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HomeMy WebLinkAbout03 - Amendment to PERS ContractOF , d O ; BEACH Council Staff Report Agenda Item No. 3 October 23. 2012 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Human Resources Department Terri L. Cassidy, Deputy City Manager /HR Director 949 - 644 -3303, tcassidy(a)newportbeachca.gov PREPARED BY: Maggie Williams- Dalgart, Human Resources Analyst APPROVED: G-- LA A TITLE: Adoption of Ordinan a No. 2012 -22 to Approve an Amendment to the Contract with the California Public Employees Retirement System to Provide Second Tier Benefit Formulae ABSTRACT: On September 25, 2012 the City Council adopted a Resolution of Intention, No. 2012- 87, and introduced Ordinance No. 2012 -22 to approve an amendment to the contract between the City of Newport Beach and the California Public Employees Retirement System (PERS) to adopt second tier retirement benefit formulae. There must be a minimum of 20 days between adoption of the Resolution and Adoption of the Ordinance. Adoption of the Ordinance is the final step in implementing the two tier retirement formulae as agreed to in Memoranda of Understanding with City's bargaining units and will take effect thirty (30) days after adoption. Employees hired on or after November 23, 2012 will be covered under second tier formulae. RECOMMENDATION: Conduct second reading and adopt Ordinance No. 2012 -22 amending the contract between the City of Newport Beach and the California Public Employees Retirement System to provide the following second tier retirement benefit formulae: 3 % @55 for Police, 2 % @50 for Firefighters, 2 % @50 for Lifeguards, and 2 % @60 for Miscellaneous members. Adoption of Ordinance No. 2012 -22 to Approve an Amendment to the Contract with the California Public Employees Retirement System to Provide Second Tier Benefit Formulae October 23, 2012 Page 2 NOTICING The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: Terri L. Cassidy Deputy City ManageriHuman R sources Director Attachments: Ordinance No. 2012 -22 Exhibit - Amendment to Contract with PERS ORDINANCE NO. 2012 -22 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING 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 NEWPORT BEACH WHEREAS, the City of Newport Beach and the Board of Administration of the California Public Employees' Retirement System have entered into a contract effective July 1, 1945, and amendments thereto, providing for participation by the City in the Calrfornia Public Employees' Retirement System; WHEREAS, the Public Employees Retirement Law permits the amendment of the contract following the adoption of a Resolution of Intent giving notice of the intent 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 Newport Beach ( "Amendment'); WHEREAS, on September 25, 2012, the City Council of the City of Newport Beach adopted Resolution No. 2012 -87 entitled "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 Newport Beach; NOW THEREFORE, the City Council of the City of Newport Beach ordain as follows: SECTION 1: That the Amendment to the Contract between the Board of Administration of the California Public Employees' Retirement System and the City Council of the City of Newport Beach ("Amendment"), a copy of which Amendment is attached hereto as "Exhibit ", and is incorporated herein this reference. SECTION 2: The Mayor of the City of Newport Beach is hereby authorized, to execute the Amendment for and on behalf of the City. SECTION 3: If any section, subsection, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional. SECTION 4 This ordinance shall take effect thirty (30) days after its adoption, and prior to expiration of fifteen (15) days from the passage thereof shall be published once in the Daily Pilot, a newspaper of general circulation, published in Costa Mesa and circulated in the City of Newport Beach, and thenceforth and thereafter shall be in full force and effect. SECTION 5: This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the _ day of 2012, and adopted on the day of 2012, by the following vote, to wit: AYES, COUNCILMEMB NOES. COUNCILMEM ABSENT COUNCILM MAYOR ATTEST: LEILANI I. BROWN. CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE By: 9 AARON C. HARP, CI ATTORNEY EXHIBIT lk"- CAPERS California Public Employees' Retirement System AMENDMENT TO CONTRACT Between the Board of Administration California Public Employees' Retirement System and the City Council City of Newport Beach 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 July 1, 1945, and witnessed April 27, 1945, and as amended effective March 1, 1948, November 1, 1951, April 1, 1956, October 31, 1970, September 18, 1971, December 11, 1971, September 24, 1977, December 18, 1977, June 17, 1978, March 24, 1979, June 30, 1979, January 12, 1989, December 2, 1989, June 12, 1996, July 12, 2000, August 26, 2000, June 15, 2002, November 30, 2002, November 13, 2004, July 23, 2005, December 22, 2007, March 15, 2008 and June 20, 2009 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 13 are hereby stricken from said contract as executed effective June 20, 2009, and hereby replaced by the following paragraphs numbered 1 through 17 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 entering membership in the miscellaneous classification on or prior to the effective date of this amendment to contract and age 60 for local miscellaneous members entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract; age 50 for local fire members, ocean beach lifeguards and those local police members entering membership in the police classification on or prior to the effective date of this amendment to contract and age 55 for local police members entering membership for the first time in the police classification after the effective date of this amendment to contract. 