HomeMy WebLinkAboutRESOLUTIONS - 01012003 - 2003-037 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on JANUM 21, W ,by the following vote:
AYES: MPRWSM GI01A; TJnd{I,MA, COMM tM.l94AI1i OR,
NOES: NW
ABSENT: mm
ABSTAIN: sviR GEM
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SUBJECT: Approving Contribution Rates to be charged and Resolution No. 2003/ 37
Interest to be credited,by the Centra Costa
County Employees' Retirement Association.
Pursuant to Government Code Section 31454 and on recommendation of the Board of the Contra
Costa County Employees' Retirement Association,BE IT RESOLVED that the following
contribution rates are approved to be effective for the period January 1,2003 through December
31,2003.
T. Basic Retirement Benefit Rate Component (payable as a%of compensation)
A. For General Members Under the 111.67% at 55"benefit schedule(Sec. 31676.11)
County* District*
1. General Members--Tier I covered by Social Security,
On the first$350 of earnable monthly compensation: 8.12% 11.45%
On earnable compensation in excess of$350 monthly: 12.17% 17.16%
2. General Members--.Tier I not covered by Social Security: 12.17% 17.16%
3. General Members—Tier II: 8.86% 12.77%
4. General Members•Tier III:
On the first$350 of tamable monthly compensation: 4.90% 8.21%
On earnable compensation in excess of$350 monthly: 7.34% 12.31%
B. For Safety Members Under the 112% at 50"benefit schedule
1. Safety Members: 13.80% 18.44%
C. For Employee Rates under the above benefit schedules --
Sec attached rate sheets A,C,E and G for rates effective January 1,2003 through
June 30,2003.
See attached rate shuts B,D,F and H for rates effective July 1,2003 through
December 31,2003.
D. For General Members Under the"2% at 55"benefit schedule(Sec. 31676.16)
1. General Members-Tier I covered by Social Security,
On the first$350 of earnable monthly compensation: 9.06% 12.40%
On tamable compensation in excess of$350 monthly: 13.59% 18.59%
2. General Members—Tier I not covered by Social Security: 13.59% 18.59%
3. General Members»Tier III:
On the first$350 of earnable monthly compensation: 6.81% 10.07%
On earnable compensation in excess of$350 monthly: 10.21% 15.09%
E. For Safety Members Under the 113% at 50"benefit schedule(Sec. 31664.1)
1. Safety Members: 25.30% 29.93%
F. For Employee Rates under the above benefit schedules —
See attached rate sheets I, K and M for rates effective January 1,2003 through
June 30,2003.
See attached rate sheets J, L and N for rates effective July 1, 2003 through
December 31,2003.
ADMINISTRAInON
CONTRISIMONS
(Raaolutioct)
II. Cost of LivinK Program Rate Component{trayable as a%of compensation)
A. For General Members Under the 111.67% at 55"benefit schedule(Sec. 31676.11)
County* District*
1. General Members—Tier I covered by Social Security,
On the first$350 of eamable monthly compensation: 3.65% 5.05%
On eamable compensation in excess of$350 monthly: 5.48% 7.57%
2. General Members--p Tier I not covered by Social Security: 5.48% 7.57%
3. General Members—Tier II: 4.54% 6.57%
4. General Members-Tier III:
4n the first$3501 of eamable monthly compensation: 3.08% 4.57%
On eamable compensation in excess of$350 monthly: 4.63% 6.86%
B. For Safety Members Under the"2% at 50"benefit schedule
1. Safety Members: 5.52% 10.28%
C. For Employee Rates under the above benefit schedules —
See attached rate sheets A, C, E and G for rates effective January 1, 2003 through
June 30,2003.
See attached rate sheets B,D,F and H for rates effective July 1, 2003 through
December 31,2003.
