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CC – Item 3C – Staff Report – Adoption of Ordinance No. 786 Authorizing and Amendment to the Contract Between BOA and Public Employee Retirement S E M\E �.n staf � .°�. � sport TO: HONORABLE MAYOR AND MEMBERS ROSEMEAD CITY COUNCIL FROM: FRANK G. TRIPEPI, CITY MANAGE DATE: JUNE 15, 1998 RE: ADOPTION OF ORDINANCE NO. 786 AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEE RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF ROSEMEAD FOR 2% @ 55 FULL FORMULA AND MILITARY SERVICE CREDIT Ordinance No. 786 was introduced at the Council Meeting of May 26, 1998. Upon adoption of this Ordinance the new rates will be effective the first payroll in August. Attached is a copy of Ordinance No. 786, which includes the new contract as Exhibit A, a copy of the current contract with PERS and revised annual cost figures which reflect the 1998-99 Budget. RECOMMENDATION It is recommended that the Rosemead City Council adopt Ordinance No. 786 Authorizing an Amendment to the Contract Between the Board of Administration of the Public Employee Retirement System and the City of Rosemead for 2% @ 55 Full Formula and Military Service Credit. COUNCIL AGENDA muffpmmno98 JUN 231998 ITEM No. ._ __ _ -- K CK 2 ORDINANCE NO. 786 AN ORDINANCE OF THE CITY COUNCILOF THE CITY OF ROSEMEAD AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF ROSEMEAD AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM THE CITY COUNCIL OF THE CITY OF ROSEMEAD DOES ORDAIN AS FOLLOWS: Section I. That an amendment to the contract between the City Council of the City of Rosemead 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 herein set out in full. Section 2. The Mayor of the City of Rosemead is hereby authorized, empowered, and directed to execute said amendment for and on behalf of said City. Section 3. This Ordinance shall take effect thirty (30) days after the date of its adoption. Section 4. The City Clerk shall certify to the adoption of this Ordinance and shall cause the same to be published in accordance with state law. PASSED, APPROVED and ADOPTED this 23rd day of June, 1998. MAYOR ATTEST: CITY CLERK EXHIBIT A AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF ROSEMEAD The Board of Administration, Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of above public agency, hereinafter referred to as Public Agency, having entered into a contact effective October 12, 1992, and witnessed September 8, 1992, and as amended effective April 9, 1993 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 11 are hereby stricken from said contract as executed effective April 9, 1993, and hereby replaced by the following paragraphs numbered 1 through 11 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. 2. Public Agency shall participate in the Public Employees' Retirement System from and after October 12, 1992 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. 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. Employees other than local safety members (herein referred to as local miscellaneous members). PLEASE DO NOT SIGN "EXHIBIT ONLY" 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. SAFETY EMPLOYEES; AND b. "PLANNING AND TRAFFIC COMMISSION". 5. Assets heretofore accumulated with respect to members in the local retirement system have been transferred to the Public Employees' Retirement System and applied against the liability for prior service incurred thereunder. 6. The percentage of final compensation to be provided 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), supplemental to Federal Social Security. 7. Public Agency elected and elects to be subject to the following optional provisions: a. Section 20938 (Limit Prior Service to Members Employed on Contract Date). b. Section 21536 (Local System Service Credit Included in Basic Death Benefit). c. Section 21031 (Public Service Credit for Limited Prior Service). d. Section 21024 (Military Service Credit as Public Service), Statutes of 1976. 8. 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 of said Retirement System. 9. Public Agency shall also contribute to said Retirement System as follows: a. 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. b. 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. 10. 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. 11. 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 , 19 BOARD OF ADMINISTRATION � CITY COUNCIL PUBLIC EMPLOYEES' RETIREMENF. STEM OF THE � CITY OF ROSEMEAD - ate . BY BY ��-� KENNETH W. MARZION, CF PRESIDING OFFICER ACTUARIAL &EMPLOYSSERVICES DIVISION C _ PUBLIC EMPLOYEES' TIREMENT SYSTEM . r QQ Witness Date r. Attest: ;' Clerk AMENDMENT PERS-CON-702A(Rcv.E\96) AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF ROSEMEAD The Board of Administration, Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of above public agency, hereinafter referred to as Public Agency, having entered into a contract effective October 12, 1992, and witnessed September 8, 1992, which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs I through 11 are hereby stricken from said contract as executed effective October 12, 1992, and hereby replaced by the following paragraphs numbered 1 through 11 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 60 for local miscellaneous members. 2. Public Agency shall participate in the Public Employees' Retirement System from and after October 12, 1992 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. 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. 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. SAFETY EMPLOYEES; AND b. "PLANNING AND TRAFFIC COMMISSION". 5. Assets heretofore accumulated with respect to members in the local retirement system have been transferred to the Public Employees' Retirement System and applied against the liability for prior service incurred thereunder. 6. The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member shall be determined in accordance with Section 21251.13 of said Retirement Law (2% at age 60), supplemental to Federal Social Security. 7. Public Agency elected to be subject to the following optional provisions: a. Section 20835.1 (Limit Prior Service to Members Employed on Contract Date). b. Section 21361.5 (Local System Service Credit Included in Basic Death Benefit). c. Section 20930.90 (Public Service Credit for Excluded or Limited Prior Service). 8. 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 of said Retirement System. 9. Public Agency shall also contribute to said Retirement System as follows: a. 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. b. 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. 10. 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. 11. 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. en B. This endment shall be effective on the '7-i ('day of 19 intep BOARD OF ADMINISTRATION CITY COUNCIL PUBLIC EMPLOYEES' RETIREMENT SYSTEM OF THE CITY OF ROSEMEAD _ 4 BY _ ✓1 _.� J at BY ri/C 1.f"---✓"-T -�i✓.�✓ C IEF, CON ' • CT SERVICES D'tiISION Presidingibfficer PUBLIC EMPLOYEES' RETIREMENT SYSTEM 2./C - 93 Witness Date Atte/ Cl PERS-CON-702 (AMENDMENT) (Rev. 10/92) CITY OF ROSEMEAD PERS CALCULATION: 2% @ 55 YEARS* "REFLECTS COLA (3.0%) AND MERIT (5.0%)" JULY 1, 1998 PROPOSED RATE RATE (2% @ 60) (2% @ 55) (A) ANNUAL PAYROLL $1,361,402.91 $1,361,402.91 (B) EMPLOYER RATE 6.774% 10.706% (C) EMPLOYEES' CONTRIBUTION RATE 7.000% 7.000% (D) ESTIMATE PERS COST CALCULATION: (A) x I (B) + (C) ) $187,519.64 $241,050.00 INCREASE IN COST PER ANNUM $53,530.36 kbo:123r5w\pers55.wk4 (revised 06-18-98)