AgdaPkt 2016-11-28 Closed and Joint SA PFA

Browse Search

employee contribution and also to pay an additional amount toward the employer’s required contribution. Under this method, the CalPERS contract is not amended, and the additional payment is not credited as an employee contribution within the individual’s CalPERS account. Under the second method, in accordance with Government Code 20516(a), an agency’s contract with CalPERS may be amended to increase the employee contribution to CalPERS, thereby contractually reducing the employer’s cost toward the benefit. This amount is credited to the employee’s account as an employee contribution. For the past several years, the City has implemented cost- sharing with employee groups under the first method. In order to ensure that contributions are credited to the employee’s CalPERS accounts, the City and both IAFF and POA agreed to implement a portion of the cost-sharing as an increased employee contribution under Government Code 20516(a). In order to increase the employee contribution to CalPERS in accordance with Government Code 20516(a), the City’s contract with CalPERS must be amended. The contract amendment requires a Resolution of Intention to Approve an Amendment to Contract, and introduction of an Ordinance authorizing an amendment. Additionally, as part of the CalPERS contract amendment process, CalPERS requires that an employee election to be held. An employee election will be held from November 29, 2016 to December 18, 2016 to vote on amending the CalPERS contract to provide for the agreed upon employee cost sharing contribution. After a successful election, Council will be presented with the final Ordinance. It is anticipated that the final Ordinance will be presented on January 9, 2017. Thirty days after the final reading, the Amendment will become effective. Beginning with the subsequent pay period, starting February 20, 2017, payroll will start reporting the cost sharing to CalPERS. ALTERNATIVES Changes to employees’ cost sharing were previously negotiated with the IAFF Local 2400 and Redwood City Police Officers Association bargaining units and approved by Council in February, 2015 and February, 2016 respectively. Therefore, no alternative actions are recommended. FISCAL IMPACT Terms are already included in the current budget for these changes. The implementation of cost-sharing as an increase to the employee share, rather than a pick-up of the employer share, does not result in any changes to current and projected retirement costs. ENVIRONMENTAL REVIEW 6.4.A. - Page 3