D. For General Members Under the"2% at 55"benefit schedule(Sec. 31676.16)
1. General Members w Tier I covered by Social Security,
On the first$350 of eamable monthly compensation: 3.77% 5.15%
On eamable compensation in excess of$350 monthly: 5.65% 7.72%
2. General Members--Tier I not covered by Social Security: 5.65% 7.72%
3. General Members-Tier III:
Can the first$350 of eamable monthly compensation: 3.49% 4.96%
On earnable compensation in excess of$350 monthly: 5.24% 7.45%
E. For Safety Members Under the"3% at 50"benefit schedule(Sec. 31664.1)
1. Safety Members: 10.02% 14.79%
F. For Employee Rates under the above benefit schedules —
See attached rate sheets I,K and M for rates effective January 1, 2003 through
June 30,2003.
See attached rate sheets J, L and N for rates effective July 1,2003 through
December 31,2003.
III. Non-refundabili y Discount Factors
Because payments made under agreement,by the employer on behalf of
employees are non-refundable,they shall be paid at the following rates:
Beneflt Schedule
1.67% at 55 2% at 55
General Tier 1: .9929 .9911
General Tier II: .8938 na
General Tier III: .9921 .9848
:Benefit Schedule
2% at 50 3% at 50
Safety: .9785 .9740
AD1M INlSTRA"ON
CONT OLMONs
(Raeon}
III. Interest to be Credit2d to Reserves
Effective 7/1/02: The amount actually earned, after reduction to pay administrative
expenses, not to exceed 4.25%per six-month period, credited on 12/31/02,and
compounded.
IV. hTOrtrr ' ltdability Discount Flators
Because payments made by the employer on behalf of employees under
agreements are non-refundable, they shall be paid at the following rates:
General Tier I: .9929
General Tier II: .8938
General Tier lli: .9921
Safety: .9785
V. blo •f,gations
The rates in Sections I and 2 have been modified (reduced)through action by the
Retirement Board, For the period July 1, 2002 through December 31,2002 only, the
Retirement Board has agreed to transfer$22,989,000 from its undistributed earning
and contingency reserve resulting in a reduction in contributions due from
employers and employees..
*The Pension Obligation Bonds issued by the County March 1, 1994, affected contribution rates
for certain County employers., The following non-County employers who participate in the
Retirement Association are referred to as "Districts". All other departments/employers are referred
to as"County"
*Mosquito Abatement *Diablo Water * East Contra Costa
*Central Sanitation *Dousing Authority Fire Protection District
*Rodeo Sanitation *Retirement * Moraga/Orinda Fire
*Delta Diablo Sanitation *LAFCO *Bethel Island
*Ironhouse Sanitation *Contra Costa County Fire Municipal Improve-
*Union Cemetery *Rodeo-Hercules Fire ment District
*San Ramon Fire *Children&Families *In Home Supportive
Commission(Prop 10) Serviced Authority
I hereby certify that this is a ttfttod correct
copy of an action taken and erred on the
minutes of the Board of Supervisors on the
date shown. ,x-'' �,
JOHN SWEETEN, Clerk the Bo4d
of Supervisors and ounty Administrator
Deputy
ADMINISTRATION
CONTlu$uTIONS
(Resolution)
,• CONTRA
TO: BOARD OF SUPERVISORS
COSTA
FROM: JOHN SWEETEN COUNTY
COUNTY ADMINISTRATOR
DATE: JANUARY 21, 2003
SUBJECT: EMPLOYEE RETIREMENT PLAN CONTRIBUTION RATES FOR
CALENDAR YEAR 2003
SPECIFIC REQUEST(3)OR RECOMMENDATION($)&BACKGROUND AND JUSTIFICATION
Recommendation:
1. ADOPT the attached resolution approved, by the Retirement Board, which establishes the
retirement plan contribution rates for employers and employees effective, January 1, 2003
through December 31, 2003.
2. REQUEST the Retirement Board to establish contribution rates on a County fiscal year basis
starting July 1, 2004, as has been the practice for many years.
