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Home My WebLink AboutMINUTES - 03122013 - SD.8RECOMMENDATION(S): ADOPT the attached Resolution No. 2013/124 approved by the Retirement Board, which establishes the retirement plan contribution rates for employers and employees effective January 1, 2013 through June 30, 2013 and July 1, 2013 through June 30, 2014. 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. The Board of Supervisors adopted those rates on October 16, 2012 and noted that CCCERA might adopt revised rates for employees based on changes from the Public Employees' Pension Reform Act of 2013 (AB 340). The October, 2012 Board reported that if CCCERA took such an action, the Board of Supervisors would be asked to adopt new rates. At its January 9, 2013 meeting, the Retirement Board reviewed and accepted the actuary’s report titled PEPRA New Tiers of Benefits for New Members. This report establishes employer and employee contribution rates for members entering CCCERA on or after January 1, 2013 who are subject to the new PEPRA benefit formulas. At the same APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 03/12/2013 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 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: March 12, 2013 David Twa, County Administrator and Clerk of the Board of Supervisors By: June McHuen, Deputy cc: SD. 8 To:Board of Supervisors From:David Twa, County Administrator Date:March 12, 2013 Contra Costa County Subject:EMPLOYEE RETIREMENT PLAN CONTRIBUTION RATES FOR JANUARY 1, 2013 THROUGH JUNE 30, 2013 AND FY 2013/2014 meeting, the Retirement Board adopted these employer and employee contribution rates, which become effective January 1, 2013. At its February 13, 2013 meeting, the Retirement Board reviewed and adopted the actuary’s recommended contribution rates for additional tiers not included in the January report. (A copy of the actuary’s reports can be found on CCCERA’s website at www.cccera.org under the Publications link.) Attached are the rates to be used effective January 1, 2013 through June 30, 2014 for members subject to the new PEPRA benefit formulas. These rates are an addendum to the contribution rates for the periods July 1, 2012 through June 30, 2013 and July 1, 2013 through June 30, 2014 adopted by the Retirement Board October 12, 2011 and August 29, 2012, respectively, which are still in effect for employees with membership dates prior to January 1, 2013. Please note the following: 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 are BEFORE ANY INCREASE IN EMPLOYEE RATE as may be required by Gov. Code §7522.30(c) or (e). If any employee’s rate needs to be increased to comply with these sections, both employee and employer rates would need to be adjusted accordingly. A convenient methodology is included on page 7 of the attachment. The rates are based on 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. ATTACHMENTS Resolution No. 2013/124 Resolution Attachment CONTRA COSTA COUNTY EMPLOYEES RETIREMENT ASSOCIATION 1355 Willow Way, Suite 221, Concord, CA 94520-5728 Telephone: (925) 521-3960, Fax: (925) 646-5747 CONTRA COSTA COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION CONTRIBUTION RATE PACKET FOR JANUARY 1, 2013 THROUGH JUNE 30, 2013 AND JULY 1, 2013 THROUGH JUNE 30, 2014 FOR ADDITIONAL TIERS GENERAL ‐ PEPRA TIERS 4 AND 5 Exhibit ACONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATIONEMPLOYER