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7.B. - Page 22 California Public Employees' Retirement System Am Actuarial Office P.O. Box 1494 Sacramento, CA 95812 -1494 ! TTY: (916) 795 -3240 CaMRS (888) 225 -7377 phone - (916) 795 -2744 fax www.calpers.ca4ov June 09, 2011 Employer Number. 0008 Employer Name: CITY OF REDWOOD CITY Rate Plan: SAFETY PLAN Re: New 3% 0 55 and 3 -yr FAC Second Tier for local Safety Plan members within a Non - pooled Plan (Section 20475: Different Level of Benefits Provided for New Employees) Dear Requestor. As requested, employer contribution rate Information on your proposed second tier follows. If you are aware of others interested in this IMormatfon (Le. payroll staff, county court employees, port districts, 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 cunent continuing first tier employees and the new second tier employees, the decrease In the employer rate would be 3.1%. 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 Safety Plan members were In second tier on June 30, 2011 and Me ulffmate expected nwma/ cast de crease was 3.1%, the cumulative rate reduction you can expect by the 2013/2014 fiscal year would be 1/10 x 3.1% - 0.31%. 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 Contrails Maintenance Unit, Indicating 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 five 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) CalPERS (225 - 7377). dL,.'- David DUBOIS, FSA, MAAA Senior Pension Actuary, CaIPERS