HomeMy WebLinkAbout06 - NB-2 - Amendment to Contract Between CalPers - 4/6/2010CITY COUNCIL AGENDA REPORT
MEETING DATE: APRIL 6, 2010 ITEM NUMBER:
SUBJECT: AMENDMENT TO THE CONTRACT BETWEEN CALPERS AND THE CITY OF COSTA
MESA - 3%@50 FORMULA (SAFETY -FIRE PLAN)
DATE: MARCH 25, 2010
FROM: ADMINISTRATIVE SERVICES DEPARTMENT/HUMAN RESOURCES DIVISION
PRESENTATION DEBRA YASUI, HUMAN RESOURCES ADMINISTRATOR
BY:
FOR FURTHER INFORMATION CONTACT: DEBRA YASUI AT (714) 754-5052
RYAN THOMAS AT (714) 754-5104
RECOMMENDATION:
1) Adopt a Resolution of Intention (Attachment 1) to approve an Amendment to the
Contract between the Board of Administration of the California Public Employees'
Retirement System (CaIPERS) and the City Council of the City of Costa Mesa
(Exhibit) in order to implement the 3% @ 50 retirement formula for eligible Fire
Safety employees.
2) Introduce, give first reading to be read by title only to, and waive further reading of
Ordinance No. (Attachment II), which authorizes the amendment to the
CaIPERS contract to implement the 3%@50 retirement formula for eligible Fire
Safety employees.
3) Authorize the City Clerk to execute the Certification of Governing Body's Action —
PERS-CON- 12 (Attachment III).
4) Authorize the City Clerk to execute the Certification of Compliance with Government
Code Section 7507 — PERS-CON-12AA (Attachment IV).
BACKGROUND:
Presently, the City of Costa Mesa has three separate retirement plans with the
California Public Employees' Retirement System (CaIPERS): a 3% @ 50 plan for Sworn
Police personnel, a 3% @ 55 plan for Sworn Fire Personnel and a 2.5% @ 55 plan for
Miscellaneous employees.
At the Special Meeting of the City Council Meeting on August 11, 2009, the City Council
approved the Memorandum of Understanding (MOU) with the Costa Mesa Firefighters
Association (CMFA) that extended the existing agreement through June 30, 2013.
1
Section 6.1, "CaIPERS", of the MOU, states: "...The City agrees to implement
procedures to amend the CaIPERS Safety Plan to provide Government Code 21362.2
(3%@50) retirement benefits to be effective in January 2010, or as soon thereafter as
permitted by CaIPERS. Pursuant to CaIPERS regulations, this new formula will apply to
all employees that are in active status on the date this amendment takes effect. This
new formula will apply to each year of eligible service credited with the City of Costa
Mesa. After the CaIPERS contract has been amended to provide the 3%@50 benefit,
the City also agrees to amend the CaIPERS Safety Plan to provide CaIPERS 20903
(Two Years Additional Service Credit) option as soon thereafter as permitted by
CaIPERS."
CaIPERS requires that certain steps be completed prior to processing a contract
amendment. First, a special actuarial valuation for the proposed plan amendment must
be completed by CaIPERS. CaIPERS begins accepting requests for these valuations
on August 1st of each year; however, they do not begin processing them until
November. City staff submitted a request on August 2, 2009. On January 25, 2010, the
City received the required actuarial valuation and followed up with a request to
CaIPERS to begin the contract amendment process to provide the 3%@50 retirement
formula for the Fire Safety group. On February 16, 2010, the City received the forms
and information necessary to amend the contract with CaIPERS.
ANALYSIS:
This CaIPERS contract amendment was a key provision of the negotiated agreement
between the City and the CMFA that was approved by the City Council on August 11,
2009. The parties to this agreement considered a wide variety of issues in the context
of good faith negotiations in accordance with Government Code Section 3500 et seq.
(Meyers-Milias-Brown Act).
CaIPERS requires that clearly defined procedures be followed for contract
amendments. The following are guidelines provided by CaIPERS in order to complete
the contract amendment process:
• First, a Resolution of Intention must be approved by the City Council, and a first
reading of the Ordinance authorizing an amendment to the contract must occur.
