1968_Unsuccessful Proposal - Laserfiche WebLink

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March 11, 1968 • • T0: Carl J. Thornton, City Manager FROM: D. E. Bott, Director of Personnel SUBJECT: QUESTIONS RAISED BY COUNCIL RELATNE TO RETIREMENT CONTRACT AP~'VD`~IENTS 1. Is there a $10 per month minimum as inferred in the resolution? No. The $10 reference is a base figure which is subject to further modification dependent upon the particular option chosen by the retiree at the time of retire- ment. EXAMPLE: Alfred F. Moulton (Service Retirement Roll) retired prior to 1957 and would theoretically benefit b,y the combined amendments to the extent of a 5.26J increase. However, he only put in 16 years of service and any retiree with less than 20 years of service has their percentage increase shaved in approximate proportion. His reduced percentage would yield $4.26 monthly plus the "automatic" $10.00 = $14.26. But when he retired he chose Option 3 and, therefore, half of his retire- ment allowance will be provided his beneficiary in the event of his death. Accordingly, the $14.26 is reduced to compensate for the increased liability. The e~;tent of reduction is dependent upon his age and the age of his wife and determined through actuarial tables. It is a rare instance when ~~n employee chooses an unmodified retirement allowance whereby all payments cease at death, therefore, under 21251.5, he receives $9.49 not $14.26. Further, the costs of these amendments are shared with whatever other agency the retiree may rave worked for prior to or subsequent to his service with Santa P_na. EXAMPLE: Homer B. Lindley (Service Retirement Roll) retired October 1953• He would receive under these amendments a 5~ increase or $13.13 plus "automa.tic" $10.00 = $23.13. This figure would not be further reduced due to his having taken the unmodified amount. However, part of his total service relates to employment with the State of California. Only $5.53 relates to the City's obligation with the remainder to be assumed by the State. 2. How many other cities within the Public Employees' Retirement System have apprcved such contract amendments? The P.E.R.S. does not have this information readily available. The only way we would be able to obtain it would be to review the individual contracts on file at their L. A, office.' They did state that many communities particularly in the Southern California area have adopted such amendments and that the State of Calif ornia with 115,000 members has incorporated these provisions. Los Angeles County, which is not under the Public Employees' Retirement System, protects retirees from inflation (and conversely, protects taxpayers from excessive payments in any depression), by adjusting county allowances up to 3~ annually to conform with the Federal Bureau of Labcr Statistics cost-of-living index for the Los Angeles-Long Beach metropolitan area. As a result, allowances went up 1.5~ in 1966, 2~ last .year and will rise 3~ more next July 1. *The group o.P cities which are utilized for salary survey purposes were contacted with the result attached to this memo. -1-