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6.C. - Page 98 of 196 CITY OF REDWOOD CITY NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2020 NOTE 9 — EMPLOYEE BENEFITS A. Pension Plan, Continued Benefits Provided — Ca1PERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and/or their beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law (PERL). The plans' provisions and benefits in effect at June 30, 2020 are summarized as follows: Beginning in fiscal year 2016, Ca1PERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability. The dollar amounts are billed on a monthly basis. The City's required contribution for the unfunded liability was $10,783,264 and $9,725,392 for the safety and miscellaneous plans respectively in fiscal year 2020. The City's Tier 2 plans for public safety and miscellaneous cover new employees hired on or after October 13, 2011. The City's Tier 3 plans for public safety and miscellaneous cover new employees hired on or after January 1, 2013 pursuant to the Public Employees' Pension Reform Act of 2013. Police and fire safety employees hired before October 13, 2011 (Tier 1) are covered under the "3% at 50" formula. Under this retirement plan, an employee's retirement earnings at age 50 are calculated by multiplying 3% by the employee's years of service. This percentage factor increases with the employee's age upon retirement. 66 185 Public Safety Tier 1 Public Safety Tier 2 Public Safety Tier 3 Benefit Vesting Schedule 5 years of service 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50 55 57 Benefit factor for each year of service as a % of annual salary 3% 2.4%-3% 2%-2.7% Required employee contribution rates 9% 9% 12% Required employer contribution rates -normal cost 22.818% 22.818% 22.818% Miscellaneous Tier 1 Miscellaneous Tier 2 Miscellaneous Tier 3 Benefit Vesting Schedule 5 years of service 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 55 60 62 Benefit factor for each year of service as a % of annual salary 2%-2.7% 1.092%-2.418% 1%-2.5% Required employee contribution rates 8% 7% 6.25% Required employer contribution rates -normal cost 9.699% 9.699% 9.699% Beginning in fiscal year 2016, Ca1PERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability. The dollar amounts are billed on a monthly basis. The City's required contribution for the unfunded liability was $10,783,264 and $9,725,392 for the safety and miscellaneous plans respectively in fiscal year 2020. The City's Tier 2 plans for public safety and miscellaneous cover new employees hired on or after October 13, 2011. The City's Tier 3 plans for public safety and miscellaneous cover new employees hired on or after January 1, 2013 pursuant to the Public Employees' Pension Reform Act of 2013. Police and fire safety employees hired before October 13, 2011 (Tier 1) are covered under the "3% at 50" formula. Under this retirement plan, an employee's retirement earnings at age 50 are calculated by multiplying 3% by the employee's years of service. This percentage factor increases with the employee's age upon retirement. 66 185