In addition, authorization for the City Clerk to provide Certification of Governing
Body's Action and Certification of Compliance with Government Code Section
7507 are required (April 6, 2010 City Council Meeting). Effective January 1,
2009, Government Code Section 7507 requires that future annual costs of the
proposed contract amendment be made public at a public meeting at least two
weeks prior to the adoption of the final Ordinance. If future costs exceed '/2 of
1 % of the future annual costs of existing benefits, an actuary must be present at
the meeting to provide information. Richard Santos, Senior Pension Actuary of
CaIPERS, will be present at this meeting should specific questions be asked.
• A final reading of the Ordinance (May 4, 2010 City Council Meeting) and a City
Council vote for or against adoption must take place. If adopted, the Ordinance
may take effect no less than 30 days later. The effective date of the Ordinance will
be June 3, 2010.
• The effective date of the contract amendment must be the first day of a payroll
period and may not be earlier than the day after the effective date of the Ordinance.
2
Therefore, the earliest possible effective date of the contract amendment would be
June 6, 2010, the first day of the payroll period. Employees who retire after that
date will be eligible for the 3%@50 factor in their retirement calculations. This
amendment will not affect any retirees or former employees of the City of Costa
Mesa. For information purposes, attached is the "Summary of Major Provisions" for
the 3%@50 formula (Section 21362.2) Local Safety Members (Attachment V).
ALTERNATIVES CONSIDERED:
The Memorandum of Understanding (MOU) was adopted by the City Council, and it
represents the successful conclusion of the legal process. As such, no alternatives are
being considered.
FISCAL REVIEW:
The CalPERS contract amendment cost analysis/actuarial study indicates that this
enhancement will lead to an increase in the 2010/2011 employer contribution rate of
6.549% (from 26.242% to 32.791 %). The employee rate for this amendment would remain
unchanged at 9%. The budget impact of this rate increase for 2010/2011 is an increase in
the Fire Department — Retirement Account of $694,171. This increase is offset by the
reduction in total personnel from 96 to 84, a savings of approximately $1.8 million. The
total net savings for 2010/2011 is approximately $1.1 million.
According to CalPERS, the change in accrued liability to provide this benefit is $4,936,806.
The present value of benefits is $5,251,094.
LEGAL REVIEW:
Legal has reviewed the documents and approved them as to form.
CONCLUSION:
Staff recommends that the City Council adopt a Resolution of Intention to Approve an
Amendment to the Contract between the Board of Administration of the California Public
Employees' Retirement System and the City Council of the City of Costa Mesa;
introduce and give first reading to the Ordinance which authorizes the amendment to
the contract to implement the 3%@50 retirement formula for eligible Fire Safety
employees; and authorize the City Clerk to execute the Certification of Governing
Body's Action (PERS-CON-12) and Certification of Compliance with Government Code
Section 7507 (PERS-CON-12A).
3
DEBRA YASUI
Human Resources Administrator/Risk
COLLEEN O'DONOGHUE
Assistant Finance Director
STEPHEN N. MANDOKI
Director of Administrative Services
KIMBERLY HALL BARLOW
City Attorney
DISTRIBUTION: City Manager
City Attorney
City Clerk
Assistant Finance Director
Budget and Research Manager
ATTACHMENTS: I Resolution of Intention and Exhibit Amendment to Contract
II Ordinance No.
III Certification of Governing Body's Action
IV Certification of Compliance with Government Code Section 7507
V Summary of Major Provisions (3% (D- 50 Formula)
040610 Council Agenda Report-CalPERS Contract Amend Fire 3/18/10 2pm
M
ATTACHMENT I
BOARD ADMINISTRATION
`,;
WHEREAS, the Public Employees' Retirement Law permits the participation of public
agencies and their employees in the Public Employees' Retirement System
by the execution of a contract, and sets forth the procedure by which said
public agencies may elect to subject themselves and their employees to
amendments to said Law; and
WHEREAS, one of the steps in the procedures to amend this contract is the adoption
by the governing body of the public agency of a resolution giving notice of
its intention to approve an amendment to said contract, which resolution
shall contain a summary of the change proposed in said contract; and
WHEREAS, the following is a statement of the proposed change:
To provide Section 21362.2 (3% @ 50 Full formula) for
local fire members.
NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency
does hereby give notice of intention to approve an amendment to the
contract between said public agency and the Board of Administration of the
Public Employees' Retirement System, a copy of said amendment being
attached hereto, as an "Exhibit" and by this reference made a part hereof.
