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Home My WebLink AboutMINUTES - 06191990 - IO.3 .I I .O.-3 TO: BOARD OF SUPERVISORS Contra FROM: Costa INTERNAL OPERATIONS COMMITTEE n. .s County DATE: June 11, 1990 -.____:, coup SUBJECT: STATUS REPORT ON APPOINTMENTS TO THE CONTRA COSTA EMPLOYEES' RETIREMENT ASSOCIATION BOARD OF DIRECTORS SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS- 1. Request County Counsel to determine whether the term of office of the Board of Supervisors ' appointees to the Retirement Board can -be adjusted so that no more than two terms of office of the Board of Supervisors ' appointees expire in the same year and no more than three terms of office on the entire Retirement Board expire in the same year and report his conclusions to our Committee at his earliest convenience. 2 . Request the members of the Retirement Board who are appointed by the Board of Supervisors to meet with the Board of Supervisors periodically so the Board of Supervisors can maintain a closer liaison and working relationship with its appointees to the Retirement Board. In this regard, request the County Administrator to coordinate with the Retirement Administrator in scheduling such a meeting over lunch on a Tuesday sometime within the next three months. 3 . Request the County Administrator, working in conjunction with the Retirement Administrator and County Counsel to negotiate an agreement whereby the Retirement Board would agree to cap its earnings in excess of its "earnings assumption and return any earnings above the capped amount to the employer and employees to offset a portion of their contributions. This agreement would be in lieu of the CONTINUED ON ATTACHMENT:Yes YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD OMMITT APPROVE OTHEEI r SIGNATURE(S): SUNNE WRIGHT McPEAK T M POWERS ACTION OF BOARD ON une , APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CC: County Administrator ATTESTED 9 19 90 Retirement Administrator PHIL B CHELOR,CLERK OF THE BOARD OF County Counsel SUPERVISORS AND COUNTY ADMINISTRATOR Gerald Cruson l�obCer oenglg BY DEPUTY M382 (10/88) planned 5 year, 20% per year reduction and eventual elimination of any return of excess earnings to the employer. 4. Authorize the Internal Operations Committee to return to the Board of Supervisors no later than July 17, 1990 with a recommendation on filling the three seats whose terms expire June 30, 1990. BACKGROUND: The Board of Supervisors appoints four members of ,the Retirement Board. The terms of office of three of these members expires June 30, 1990 . Currently six of the nine seats on the Retirement Board have terms of office which expire in 1990 and every three years thereafter. The potential for such a massive turnover in the membership of the Retirement Board is of concern to the Retirement Administrator and our Committee. We are therefore suggesting that County Counsel determine what can be done to adjust the terms of office of at least the Board of Supervisors ' appointees so fewer terms of office expire in the same year (See the attached history of Retirement Board Terms of Office which has been prepared by the Retirement Administrator) . Our Committee interviewed the three incumbent members of the Retirement Board whose terms of office expire June 30, 1990 . We closely questioned them on how they can balance their fiduciary responsibility to the Retirement system while still reflecting the fact that they represent the Board of Supervisors on the Retirement Board. We discussed at some length the policy which was adopted by the Retirement Board in 1989 to phase out the return to the County of "excess" earnings over a five year period of time and the long-term interest of the Retirement Board in fully funding the retirement system. The members of the Retirement Board noted that they seldom have any contact from the members of the Board of Supervisors, have never had an opportunity to meet with the full Board of Supervisors and would appreciate the opportunity to do so, so as to better understand the concerns of the Board of Supervisors and provide the Retirement Board members an opportunity to share their positions on various issues with the Board of Supervisors. We are recommending that the County Administrator and Retirement Administrator schedule such a meeting for a Tuesday noon over lunch in Room 105 or 108 so we can have a somewhat more informal meeting to discuss these issues. Finally, the members of the Retirement Board seemed receptive to considering alternative methods of determining whether to disburse any of their "excess" earnings to the County. Our concern is that it would be possible for the Retirement Board to artificially hold down their earnings assumptions, thereby increasing the contributions required of both the employer and employees, thereby generating substantial "excess" earnings. If then, the Retirement Board refuses to return some of these earnings to the employer and employee, the County is, in effect, being penalized twice; once by having to contribute more money than was absolutely necessary and second by having no chance to receive some of those contributions back from the retirement system when it has been shown that there was no need for the contributions to have been so high. The suggestions was made that the Retirement Board agree to "cap" the "excess" earnings they retain at an agreed upon percentage of assets above the earnings assumption and then return all earnings above the "cap" to the employer and/or employee; in the case of the employer by a direct subsidy back to the General Fund and in terms of the employees by reducing their future contributions in order to use up the employees ' share of the "excess" earnings. The three members of the Retirement Board we interviewed agreed that they would be willing to take a look at such an agreement and we are therefore asking that the County Administrator and Retirement Administrator prepare an agreement which can be negotiated with the Retirement Board and Board of Supervisors to govern future distributions of the "excess" earnings. We plan to return to the Board of Supervisors within the next few weeks with a recommendation on making appointments to these three seats. HISTORY OF RETIREMENT BOARD AND TERMS OF OFFICE July, 1945 System was created with a 5 Member Board. Member 1 Is the County Treasurer Members 2 & 4 First terms were 2 years, 3 years thereafter Members 3 & 5 First and subsequent terms were 3 years. January, 1952 Board was expanded to 7 members. Members 6 & 7 First terms were to be 2 years, beginning January 1, 1952, and 3 years thereafter beginning January 1, 1954. 1953 Member #7, Alternate (7A) were added. Member 7A First term was to be 2 years beginning January 1, 1952 and 3 years thereafter beginning January 1, 1954 (same language as enacted when Members 6 & 7 added to the Board). In actuality Member #6 was appointed to a 3 year term effective July 1, 1954 (rather than January) and Members #7 and 7 Alternate were elected to 3 year terms also effective July 1, 1954 (rather than January) . Thus, Members 6, 7 & 7A shared the same terms as Members 3 & 5. 1972 Board was expanded to 9 members. Members 8 & 9 First terms were to begin as soon as practicable and expire concurrent with the longest term of an elected member. - Elected Member #2 term expired June, 1974 - Elected Members #3, 7 & 7A terms expired June, 1975 - Thus Members #8 & 9 terms expired June, 1975. 1/86 Member 8 died while serving a term which was due to expire 6/30/87. Replaced by election 7/1/86. New member placed in a new 3 year term to expire 6/30/89. Term Member # Expires 6/30 2 3 4 5 6 7 7A 8 9 1947 X 1948 X X 1949 - - - - - - - - - None - - - - - - - - - 1950 X X 1951 X X 1952 - - - - - - - - - - - None - - - - - - - - 1953 X X 1954 X X 1955 - - - - - - - - - - - None - - - - - - - - - 1956 X X 1957 X X X X X 1958 - - - - - - - - None - - - - - - - - - - - 1959 X X 1960 X X X X X 1961 - - - - - - - - None - - - - - - - - - - - G 1972 X X X X X 1973 - - - - - - - - None - - - - - - - - - - - 1974 X X 1975 X X X X X X X 1976 - - - - - - - - None - - - - - - - - - - - 1977 X X 1978 X X X X X X X 1979 - - - - - - - - None - - - - - - - - - - - 0 1989 X X X 1990 X X X X X X 1991 - - - - - - - - None - - - - - - - - - - - 1992 X X X 1993 X X X X X X 1994 - - - - - - - None - - - - - - - - - - -