2. Public Agency shall participate in the Public Employees' Retirement System from and after July 1, 1945 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 CalPERS 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. Ocean Beach Lifeguards (included as local safety members); d. 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: a. POLICE CADETS; AND b. RESERVE OFFICERS. 6. The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member in employment before and not on or after December 22, 1977 shall be determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Full). 7. The percentage of final compensation to be provided for each year of credited prior and current service for local miscellaneous members in employment on or after December 22, 2007 and not entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract shall be determined in accordance with Section 21354.4 of said Retirement Law (2.5% at age 55 Full). 8. The percentage of final compensation to be provided for each year of credited current service as a local miscellaneous member entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract shall be determined in accordance with Section 21353 of said Retirement Law (2% at age 60 Full), 9. The percentage of final compensation to be provided for each year of credited prior and current service as a local .safety member entering membership in the safety classification on or prior to the effective date of this amendment to contract shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full). 10. The percentage of final compensation to be provided for each year of credited current service as a local fire member entering membership for the first time in the fire classification and ocean beach lifeguards entering membership for the first time in the ocean beach lifeguard classification after the effective date of this amendment to contract shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 11. The percentage of final compensation to be provided for each year of credited current service as a local police member entering membership for the first time in the police classification after the effective date of this amendment to contract shall be determined in accordance with Section 21363.1 of said Retirement Law (3% at age 55 Full). 12. Public Agency elected and elects to be subject to the following optional provisions: a. Section 20421 ( "Local Safety Member' shall include ocean beach lifeguards of a city as described in Government Code Section 20421). b. Section 21574 (Fourth Level of 1959 Survivor Benefits). C. Section 21024 (Military Service Credit as Public Service). d. Section 21389 (Second Opportunity to Elect 1959 Survivor Benefits). Legislation repealed said Section effective September 27, 1979. e. Section 20965 (Credit for Unused Sick Leave) for local miscellaneous members only. f. Section 20042 (One -Year Final Compensation) for local miscellaneous members and local safety members entering membership on or prior to the effective date of this amendment to contract. g. Section 21548 (Pre- Retirement Option 2W Death Benefit). h. Section 20516 (Employees Sharing Cost of Additional Benefits) for miscellaneous members entering membership on or prior to the effective date of this amendment to contract: Section 21354.4 (2.5% @ 55 Full formula) for local miscellaneous members. The employee cost sharing contributions are not to exceed 2.420 %. The maximum employee cost sharing contribution is the normal cost plus the increase in the accrued liability due to the benefit improvement amortized over 20 years. In no event shall the employee cost sharing contribution attributable to the unfunded liability remain in effect beyond December 31, 2027. Thereafter, in any given contribution year, the maximum employee cost sharing contribution cannot exceed .838% of payroll. Section 20475 (Different Level of Benefits). Section 21362 (2% @ 50 Full formula) and Section 20037 (Three -Year Final Compensation) are applicable to local fire members entering membership for the first time in the fire classification and ocean beach lifeguards entering membership for the first time in the ocean beach lifeguard classification after the effective date of this amendment to contract, Section 21363.1 (3% @ 55 Full formula) and Section 20037 (Three - Year Final Compensation) are applicable to local police members entering membership for the first time in the police classification after the effective date of this amendment to contract, and Section 21353 (2% @ 60 Full formula) and Section 20037 (Three - Year Final Compensation) without Section 20516 (Employees Sharing Cost of Additional Benefits) are applicable to local miscellaneous members entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract. 13. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on September 24, 1977. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834. 14. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System. 15. 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 21574 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. 16. 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. 17. 