Item 8-A

Council Meeting: September 8, 1998 Santa Monica, CA

TO: Mayor and City Council

FROM: City Staff

SUBJECT: Recommendation to Adopt Resolution of Intention to Amend Contract Between the California Public Employees' Retirement System and the City of Santa Monica to Amend the Survivor Benefit Option for Local Fire Members and to Authorize the City Manager to Execute the Agreement to Pool 1959 Survivor Benefits Assets and Liabilities Between the Board of Administration of the Public Employees' Retirement System and the City Council of the City of Santa Monica and to Hold a Public Hearing and First Reading of an Ordinance to Amend Said Contract as Indicated

Introduction

This report requests that Council adopt the attached resolution stating its intent to approve an amendment to the contract between the California Public Employees' Retirement System (CalPERS) and the City of Santa Monica to provide Section 21573 Third Level of 1959 Survivor Benefits for local fire members only. This report also requests that the City Council authorize the City Manager to execute the agreement to pool 1959 survivor benefits assets and liabilities between the Board of Administration of the Public Employees' Retirement System and the City Council of the City of Santa Monica. The attached resolution and agreement comply with the procedure required by CalPERS . This report also requests that on September 8, 1998 there be a public hearing and first reading of an ordinance which would amend said contract as indicated. The ordinance is also attached.

Discussion

The City of Santa Monica contracts with CalPERS to provide a retirement plan for its permanent safety (police and fire) and miscellaneous (non-safety) employees. As a contracting agency, the City may amend its contract(s) to provide various optional benefits offered by CalPERS.

The 1959 Survivor Benefit option is an additional CalPERS benefit which contracting agencies can offer to employees who are not covered by Social Security. The 1959 Survivor Benefit option is modeled after the Social Security program in that it provides a monthly benefit to the families of CalPERS members who die prior to retirement.

As Social Security benefits improved over the years, CalPERS has modified the 1959 Survivor Benefit option by providing additional benefit levels. The Third Level provides a higher monthly payment to the CalPERS member's family than that which is provided by the basic program.

As a part of the most recent Memorandum of Understanding (MOU) negotiated between the City of Santa Monica and the Santa Monica Firefighters Association Local 1109, the City agreed to amend its contract with CalPERS to provide Section 21573 Third Level of 1959 Survivor Benefits for local fire members only.

Budget/Fiscal Impact

A provision in the Memorandum of Understanding between the City of Santa Monica and the Santa Monica Firefighters Association Local 1109 requires each covered employee to be subject to a payroll deduction of up to $1.50 per month to cover any additional costs incurred by the City as a result of implementing the Third Level of the 1959 Survivor Benefit. As a result, there are no budget or financial impacts to the City because the employer's contribution is capped at $1.50 per month per employee.

Recommendation

It is recommended that the City Council authorize the City Manager to execute the attached Agreement to pool 1959 survivor benefits assets and liabilities between the Board of Administration of CalPERS and the City Council of the City of Santa Monica and to adopt the attached resolution indicating its intent to approve an amendment to the contract between CalPERS and the City of Santa Monica to provide Section 21573 Level Three of 1959 Survivor Benefits for local fire members only. It is further recommended that on September 8, 1998 there be a first reading of the Ordinance to amend said contract.

Prepared By: Karen Bancroft, Director of Personnel

Attachments: Resolution of Intention

Agreement to Pool 1959 Survivor Benefits Assets and Liabilities

Ordinance Authorizing an Amendment to the CalPERS Contract