.Background:
Each year, the Retirement Board establishes contribution rates for employee retirement plans
based on an annual actuarial valuation study. In December, the Retirement Board adopted the
attached resolution establishing employee and employer rates for Tier 1, Tier 11, Tier III and Safety
retirement plans for the 2003 calendar year. These rates have been included in the 2002-2003
budget and will be Included in the 2003-04 budget.
Last year,the Retirement Board departed from a long-standing practice of setting rates on a fiscal
year basis and established rates on a calendar year. The new practice causes budgeting
concerns since the County budget for fiscal year 2003-04 will be prepared without knowing the
retirement plan rates to be charged for the last half of the 2003-04 fiscal year- January 1, 2004
through June 30, 2004. This budget uncertainty may cause problems next budget year if the
forecast of retirement cost are off the mark.
The County and other employers associated with the Retirement System should not have to
estimate retirement costs each fiscal year but should know the precise rates at the time budgets
are being developed. In past years the Retirement Board has advised us of rates as early as four
months prior to the start of the new fiscal year. Cities are advised of CaiPERS rates in March
each year.
CONTINUED ON ATTACHMENT'YES SIGNATURE:
'RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATUREtS}. ., r
ACTION OF B DON APPROVED AS RECOMMENDED 4
OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT AND CORRECT COPY OF AN ACTION TAKEN
AYES:X,,T-r,,� arAN_ NOES'. M09 AND ENTERED ON MINUTES OF THE BOARD
ABSENT:IAB. ABSTAIN:TTI_�._---- OF SUPERVISORS ON THE DATE SHOWN.
Contact:Tony Ensa 54094 .
✓*,Cc:CAO ATTESTED --I��-
Roger Edwards,Auditor-Controller John Sweeten,CLERK OF Ed OF
Retirement Administrator SUPERVISORS AND COUNTY ADMINISTRATOR
Spacial Dlstrlc3s
BY,y •� ,oEPuTY
Date: December 18,2002
To: Interested Parties and Participating Employers
Prom: Pat Wiegert,Retirement Administrator,
Subject: Contribution Rates Effective January 1,2003
As you may already know,the Retirement Board met with its actuary some time ago to review
and take action on employer and employee contribution rates that are scheduled to go into effect
January 1,2003. Since that time however,two additional events took place:
1. The County and some of our Special Districts adopted enhanced benefits for their employees.
■ General members' benefits under Gov. Code Section 31676.16, commonly referred to as
"2%at 55",and
• Safety members' benefits under Gov. Code Section 31664.1, commonly referred to as
"3%at 50".
2. The Retirement Board took action to transfer surplus excess funds to reduce a portion of
employees' COLA rate component for a part of the year.
The first of these events required a second valuation in order to establish employer and employee
rates under the enhanced benefit schedules. The second event,the transfer of funds to reduce
employee rates,took place at the Board's December 11 meeting.
Enclosed are the rates to be used effective January 1, 2003 through December 31, 2003.
Participating employers who are receiving this mailing will also find copies enclosed of both the
Actuarial"Valuation Report for January 1,2002 and the actuary's Addendum Report dated
November 20,2002. These reports provide the detail supporting the rates.
Please note the following.
The employer rates are effective January 1, 2003 through December 31,
2003.
Contrary to past practice,the Board did not transfer funds to subsidize employer rates
for Calendar Year 2003.
CONTRA COSTA COUNTY
RECEIVED
CONTRIBUTIONS DEC 2 a
CONTRA COSTA COUNTY
EMPLOYEES RETIREMENT ASSOCIATION
1355 VAHow Way,Snits 221,Concord,CA 9452M OF
Telephones 025)646.5741,Fax: (925)646-3749 (;i iPIATOR
x
x:
1
✓ The employee rates change July 1, 2003.
The Board transferred sufficient funds to reduce the COLA contribution rate for
employees for the first 6 months of 2003.