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 NEWPORT BEACH BY KAREN DE FRANK, CHIEF CUSTOMER ACCOUNT SERVICES DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM AMENDMENT CaIPERS ID 41545983430 PERS - CON -702A BY PRESIDING OFFICER Witness Date /uim Clerk CITY • -- NEWPORTHEACH City CouncH Staff Report ' -- Agenda Item No. 20 September 25, 2012 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, City Manager 949 - 644 -3002, dkiff(cDnewportbeachca.gov Human Resources Department Terri L. Cassidy, Deputy City Manager /HR Director 949 - 644 -3303, tcassidy(a?newportbeachca.gov PREPARED BY: Terri L. Cassidy, Deputy City Manager /HR Director � A ,/ APPROVED: l \ TITLE: Implementation of Negotiated Changes to Employee Retirement Benefits through Amendment of the Contract with the California Public Employees Retirement System (CaIPERS); and Adoption of a Defined Contribution Plan with the Public Agency Retirement System (PARS) ABSTRACT: Through the statutory meet and confer process under the Meyers- Milias -Brown Act, codified in Government Code Section 3500 et seq., the City and its recognized bargaining units agreed to significantly change employees' retirement benefit formulae with the California Public Employees Retirement System (CaIPERS). The agreement to implement a "second tier" will, over time, reduce the City's obligations to fund pensions for employees. This item presents the following second tier formulae: 3 % @55 for Police, 2 % @50 for Fire and Lifeguards, and 2 % @60 for Miscellaneous members. The City Council's approval of the Police Management Association Memorandum of Understanding (MOU) on September 11, 2012, the last of the public safety contracts, allowed for implementation of the proposed second -tier formulae. In addition, the Firefighters Association and Fire Management Association MOUs create a hybrid retirement benefit for new hires through the establishment of a Defined Contribution Implementation of Negotiated Changes to Employee Retirement Benefits through Amendment of the Contract with the California Public Employees Retirement System (PERS); and Adoption of a Defined Contribution Plan with the Public Agency Retirement System (PARS) September 25, 2012 Page 2 Plan. City Council approval of the proposed Resolutions and Introduction of the PERS Ordinance will complete implementation of these pension reform measures. RECOMMENDATION: 1. Adopt Resolution No. 2012 -87 relating to the City's Intention to Approve an Amendment to the Contract between the Board of Administration, California Public Employees' Retirement System (PERS) and the Newport Beach City Council to authorize the following second tier retirement formulae: 3 % @55 for Police; 2% @50 for Fire; 2 % @50 for Other Safety (Lifeguards); and 2 %@60 for Miscellaneous members. 2. Introduce Ordinance No. 2012 -22 relating to a PERS contract amendment and pass to 2nd Reading on October 23, 2012. 3. Adopt Resolution No. 2012 -88 implementing a qualified Defined Contribution Plan with the Public Agency Retirement System (PARS). FUNDING REQUIREMENTS: Administrative costs associated with the Defined Contribution Plan are anticipated to be minor and require no additional funding at this time. Long term savings associated with adoption of second tier formulae are included in the discussion below. DISCUSSION: The rising cost of public employee pension benefits has become burdensome, potentially impacting public employer services and forcing some agencies to decide between providing benefits or reducing services. There has been a call for pension reform in recent years from a variety of individuals and groups, including Governor Brown, members of the California legislature, business groups, and community leaders. In the 2010 Fiscal Sustainability Plan (Resolution No. 2010 -4) and 2011 Compensation Philosophy (Resolution No. 2011 -55) the Newport Beach City Council outlined goals and established priorities to ensure a fair allocation of pension costs. Consistent with this direction, the City negotiated labor contracts that include major changes to retirement benefits, including employees paying a larger share of retirement costs and a reduced benefit for newly -hired employees with implementation of second tier benefit formulae. Successor Memoranda of Understanding adopted on December 14, 2010 with the City Employees Association, Professional and Technical Employees Association, Employees League, and the Key and Management Compensation Plan include a provision for a 2 % @60 formula; the Lifeguard Management Association MOU 2 Implementation of Negotiated Changes to Employee Retirement Benefits through Amendment of the Contract with the California Public Employees Retirement System (PERS); and Adoption of a Defined Contribution Plan with the Public Agency Retirement System (PARS) September 25, 2012 Page 3 adopted on June 28, 2011 provides for a 2 % @50 formula; the Firefighters Association MOU adopted on May 22, 2012 provides a 2 % @50 formula for Safety and 2 % @60 formula for Miscellaneous; the Police Association MOU adopted on June 26, 2012 provides a 3 % @55 formula for Safety and 2 % @60 formula for Miscellaneous; the Fire Management Association MOU adopted on August 14, 2012, provides a second tier 2 % @50 formula; and the Police Management Association MOU adopted on September 11, 2012 provides a second tier 3 % @55 formula. The impact of the second tier formulae mean reduced, though still competitive, pension benefits for newly -hired employees. Current Police, Fire and Lifeguard