HomeMy WebLinkAbout03 - PARS Supplemental Retirement PlanAgenda Item No. 3
CITY OF NEWPORT BEACH
Administrative Services Department
Resource Management • Fiscal Services • M.I.S. • Revenue • Accounting
February 13, 2001
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM. Dennis Danner, Administrative Services Director
SUBJECT: RECONFIRMATION OF PARS SUPPLEMENTAL RETIREMENT
PLAN
RECOMMENDATION
Adopt the attached Resolution reconfirming the City's participation in the subject plan.
BACKGROUND
PARS (Phase II) has administered several programs for the City over the past eight years.
These include:
• An ongoing retirement plan (Social Security Alternative) for our part -time
employees, and
• Four different supplemental retirement programs for full -time employees (two of
which have only one employee enrolled).
PARS (Phase II) is the most well established entity in this area (probably the State) doing this
kind of work for government agencies. We conducted our own audit of their operation four
years ago, and the auditor's report produced no findings which would be cause for concern.
Also, we recently contacted AON, who is the City's representative for Health Benefits and
other programs, concerning possible alternatives to the PARS program. AON is active in
various aspects of this market as well. We were advised by John Bartel of AON that he was
quite familiar with the PARS programs, and that although supplemental retirement program
alternatives could be developed for the City, he thought it would be very unlikely that
anything would be competitive with what we already have in place with PARS.
(Just for the City Council's information, AON did report, as a separate matter, that there are
now alternatives to the retirement plan used for part-time employees that might be more
attractive. We are looking into that, and we will report to the City Council if there is the
potential to improve the City's position. However, this gets to be complicated, since any
changes to that program are subject to the Meet and Confer process.)
February 13, 2001
Pale 2
CURRENTSTATUS
For two reasons, it is appropriate for the City Council to reconfirm its authorization for the
City's participation in these programs at this time.
• Governing regulations (usually IRS) have mandated administrative changes to the
programs. This comes up from time to time. Therefore one purpose of the Resolution is to
reconfirm the City's participation at this time, and to authorize the Administrative
Services Director, with review by the City Manager, to approve the implementation of
such program changes in the future.
• In addition, some employees, especially those with long tenure, have leave to sell back
and/or other lump sum payments due to them at the time their employment is terminated.
If the employee requests it, the City can place these funds in a Supplemental Retirement
Program with PARS, thereby enabling the employee to defer taxation on the amount due
to the employee. Costs of this transaction will be borne by the employee unless alternative
arrangements are specifically negotiated with the City on a case -by -case basis; and the
employee in each case will submit a specific written request and execute a hold - harmless
agreement.
If there are questions about this proposed Resolution, please do not hesitate to contact me at
extension 3123.
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH
RECONFIRMING CITY PARTICIPATION IN THE PARS SUPPLEMENTAL RETIREMENT
PLAN ADMINISTERED BY PHASE II SYSTEMS, PARS TRUST ADMINISTRATOR
WHEREAS, it is determined to be in the best interest of the City of Newport Beach
( "CITY ") to continue participation in the Public Agency Retirement System (PARS)
Supplemental Retirement Plan to provide retirement benefits for its employees and their
beneficiaries, and
WHEREAS, the CITY is currently a member of PARS, which provides to its employees a
governmental plan, qualifying under relevant sections of the Internal Revenue Code and the
California Government Code, and
WHEREAS, the CITY has no objection to leave settlement and other lump sums due
employees at the time they leave City employment from being deposited to a PARS
Supplemental Retirement Plan, so long as such action is requested and authorized by the
employee and is in compliance with all applicable laws and IRS rulings,
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Newport
Beach does hereby resolve, order, and determine as follows:
Section 1. The CITY COUNCIL does hereby re- confirm the PARS Supplementary
Retirement Plan (SRP) for City employees effective January 1, 2001.
Section 2. The CITY COUNCIL hereby appoints the Administrative Services Director as
CITY Administrator for PARS, and further authorizes him /her to take whatever additional actions
are necessary to maintain the participation of the CITY in PARS and to maintain the City's
compliance with relevant regulations issued or as may be issued by the Federal or State
government or agencies. The actions of the Administrative Services Director in this capacity
shall be reviewed and approved by the City Manager, as the City Manager deems appropriate.
Section 3. The CITY's PARS Administrator is hereby authorized to execute the PARS
legal documents on behalf of the CITY to implement a supplemental plan to CaIPERS.
Section 9. All the recitals in this Resolution are true and correct and this City Council so
finds, determines and represents.
ADOPTED this day of 2001.
Mayor, City of Newport Beach
ATTEST:
City Clerk, City of Newport Beach
STATE OF CALIFORNIA
) ss.
COUNTY OF ORANGE
I hereby certify that the foregoing Resolution was duly and regularly adopted by the City
Council of the City of Newport Beach at a regular meeting thereof held on the day of
2001, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:,
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
City Clerk, City of Newport Beach