Employees not receiving enhanced benefits have their COLA rate totally eliminated for
the first 6 months. See enclosed rate charts A,C, E and G.
Employees who are receiving enhanced benefits will have their COLA rate reduced
enough to result in a total rate(basic component+COLA component)equal to the rate
paid by employees not receiving enhanced benefits. See enclosed rate charts I,K and M.
Effective July 1,2003, all rate subsidies are removed and employees will pay the full
cost of their benefits. See enclosed rate charts B,I),F and H for employees not receiving
enhanced benefits, and charts J, L and N for employees who are receiving enhanced
benefits.
✓ The rates are BEFORE ANY EMPLOYER SUBVENTION.
The rates quoted here are the employer,and employee required rates without taking into
consideration any employer subvention of employee contributions. Because of this,if
you subvert employee rates,you will need to compute this additional contribution and
adjust both employee and employer rates accordingly. A convenient methodology is
included for your use.
✓ The rates are BEFORE ANY EMPLOYEE-EMPLOYER COST
SHARING.
A new provision in the law allows safety members to defray the employer cost for the
"3%at 50"benefit improvement.The rates quoted here are the employer and employee
required rates without taking into consideration any employee contribution to defray this
cost. If you are providing the"3%at 50"benefit to your safety employees and if your
employees have agreed to defray part of your increased cost,you will need to adjust
bath employee and employer rates accordingly. A convenient methodology is included
for your use.
The rates distinguish between "County" and "District" Rates.
The County used the proceeds from its sale of Pension Obligation Bonds in early 1994
to extinguish its share of the unfunded liability at that time. Since then,the portion of
the total employer rate,which is attributable to amortizing the unfunded liability,has
been separately accounted for between the county and districts.
enclosures
CONTRIBUTIONS
CONTRA COSTA,COUNTY
EMPLOYEES RETIREMENT ASSOCIATION
1335 willow way,suite 221,Concord,CA 94520-57n
Telephone; (935)646.5741,Fax. (925)646.3747
i
• • nT
t F
CONTRA COSTA COUNTY EMPLOYEES'RETMEMENT ASSOCTAnON
EMPLOYER RATES FOR DISTRICTS
AT VARYING SUBVENTION LEVELS
OLD BENEFITS
Eff. January 1,2003
(--- -.__......_...__..._Subvention Levels....._...... �.............. .-►
50% 8{)00$''0 85% 90010 95% 100010
TIER I(Aggregate)
Basic 16.78010 16.78% 16.78% 16.78% 16,78% . 16,78%
Subvention 2.80 4.48 4.76 5.04 5.32 5.60
Basic+Subv. 19.58 21.26 21.54 21.82 22.10 22.38
COL 7.39 7.39 7.39 7.39 7,39 7.39
Total 26.970!° 28.65% 28.93% 29.21% 29.49% 29.77%
TIER 11
Basic 12.77010 12.77% 12.77% 12.77% 12.77% 12.77%
Subvention .1.19 1.90 2.02 2.14 2.26 2.38
Basic+Subv. 13.96 14.67 14.79 14.91 15.03 15.15
COL 6,57 6.57 6.57 6.57 6.57 6.57
Total 20.53% 21.24% 21.36010 21.48% 21.60°10 21.72%
TIER III(Aggregate)
Basic 12.03% 12.03% 12.03% 12,03% 12.03% 12,03%
Subvention 3.23 5.17 5.49 5.81 6.14 6.46
Basic+Subv. 15.26 17.20 17.52 17.84 18.17 18.49
COL 6.69 6.69 6.69 6.69 6.69 6.69
Total 21,95% 23.89% 24,21% 24,53% 24.86010 25.18%
SAFETY
Basic 18,44010 17.30% 17,30% 17.30% 17.30% 17.30%
Subvention 3.72 5.95 6.32 6,70 7.07 7.44
Basic+Subv. 22.16 23.25 23.62 24.00 24.37 24.74
COL 10.28 10.28 10.28 10.28 10.28 10.28
Total 32.44% 33.53% 33.90% 34.28% 34,65% 35.02%
All rates above are as a percent of payroll.