employees under the 3 % @50 formula are eligible to receive 3% pension for each year of service. Under this benefit plan an employee who retires at age 50 with 30 years of service will receive a pension equal to 90% of salary. Under the 2 % @50 formula for Fire and Lifeguards, an employee retiring at age 50 with 30 years of service will receive a pension benefit equal to 60% of salary. Under 2 % @50 if an employee retires at age 55 with 30 years of service, the benefit factor increases and the employee would receive a pension benefit of 81% of salary. Under the 3 % @55 formula for Police, an employee with 30 years of service would still be eligible to receive a pension equal to 90% of salary, however the employee would be required to work to a later age (55 instead of current age 50). Public Employees Pension Reform Act On September 12, 2012, Governor Brown signed into law the Public Employees Pension Reform Act ( PEPRA), which overhauled public employer pension benefits. Much of the legislation applies to newly hired employees, particularly those "entering" the retirement system for the first time. PEPRA mandates new benefit formulas as of January 1, 2013, for the majority of public employers. The new benefit formulas, 2.7 % @57 for new Police, Fire and Lifeguard personnel, and 2 % @62 for new Miscellaneous members, creates a uniform standard that will apply to nearly all municipalities. Other significant changes include a computation of the average three years of final salary, a salary cap for purposes of calculating pay, and reductions in types of salary that can be considered as "compensation" toward pensionable pay. The changes will provide long term savings and secure a more sustainable public pension system. In practical terms, the impact of the legislation is that the City will have to adopt a third - tier benefit formula for employees new to the retirement system after January 1, 2013. However, the legislation does not apply to employees currently in the system who transfer between PERS agencies. This means employees hired by the City after January 1, 2013, who are already PERS members, will be placed into the benefit plan in effect December 31, 2012. Due to the fact that the City is implementing second -tier 3 Implementation of Negotiated Changes to Employee Retirement Benefits through Amendment of the Contract with the California Public Employees Retirement System (PERS); and Adoption of a Defined Contribution Plan with the Public Agency Retirement System (PARS) September 25, 2092 Page 4 benefits at this time, the City ensures laterals are hired at a lower benefit formula than current employees are receiving. Attachment D, Newport Beach Current and Future Retirement Formulae, details employee formula eligibility based on date of hire for current and future employees. The savings associated with adopting second -tier formulae will occur gradually. As the number of employees entering City employment under a new tier increases, the savings will be reflected in the City's PERS Employer Rate. PERS estimates the reduction in the Employer rate to be between 2% and 4% over time. Included as Attachment A, is a proposed Resolution of Intention To Approve An Amendment to the Contract Between the Board of Administration, California Public Employees' Retirement System and the City Council of the City of Newport Beach, which is required by PERS as the first step in implementing the second -tier formulae. The Resolution's purpose is to notify the public that the City intends to amend its contract with PERS and to show the cost, if any, associated with the change (there is only saving associated with these contract changes). The PERS contract amendment cannot become effective until the adoption of an ordinance, which is being recommended for introduction as part of this agenda item. Adoption of the ordinance cannot occur until twenty (20) days have passed following City Council's adoption of the proposed Resolution of Intention, which is expected to occur at the City Council meeting on October 23, 2012. Under PERS regulations the effective date of the PERS contract amendment is thirty (30) days after adoption of the ordinance. It is anticipated employees hired after November 25, 2012, will be hired under the second tier formulae. Additionally, the recently adopted MOUs with the Firefighters Association and Fire Management Association provide a voluntary Defined Contribution (DC) Plan, which will be available to employees hired at a retirement formula lower than the current 3 % @50. Participation in the plan requires a one -time irrevocable employee election with a City matching contribution of up to 1.5% of salary. As structured, the City's matching contribution will only be accessible to the employee upon retirement (service or medical) from the City. The City Council's adoption of the Resolution of the City Council of the City of Newport Beach Adopting a Qualified Defined Contribution Plan with the Public Agency Retirement System (PARS Trust) (Attachment C) will establish the DC Plan and authorize the Public Agency Retirement Services (PARS) as the Trust Administrator. The Plan will provide the option for employees in other lower tier formulas to participate, if agreed through the meet and confer process. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will 4 Implementation of Negotiated Changes to Employee Retirement Benefits through Amendment of the Contract with the California Public Employees Retirement System (PERS); and Adoption of a Defined Contribution Plan with the Public Agency Retirement System (PARS) September 25, 2012 Page 5 not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. (NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Submitted by: Terri L. Cassidy Deputy City Manager /HR Direct Attachments: A. Resolution No. I A Resolution of Intention to Approve an Amendment to the Contract between the Board of Administration, California Public Employees' Retirement System and the City Council of the City of Newport Beach B. Ordnance No. , An Ordinance of the City Council of the City of Newport Beach Authorizing an Amendment to the Contract between the Board of Administration, California Public Employees' Retirement System and the City Council of the City of Newport Beach C. Resolution No. A Resolution of the City Council of the City of Newport Beach Adopting a Qualified Defined Contribution Plan with the Public Agency Retirement System (PARS Trust) D. Comparison of Current and Future Retirement Formulae 5 Attachment A RESOLUTION NO. 2012- A RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATON CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH WHEREAS, the Public Employees Retirement Law permits the participation of the 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 n the procedures to amend the contract is the adoption by the governing body of the public agency of 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 changes: To provide Section 20475 (Different Level of Benefits). Section 21362 (2 % @50 Full formula) and Section 20037 (Three -Year Final Compensation) are applicable to local fire members entering membership for the first time in the fire classification and ocean beach lifeguards entering membership for the first time in the ocean beach lifeguard classification after the effective date of this amendment to contract, Section 20475 (Different Level of Benefits). Section 21363.1 (3 % @55 Full formula) and Section 20037 (Three -Year Final Compensation) are applicable to local police members entering membership for the first time in the police classification after the effective date of this amendment to contract, and Section 20475 (Different Level of Benefits). Section 21353 (2 % @60 Full formula) and Section 20037 (Three -Year Final Compensation) without Section 20516 (Employees Cost Sharing of Additional Benefits) are applicable to local miscellaneous members entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract. 2 NOW, THEREFORE, the City Council of the City of Newport Beach does hereby give notice of intention to approve an amendment to the contract between the Board of Administration of the Public Employees' Retirement System and the City of Newport Beach, a copy of said amendment being attached hereto, as an "Exhibit" and by this reference made part hereof. M ATTEST: City Clerk Adopted this 25th day of September, 2012. Nancy Gardner, Mayor of the City of Newport Beach 7 L . California Public Employees' Retirement System NiIJ-1V40111 33 1Z 19) 1 O Between the Board of Administration California Public Employees' Retirement System and the City Council City of Newport Beach 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 a$ Public Agency, having entered into a contract effective July 1, 1945, and witnessed April 27, 1945, and as amended effective March 1, 1948, November 1, 1951, April 1, 1956, October 31, 1970, September 18, 1971, December 11, 1971, September 24, 1977, December 18, 1977, June 17, 1978, March 24, 1979, June 30, 1979, January 12, 1989, December 2, 1989, June 12, 1996, July 12, 2000, August 26, 2000, June 15, 2002, November 30, 2002, November 13, 2004, July 23, 2005, December 22, 2007, March 15, 2008 and June 20, 2009 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 13 are hereby stricken from said contract as executed effective June 20, 2009, and hereby replaced by the following paragraphs numbered 1 through 17 inclusive: D 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 entering membership in the miscellaneous classification on or prior to the effective date of this amendment to contract and age 60 for local miscellaneous members entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract; age 50 for local fire members, ocean beach lifeguards and those local police members entering membership in the police classification on or prior to the effective date of this amendment to contract and age 55 for local police members entering membership for the first time in the police classification after the effective date of this amendment to contract. 2. Public Agency shall participate in the Public Employees' Retirement System from and after July 1, 1945 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 CalPERS 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. Ocean Beach Lifeguards (included as local safety members); d. 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: a. POLICE CADETS; AND b. RESERVE- OFFICERS. 6. The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member in employment before and not on or after December 22, 1977 shall be determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Full). 19 7. The percentage of final compensation to be provided for each year of credited prior and current service for local miscellaneous members in employment on or after December 22, 2007 and not entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract shall be determined in accordance with Section 21354.4 of said Retirement Law (2.5% at age 55 full). 