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1.A-2 PERS COMMITTEE DECIDES AD 719. CITIES ASKED TO REPORT COSTS BUYING BACK SERVICE CREDIT INCURRED DURING HIGH (ORANGE) The CalPERS Benefits and Administration THREAT LEVElS Commieee met on Wednesday, February 18'" to In an effort to assess financial burdens to local discuss h,w members can buy back additional and state govemments for heightened security service cr&dit. Over the past few months, there measures, the Department of Homeland Security has been a lot of confusion as to what types of (DHS), through the Office for Domestic Preparedness funds members can use to pay for additional (ODP), is requesting a report of actual overtime years of service through PERS. expenses incurred by state agencies and local jurisdictions for critical infrastructure protection during At Wednesday's hearing, it was decided that the latest Orange level period, which began on active employees can use their 403(b) and 457 December 21, 2003, and ended on January 9, 2004. plans to purchase the credit on a lump sum Though there is currently no money available for basis, Members cannot, however, use these funds to pay the benefit if they choose to pay for reimbursement to state and local govemments for the additional service credit in installments. incurred expenses, the League would like to reinforce Those payments are paid out of the member's the request of DHS to encourage cities to report salary on a pre-tax basis, or pension, once expenses incurred for critical infrastructure protection during the latest Orange threat level period, It is retired. hoped that this infonnation will provide sufficient At a December 2003 meeting, the PERS justification for an additional appropriation by DHS. board postponed the acceptance of in-service 'The Department of Homeland Security recog- transfers from 403(b) and 457 plans to purchase nizes the significant financial impact that periods of additional service under AB 719, until further High (ORANGE) threat levels have had on state and review of the legal issues and survey what other local governments and is engaged in an ongoing systems were doing. effort to assess this financial burden; DHS stated in a recent memorandum to state homeland security What Other Systems are Doing agencies. 'It is imperative that we have input from our state and local partners in order to accurately deter- The current practices of the Los Angeles mine these costs: County Employees Retirement Association (LACERA) does provide a non-qualified credit Local governments are asked to submit a purchasing options, but does not permit the report ofthese expenses to their county Opera- purchase with in-service transfers from 403(b) tional Area Coordinator before February 23, and 457 pian funds. 2004, (State agencies are being asked to submit these reports to ODP by February 23, 2004) The Ca State Teachers' Retirement System Local governments should generally consider (CaISTRS) does allow in-service transfers from 403(b) plans and 457 plans without requiring critical infrastructure to include any system or asset that if attacked would result in catastrophic loss of life corresponding service. and/or catastrophic economic loss. A full list of For additional information, please contact specific types of facilities that should also be consid- Amy Brown at 916-658-8279. ered is available at: www.cacities.orglpublicsafety. For an electronic copy of the county Operational Area Coordinator contact list, or a sample reporting template to capture actual costs incurred at specific site locations, please contact Liisa Lawson at IIawson/!!)cacities oro or 916-658-8249, PAGE 2/PRIORITY FOCUS Visit the League's Official Web Site--www.cacities.org