AND EMPLOYEE CONTRIBUTION RATES EFFECTIVE FOR JANUARY 1, 2013 THROUGH JUNE 30, 2013 for PEPRA MEMBERSCost Group #1 Cost Group #3 Cost Group #4 Cost Group #5 Cost Group #6GENERAL PEPRA TIERSDistricts Districts Central Contra Costa Contra Costa Contra Costa County DistrictsPEPRA Tier 4 (3% COLA) BASICCountywithout POBwith POBSanitary DistrictHousing AuthorityFire Protection Districtwithout POBEmployer 16.26% 21.34% 14.11% 31.49% 17.88% 14.38% 14.79%Member 7.57% 7.57% 7.57% 7.57% 7.57% 7.57% 7.57%PEPRA Tier 4 (3% COLA) COLEmployer 6.03% 10.10% 5.90% 13.97% 10.83% 6.58% 6.41%Member 2.68% 2.68% 2.68% 2.68% 2.68% 2.68% 2.68%Non‐Refundability Factor 0.9552 0.9552 0.9552 0.9558 0.9532 0.9561 0.9544Cost Group #2Cost GroupEmployer NameDistrictsCost Group #1 County GeneralPEPRA Tier 5 (3%/4% COLA) BASICCountywithout POBLAFCOEmployer 15.68% 20.76% CC Mosquito & Vector Control DistrictMember 6.89% 6.89% Bethel Island Municipal Improvement DistrictFirst 5 - Children and Families CommissionPEPRA Tier 5 (3%/4% COLA) COLContra Costa County Employees' Retirement AssociationEmployer 5.75% 9.82% Superior CourtMember 2.36% 2.36% East Contra Costa Fire Protection DistrictMoraga-Orinda Fire Protection DistrictNon‐Refundability Factor0.952 0.952Rodeo-Hercules Fire Protection DistrictSan Ramon Valley Fire Protection DistrictCountyCost Group #1 Cost Group #2Cost Group #2 County GeneralPEPRA Tier 4 & 5 (2% COLA) BASICTier 4Tier 5In-Home Supportive ServicesEmployer 16.22% 15.73% CC Mosquito & Vector Control DistrictMember 7.61% 6.84% Superior CourtPEPRA Tier 4 & 5 (2% COLA) COLCost Group #3 Central Contra Costa Sanitary DistrictEmployer 4.99% 4.82%Member 1.64% 1.41% Cost Group #4 Contra Costa Housing AuthorityNon‐Refundability Factor 0.9552 0.952Cost Group #5 Contra Costa County Fire Protection DistrictCost Group #6 Rodeo Sanitary DistrictByron Brentwood Cemetery DistrictAdditional Cost Groups 2013-2014.xlsExhibitA_PEPRA Page 22/13/2013 SAFETY ‐ TIERS D AND E Exhibit BCONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATIONEMPLOYER AND EMPLOYEE CONTRIBUTION RATES EFFECTIVE FOR JANUARY 1, 2013 THROUGH JUNE 30, 2013 for PEPRA MEMBERSCost Group #7 Cost Group #10 Cost Group #11 Cost Group #12SAFETY PEPRA TIERSContra Costa County East Contra Costa Moraga‐Orinda San Ramon Valley Rodeo‐HerculesPEPRA Safety Tier D BASICCountyFire Protection DistrictFire Protection DistrictFire Protection DistrictFire Protection DistrictFire Protection DistrictEmployer 28.36% 19.34% 40.28% 16.70% 33.03% 33.64%Member 11.08% 11.08% 11.08% 11.08% 11.08% 11.08%PEPRA Safety Tier D COLEmployer 17.55% 18.09% 34.05% 15.26% 17.65% 17.72%Member 4.67% 4.67% 4.67% 4.67% 4.67% 4.67%Non‐Refundability Factor 0.9703 0.9706 0.9706 0.9722 0.9717 0.9735Cost Group #9Cost GroupEmployer NamePEPRA Safety Tier E BASICCounty (DSA only)Cost Group # 7 County SafetyEmployer 27.60%Member 10.38% Cost Group # 8 Contra Costa County Fire Protection DistrictEast Contra Costa Fire Protection DistrictPEPRA Safety Tier E COLEmployer 15.50% Cost Group # 9 County Safety - DSA hires since January 1, 2007Member 2.62%Cost Group # 10 Moraga-Orinda Fire Protection DistrictNon‐Refundability Factor 0.9715Cost Group # 11 San Ramon Valley Fire Protection DistrictCost Group # 12 Rodeo-Hercules Fire Protection DistrictCost Group #8Additional Cost Groups 2013-2014.xlsExhibitB_PEPRA Page 32/13/2013 GENERAL ‐ PEPRA TIERS 4 AND 5 Exhibit CCONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATIONEMPLOYER AND EMPLOYEE CONTRIBUTION RATES EFFECTIVE FOR JULY 1, 2013 THROUGH JUNE 30, 2014 for PEPRA MEMBERSCost Group #1 Cost Group #3 Cost Group #4 Cost Group #5 Cost Group #6GENERAL PEPRA TIERSDistricts Districts Central Contra Costa Contra Costa Contra Costa County DistrictsPEPRA Tier 4 (3% COLA) BASICCountywithout POBwith POBSanitary DistrictHousing AuthorityFire Protection Districtwithout POBEmployer 18.25% 23.72% 12.63% 34.83% 18.95% 17.94% 15.40%Member 7.57% 7.57% 7.57% 7.57% 7.57% 7.57% 7.57%PEPRA Tier 4 (3% COLA) COLEmployer 6.43% 10.81% 4.37% 14.92% 10.97% 7.98% 4.38%Member 2.68% 2.68% 2.68% 2.68% 2.68% 2.68% 2.68%Non‐Refundability Factor 0.9838 0.9838 0.9838 0.9729 0.9761 0.9937 0.9031Cost Group #2Cost GroupEmployer NameDistrictsCost Group #1 County GeneralPEPRA Tier 5 (3%/4% COLA) BASICCountywithout POBLAFCOEmployer 17.67% 23.14% CC Mosquito & Vector Control DistrictMember 6.89% 6.89% Bethel Island Municipal Improvement DistrictFirst 5 - Children and Families CommissionPEPRA Tier 5 (3%/4% COLA) COLContra Costa County Employees' Retirement AssociationEmployer 6.15% 10.53% Superior CourtMember 2.36% 2.36% East Contra Costa Fire Protection DistrictMoraga-Orinda Fire Protection DistrictNon‐Refundability Factor0.9465 0.9465Rodeo-Hercules Fire Protection DistrictSan Ramon Valley Fire Protection DistrictCountyCost Group #1 Cost Group #2Cost Group #2 County GeneralPEPRA Tier 4 & 5 (2% COLA) BASICTier 4Tier 5In-Home Supportive ServicesEmployer 18.21% 17.72% CC Mosquito & Vector Control DistrictMember 7.61% 6.84% Superior CourtPEPRA Tier 4 & 5 (2% COLA) COLCost Group #3 Central Contra Costa Sanitary DistrictEmployer 5.39% 5.22%Member 1.64% 1.41% Cost Group #4 Contra Costa Housing AuthorityNon‐Refundability Factor 0.9838 0.9465Cost Group #5 Contra Costa County Fire Protection DistrictCost Group #6 Rodeo Sanitary DistrictByron Brentwood Cemetery DistrictAdditional Cost Groups 2013-2014.xlsExhibitC_PEPRA Page 42/13/2013 SAFETY ‐ TIERS D AND E Exhibit DCONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATIONEMPLOYER AND EMPLOYEE CONTRIBUTION RATES EFFECTIVE FOR JULY 1, 2013 THROUGH JUNE 30, 2014 for PEPRA MEMBERSCost Group #7 Cost Group #10 Cost Group #11 Cost Group #12SAFETY PEPRA TIERSContra Costa County East Contra Costa Moraga‐Orinda San Ramon Valley Rodeo‐HerculesPEPRA Safety Tier D BASICCountyFire Protection DistrictFire Protection DistrictFire Protection DistrictFire Protection DistrictFire Protection DistrictEmployer 33.31% 23.65% 45.18% 21.59% 36.57% 43.76%Member 11.08% 11.08% 11.08% 11.08% 11.08% 11.08%PEPRA Safety Tier D COLEmployer 20.07% 19.82% 36.23% 18.73% 18.84% 22.29%Member 4.67% 4.67% 4.67% 4.67% 4.67% 4.67%Non‐Refundability Factor 0.9966 0.9596 0.9596 0.9813 0.9894 0.9772Cost Group #9Cost GroupEmployer NamePEPRA Safety Tier E BASICCounty (DSA only)Cost Group # 7County SafetyEmployer 32.55%Member 10.38% Cost Group # 8Contra Costa County Fire Protection DistrictEast Contra Costa Fire Protection DistrictPEPRA Safety Tier E COLEmployer 18.02% Cost Group # 9County Safety ‐ DSA hires since January 1, 2007Member 2.62%Cost Group # 10Moraga‐Orinda Fire Protection DistrictNon‐Refundability Factor 0.8852Cost Group # 11 San Ramon Valley Fire Protection DistrictCost Group # 12 Rodeo-Hercules Fire Protection DistrictCost Group #8Additional Cost Groups 2013-2014.xlsExhibitD_PEPRA Page 52/13/2013 GENERAL ‐ TIER 1 COUNTY Exhibit ECONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATIONEMPLOYER CONTRIBUTION RATES EFFECTIVE FOR JULY 1, 2013 THROUGH JUNE 30, 2014 for Members with Membership Date on or after January 1, 2011Cost Group #1GENERAL TIERS ‐ ENHANCEDTier 1 BASIC Enhanced 2% @ 55CountyFirst $350 monthly & in Social Security 15.38%Excess of $350 monthly & in Social Security 23.07% All Eligible $ if NOT in Social Security23.07%Tier 1 COL Enhanced 2% @ 55First $350 monthly 4.98%Excess of $350 monthly 7.46% All Eligible $ if NOT in Social Security7.46%Non‐Refundability Factor 0.9838Additional Cost Groups 2013-2014.xlsExhibitE_NewHire Page 62/13/2013 Page 7 CONTRA COSTA COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION SUBVENTION Under PEPRA, the standard is that employees pay at least 50 percent of normal costs and that employers not pay any of the required employee contribution, with some exceptions. Gov. Code §7522.30(f) allows the terms (regarding the employee’s required contribution) of a contract, including a memorandum of understanding, that is in effect on January 1, 2013, to continue through the length of a contract. This means that it is possible that an employer will subvent a portion of a PEPRA member’s required contribution until the expiration date of the current contract, so long as it has been determined that the contract has been impaired. Employee rate – Decrease the employee’s rate by the subvention percent (i.e. 50%, 75%, etc.). Employer rate – Increase the employer’s rate by a percent of the employee’s decrease using the applicable refundability factor: EXAMPLE FOR COST GROUP #3: If the subvention percent is 50%, Employee rates should be decreased by 7.57% × 50% = 3.785% The employer rate should be increased by 3.785% × 0.9558 = 3.6177% CAUTION – these rates are for employer subvention, NOT employer pick-up of employee contribution rates. When an employer subvents, the contribution subvented is not placed in the member’s account and is therefore not available to the member as a refund. For this reason, the employer pays the contribution at a discount (i.e. “Non-Refundability Factor”). Employer pick-ups of employee contributions are those made under Section 414 (h)(2) of the Internal Revenue Code. These contributions are added to the member’s account, are available to the member as a refund and are considered by CCCERA a part of the member’s compensation for retirement purposes. EMPLOYEE PAYMENT OF EMPLOYER COST There are two reasons why the attached contribution rates may need to be adjusted to increase the employee portion. Gov. Code §7522.30(c) requires that an employee’s contribution rate be at least equal to that of similarly situated employees. Gov. Code §7522.30(e) allows the employee contributions to be more than one-half of the normal cost rate if the increase has been agreed to through the collective bargaining process. If you need to increase the employee contribution rate for any reason, you will need to adjust both employee and employer rates: Employee rate – Increase the employee’s rate by the desired percent of payroll. Employer rate – Decrease the employer’s rate by a percent of the cost-sharing percent of payroll using the applicable refundability factor: EXAMPLE FOR TIER E COST GROUP #9: If the required increase in the employee rate is 1.0%, Employee rates should be increased by 1.0%. The employer rate should be decreased by 1.0% × 0.9715 = 0.9715%