8. The percentage of final compensation to be provided for each year of credited current service as a local miscellaneous member entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract shall be determined in accordance with Section 21353 of said Retirement Law (2% at age 60 Full). 9. The percentage of final compensation to be provided for each year of credited prior and current service as a local safety member entering membership in the safety classification on or prior to the effective date of this amendment to contract shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full). 10. The percentage of final compensation to be provided for each year of credited current service as a local fire member entering membership for the first time in the fire classification and ocean beach lifeguards entering membership for the first time in the ocean beach lifeguard classification after the effective date of this amendment to contract shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 11. The percentage of final compensation to be provided for each year of credited current service as a local police member entering membership for the first time in the police classification after the effective date of this amendment to contract shall be determined in accordance with Section 21363.1 of said Retirement Law (3% at age 55 Full). 12. Public Agency elected and elects to be subject to the following optional provisions: a. Section 20421 ( "Local Safety Member" shall include ocean beach lifeguards of a city as described in Government Code Section 20421). b. Section 21574 (Fourth Level of 1959 Survivor Benefits). C. Section 21024 (Military Service Credit as Public Service). d. Section 21389 (Second Opportunity to Elect 1959 Survivor Benefits). Legislation repealed said Section effective September 27, 1979. 11 e. Section 20965 (Credit for Unused Sick Leave) for local miscellaneous members only. Section 20042 (One -Year Final Compensation) for local miscellaneous members and local safety members entering membership on or prior to the effective date of this amendment to contract. g. Section 21548 (Pre- Retirement Option 2W Death Benefit). Section 20516 (Employees Sharing Cost of Additional Benefits) for miscellaneous members entering membership on or prior to the effective date of this amendment to contract: Section 21354.4 (2.5% @ 55 Full formula) for local miscellaneous members. The employee cost sharing contributions are not to exceed 2.420 %. The maximum employee cost sharing contribution is the normal cost plus the increase in the accrued liability due to the benefit improvement amortized over 20 years. In no event shall the employee cost sharing contribution attributable to the unfunded liability remain in effect beyond December 31, 2027. Thereafter, in any given contribution year, the maximum employee cost sharing contribution cannot exceed .838% of payroll. Section 20475 (Different Level of Benefits). Section 21362 (2% @ 50 Full formula) and Section 20037 (Three -Year Final Compensation) are applicable to local fire members entering membership for the first time in the fire classification and ocean beach lifeguards entering membership for the first time in the ocean beach lifeguard classification after the effective date of this amendment to contract, Section 21363.1 (3% @ 55 Full formula) and Section 20037 (Three - Year Final Compensation) are applicable to local police members entering membership for the first time in the police classification after the effective date of this amendment to contract, and Section 21353 (2 % @ 60 Full formula) and Section 20037 (Three - Year Final Compensation) without Section 20516 (Employees Sharing Cost of Additional Benefits) are applicable to local miscellaneous members entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract. 12 13. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on September 24, 1977. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834. 14. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System. 15. 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 21574 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. 16. 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. 13 17. 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 NEWPORT BEACH BY KAREN DE FRANK, CHIEF CUSTOMER ACCOUNT SERVICES DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM AMENDMENT CaIPERS ID #1545983430 PERS- CON -702A BY PRESIDING OFFICER Witness Date Attest: Clerk 14 Attachment B ORDINANCE NO. 2012- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING 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 NEWPORT BEACH WHEREAS, the City of Newport Beach and the Board of Administration of the California Public Employees' Retirement System have entered into a contract effective July 1, 1945, and amendments thereto, providing for participation by the City in the California Public Employees' Retirement System; WHEREAS, the Public Employees Retirement Law permits the amendment of the contract following the adoption of a Resolution of Intent giving notice of the intent 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 Newport Beach ( "Amendment'); WHEREAS, on September 25, 2012, the City Council of the City of Newport Beach adopted Resolution No. entitled "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 Newport Beach; NOW THEREFORE, the City Council of the City of Newport Beach ordain as follows: SECTION 1: That the Amendment to the Contract