HomeMy WebLinkAboutMINUTES - 07201999 - C211 Q
T 0: BOARD OF SUPERVISORS
Contra .
FROM: PHIL BATCHELOR, COUNTY ADMINISTRATOR
Costa
July 13, 1999 , t,� County�
DATE: sra...a...
SU13JE-CT: INCREASE IN THE BURIAL ALLOWANCE PAID TO RETIREES
SPEC1Fi%REQUEST(S)OR RECOMMENDA710hNIS)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
ADOPT the attached Resolution which makes Government Code Section 31739.5
applicable in Contra Costa County and in doing so, authorizes the Retirement Board
to increase the burial allowance that is paid when a retiree dies from $1,000 to
$5,000,
FISCAL IMPACT:
None on the County General Fund. All benefits will be paid from the Retirement
Association's excess surplus earnings.
Currently, when a retiree dies, the Retirement Association pays a $1,000 burial
allowance to the named beneficiary of the retiree to assist in paying for burial
expenses. Legislation was enacted in 1997 (Chapter 439, Statutes of 1997) which
permits the burial allowance to be increased to not to exceed $5,000. However,this
provision cannot be put into effect in a County until the Board of Supervisors, by
majority vote, adopts a resolution making this section of the Code effective in that
County and until the Retirement Board adopts a resolution determining that the
benefit may be financed from surplus earnings of the retirement fund. The
Retirement Board has now made that finding and is recommending that the Board
of Supervisors make this increased burial allowance effective in Contra Costa
County.
CONT;NUE'D ON ATTACHMENT: YES SIGNATURE:
K RECOMMENCATSON OF COUNTY ADMINISTRATOR RaCONIMENOATION OF BOAF3'J' COMM.!TTEE
APPROVE OTHER
S uNAT:tIf Is : "e.
ACTION OF BOARD ON-- July- 20 , 1999 APPROVED AS RECOMMENDED XX OTHER
VOTE OF SUPERVISORS
c
1 HEREBY CERTIFY THAT THIS IS A TRUE
NAN1�10I�S;ABSENT -- ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: __ _ NOES: AND ENTERED ON THE MINUTES OF THE€OARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN,
County
July 20, 1999
Contact-, i� ou 7ty Admini trator PHIL BATCHELOR,CLERK OF T# E SOARC OF
CC: Retirement Administrator SUPERVISORS AND COUNTY ADMINISTRATOR
County Counsel
Y ,cs;Pu~y
As the attached memo from the Retirement Administrator indicates, the Retirement
Board is prepared to make $8,968,000 available from its surplus earnings to fully
fund this burial allowance for all retirees.
-2-
BOARD OF SUPERVISORS
OF
CONTRA COSTA COUNTY, STATE OF CALIFORNIA
IN THE MATTER OF,
Making Government Code Section 31739.5
applicable in Contra Costa County } RESOLUTION NO, 99/3 4 8
regarding a burial allowance for retirees
WHEREAS, the Retirement Board is currently authorized to provide a burial
allowance of$1,000 to the named beneficiary of any retiree upon the death of the
retiree, and
WHEREAS, the burial allowance has not been increased in the past fourteen years,
and
WHEREAS, in 1997, the Legislature passed and the Governor signed AB 407
(Chapter 439, Statutes of 1997) which, by adding Section 31739,5 to the
Government Code, authorized 1937 Act counties to increase the burial allowance
to $5,000, subject to the approval of the Board of Supervisors and subject to a
finding by the Board of Retirement that the benefit may be financed from surplus
earnings of the retirement fund, and
WHEREAS,the Board of Retirement has determined that it can fund the benefit from
the surplus earnings of the retirement fund and has voted to transfer the necessary
funds into the heath Benefit Deserve to fully fund the $5,000 burial allowance for all
retirees, and
WHEREAS, the Board of Supervisors believes that it is appropriate to consent to
making Government Code Section 31739.5 applicable in Contra Costa County;
NOW, THEREFORE, BE IT BY THE BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA RESOLVED that the Board hereby makes California
Government Code Section 31739.5 applicable in Contra Costa County as to all
retired members who die on or after July 20, 1999,
PASSED by unanimous vote of the Board Members present on this twentieth day
of July, 1999.
1 hereby certify that this is a true and correct copy of an order entered on the minutes
of said Board of Supervisors on the date aforesaid.
Witness my hand and the Seal of the Board
of Supervisors affixed on this twentieth day of
July 1999.
PHIL BATCHELOR, clerk of the Board of
Supervisors and county Administrator
Sy:
ep clerk
1 0
Date: July 8, 1999
To: Board of Supervisors
From: Pat Wiegert, Administrator'pk
Subject: Increase in the Retirement System Lump Sure
Death Benefit
On behalf of the Board of Retirement, I request that the Board of Supervisors adopt the
permissive previsions of Gov. Code Sec.31789.5 as created by Cly 439, Statutes of 1997.
At present,when one of our retirees dies,we pay a$1,000 burial allowance to the named
beneficiary. Section 31789.5, which became effective January 1, 1997, allows the
retirement system to increase the death benefit amount to $5,000. It becomes operative
only if the Board of Supervisors adopts the provision by a majority vote. As of this date,
three other'37 Act counties have adopted this amount.
Section 31789.5 also provides that the cost of this benefit may be paid from excess
surplus earnings of the retirement system the same as the current $1,000 benefit is
funded. Our actuary has determined that the total cost of this benefit is $8,968,000 for all
retirees. A copy of the actuary's cost determination is attached to this memo.
The Board of Retirement has already transferred$880,852 of this year's excess surplus
earrings to fully fund the death benefit at its current level. The Board has voted to
transfer an additional $8,968,000 to pay the entire cost of a$5,000 death benefit as a
result of the fund's performance over the past several years.
