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6.3. C. - Page 1 <br /> RE PO RT <br /> To the Honorable Mayor and City Council <br /> From the Cit Mana er <br /> February 6, 2012 <br /> SUBJECT <br /> Execute a Transfer of Funds Agreement between the City of Redwood City, California <br /> Public Employee Retirement System (CALPERS) and the City/County Association of <br /> Governments of San Mateo County (C/CAG) <br /> RECOMMENDATION <br /> Authorize the Mayor to execute a Transfer of Funds Agreement between the City of <br /> Redwood City, CALPERS and C/CAG to transfer funds and a liability from the <br /> CALPERS City of Redwood City account to the C/CAG account in CALPERS for two <br /> C/CAG employees that are included in the City of Redwood City payroll system. <br /> BACKGROUND <br /> The C/CAG Executive Director and Administrative Assistant (the C/CAG employees) <br /> are covered by the City payroll system with the employment costs to Redwood City fully <br /> reimbursed by C/CAG under an agreement executed in 1996. All benefits, including <br /> retirement benefits, provided to the C/CAG employees are provided through the City. <br /> CALPERS performed an audit on the City in 2008, and directed that the CALPERS <br /> benefits for the C/CAG employees be addressed in a contract directly between C/CAG <br /> and CALPERS as the C/CAG employees are not employees of the City. <br /> ANALYSIS <br /> C/CAG has been working with CALPERS to establish a separate C/CAG — CALPERS <br /> agreement. CALPERS has requested that the C/CAG — CALPERS agreement include <br /> both future and prior service. The funds paid by the employer and employees for the <br /> C/CAG employees are currently in the CALPERS City of Redwood City account. <br /> Accordingly, it is necessary to transfer the funds for the C/CAG employees from the <br /> CALPERS City of Redwood City account to the CALPERS C/CAG account. <br /> As of January 1, 2012 there were $352,000 of employer contributions and $346,000 of <br /> employee contributions for the C/CAG employees in the City's account. The amount to <br /> be transferred will be slightly higher since the implementation will be as of March 12, <br /> 2012. The final amount will be determined by CALPERS. The City was reimbursed by <br /> C/CAG for all of these payments plus a three percent administrative charge. <br /> Transferring the C/CAG employees to the C/CAG CALPERS account also transfers <br /> $982,000 of liability from the City CALPERS account to the C/CAG account. Therefore, <br /> the City unfunded liability will be reduced by $284,000. <br />