between the Board of Administration of the California Public Employees' Retirement System and the City Council of the City of Newport Beach ( "Amendment "), a copy of which Amendment is attached hereto as "Exhibit ", and is incorporated herein this reference. SECTION 2: The Mayor of the City of Newport Beach is hereby authorized, to execute the Amendment for and on behalf of the City. SECTION 3: If any section, subsection, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional. SECTION 4: This ordinance shall take effect thirty (30) days after its adoption, and prior to expiration of fifteen (15) days from the passage thereof shall be published once in the Daily Pilot, a newspaper of general circulation, published in Costa Mesa and circulated in the City of Newport Beach, and thenceforth and thereafter shall be in full force and effect. 15 SECTION 5: This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the _ day of 2012, and adopted on the day of 2012, by the following vote, to wit: AYES, COUNCILMEMBERS NOES, COUNCILME ABSENT COUNCILMEMBE MA ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE AARON C. HARP, CI ATTORNEY IN Ca1PERS California Public Employees' Retirement System -- EXHIBIT AMENDMENT TO CONTRACT Between the Board of Administration California Public Employees' Retirement System and the City Council City of Newport Beach 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 July 1, 1945, and witnessed April 27, 1945, and as amended effective March 1, 1948, November 1, 1951, April 1, 1956, October 31, 1970, September 18, 1971, December 11, 1971, September 24, 1977, December 18, 1977, June 17, 1978, March 24, 1979, June 30, 1979, January 12, 1989, December 2, 1989, June 12, 1996, July 12, 2000, August 26, 2000, June 15, 2002, November 30, 2002, November 13, 2004, July 23, 2005, December 22, 2007, March 15, 2008 and June 20, 2009 which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows: A. Paragraphs 1 through 13 are hereby stricken from said contract as executed effective June 20, 2009, and hereby replaced by the following paragraphs numbered 1 through 17 inclusive: 17 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 entering membership in the miscellaneous classification on or prior to the effective date of this amendment to contract and age 60 for local miscellaneous members entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract; age 50 for local fire members, ocean beach lifeguards and those local police members entering membership in the police classification on or prior to the effective date of this amendment to contract and age 55 for local police members entering membership for the first time in the police classification after the effective date of this amendment to contract. 2. Public Agency shall participate in the Public Employees' Retirement System from and after July 1, 1945 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. IN (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 CalPERS 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. Ocean Beach Lifeguards (included as local safety members); d. 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: a. POLICE CADETS; AND b. RESERVE OFFICERS. 6. The percentage of final compensation to be provided for each year of credited prior and current service as a local miscellaneous member in employment before and not on or after December 22, 1977 shall be determined in accordance with Section 21354 of said Retirement Law (2% at age 55 Full). m 7. The percentage of final compensation to be provided for each year of credited prior and current service for local miscellaneous members in employment on or after December 22, 2007 and not entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract shall be determined in accordance with Section 21354.4 of said Retirement Law (2.5% at age 55 Full). 8. The percentage of final compensation to be provided for each year of credited current service as a local miscellaneous member entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract shall be determined in accordance with Section 21353 of said Retirement Law (2% at age 60 Full). 9. The percentage of final compensation to be provided for each year of credited prior and current service as a local safety member entering membership in the safety classification on or prior to the effective date of this amendment to contract shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full). 10. The percentage of final compensation to be provided for each year of credited current service as a local fire member entering membership for the first time in the fire classification and ocean beach lifeguards entering membership for the first time in the ocean beach lifeguard classification after the effective date of this amendment to contract shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full). 11. The percentage of final compensation to be provided for each year of credited current service as a local police member entering membership for the first time in the police classification after the effective date of this amendment to contract shall be determined in accordance with Section 21363.1 of said Retirement Law (3% at age 55 Full). 12. Public Agency elected and elects to be subject to the following optional provisions: a. Section 20421 ( "Local Safety Member" shall include ocean beach lifeguards of a city as described in Government Code Section 20421). b. Section 21574 (Fourth Level of 1959 Survivor Benefits). C. Section 21024 (Military Service Credit as Public Service). d. Section 21389 (Second Opportunity to Elect 1959 Survivor Benefits). Legislation repealed said Section effective September 27, 1979. 