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Home My WebLink About2009-73 - Supplemental Retirement PlanRESOLUTION NO. 2009-73 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING ADOPTION OF A SUPPLEMENTAL RETIREMENT PLAN (SRP) WHEREAS, the City of Newport Beach's multi -year Financial Plan currently identifies a structural budget deficit; and WHEREAS, the City Council finds it to be in the fiscal interest of the City of Newport Beach (the "City ") and its employees to consider the provision of a Supplemental Retirement Plan to eligible employees who wish to voluntarily exercise their option to separate from City service; and WHEREAS, the City of Newport Beach is a member of the Public Agency Retirement System (PARS) Trust for the purpose of providing tax qualified retirement benefits; and WHEREAS, the PARS Trust has made available a Supplementary Retirement Plan (SRP), supplementing CalPERS and qualifying under the relevant sections of the Internal Revenue Code and the California Government Code. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DOES RESOLVE AS FOLLOWS: Section 1. The City Council does hereby adopt the PARS Supplemental Retirement Plan (SRP), as described in Exhibit A to this Resolution, effective October 14, 2009; and Section 2. The Supplementary Retirement Plan must have sufficient plan participation to meet the City's fiscal, managerial and operational objectives. If the objectives are not reached, the City may withdraw the retirement incentive. If the City withdraws the incentive as to some or all eligible employees, all resignations of employees from whom the offer was rescinded will be automatically revoked; and Section 3. The City Council hereby appoints the Human Resources Director or her designee as the City's Plan Administrator for the PARS Supplementary Retirement Plan; and Section 4. The City's PARS SRP Administrator is hereby authorized to execute the PARS legal and administrative service documents on behalf of the City to implement a PARS Supplemental Retirement Program. In addition, if the City's PARS Administrator finds that the PARS SRP benefit must be limited under Section 415 of Internal Revenue Code, then the Plan Administrator will implement replacement benefit programs at no additional cost to the City. ADOPTED this 13`h day of October, 2009. ATTEST: Leilani Brown '— City Clerk Mayor of Newport Beach Exhibit A to the Resolution Newport Beach PARS Supplemental Retirement Program Description 1.0 Elieibility 1.1 Those Miscellaneous and non - Safety employees (excluding the City Attorney, City Manager, and City Clerk) who: a) Are employed by the City as of October 13, 2009; b) Are fifty (50) years of age as of January 31, 2010; c) Have at least three (3) years of City service as of January 31, 2010; d) Resign from City employment effective no later than January 30, 2010; and e) Retire under PERS effective no later than January 31, 2010. 2.0 Participation Requirements 2.1 Participating employees shall submit all required PARS enrollment materials and City Letter of Resignation to PARS on or before the deadline date of November 20, 2009. Resignations of participants are irrevocable as of the enrollment deadline and may not be rescinded unless the City withdraws the incentive pursuant to Paragraph 2.2 below. 2.2 An employee's participation in the plan must meet the City's financial and managerial objectives in order for the employee's participation to be approved by the City. If after the close of the enrollment window the City determines that the employee's participation in the plan does not meet the City's financial and managerial objectives, the City may withdraw the incentive for that employee, provided it notifies that employee of the withdrawal of the employee's participation on or before December 14, 2009. If the City withdraws the incentive for an employee, that employee's resignation will be automatically rescinded. After the November 20, 2009 deadline, if the incentive is approved for an employee, that employee's participation in the incentive and resignation from City employment is locked in and may not be rescinded. 2.3 Participation in the retirement incentive requires: a. Submission of required PARS enrollment materials and City Letter of Resignation to PARS by November 20, 2009; b. Resignation from City employment effective no later than January 30, 2010; and c. Retirement from PERS and the PARS Supplemental Retirement Plan on or before January 31, 2010. 3.0 Incentive Payments 3.1 Regarding the basic incentive under this plan: a) The basic, unmodified benefit shall be a monthly cash payment for the lifetime of the participant. b) The monthly cash payment amount shall equal one - twelfth of seven percent (7.0%) of Final Pay, up to Final Pay of $75,000. For employees whose Final Pay is over $75,000, the monthly cash payment shall equal one - twelfth of seven percent (7.0 %) for $75,000, then one - twelfth of six percent (6.00 %) of the remainder of Final Pay over $75,000. c) For purposes of this plan, Final Pay shall be defined as the employee's current base annual salary as of October 13, 2009. 3.2 Alternative monthly forms of payment of equivalent present value to the basic benefit shall be offered. They shall include: a) Joint - and - survivor payments; b) Payments made for the life of the participant, subject to a ten year minimum; and c) Fixed term payments of from five (5) to fifteen (15) years. These payments are guaranteed to the participant for the full term selected. 3.3 The amount of monthly payment shall be fixed as of November 20, 2009 and shall not be subject to increase thereafter. 3.4 The choice of form of payment (and the choice of payment beneficiary if choosing a joint and survivor form of payment) shall become final as of November 20, 2009 and shall not be subject to change thereafter. 3.5 PARS benefits are to commence February 1, 2010. 4.0 Contract Administrator 4.1 The Contract Administrator for the Retirement Incentive shall be PARS. 4.2 In the event the plan is cancelled due to insufficient participation, the Employer shall pay Phase II Systems /PARS a one -time fee of $2,500.00. 4.3 The fee for Phase II Systems /PARS shall be 5.0% of plan contributions to the PARS Trust for services related to the Supplemental Retirement Plan. Projected Timeline (Estimated): 1. City Council approval of PARS Incentive 2. Enrollment Packets Mailed to Employees' Home 3. Employee Orientation Meeting & Workshop 4. Enrollment Window Closes 5. City receives Post- Analysis 6. City Announces whether Plan goes forward 7. Employees Resign from City employment 8. Employees Retire under PERS, PARS REP & PARS SRP 9. Benefits Commence # # # October 13, 2009 On or about October 16, 2009 Week of October 26, 2009 no later than 5:00 p.m., November 20, 2009 no later than November 29th no later than December 14, 2009 on or before January 30, 2010 on or before January 31, 2010 February 1, 2010 STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2009 -73 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 13th day of October, 2009, and that the same was so passed and adopted by the following vote, to wit: Ayes: Henn, Rosansky, Curry, Webb, Gardner, Mayor Selich Noes: None Absent: Daigle Abstain: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 14th day of October, 2009- d av� � City Clerk Newport Beach, California (Seal)