IN
Date adopted and approved
(Amendment)
CON -302 (Rev. 4/96)
Presiding Officer
Title
Ca1PERS
California
Public Employees' Retirement System
Between the
Board of Administration
California Public Employees' Retirement System
and the
City Council
City of Costa Mesa
---------------
The Board of Administration, California Public Employees' Retirement System,
hereinafter referred to as Board, and the governing body of the above public agency,
hereinafter referred to as Public Agency, having entered into a contract effective August
13, 1978, and witnessed August 7, 1978, and as amended effective July 15, 1979,
October 25, 1987, October 30, 1992, September 18, 1994, January 4, 1996, June 22,
1998, June 16, 2000, December 31, 2000, May 20, 2001, December 19, 2002,
September 28, 2008 and August 20, 2009 which provides for participation of Public
Agency in said System, Board and Public Agency hereby agree as follows:
A. Paragraphs 1 through 17 are hereby stricken from said contract as executed
effective August 20, 2009, and hereby replaced by the following paragraphs
numbered 1 through 16 inclusive:
1. All words and terms used herein which are defined in the Public
Employees' Retirement Law shall have the meaning as defined therein
unless otherwise specifically provided. "Normal retirement age" shall
mean age 55 for local miscellaneous members and age 50 for local safety
members.
2. Public Agency shall participate in the Public Employees' Retirement
System from and after August 13, 1978 making its employees as
hereinafter provided, members of said System subject to all provisions of
the Public Employees' Retirement Law except such as apply only on
election of a contracting agency and are not provided for herein and to all
amendments to said Law hereafter enacted except those, which by
express provisions thereof, apply only on the election of a contracting
agency.
3. Public Agency agrees to indemnify, defend and hold harmless the
California Public Employees' Retirement System (CaIPERS) and its
trustees, agents and employees, the CaIPERS Board of Administration,
and the California Public Employees' Retirement Fund from any claims,
demands, actions, losses, liabilities, damages, judgments, expenses and
costs, including but not limited to interest, penalties and attorneys fees
that may arise as a result of any of the following:
(a) Public Agency's election to provide retirement benefits,
provisions or formulas under this Contract that are different than
the retirement benefits, provisions or formulas provided under
the Public Agency's prior non-CaIPERS retirement program.
(b) Public Agency's election to amend this Contract to provide
retirement benefits, provisions or formulas that are different than
existing retirement benefits, provisions or formulas.
(c) Public Agency's agreement with a third party other than
CaIPERS to provide retirement benefits, provisions, or formulas
that are different than the retirement benefits, provisions or
formulas provided under this Contract and provided for under
the California Public Employees' Retirement Law.
(d) Public Agency's election to file for bankruptcy under Chapter 9
(commencing with section 901) of Title 11 of the United States
Bankruptcy Code and/or Public Agency's election to reject this
Contract with the CaIPERS Board of Administration pursuant to
section 365, of Title 11, of the United States Bankruptcy Code
or any similar provision of law.
(e) Public Agency's election to assign this Contract without the prior
written consent of the CaIPERS' Board of Administration.
(f) The termination of this Contract either voluntarily by request of
Public Agency or involuntarily pursuant to the Public Employees'
Retirement Law.
(g) Changes sponsored by Public Agency in existing retirement
benefits, provisions or formulas made as a result of
amendments, additions or deletions to California statute or to
the California Constitution.
4. Employees of Public Agency in the following classes shall become
members of said Retirement System except such in each such class as
are excluded by law or this agreement:
a. Local Fire Fighters (herein referred to as local safety members);
b. Local Police Officers (herein referred to as local safety members);
C. Employees other than local safety members (herein referred to as
local miscellaneous members).
5. In addition to the classes of employees excluded from membership by
said Retirement Law, the following classes of employees shall not become
members of said Retirement System:
6. Assets heretofore accumulated with respect to members in the local
retirement system have been transferred to the Public Employees'
Retirement System on September 18, 1994 and applied against the
liability for prior service incurred thereunder. That portion of the assets so
transferred which represent the accumulated contributions (plus interest
thereof) required of the employees under said local system has been
credited to the individual membership account of each such employee
under the,Public Employees' Retirement System.
7. Benefits paid to pensioner or annuitants under the local system on or prior
to September 18, 1994 shall be continued and paid at their existing rates
by the Public Employees' Retirement System as authorized by Section
20481 of the Government Code.
8. The percentage of final compensation to be provided for local
miscellaneous members in employment before and not on or after
September 28, 2008 for each year of credited prior service is 0% and the
percentage of final compensation to be provided for each year of credited
current service is 100% and determined in accordance with Section 21354
of said Retirement Law (2% at age 55 Full).
