HomeMy WebLinkAboutMINUTES - 10162012 - SD.4RECOMMENDATION(S):
ADOPT the attached Resolution No. 2012/447 approved by the Retirement Board, which establishes the retirement
plan contribution rates for employers and employees effective July 1, 2013 through June 30, 2014.
FISCAL IMPACT:
Significant fiscal impact - see 'Background' below.
BACKGROUND:
Each year, the Retirement Board establishes contribution rates for employee retirement plans based on an annual
actuarial valuation study. The FY 2013-14 rates were based upon the actuary's December 31, 2011 Valuation Report,
a copy of which can be found on the Contra Costa County Employees' Retirement Association's (CCCERA) website
at www.cccera.org under the Publications link. On August 8, 2012, the Retirement Board adopted the attached
resolution establishing employee and employer rates for Tier I, Tier II, Tier III and Safety retirement plans for the
2013-14 fiscal year. These rates will be included in the salary forecast and planning for the 2013-14 budget.
It should be noted that CCCERA may adopt revised rates for employees based on changes from the Public
Employees' Pension Reform Act of 2013 (AB 340). Should CCCERA take such an action, the Board of Supervisors
will be asked to adopt new rates.
All rates include the impact of recent earning losses due to the economy. It is anticipated that rates for the majority of
employees will be higher for FY 2013-14 and could continue for at least the next several years. These rates include
the following:
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 10/16/2012 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Mary N. Piepho, District III Supervisor
Karen Mitchoff, District IV Supervisor
ABSENT:Federal D. Glover, District V
Supervisor
Contact: Lisa Driscoll, County Finance
Director 335-1023
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes
of the Board of Supervisors on the date shown.
ATTESTED: October 16, 2012
David Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc:
SD. 4
To:Board of Supervisors
From:David Twa, County Administrator
Date:October 16, 2012
Contra
Costa
County
Subject:EMPLOYEE RETIREMENT PLAN CONTRIBUTION RATES FOR FISCAL YEAR 2013/2014
BACKGROUND: (CONT'D)
The rates quoted in these schedules are the employer and employee required rates without taking into consideration any
employer subvention of employee contributions. Contra Costa County subvents employee contributions in some labor
agreements.
The rates quoted are before any employee-employer cost sharing. A provision in the law allows safety members to defray
the employer's cost of the '3% at 50" enhanced benefit. Many Contra Costa County safety members defray a portion of this
cost. These cost sharing agreements vary by bargaining unit.
The rates reflect the Retirement Board action to depool CCCERA's assets, liabilities and normal cost by employer.
The rates reflect the Retirement Board action to change the terminal pay policy for members with membership dates on or
after January 1, 2011. Resolution Exhibits ending in "-1" are for members with membership dates before January 1, 2011.
Exhibits ending in "-2" are for members will membership dates on or after January 1, 2011.
In a letter dated August 8, 2012, CCCERA’s actuary issued a report with a five-year projection of estimated employer
contribution rate changes. The rate changes for the average rate for the aggregate plan were provided. Note that because the
actuary estimated the allocation of the rate changes across the cost groups, the actual rate changes by group may differ from
those shown in the exhibit, even if the plan-wide rate changes are close to those shown below. As can be seen in the chart, the
cumulative impact of smoothing gains and losses is projected to be 5.74% (as of 12/31/16). The total impact to the County, all
things considered, is expected to be very close to these figures.
Projected contribution rate increases, assuming at least 7.75% earnings annually are depicted in the chart below:
Additionally per the norm, rates in FY 2013-14 will be adjusted to cover pension obligation bonds (POB). POB rates will
increase by 7.39% from FY 2012/13 to FY 2013/14. It is important enough to repeat that the projected increases are net of a
7.75% earning assumption and do not include adjustments for pension obligation bond payments.
CONSEQUENCE OF NEGATIVE ACTION:
Rates will not be properly applied to employees and the County which will cause an imbalance between what is owed to the
Contra Costa county Employees Retirement Association and what is put aside for those payments.
CHILDREN'S IMPACT STATEMENT:
None.
CLERK'S ADDENDUM
Speaker: Rollie Katz, Public Employees' Union Local One.
ATTACHMENTS
Resolution No. 2012/447
Exhibits A-J
Resolution 2012/447 Exhibits A-JPage 1 of 22
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