HomeMy WebLinkAboutL-1 Public Employees' Retirement System 1.
* ; -' * The City of Azusa Al
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 MEMBER'OF THE CITY COUNCIL
FROM: GEOFF CRAIG, DIRECTOR OF FINAN a.
HENRY GARCIA, CITY ADMINISTRAT► ' ��
VIA: `
DATE: April 7, 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 an Ordinance for the Council to adopt.
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. On February 18th, Council authorized the
presentation at the March 3rd regular meeting of the drafts of the Resolution and Ordinance that
would authorize amending the City's contract with the Public Employees' retirement System to
include the Fourth Level of the"1959" Survivor Benefit. On March 3rd, Council passed the
Resolution of Intention to approve the Amendment, and introduced the Ordinance authorizing the
Amendment to the PERS contract. Staff is recommending that Council now conducts the final
reading and adopts the Ordinance.
Recommendations
Staff recommends that Council:
Adopt the Ordinance authorizing an Amendment to the contract between the City of
Azusa and the Board of Administration of the Public Employees' Retirement System.
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ORDINANCE NO. 97-02
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AZUSA
AUTHORIZING AN AMENDMENT TO THE CONTRACT BETWEEN
THE CITY COUNCIL OF THE CITY OF AZUSA AND THE BOARD OF
ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
THE CITY COUNCIL OF THE CITY OF AZUSA does ordain as follows:
SECTION 1. That an amendment to the contract between the City Council of the City of
Azusa and the Board of Administration of the California Public Employees' Retirement System is
hereby authorized, a copy of said amendment being attached hereto, marked Exhibit, and by such
reference be made a part hereof as though herein set out in full.
SECTION 2. The Mayor of the City of Azusa is hereby authorized, empowered, and
directed to execute said amendment for and on behalf of said Agency.
SECTION 3. This Ordinance shall take effect thirty (30) days after the date of its
adoption, and prior to the expiration of fifteen (15) days from the passage thereof shall be
published at least once in the Azusa Herald, a newspaper of general circulation, published and
circulated in the City of Azusa and thenceforth and thereafter the same shall be in full force and
effect.
ASSED AND PPROVED thi 7th day of April , 1997.
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )ss.
CITY OF AZUSA )
I, ADOLPH SOLIS, City Clerk of the City of Azusa, do hereby certify that the foregoing
Ordinance No. 97-02 was regularly introduced and placed upon its first reading at a
meeting of the City Council on the 3rd day of March , 1997. That thereafter said
Ordinance was duly adopted and passed at a regular meeting of the City Council on the 7th
day of April , 1997 by the following vote, to wit:
AYES COUNCILMEMBERS: HARDISON, STANFORD, ROCHA, BEEBE, MADRID
NOES COUNCILMEMBERS: NONE
ABSENT COUNCILMEMBERS: NONE
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