9. The percentage of final compensation to be provided for local
miscellaneous members in employment on or after September 28, 2008
for each year of credited prior service is 0% and the percentage of final
compensation to be provided for each year of credited current service is
100% and determined in accordance with Section 21354.4 of said
Retirement Law (2.5% at age 55 Full).
10. The percentage of final compensation to be provided for each year of
credited prior and current service as a local safety member shall be
determined in accordance with Section 21362.2 of said Retirement Law
(3% at age 50 Full).
11. Public Agency elected and elects to be subject to the following optional
provisions:
a. Section 20042 (One -Year Final Compensation).
b. Section 20965 (Credit for Unused Sick Leave).
C. Sections 21624 and 21626 (Post -Retirement Survivor Allowance).
d. Section 21573 (Third Level of 1959 Survivor Benefits) for local
miscellaneous members only.
e. Section 20903 (Two Years Additional Service Credit).
f. Section 20938 (Limit Prior Service to Members Employed on
Contract Date) for local safety members only.
g. Section 21536 (Local System Service Credit Included in Basic
Death Benefit) for local safety members only.
h. Section 21427 (Improved Nonindustrial Disability Allowance) for
local fire members.
i. Section 21031 (Public Service Credit for Limited Prior Service) for
local miscellaneous members only.
Section 21024 (Military Service Credit as Public Service).
k. Section 21027 (Military Service Credit for Retired Persons).
Section 21023.5 (Public Service Credit for Peace Corps,
AmeriCorps VISTA, or AmeriCorps Service).
12. Public Agency, in accordance with Government Code Section 20834, shall
not be considered an "employer" for purposes of the Public Employees'
Retirement Law. Contributions of the Public Agency shall be fixed and
determined as provided in Government Code Section 20834, and such
contributions hereafter made shall be held by the Board as provided in
Government Code Section 20834.
13. Public Agency shall contribute to said Retirement System the contributions
determined by actuarial valuations of prior and future service liability with
respect to local msicellaneous members and local safety members of said
Retirement System.
14. Public Agency shall also contribute to said Retirement System as follows:
a. Contributions required per covered member on account of the 1959
Survivor Benefits provided under Section 21573 of said Retirement
Law. (Subject to annual change.) In addition, all assets and
liabilities of Public Agency and its employees shall be pooled in a
single account, based on term insurance rates, for survivors of all
local miscellaneous members and local safety members.
b. A reasonable amount, as fixed by the Board, payable in one
installment within 60 days of date of contract to cover the costs of
administering said System as it affects the employees of Public
Agency, not including the costs of special valuations or of the
periodic investigation and valuations required by law.
C. A reasonable amount, as fixed by the Board, payable in one
installment as the occasions arise, to cover the costs of special
valuations on account of employees of Public Agency, and costs of
the periodic investigation and valuations required by law.
15. Contributions required of Public Agency and its employees shall be
subject to adjustment by Board on account of amendments to the Public
Employees' Retirement Law, and on account of the experience under the
Retirement System as determined by the periodic investigation and
valuation required by said Retirement Law.
16. Contributions required of Public Agency and its employees shall be paid
by Public Agency to the Retirement System within fifteen days after the
end of the period to which said contributions refer or as may be prescribed
by Board regulation. If more or less than the correct amount of
contributions is paid for any period, proper adjustment shall be made in
connection with subsequent remittances. Adjustments on account of
errors in contributions required of any employee may be made by direct
payments between the employee and the Board.
B. This amendment shall be effective on the day of ,
BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES' RETIREMENT SYSTEM CITY OF COSTA MESA a
BY
LORI MCGARTLAND, CHIEF
EMPLOYER SERVICES DIVISION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
AMENDMENT ER# 1193
PERS-CON-702A
BY
PRESIDING OFFICER
Witness Date
Attest:
Clerk
ATTACHMENT II
ORDINANCE NO. 10 -
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF COSTA MESA, CALIFORNIA, AUTHORIZING AN
AMENDMENT TO THE CONTRACT BETWEEN THE
CITY COUNCIL OF THE CITY OF COSTA MESA AND
THE BOARD OF ADMINISTRATION OF THE
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT
SYSTEM.
WHEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES
HEREBY ORDAIN AS FOLLOWS:
Section 1. That an amendment to the contract between the City Council of the City of
Costa Mesa and the Board of Administration, California Public Employees' Retirement
System is hereby authorized, a copy of said amendment being attached hereto, marked
Exhibit, and by such reference made a part hereof as though herein set out in full.
Section 2. The City Manager of the City of Costa Mesa is hereby authorized,
empowered, and directed to execute said amendment for and on behalf of said Agency.
Section 3. This Ordinance shall take effect 30 days after the date of its adoption, and
prior to the expiration of fifteen (15) days from the passage thereof shall be published
once in the NEWPORT BEACH/COSTA MESA DAILY PILOT, a newspaper of general
circulation, published and circulated in the City of Costa Mesa, and thenceforth and
thereafter shall be in full force and effect.
PASSED AND ADOPTED this 4th day of May, 2010.
Allan Mansoor, , Mayor
ATTEST:
APPROVED AS TO FORM:
Julie Folcik, City Clerk Kimberly Hall Barlow, City Attorney
THIS PAGE RESERVED FOR CITY CLERK'S OFFICE
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF COSTA MESA )
I, JULIE FOLCIK, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY
that the above and foregoing Ordinance No. 10 -XX was duly introduced for first reading
at a regular meeting of the City Council held on the 6t" day of April, 2010, and that
thereafter, said Ordinance was duly passed and adopted at a regular meeting of the
City Council held on the 4t" day of May, 2010, by the following roll call vote, to wit:
F-102•�9011ilk us] 10TAI21J1:121:601
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the
City of Costa Mesa this XXt" day of Month, 2010.
JULIE FOLCIK, CITY CLERK
(SEAL)
I hereby certify that the above and foregoing is the original of Ordinance No. 10 -XX duly
passed and adopted by the Costa Mesa City Council at the regular meeting held May 4,
2010, and that Summaries of the Ordinance were published in the Newport Beach -
Costa Mesa Daily Pilot on Month XX, 2010.
JULIE FOLCIK, CITY CLERK
(SEAL)
ATTACHMENT III
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
I hereby certify that the foregoing is a true and correct copy of a Resolution adopted by the
(governing body)
(public agency)
W
(date)
Clerk/Secretary
Title
PERS-CON-12 (rev. 1/96)
of the
ATTACHMENT IV
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
(888) CalPERS (225-7377)
• •.
WeTe
#1 ant
By signing below, I hereby certify that in accordance with Section 7507 of the
Government Code statements 1, 2, and 3 are true; and that statement 4 is applicable
and is true if I have placed my initials beside the statement:
1. Services of an actuary were secured to provide a statement of the actuarial
impact upon future annual costs before authorizing changes in retirement plan
benefits.
2. The actuary prepared a statement of the actuarial impact of the proposed
changes in benefits upon future annual costs, including normal cost and any
additional accrued liability. The statement of the actuarial impact for the increase
in benefits was made public on at a public meeting
(date)
of the
(governing body)
(public agency)
of the
which is at least two weeks prior to the adoption of the Resolution / Ordinance.
3. Adoption of the retirement benefit increase will not be placed on the consent
calendar.
4. [INITIAL HERE IF THIS STATEMENT APPLIES]
An actuary was present to provide information as needed at the public meeting at
which the adoption of the benefit change was considered. (The presence of an
actuary is required if future costs of the benefit changes exceed 1/2 of 1 % of the
future annual costs of the existing benefits.)
Signature
Print Name of Authorized Signer
Title
Date
PERS-CON-12AA (rev. 6/09)
ATTACHMENT V
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Actuarial and Employer Services Branch
Public Agency Contract Services
(888) CalPERS (225-7377)
SUMMARY OF MAJOR PROVISIONS
3% @ 50 Formula (Section 21362.2)
Local Safety Members
SERVICE RETIREMENT
To be eligible for service retirement, a member must be at least age 50 and have five years of
CalPERS credited service. If provided by the employer's contract, mandatory retirement age for
local safety members is age 60.
The monthly retirement allowance is determined by age at retirement, years of service credit and
final compensation. The basic benefit is 3% of final compensation for each year of credited
service upon retirement at age 50. The allowance is limited to 90% of final compensation.
Final compensation is the average monthly pay rate during the last consecutive 36 months of
employment, or 12 months if provided by the employer's contract, unless the member designates a
different period of 36 or 12 consecutive months when the average pay rate was higher. Certain
items of special compensation earned during your final compensation period will be included in
your final compensation, in accordance with Board regulations.
