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• <br />Tfl~ CITY 0~ SflflTfl flOfl <br />CALIFORNIA <br />March 14, 1.968 <br />Please aclclress relies tu: <br />MEMO TO: City Council <br />FROM: City Manager <br />SUBJECT: FURTHER CONSIDERATION OF MY RECOMMENDATION FOR CHANGES <br />I:N THE RETIREMENT SYSTEM CONTRACT <br />Accompanying this memorandum is material which was developed by the <br />Personnel Office in an attempt to answer the questions which were raised <br />by members of the City Council when this matter was discussed at your <br />last meeting. The problem of interpretation of the $10 minimum increase <br />continues t:o be a complicated one for me to understand, but I do believe <br />that the accompanying memorandum does explain the situation and eliminates <br />the seeming contradictions of the resolution drawn by the State department. <br />On the othE~r questions as to comparability with public and private in- <br />dustry, thE~ information contained in the report certainly is not definitive, <br />but I think: is indicative of the fact that the majority, as well as the <br />trend, of g>rograms supports the contention that we should continue to <br />adjust the incomes of retired employees rather than retain them on a fixed <br />dollar amoLlnt. <br />I think thE~ only question not specifically commented upon in the accompany- <br />ing material lies in the question raised as to whether it would not be more <br />equitable f:or the anticipated future costs of such increases for retired <br />employees t:o be included in the actuarial studies and charged against the <br />two contributing parties, the employee as well as the employer. It is my <br />belief that: this is actually what is happening at the present time. As I <br />indicated t:o the City Council in my original presentation, the quadrennial <br />surveys take into account any changes in actuarial tables, any changes in <br />the earning power of invested funds, and any changes which occur as to the <br />specific measures of liability against either of the contracting parties, <br />employee oz' employer. The result of each of the two actuarial studies <br />made within the last 10 years has resulted in material decreases in per- <br />centages of: charge allocated to both the employees and the employers. The <br />greatest effect making such a reduction possible has been the increased <br />earning po~ier of the money invested. In this instance, such moneys consti- <br />tute not or.~ly the current investments of the City and its employees, but <br /> <br />