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Home My WebLink About05 - Pre-Retirement Option Settlement Death Benefit to Miscellaneous EmployeesCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 5 September 14, 2004 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Sharon Wood, Assistant City Manager 644 -3222, swood @city.newport- beach.ca.us SUBJECT: Resolution of Intention and Ordinance to Approve an Amendment to PERS Contract to Provide Pre - Retirement Optional Settlement Death Benefit to Miscellaneous Employees RECOMMENDATION: 1. Adopt Resolution No. 2004- , A Resolution of Intention to Approve an Amendment to Contract Between the Board of Administration, California Public Employees' Retirement System and the City Council of the City of Newport Beach. 2. Introduce Ordinance No. 2004-, An Ordinance of the City Council of the City of Newport Beach Authorizing an Amendment to the Contract Between the City Council of the City of Newport Beach and the Board of Administration of the California Public Employees' Retirement System, and pass to second reading on October 12, 2004. DISCUSSION: The Memoranda of Understanding (MOUs) with the three miscellaneous (non- safety) employee groups that were approved by the City Council on August 24 provide that the City will implement the pre- retirement optional settlement death benefit. This benefit allows the spouse of a deceased employee who was eligible to retire at the time of death to receive either a lump sum payment (the current benefit) or the monthly allowance the employee would have received had he or she retired. Staff has received and reviewed an actuarial valuation of this benefit from PERS, and received the contract amendment documents from PERS. The annual cost of this benefit is approximately $93,000. Sufficient funds were included in the 2004 -05 budget. Resolution of Intention and Ordinance to Approve Amendment to PERS Contract September 14, 2004 Page 2 The next steps in the process are for the City Council to adopt the Resolution of Intention and an Ordinance approving the amendment. Submitted by: S a n Wood Assistant City Manager Attachments: Resolution Ordinance RESOLUTION NO. 2004- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DECLARING ITS INTENTION TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION, CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL, CITY OF NEWPORT BEACH 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 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 21548 (Pre- Retirement Optional Settlement 2 Death Benefit) for local miscellaneous members. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Newport Beach 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 an "Exhibit" and by this reference made a part hereof. Passed and adopted by the City Council of the City of Newport Beach at a regular meeting held on the 14`h day of September 2004. Tod W. Ridgeway, Mayor LaVonne M. Harkless, City Clerk n ORDINANCE NO. 2004- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM The City Council of the City of Newport Beach does hereby ordain as follows: Section 1. That an 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 "A," 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. This Ordinance shall take effect thirty (30) days after its adoption, and prior to the 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. Adopted and approved this day of September 2004 by the following vote: AYES, COUNCILMEMBERS _ NAYS, COUNCILMEMBERS ABSTAIN, COUNCILMEMBERS Tod W. Ridgeway, Mayor Attest: City Clerk ME .tip. _._.- ...... �rrr CaIPERS EXHIBIT California Public Employees' Retirement System Cz> O PCD 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 c:mtract 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, SeptembE r 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 1�, 1996, July 12, 2000, August 26, 2000, June 15, 2002 and November 30, 20C2 which provides for participation of Public Agency in said System, Board and Publi(: Agency hereby agree as follows: A. Paragraphs 1 through 13 are hereby stricken from said contract as executed effective November 30, 2002, and hereby replaced by tfe 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, "Norma retirement age" shall mean age 55 for local miscellaneous members: age 55 for local fire members and ocean beach lifeguards; and arle 50 for local police members. Z Public Agency shall participate in the Public E nployees' Retirement System from and after July 1, 1945 making its em )loyees as hereinafter provided, members of said System subject to all p •ovisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein :ind to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting a aency. 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 locz I safety members); b. Local Police Officers (herein referred to as to ;al safety members); C. Ocean Beach Lifeguards (included as local safety members); d. Employees other than local safety member: (herein referred to as local miscellaneous members). 4. In addition to the classes of employees exclude( from membership by said Retirement Law, the following classes of employees shall not become members of said Retirement System: a. CADETS; AND b. RESERVE OFFICERS. 5. The percentage of final compensation to be prodded for each year of credited prior and current service as a local miscellaneous member 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 pro tided for each year of credited prior and current service as a local fire members & ocean beach lifeguards shall be determined in accordance with Section 21363.1 of said Retirement Law (3% at age 55 Full). 7. The percentage of final compensation to be pro tided for each year of credited prior and current service as a local police member shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full). SE DO 8. Public Agency elected and elects to be subject to the following optional provisions: a. Section 20421 ( "Local Safety Member' shal include ocean beach lifeguards of a city as described in Government Code Section 20421). b. Section 21574 (Fourth Level of 1959 Survivo 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 Si .::k Leave) for local miscellaneous members only. f. Section 20042 (One -Year Final Compensatic n). g. Section 21548 (Pre- Retirement Optional Settlement 2 Death Benefit) for local miscellaneous members on y. 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 Governmeiit 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 fut.ire service liability with respect to local miscellaneous members and local :>afety members of said Retirement System. 11. Public Agency shall also contribute to said Retirem.:ant System as follows: a. Contributions required per covered member on account of the 1959 Survivor Benefits provided under Section 2' 574 of said Retirement Law. (Subject to annual change.) In a Edition, all assets and liabilities of Public Agency and its employe -:s shall be pooled in a single account, based on term insurance rides, for survivors of all local miscellaneous members and local safety members. 11 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 Bard, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Publi,; Agency, and costs of the periodic investigation and valuations required by law. 12. Contributions required of Public Agency and it: employees shall be subject to adjustment by Board on account of amE ndments 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 eriployees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer o° as may be prescribed by Board regulation- If more or less than the correct amount of contributions is paid for any beriod, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee r iay 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 NEWPORT BEACH BY BY KENNETH W. MARZION,•CH,iEF PRESIDING OFFICER C' >' ACTUARIAL & EMPLOYbIk SERVICES DIVISION PUBLIC EMPLOYEES% RETIREMENT SYSTEM ' �i Witness Date Attest: Clerk AMENDMENT I -R# 0060 PERS - CON -70.A (Rev. 8 \02) a