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updated resolution is necessary in order to ensure the continuation of tax-deferred <br />status of all employee pension contributions. <br /> <br />ANALYSIS <br />This is the second reading of the Ordinance which was introduced at the regular City <br />Council meeting held on June 26, 2017. The proposed Ordinance would authorize an <br />amendment to the contract between CalPERS and the City of Redwood City. <br />State CalPERS law permits cost-sharing of required employer contributions through two <br />different methods. Under the first method, in accordance with Government Code <br />Section 20516(f), pursuant to an MOU, the employee is required to pay the standard <br />employee contribution and to pay an additional amount toward the employer’s required <br />contribution. Under this method, the CalPERS contract is not amended, and the <br />additional payment is not credited as an employee contribution within the individual’s <br />CalPERS account. Under the second method, in accordance with Government Code <br />20516(a), an agency’s contract with CalPERS may be amended to increase the <br />employee contribution to CalPERS, thereby contractually reducing the employer’s cost <br />toward the benefit. This amount is credited to the employee’s account as an employee <br />contribution. In order to ensure that contributions are credited to the employees’ <br />CalPERS accounts, the City and COA agreed to implement a portion of the cost-sharing <br />as an increased employee contribution under Government Code 20516(a). At the same <br />time, the employee obligation to pay a portion of the City’s costs under Government <br />Code 20516(f) will be reduced. <br />With the adoption of this Ordinance by the City Council, the Amendment will become <br />effective October 2, 2017 (the first day of the payroll period at least 30 days following <br />the effective date of the Ordinance), and payroll will make appropriate changes to the <br />reporting of the cost sharing to CalPERS. <br /> <br />ALTERNATIVES <br />Changes to employees’ cost sharing were previously negotiated with the COA <br />bargaining unit and approved by Council in February 2017. Therefore, no alternative <br />actions are recommended. <br /> <br />FISCAL IMPACT <br />The CalPERS contract amendment to increase the employee contribution to pension <br />will be offset by an equivalent reduction in the employee payments of the City’s share of <br />pension costs. This change does not result in any impacts to current and projected <br />retirement costs. <br /> <br /> <br /> <br /> <br />8.A. - Page 2