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7.B. - Page 18 Callfornla Public Employees' Retirement System Am Actuarial Office P.O. Box 1494 Sacramento, CA 95812 -1494 ' . . TTY: (918) 795 -3240 (MRS (888) 225 -7377 phone - (916) 795-2744 fax www.calpem.ca.gov June 09, 2011 Employer Number. 0008 Employer Name: CITY OF REDWOOD CITY Rate Plan: MISCELLANEOUS PLAN Re: New 2% 0 60 and 3 yr FAC Second Tier for local Miscellaneous Plan members within a Non -pooled Plan (Section 20475: Different Level of Benefits Provided for New Employees) Deer Requester: As requested, employer contribution rate information on your proposed second tier follows. if you are aware of others Interested in this Information (i.e. payroll staff, county court employees, port districb, eta), please inform them. The information is based on the June 30, 2009 annual valuation. There will be no immediate employer contribution rate Impact from this amendment. Ultimately, however, your employer normal cost will decrease. If the mix of active member entry ages were the same for both the current continuing fast tier employees and the new second tier employees, the decrease in the employer rate would be 3.8 %. The employer rate reduction will occur gradually, beginning on July 1, 2013, If there are second tier employees hired on or before June 30, 2011. For fiscal years 2013/2014 and beyond, the projected cumulative amount of rate reduction you can expect from introducing a second tier Is equal to the ratio of your second tier payroll to your total plan payroll two and a half years earlier. For example If 1/10 of your Miscellaneous Plan members were In second tier on June 30, 2011 and the u0mate eWedd name/ amt deamse was 3.8%, the cumulative rate reduction you can expect by the 2013/2014 fiscal year would be 1/10 x 3.8% = 0.38%. To initiate an amendment to the contract, please complete the attached election form and mail or FAX (916) 795- 3005 the form with a letter to the Contracts Mainteenance Unit, lndpting your wish to contract for Section 20475 (Different Level of Benefits) and identifying the group(s) to which the benefit reduction applies. In sections 20463 (b) and (c), the California Public Employees' Retirement Law requires the governing body of a public agency within fire days of receipt of the contract amendment cost analysis, to provide each employee organization with a copy of the analysis. If this cost analysis was requested by an employee organization, the employee organization is also required within five days of receipt of the analysis, to provide a copy of the analysis to the public agency. If you have questions, please call (888) CaIPERS (225 - 7377). David DuBois, FSA, MAAA 1 _ Senior Pension Actuary, Ca1PERS