HomeMy WebLinkAboutMINUTES - 11122013 - SD.4RECOMMENDATION(S):
ACCEPT actuarial valuation of future annual costs of proposed changes to Retirement Benefits, changing the COLA
for those employees represented by the Physicians' and Dentists' Organization of Contra Costa who become members
of the CCCERA on or after January 1, 2014, as provided by Buck Consultants in a letter of November 4, 2013.
FISCAL IMPACT:
As shown in the valuation, the result of the retirement changes described herein, if implemented, will save 1.0% of
annual pensionable pay with the first hire in year one. Future valuation results will change with demographic and cost
updates. These projections do accurately measure the direction of the plan change costs. Over time, as more
employees are hired into the new PEPRA tier at a 2% COLA, the savings will become more significant. It should be
noted that the figures presented in this report represent the savings associated only with the negotiation of a 2%
COLA. The actual savings from both the new State law and the negotiated change beginning January 1 is the savings
between the new PEPRA tier with a 2% COLA and Tier III with a 3% COLA. When considering the difference
between these tiers the total savings is closer to 5.0%.
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 11/12/2013 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: November 12, 2013
David Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc: Christine Penkala, County Benefits Manager, Robert Campbell, Auditor-Controller
SD.4
To:Board of Supervisors
From:David Twa, County Administrator
Date:November 12, 2013
Contra
Costa
County
Subject:Government Code 7507 Compliance - Retirement Benefits - Physicians' and Dentists' Organization of Contra Costa
BACKGROUND:
Government Code, Section 7507 requires with regard to local legislative boards, that the future costs of changes in
retirement benefits or other post employment benefits as determined by the actuary, shall be made public at a
public meeting at least two weeks prior to the adoption of any changes in public retirement plan benefits or other
post employment benefits. The code also requires that an actuary be present to provide information as needed at
the public meeting at which the adoption of a benefit change shall be considered.
Assembly Bill 340 (AB340), known as the California Public Employees' Pension Reform Act of 2013 (PEPRA),
took effect January 1, 2013. Generally, for those employees in the Physicians' and Dentists' Organization of
Contra Costa who become members of the Contra Costa County Employees’ Retirement Association (CCCERA)
on or after January 1, 2013, PEPRA requires a pension formula of 2% at age 62, 36 month final compensation
averaging, and a maximum salary amount used for pension calculation of $110,100 (plus CPI). PEPRA does not
address Cost of Living Adjustments (COLAs).
On December 3, 2013, the Board of Supervisors may consider and may take formal action with respect to a
proposed change in the COLA to the pension benefit. Contra Costa County has negotiated a 2.00% COLA to the
pension benefit for those Physicians' and Dentists' Organization of Contra Costa employees who become
members of CCCERA on or after January 1, 2014.
A 7507 report from Buck Consultants dated November 4, 2013 is attached. The report explains that this change
affects only future employees; it will have no effect on the unfunded actuarial accrued liabilities of CCCERA.
The savings shown are combined employee and employer normal costs. The savings are equal to the excess of the
normal cost for the PEPRA structure and a 3.00% COLA to the pension benefit over the normal cost of a PEPRA
structure and a 2.00% COLA.
On December 3, 2013, the Human Resources Director may return to the Board with a Memorandum of
Understanding (MOU) between the Physicians' and Dentists' Organization of Contra Costa and the County. Prior
to adoption of the MOU, an actuary will be present to answer any questions that the Board or public poses
regarding the savings associated with the pension change.
For FY 2013-14, the majority of employees in the Physicians' and Dentists' Organization of Contra Costa hired
after January 1, 2014 will be under the following pension rate structure:
CONSEQUENCE OF NEGATIVE ACTION:
Delayed implementation of the COLA reduction, resulting in loss of savings.
CHILDREN'S IMPACT STATEMENT:
None.
ATTACHMENTS
7507 Report for PDOCC dated November 4, 2013