Loading...
HomeMy WebLinkAbout1968_Unsuccessful Proposal~ ~ June B, 1808 Kisulc Yang, Actuary Section 23 State of California public Brnployees' Retirement System 1410 Ninth Street Sacramento, California (35608 Uear 1V1~ r. Yang: This is to advise you of the action of the Santa Ana City Council regarding the proposed amendment to our retire- ment contract to include Sections 21251. 5 and 21251. 0 of the Retirement Law. Can two separate occasions the ordinance approving the amendment to the contract has failed to receive an affirmative vote of two-thirds of the xneraber~a of the governing body. Very truly yours, Doris lbl. Brown Clerk of the Council iii: ~«v cc: PersonnellJirector ,, f vti7Tc~iANC,~ NS ~l$ C-F ~'c%E CITYY i:JUriGii, Ui~ THk: ~„;ZT3r uF' .ar~NTt`~ A~ AUTHOkILIi~TG AN t~DII~ElMi'I' T4 i^rx: C;v$~tTCT bETWc~E1v THri CI'1''`s' LCI3i~iCIL .t~l~i3 1't:iL DC~~ {3~' r~l~~iINISTRriTIGir]" tirr'r' THE CALIFORNIA STATE ~"MPLOYEES' RETIR~ENiEi+~T SYSTF2si "I`iiE CITY C~INCIL OF T~3E CITY OF SA2+TT'A AbiA DC)ES ORUAIt~ AS Fl')LLOG~:3 s og:L:TI4I~ l: That axl aza+~nc~nen~c to the contract between the CITY :OU~;C~:L a.~ the r.:IZ'Y' Or' 1JTA tsl3a and the SANS, OF .ADMINISTT~TIOIN, :,r~,,LZ~':)KDi'IA STi~-TL kLfiYEES' R".,'TIRE~i:r.Zv~P SYSTEM is hereby authosis~ed, a caper aL ~aaid amen3u+ezxi. ber.~ attachr~+~ here~Ca and xnark~aci "E~F3Ii3ZT A" aazd mar such reference made ~2t part hereof as3 though herein set put in full. ;~.~CTlaiv d : That xe: ;~ayor ar the City Ccauncil is~ hereby authoJ:zed, empowered, and directed to execute said anxendanent far and oxi behalf of staid Agency. SECTI®~ 3: That this Ordinance shalt take effect 3C- days after the dx:te of its adoption, and prior to the exa3iration of l5 days fr©x-r the passage thereof sha2i be published at least ones: in the Register, a new:zpaper oi` general circulation, published and circulated in the City cif Santa Ana, and theneef4rth and thereafter the same shall be in fu:L.t force and effect. PASSED AND ADOPTED by the City Counc~.l ~f the City of Santa Ana at it~a regular meeting held on the. 3rd day of June, l~.)68. ATTES'T' z cLERx ©F THE Cocr~clL STATE OF CALIP'ORP3IA) CQUN'T"~' OF 01~.~NGE ) SS CITY OF SANTA ANA. rdAYaR I, DORIS A~. SRC)WN, do hereby certify that I anx the Clerk of the Caunc.i.l of the City of Santa Anas that the foregoing Ordinance was intro~;~uced at a regular nesting of the Cite Council of said City held on the 2CJth day ©f A~tay, 4r~6S, and was again considered by s~atc Gc~unc.'