To assist your Board in its deliberations, I offer the following information:
• The lump sure death benefit was intended to pay for the retiree's funeral
expenses.
• For years,the death benefit was $750.
• In 1985 the benefit was increased to $1,000, a special reserve account was
established to pay this benefit, and excess surplus earnings were used to fully fund
the benefit(no County cost)
® Funeral expenses in California increased at an average annual rate of 9%between
1980 and 1994.**
• At that rate, and assuming$1,000 would have adequately defrayed fi.neral
expenses in 1985,you'd.need$3,640 to accomplish the same in 1999, and this
doesn't include burial plot and related expenses.
Survey of Funeral Costs and Consumer Preferences in the State of Californi ,march, 1994,the most current survey
available to me.
CONTRA COSTA COUNTY
EMPLOYEES RETIREMENT ASSOCIATION
®i 1n
1355 Willow way,Suite 221,Concord,CA 94520-5728
Telephone: (925)646-5741.,Fax: (925)646-5747
Wgq yg gg gg�.a�$$$ MNURCER
pp- g��!,,gga:.wa�y�yy
J°6UEL-oak i
October 12, 1998
Ms. Patricia Wiegert, CEBS
Retirement Administrator
Cancra Costa County
Employees' Retirement .Association
1355 Willow 'may, Suite 221
Concord, C.A. 94520
Re.- Lu.crease Lump Sum.Death Benefit(Revised)
Dear pat:
We have revised Deur lump sum death benefit reserve study dated August 25,
1998.
The revision is necessary because:
1. In our original study, we assumed ra $3,000 death benefit will be pard to
Tier 2 members from the.current Beath Benefit Reserve. . However, from
the discussion at the September Administrative Committee meeting, we
understand that only $1,000 will be paid out to Tier 2 members from the
Death Benefit Reserve.
in other words, members in all tiers will receive $1,000 from the .death
Benefit Reserve.
2. The Retirement Association has actually been paying the full $3,000 Tier 2
death benefit from the Death Benefit Reserve. As a result, we understand
that a total of$24,000 has been overpaid from the Death,Benefit Reserve.
We assume in this calculation that the Retirement Board will make a
correction by transferring $24,000 from the Employer Advance Reserve to
the Death Benefit Reserve.
Cu enj rooarar$t NCW Er93=
$1,000 Death Benefit $5,000 Death Benefit
Present'value of Future Benefits for
Retired members $1,461,000 $7,305,000
Current inactive nested members $70,000 1 $351,000
Current active members , t? LiA51=
'dotal $2,242,000 $11,210,000
Death Benefit Reserve (as of $1,337,148 $1,337,148
12131/97) Before Correction
Death Benefit Reserve (as of $1,361,148 $1,361,148
12131197) After Correction
Excess/(Deficiency) as of 12131197 2)
William M.Mercer,€ncorporated Phone 416 743 5700 California Insurance License 051000
3 Embarcadero Center,Suite 1500 Fax 415 743 8350
Box 744015$120
San Francisco,CA 94111.4015
WILLIAMM
MERCER
FIs. Patricia Wie,gert, CEBS
October 12, 1998
Page 2 .
There has leen n_s change to the cast estimate of increasing the current
benefit, only to the level of the current Death Benefit Reserve and its
associated liability.
The followings are points of nate:
1. The above liability calculation was based on membership statistics as of
December 31, 1997 and, because all members will get the same death
benefit, the liability will not be impacted by the transfer of Tier 2 members
to Tier 3.
2. We do not have any documentation which: would allow us to determine
how the current Death Benefit Reserve was established and to explain why
the current reserve is deficient.
Tease t us know if you have any questions.
Since 1 ,
Dreg James P.S.A.
Dj/AY:If
31 3a Death of person receiving retirement allowance;death
*fit to ;operation and application of Section
(a) Upon the death of any person after retirement and while receiving as
retirement allowance this system,or any superseded system.'there shall be
paid to his or her estaw or to tlse beneficiary as he or she shall nominate by
wrium designation duly executed and filed with the board, an amount ate=
ned by the of s ors 'W ° ..load a rxi . . of the
,WURlY Or.di_ t. The board at SoperViSors Shall, by reaptution adopted by
majority vote, fix and detecmine can smount that shall not exceed five thousand
dollars($5,000).
(b) Tba section applies to every member who dies aft= this section be-
comes operative vsrh+edw he or she has redred before or after the operative date or
effective date of this section.
(c) 71ae death bemfit provided by this sections shall be paid in lieu of a
payment under Section 31789 or 31783.1.
(d) This section shall not be operative in any county until such time as the
board of Supervisors shall, by ution adopted by majority vote, make the
provisions of tfsis section applicable in the county.
(Added by Stats. 1997,Ch.439(A.B.407),Sec. 1.)
31789 Death of person while receiving retirement allowance;
operation and application
(a) Upon the death of any person after retirement and while receiving a
retirmment allowance from this ssystena,or any superseded system,there shall be
paid to his or her estate, or to the beneficiary as he or she shall nominate by
written designation duly executed and filed with the board, an amountdeter-
mined
by the board of supervisors. of sopervison shall,byresolu-
tion tett by majority arcate,fix and deterraine are amount that shall not exceed
five thousand dollars($5,000).
(b) -This Section applies to every member who dies after this section be-
comes operative whether he or she has retired before or after the operative date or
effective date of this section.
(c) benefit provided by this section shall be paid in liens of a
Payment wider Section 31789 or 31789.1 and may be paid in part,fi;omp contribu-
tions of that minty Of district in accordance wi