Employee contribution rates vary depending upon their age at entry, For this reason,subvention percents
above are averages for that coverage category.
To compute the exact subvention percent for each employee,do the following;
L. Find the employee's basic contribution rate on the attached charts using the
coverage category and the employee's entry age. Only the.basic rate can be
subvented
2. Multiply this by your subvention percent(ie.50"1x,70010,85016,etc.).
3. Multiply this result by the reduction factor for that employment category.
Tier 1 .9929
Tier li .8938
Tier III .9921
Safety .9785
CAU110N - 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
(ie.The"reduction 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 the
retirement system as part of the member's compensation for retirement purposes.
. is
CONTRA COSTA COUNTY EMPLOYEES'RETIREMENT ASSOCIATION
EMPLOYER RATES FOR DISTRICTS
AT VARYING SUBVENTION LEVELS
NEW BENEFITS
Eft. January 1,2003
E.._............"____.._,._-.Subvention Levels
50% 80% 85% 90010 95% 100%
TIER I(Aggregate)
Basic 18.18% 18.18% 18.18% 18.18% 18.18% 18.18%
Subvention 2.40. 3.84 4.08 4.32 4.56 4.80
Basic+Subv. 20.58 22.02 22.26 22.50 22.74 22.98
COL 7.54 7.54 7.54 7.54 7.54 7.54
Total 28.12% 29.56% 29.80% 30,04010 30. 880fo 30.52%
TIER III(Aggregate)
Basic 14.74% 12.03% 12.03% 12.03% 12.03% 12.03%
Subvention 2.79 4.46 4.74 5.02 5.30 5.58
Basic+Subv. 17.53 16.49 16.77 17.05 17.33 17.61
COL 7.28 7.28- 7.28 7.28 7.28 7.28
Total 24.81% 23.77% 24.05% 24.33010 24.610/o 24.89%
SAFETY
Basic 29.93% . 29,93% 29.93% 29.93% 29.93% 29.93%
Subvention 3.70 5.92 6.29 6.66 7.03 7.40
Basic+Subv, 33.63 35.85 36.22 36.59 36.96 37.33
COL 14.79 14.79 14.79 14.79 14.79 14.79
Total 48.42% 50.64% 51,01% 51.38% 51,75% 52.12%
All rates above are as a percent of payroll.
Employee contribution rates vary depending upon their age at entry. For this reason,subvention percents
above are averages for that coverage category.
To compute the exact subvention percent for each employee,do the following:
1. Find the employee's basic contribution rate on the attached charts using the
coverage category and the employee's entry age. Only the Busk rate can be
subverted.
2. Multiply this by your subvention percent(ie.50%,70%,85%,etc.).
3. Multiply this result by the reduction factor for that employment category:
Tier I .9911
Tier III .9848
Safety .9740
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
(ie,The"reduction 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 the
retirement system a;part of the member's compensation for retirement purposes.
CONTRA COSTA COUNTY EMPLOYEES'RETIREMENT ASSOCIATION
ADJUSTING RATES
TO REFLECT
' EMPLOYEE PAYMENT
OF EMPLOYER COST
A neve provision in the law allows safety members to defray the employer cost
for the"3%at 50"benefit improvement. If you are providing the"3%at 50"�,
benefit to your safety employees and if your employees have agreed to defray
part of your increased cost,you will need to adjust both employee and employer
rates;
Employee rate—Increase the employee's rate by the cost-sharing percent of
payroll agreed.
Employer rate—Decrease the employer's rate by a percent of the cost-sharing
percent of payroll using the Safety refundability factor(9740 for CY 2003)
Ex,&MPLE: If the cost-sharing percent is 4.5%,
Employee rates should be increased by 4.5%.
The employer rate should be decreased by (4.5%x.9740)
4.383%