HomeMy WebLinkAboutL- 1 Amendment to contract with Public Employees' Police Dept. effiligfig 0 OF AZUSA 141
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Finance Department• 213 E.Foothill Blvd. ■P.O.Box 1395 •Azusa,CA 91702-1395
Tel: (818)812-5203 • FAX(818)334-6358
AGENDA ITEM
TO: HONORABLE MAYOR AND MEMBERS OF TH CITY COUNCIL
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FROM: GEOFF CRAIG, DIRECTOR OF FINANCE 0
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VIA: HENRY GARCIA, CITY ADMINISTRATOR
DATE: March 3, 1997
SUBJECT: AMENDMENT TO CONTRACT WITH PUBLIC EMPLOYEES'
RETIREMENT SYSTEM TO PROVIDE SECTION 21382.5 (FOURTH
LEVEL OF 1959 SURVIVOR BENEFITS) FOR LOCAL
MISCELLANEOUS MEMBERS AND LOCAL POLICE MEMBERS
Background
As part of the negotiations which culminated in the new four-year contracts (and revised existing
contracts)with the various bargaining units, management agreed that, effective as soon as
possible, the City shall amend its contract with the Public Employees Retirement System(PERS)
to include the highest level (Fourth Level) of the"1959" Survivor Benefit. This report explains
the procedure and the cost and presents a Resolution, an Ordinance and two Certifications for the
Council to consider.
Findings
Unfortunately, there are occasions when, due to accident, injury or illness, a City employee passes
away prior to reaching age 50, which is the minimum age to retire with a pension from the Public
Employees' Retirement System. At its inception, the City's contract with the Public Employees'
Retirement System made no provision for the survivor of such an employee to receive any type of
monthly allowance. In many cases, this resulted in severe hardship. In 1959, State law was
amended to allow employers to provide a minimum monthly allowance to the survivor of an
employee who passes away prematurely. The cost is 93 cents per pay period per employee. For
the City of Azusa this amounts to approximately $ 7,311.46 per year.
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Fortunately, use of this retirement contract provision has been low enough that the employer
contributions plus PERS' tremendous investment capacity have placed the fund in a nearly
self-sufficient position. Recently, PERS has offered to Azusa the option to increase the amount
of the monthly allowance to the survivor of a prematurely-deceased employee, at no additional
cost for 25 or more years. Following is a comparison of the current versus the proposed benefit:
Current Monthly Benefit Proposed Monthly Benefit
Survivor $350 $950
Survivor+ 1 Dependent 700 1,900
Survivor+ 2 or more Dependents 840 2,280
Insamuch as the City of Azusa has contracted with the Public Employees' Retirement System
since 1949, staff believes that it would be appropriate to participate in and benefit from the
System's return on the investment of 1959 Survivor Benefit contributions. To do so requires that
Council pass a Resolution and adopt an Ordinance. Staff is recommending that Council approve.
Recommendations
Staff recommends that Council:
1. Pass the attached Resolution of Intention to Approve an Amendment to the contract
between the Board of Administration of the Public Employees' Retirement System and the
City Council of the City of Azusa; and
2. Introduce an Ordinance authorizing an Amendment to the contract between the City of
Azusa and the Board of Administration of the Public Employees' Retirement System; and
3. Authorize the Mayor to sign the"Certification of Compliance with Government Code
Section 7507" and the"Agreement to Pool 1959 Survivor Benefits Assets and Liabilities
between the Board of Administration of the Public Employees' Retirement System and the
City Council of the City of Azusa."
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RESOLUTION NO. 47-C 2 4
RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT
TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION
OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE
CITY COUNCIL OF THE CITY OF AZUSA
WHEREAS, the Public Employee's Retirement Law permits the participation of
public agencies and their employees in the Public Employee's 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 amendments 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 21382.5 (Fourth Level of 1959
Survivor Benefits) for local miscellaneous members
and local police members.
NOW, THEREFORE, BE IT RESOLVED that the governing body of the above
agency does hereby give notice of 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.
The City Clerk shall certify the passage of this resolution.
APPROVED AND PASSED this 13rd day of March , 1997.
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MAYOR
I HEREBY CERTIFY that the foregoing Resolution was duly passed by the City Council of
the City of Azusa at a regular meeting thereof held on the 3rd day of March , 1997.
AYES: COUNCILMEMBERS: HARDISON, MADRID, NARANJO, BEEBE, ALEXANDER
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
/Jr/
CITv CLERK
AGREEMENT
TO POOL
1959 SURVIVOR BENEFITS ASSETS AND LIABILITIES
BETWEEN THE
BOARD OF ADMINISTRATION
bF THE
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AND THE
CITY COUNCIL
OF THE
CITY OF AZUSA
WHEREAS, Government Code Section 21382.5 provides for a single employer rate to be
established to provide benefits under said Section on account of members
employed by contracting agencies electing to include the provision of said Section
in their contracts; and
WHEREAS, Government Code Section 21382.5, requires pooling of all assets and liabilities of
all contracting agencies subject to said Section;
NOW, THEREFORE BE IT AGREED, that assets and liabilities of the City of Azusa and its
covered employees shall be pooled pursuant to the provisions of Government Code
Section 21382.5.
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT SYSTEM OF THE
CITY OF AZUSA
BY BY
KENNETH W. MARZION, CHIEF PRESIDING OFFICER
ACTUARIAL& EMPLOYER SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Date
PERS-CON-59(Rev.7/96)
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(916) 326-3420
CERTIFICATION OF COMPLIANCE WITH
GOVERNMENT CODE SECTION 7507
I hereby certify that in accordance with section 7507 of the Government Code the future annual
costs as determined by the System Actuary and/or increase in retirement benefit(s) have been
made public at a public meeting of the City Council of the City of Azusa on the 18th day of
February, 1997, which is at least two weeks prior to the adoption of the Resolution.
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/ / ` __/
CITY CLE '
Date
i
p.IH”.6,4
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(916) 326-3420
CERTIFICATION OF GOVERNING BODY'S ACTION
I hereby certify that the foregoing is a true and correct copy of a Resolution passed by the City
Council of the City of Azusa on the 3rd day of March, 1997.
/ CITY CLERK v