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SARATOGA CITY COUNCIL
MEETING DATE: December 21, 2011 AGENDA ITEM:
DEPARTMENT: City Attorney CITY MANAGER: Dave Anderson PREPARED BY: Monica LaBossiere DIRECTOR: Mary Furey Human Resources Manager Finance & Administrative Services Director
SUBJECT: Council CalPERS Election of Optional Membership and Pension Reform
RECOMMENDED ACTION: Approve the terms and conditions contained in said Resolution which is attached hereto between the City Council and the City effective December 21, 2011.
BACKGROUND:
California Government Code Section 20322 provides that an “elected officer” is excluded from membership in the California Public Employees’ Retirement System (CalPERS) unless he or she files
with the CalPERS Board of Administration an election in writing to become a member. The election of
optional membership may be filed at any time while a compensated councilmember holds the office (PERS-AESD-59 Form). Once a councilmember establishes membership with CalPERS, it may be
terminated only upon permanent separation from the office. The Human Resources Manager is the contact person to assist councilmembers who are interested in
establishing membership with CalPERS. Newly elected officials receive information from the Human Resources Manager on or before their elected start date. If elected officials opt out of filing to become a
CalPERS member on their elected start date and decide at a later date to file, the later date becomes the
elected official’s vesting start date with CalPERS, not the start date the official was elected. Elected officials have the option to purchase service credit for served time back to the start date the official was elected (PERS-MSD-372 Form).
Retirement benefits through CalPERS are vested with a minimum of 5 years of service. Continuous
service with one jurisdiction/special district is not required; rather it can be accumulated through service
in more than one jurisdiction/special district participating in CalPERS.
Once a councilmember establishes membership with CalPERS the councilmember is eligible to
participate in the health plans offered by CalPERS. Councilmembers who elect to participate in the health plans offered by CalPERS are responsible for paying 100% of the cost of the health plan premium.
To date, the City has three (3) councilmembers whom have established membership with CalPERS and are participating in the City’s 2%@55 retirement plan. To date, no councilmembers are participating in
the health plans offered by CalPERS.
The following is a summary of pension reform measures the City is proposing to the City Council:
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• Retirement: Effective December 21, 2011, councilmembers currently participating in the CalPERS 2%@55 retirement plan will contribute the employee fixed share of seven (7) percent on a pre-tax
basis of his/her monthly stipend of $250.00.
• Pension Reform: Agree to pension reform to include a second tier 2%@60 defined benefit retirement
formula with the highest three (3) year average of salary as part of the retirement calculation for future elected officials.
FISCAL IMPACTS: Each councilmember participating in the CalPERS defined benefit retirement plan will contribute $17.50
per month (7.00% of $250.00 monthly stipend).
CONSEQUENCES OF NOT FOLLOWING THE RECOMMENDED ACTIONS: N/A
ALTERNATIVE ACTION(S): N/A
FOLLOW UP ACTION(S): N/A
ADVERTISING, NOTICING AND PUBLIC CONTACT: Pursuant to Government Code 54954.2, this item was properly posted as a City Council agenda item and
was included in the packet made available on the City’s website in advance of the meeting. A copy of the agenda packet is also made available at the Saratoga Branch Library each Monday in advance of the
Council meeting.
ATTACHMENTS:
1. Resolution