DISABILITY RETIREMENT
Members substantially incapacitated from performing the usual duties for the position for his/her
current employer would be eligible for disability retirement provided they have at least five years of
service credit. The monthly retirement allowance is 1.8% of final compensation for each year of
service. The maximum percentage for members who have between 10.000 and 18.518 years of
service credit is one-third of their final compensation. If the member is eligible for service
retirement the member will receive the highest allowance payable, service or disability. If provided
by the employer's contract, the benefit would be a minimum of 30% of final compensation for the
first five years of service credit, plus 1 % for each additional year of service to a maximum benefit
of 50% of final compensation.
INDUSTRIAL DISABILITY RETIREMENT
Members permanently incapacitated from performing their duties, as defined above under
Disability Retirement, and the disability is a result of a job-related injury or illness may receive an
Industrial Disability Retirement benefit equal to 50% of their final compensation. If provided in the
employer's contract and the member is totally disabled, the disability retirement allowance would
equal 75% of final compensation in lieu of the disability retirement allowance otherwise provided.
If the member is eligible for service retirement, the service retirement allowance is payable. The
total allowance cannot exceed 90% of final compensation.
PRE -RETIREMENT DEATH BENEFITS
Basic Death Benefit: This benefit is a refund of the member's contributions plus interest and up to
six months' pay (one month's salary rate for each year of current service to a maximum of six
months).
PERS-CON-52 (rev. 6/07)
1957 Survivor Benefit: An eligible beneficiary may elect to receive either the Basic Death Benefit or
the 1957 Survivor Benefit. The 1957 Survivor Benefit provides a monthly allowance equal to one-
half of the highest service retirement allowance the member would have received had he/she
retired on the date of death. The 1957 Survivor Benefit is payable to the surviving spouse or
registered domestic partner until death or to eligible unmarried children until age 18.
1959 Survivor Benefit: (if provided by the employer's contract and the member is not covered
under social security.) A surviving spouse or registered domestic partner and eligible children may
receive a monthly allowance as determine by the level of coverage. This benefit is payable in
addition to the Basic Death Benefit or 1957 Survivor Benefit. Children are eligible if under age 22
and unmarried.
Pre -Retirement Option 2W Death Benefit: (If provided by the employer's contract.) The spouse or
registered domestic partner of a deceased member, who was eligible to retire for service at the
time of death, may to elect to receive the Pre -Retirement Option 2W Death Benefit in lieu of the
lump sum Basic Death Benefit. The benefit is a monthly allowance equal to the amount the
member would have received if he/she had retired for service on the date of death and elected
Option 2W, the highest monthly allowance a member can leave a spouse or registered domestic
partner.
Special Death Benefit: A surviving spouse, registered domestic partner, or eligible children or step
children may receive a monthly allowance equal to one-half of the final compensation. If the cause
of death is due to external violence or physical force while on the job, and there are eligible
surviving children in addition to a spouse or registered domestic partner, the allowance may be
increased to a maximum of 75%.
COST -OF -LIVING ADJUSTMENTS
The cost of living allowance increases are limited to a maximum of 2% compounded annually
unless the employer's contract provides a 3, 4, or 5% increase.
DEATH AFTER RETIREMENT
The lump sum death benefit is $500 (or $600, $2,000, $3,000, $4,000 or $5,000 if provided by the
employer's contract) regardless of the retirement plan chosen by the member at the time of
retirement.
TERMINATION OF EMPLOYMENT
Members who have separated from employment may elect to leave their contributions on deposit
or request a refund of contributions and interest. Those who leave their contributions on deposit
may apply at a later date for a monthly retirement allowance if the minimum service and age
requirements are met. Members who request a refund of their contributions terminate their
membership and are not eligible for any future benefits unless they return to CalPERS
membership.
EMPLOYEE CONTRIBUTIONS
Local safety members covered by the 3% @ 50 formula contribute 9% of reportable earnings.
Those covered under a modified formula (coordinated with Social Security) do not contribute on
the first $133.33 earned.
The employer also contributes toward the cost of the benefits. The amount contributed by the
employer for current service retirement benefits generally exceeds the cost to the employee. In
addition, the employer bears the entire cost of prior service benefits (the period of time before the
employer provided retirement coverage under CaIPERS). All employer contribution rates are
subject to adjustment by the CalPERS Board of Administration.
PERS-CON-52 (rev. 6/07)