9 e. Section 20965 (Credit for Unused Sick Leave) for local miscellaneous members only. f. Section 20042 (One -Year Final Compensation) for local miscellaneous members and local safety members entering membership on or prior to the effective date of this amendment to contract. g. Section 21548 (Pre- Retirement Option 2W Death Benefit). h. Section 20516 (Employees Sharing Cost of Additional Benefits) for miscellaneous members entering membership on or prior to the effective date of this amendment to contract: Section 21354.4 (2.5% @ 55 Full formula) for local miscellaneous members. The employee cost sharing contributions are not to exceed 2.420 %. The maximum employee cost sharing contribution is the normal cost plus the increase in the accrued liability due to the benefit improvement amortized over 20 years. In no event shall the employee cost sharing contribution attributable to the unfunded liability remain in effect beyond December 31, 2027. Thereafter, in any given contribution year, the maximum employee cost sharing contribution cannot exceed .838% of payroll. Section 20475 (Different Level of Benefits). Section 21362 (2 % @ 50 Full formula) and Section 20037 (Three -Year Final Compensation) are applicable to local fire members entering membership for the first time in the fire classification and ocean beach lifeguards entering membership for the first time in the ocean beach lifeguard classification after the effective date of this amendment to contract, Section 21363.1 (3% @ 55 Full formula) and Section 20037 (Three - Year Final Compensation) are applicable to local police members entering membership for the first time in the police classification after the effective date of this amendment to contract, and Section 21353 (2 % @ 60 Full formula) and Section 20037 (Three - Year Final Compensation) without Section 20516 (Employees Sharing Cost of Additional Benefits) are applicable to local miscellaneous members entering membership for the first time in the miscellaneous classification after the effective date of this amendment to contract. 21 13. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on September 24, 1977. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834. 14. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System. 15. 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 21574 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. 16. 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. 22 17. 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 NEWPORT BEACH BY KAREN DE FRANK, CHIEF CUSTOMER ACCOUNT SERVICES DIVISION PUBLIC EMPLOYEES' RETIREMENT SYSTEM AMENDMENT CaIPERS ID #1545983430 PERS - CON -702A BY PRESIDING OFFICER Witness Date Attest: Clerk 23 Attachment C RESOLUTION NO. 2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTING A QUALIFIED DEFINED CONTRIBUTION PLAN WITH THE PUBLIC AGENCY RETIREMENT SYSTEM (PARS TRUST) WHEREAS, the City of Newport Beach ( "City') is a member of the Public Agency Retirement Services (PARS Trust) for the purpose of providing tax qualified retirement benefits; and WHEREAS, it is determined to be in the best interest of the City and its employees to provide a Defined Contribution Plan to eligible employees; and WHEREAS, the PARS Trust has made available a Defined Contribution Plan qualifying under relevant sections of the Internal Revenue Code and the California Government Code. NOW, THEREFORE, the City Council of the City of Newport Beach does hereby RESOLVE as follows: Section 1. The City Council, being a member of the PARS Trust, does hereby adopt the PARS Defined Contribution Plan, as part of the City's retirement program for eligible employees, effective December 1, 2012. Section 2. The City Council hereby appoints PARS as a Trust Administrator, U.S. Bank National Association, as Trustee, and John Hancock Life Insurance Company as Custodian /Recordkeeper for the PARS Defined Contribution Plan. Section 3. The City Council hereby appoints the Human Resources Director, or his/her successor designee, as the City's Plan Administrator for the Public Agency Retirement System. Section 4. The City's Plan Administrator is hereby authorized to execute the PARS legal and administrative documents on the behalf of the City and to take whatever additional actions are necessary to maintain the City's participation in PARS and to maintain PARS compliance of any relevant regulation issued or as may be issued; therefore authorizing him /her to take whatever additional actions are required to administer the City's PARS plan(s). 24 AM ATTEST: City Clerk Adopted this 25th day of September, 2012. Nancy Gardner, Mayor of the City of Newport Beach 25 Attachment D Newport Beach Current and Future Retirement Formulae Employee Group Current Formulae Second Tier Formulae PEPRA Formulae Police (Safety) 3 % @ 50 3% @ 55 2.7% @ 57 Fire (Safety) 3% @ 50 2% @ 50 2.7% @ 57 Lifeguards 3% @ 50 2% @ 50 2.7% @ 57 Miscellaneous 2.5% @ 55 2% @ 60 2% @ 62 Employees hired by the 1) Employees hired City on or before between November 26, All employees new to November 25, 2012 2012 and December 31 , the PERS system, hired Applies to: .(estimated date based on 2012; 2) Employees hired on or after January 1, proposed implementation after January 1, 2013 who 2013 of 2nd tier) are already in the retirement system 09/25/2012 91