -13
appropriately removed that special reporting provision outlined in the MOU.
Recently, PERS notified the City that as a matter of administrative procedure, the City should
also have adopted a Resolution to clarify that the City would continue to pay 2.42% of the rate
on the employee side (aka the Member Contribution, although no special compensation would
be reported). This is based on prior agreements and contract amendments with PERS for the
City to pay a portion of the Member Contribution and for employees to pay a portion of the
Employer Contribution. The proposed Resolution does not change the contributions employees
in these groups have agreed to pay, rather, it clarifies how the funds are reported to PERS. The
12.35% employee contribution remains and will represent, by the end of the contract, an
estimated 45% share in the total cost of the pension obligation for non - safety personnel.
The proposed Resolution was reviewed and verified by City Attorney's Office staff as
meeting PERS procedural requirements. If adopted by the City Council, staff will file the
Resolution with PERS.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California Environmental
Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or
reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the
activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of
Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to
the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the
meeting at which the City Council considers the item).
ATTACHMENTS:
Description
Attachment A - PERS Resolution for Employer Paid Member Contributions
95
Attachment A
RESOLUTION NO. 2014 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH FOR
EMPLOYER PAID MEMBER CONTRIBUTIONS
WHEREAS, the City Council of the City of Newport Beach has the authority to
implement Government Code Section 20691; and
WHEREAS, the City Council of the City of Newport Beach has written labor
policies or agreements which specifically provides for the normal member contributions
to be paid by the employer for employees in the City Employees Association,
Professional and Technical Employees Association, Employees League, Key and
Management group, and part-time unit; and
WHEREAS, one of the steps in the procedures to implement Section 20691 is
the adoption by the City Council of the City of Newport Beach of a Resolution to
commence said Employer Paid Member Contributions; and
WHEREAS, the City Council of the City of Newport Beach has identified the
following conditions for the purpose of its election to pay EPMC:
Section 1. This benefit shall apply to all Tier 1 Miscellaneous employees
represented by the City Employees Association, Professional and Technical
Employees Association, Employees League, Key & Management group, and part-time
group.
Section 2. This benefit shall consist of paying 2.42% of the normal
member contributions as EPMC.
Section 3. The effective date of this Resolution shall be January 26, 2013.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Newport Beach elects to pay the EPMC, as set forth above.
Adopted this day of 2014.
M
ATTEST:
City Clerk
Mayor of the City of Newport Beach