CC - 2012-44 - Amendment to the PARS Retirement Enhancement Plan to Include an Early Retirement IncentiveRESOLUTION NO. 2012 - 44
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ROSEMEAD, CALIFORNIA, AUTHORIZING AN AMENDMENT TO THE
PARS RETIREMENT ENHANCEMENT PLAN TO INCLUDE AN EARLY
RETIREMENT INCENTIVE
WHEREAS, the City of Rosemead (the "City ") is a member of the Public
Agency Retirement System (PARS) for the purpose of providing tax qualified retirement
benefits; and
WHEREAS, the City maintains the PARS Retirement Enhancement Plan (the
"Plan ") supplementing CalPERS, and qualifying under the relevant sections of the
Internal Revenue Code and the California Government Code; and
WHEREAS, the City has reserved the right to amend the Plan from time to time in
accordance with Section 5.3 of the Plan; and
WHEREAS, the City deems it to be in the best interest of the City and its eligible
employees to amend the Plan to provide an early retirement incentive, in addition to the
retirement benefit provided under the existing Plan, for those Miscellaneous employees
who (i) are actively employed by the City as of July 24, 2012; (ii) are at least fifty -five
years of age and eligible to retire under CaIPERS under a regular service retirement as
of September 30, 2012; (iii) resign from City employment effective no later than
September 28, 2012; and (iv) concurrently retire under CalPERS effective no later than
September 30, 2012; and
WHEREAS, the incentive offered shall equal: (Part 1) a monthly cash income for
the lifetime of the participant equal to two additional years of CalPERS service credit,
and (Part 2) two additional years of service credit shall be added to the underlying Plan
for benefit service and vesting purposes. Alternative forms of payment under Part 1 of
the incentive shall include a 100% joint- and - survivor monthly payment, lump sum
payment, or fixed term monthly payments from five to fifteen years.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ROSEMEAD
DOES HEREBY RESOLVE AS FOLLOWS:
1. The City Council does hereby authorize amending the PARS Retirement
Enhancement Plan effective July 24, 2012, to provide an early retirement
incentive as outlined above; and
2. The retirement incentive must meet the City's fiscal and operational
objectives in order for the plan to go into effect. If these goals are not
reached, the City may withdraw the retirement incentive. If the City withdraws
the retirement incentive, resignations may be rescinded; and
Resolution No. 2012 - 44
Page 2
The City Council has appointed the City Manager, or his /her successor or
his /her designee as the City's PARS Plan Administrator; and
4. The City's Plan Administrator is hereby authorized to execute the PARS legal
and administrative service documents on behalf of the City to implement the
PARS early retirement incentive and further authorizes him to take whatever
additional actions required to administer the City's PARS plans.
PASSED AND ADOPTED this 24th day of July, 2012.
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Sandra Armenfa, Mayor
ATT ST: n r
Ol.to� 1vlr���1
Gloria Molleda, City Clerk
APPROVED AS TO FROM
Rachel Rich an, City Attorney
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS.
CITY OF ROSEMEAD )
I, Gloria Molleda, City Clerk of the City of Rosemead, do hereby certify that the foregoing
Resolution No. being 2012 -44:
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ROSEMEAD, AUTHORIZING
ANAMENDMENT TO THE PARS RETIREMENT
ENHANCEMENT PLAN TO INCLUDE
ANEARLY RETIREMENT INCENTIVE
was duly and regularly approved and adopted by the Rosemead City Council on the 24Th of July,
2012, by the following vote to wit:
Yes: Alarcon, Armenta, Clark, Low, Ly
No: None
Abstain: None
Absent: None
Gloria Molleda
City Clerk
ROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY C UNCIL
FROM: JEFF ALLRED, CITY MANAGER
DATE: JULY 24, 2012
SUBJECT: EARLY RETIREMENT INCENTIVE THROUGH PARS
SUMMARY
As the City Council is aware, the City currently has a structural budget imbalance and staff has
been working to identify ways of reducing ongoing costs. The Council authorized the offering of
a Retirement Incentive Enhancement Plan in 2009 and earlier in 2012. In 2009 there were two
employees that retired under the plan and in 2012 there were five employees. Despite this
reduction in the work force of seven employees combined with reductions through regular
attrition and a reduced reliance on part -time staff, the City continues to have a structural deficit.
Based upon ongoing discussions employees, it is believed that there are several employees
who would be interested in participating in a Retirement Incentive Plan if it was offered an
additional time.
As with previous offerings, the Retirement Incentive Plan will provide two additional years of
service credit to full -time employees who accept the offer. The benefit is designed to mirror the
CalPERS retirement benefits and will be distributed and calculated as such. PARS will provide
a general meeting for all eligible team members, and will then schedule individual follow -up
meetings if employees wish to discuss the personal financial benefits of the plan. Under the
proposed plan, employees will have to make their final decision of acceptance on or before
August 31, 2012. Once the decision has been made, a retirement date on or before September
30, 2012 will be identified.
It is recommended that the City Council adopt Resolution 2012- 44 authorizing the Retirement
Incentive Plan with PARS.
ANALYSIS
In order to develop a balanced budget for Fiscal Year 2012 -13, new revenue sources and
expenditure reductions totaling $3.6 million were necessary. While many of the adjustments
made to balance the budget were permanent in nature, a number of one -time sources were also
used to bridge the gap. In light of these one -time sources and projected future cost increases,
staff continues to search for additional ways to balance the budget on an ongoing basis.
In 2007 the City had 67 full -time employees and 18 '% -time employees. Since this time
significant efforts have been made to reduce the total workforce without layoffs while
maintaining a high level of service and programs. With the adoption of the 2012 -13 Budget, full -
time staffing had been reduced to 53 employees, a 20% reduction, and' /4time positions have
been reduced to 11 employees. Ultimately, staffing cannot continue to be reduced in large
numbers while maintaining existing service levels and programs, but it is believed that a
ITEM NO. __ 0 - (..
City Council Meeting
July 24, 2012
Page 2 of 2
reduction to 50 full -time employees is realistic and likely sustainable. It should also be noted
that some departments have already absorbed significant staffing reductions and should
additional employees choose to take advantage of this program, a commitment to entirely
eliminating positions may not be possible. In these cases, positions would likely be downgraded
to ensure an overall savings.
Prepared by:
f *11_� T
Matthew E. Ha ke worth
Assistant City Manager
Attachments: A — Resolution 2012 - 44