..l at its rcgu~.ar rc.eeting he id an the 3rd day oaf ~'une, 166, and a•t said meeting was passed and adopted by the f©llowing vote, to wit s A'.~ES, COtR~CILM3~~7 Ba ,.. Cz.r ~~,_:y;, G~~i~.t, '~~~r;~~~~~ NOES, COL'NCIL~2EI4: i a°Y-~~ :, ~M .._ I~c.t~zi....,.. _. ?~BSEN'~, COUNCILMEN s 7~;-~r: CLERK OF THE COUNCIL ~~,/ .:`' ~- ~.. ~~G..... ~`G ~~ ~~~~ .~ ~~ t~i~Iiv''c~.~." NS '~~.5 '.7~` T~rik: C~'~'Y C'C~L3~CI~. ~F TIE ~::IT'.+ ,x F' >.~,ii~'~-,c. t.~.? ~U~°t~s~:%.'r ZT+~~ aT:3 u~~t«'°'~«:~,~:~:lyi '1't7 'r`iil: .. }~h ~,•~~»2 rsJ~'°S``r~k l.y~: '~~!'%,: t::.~'T~i ~ ~~T:i':,:21.. *:~? TFiE ~3~Ja~a'<~:~ ,,v ~~~;~,i..±~..~Tk~.r.'I~Iu~a t~~" 'CH.~ G~LZPt~R1~ZA ~T~'3T :;~;Ml~i,tBYE~.~a' €~'TZREM~'I' SYSTEM. '~'xiE c"IT"S ~'~n~lti'CIL ~~F T~I1~ +CITY !~F 5:~•:.~~'.... ;~;~ ~Ec ~~~`a~:~,~i ~^ P"JLI..;;~~';' s ~~~`.~,~~~ ,. a °~:st~-~ ~ixs 211Y~~'er1CiTlPlll~ tO the c~:r'!tx'aCt 1~etwe~r, t_'7Q C'TTY C"3~TS+CI:~ o~: tae CITY' 7F 5.~~. '~.t~R, :end th~° B4~F~2 4F AI7MZ~tZST~Tx41~, C.'~LZFrO.~tNIA STa'aTE ~'~~LC?YSES' R~'R."Ikk~i`" :.>'"~aTEi, i~ ti~~e~~~;~~ ~~uth~~'i:eci, c~ Ci,~",'~' Vii.: di;~.2.~.'. ~ilit~Tl:~'tkerY't.: }?Gs~,r!'.~{" ~:~t.'~~{:11t;st::i ~~.~t:E'i;.~ %#riG~ r;1~1''•'~:~t"i ~x~.~N;[~~+~. ~l,rs ~.nc~ b, si.:r.Y: re~~srsrrr:~: r~~~lde ~~. ~.~axt :~t~r'~AC) ~~ t~1~u~~1 2aerei,n yet ~riat ~. Yi .t11 1. , E+CTIflid ~'. a That the 2~°.ayQr ~ ttae Cit: Cauncil is hereby auth~r~.: ed., er~~~.~~get~:3, and ciir~cte~~ t~ e23;+~C1»t~ ~~~~ ~ttaeT~c~li,r+~~~ ~"ter SECTZ©E~ ~ c That tt°~~.~~ ~rc~in~nc~ t~'".~' dE:~t~ ::7~ ltd ~C~G}~it1~Ct,rlPl~ 5'r~.A~' '~'."3 the c~l~sage there~~ shm? .i, beL ~ub~. ishec~ a news,:~a~er ~~ c~enera~. circtrlatf.on, Sul Cit~• ~. ~_ aant~t ~;na, and t'~enc~e~~arth ~rtd in itx~ ' fc~r~e anc~ e+~x~ert. ~ha~l t~.ke e~~~ct ~.•~ ;a«;>~ t~~tc~r the c:~r,pi ~at;.~~n ~a.,°: :~."s dais z t,~m at 3,ea~t r~nce in the Register, ~~ 3.s;1~=4~ c~X'x:~ cir~:~ 7 a~f:e~'' irj the t2?.c: r~~a ~t~x~ tale ~afl ~sY:a .~. b+~ P~-SSEU AI~I7 ~I3t7PTE~ b.t~ thae City C4uncii of the City 4~: Sang. .~,na et i~.~; ~~uJ_~:- r::c~etin~; h~:~ pan }he 1.~th ~:~u~~ ~~ ,r~:;zi' ~ ~ ~~a~~ '~'o'TES'?.` . i~ `T L.' C7,:~ 'JF ^T~IE CUUNC'Z~.: STa3TI (3F' Ca`~LZ1pQlrZt,TZ~. ) eZT~ k~~F s.TA I, t;K;RZ~ .~. k~R(~~fil, d:~ ~~~areh~,• cezti~~ thz~t Z ~m the C~.erk ~~ the Cc~unr..zl of t'h+~ ct~F ~~ s~nta ~,na: thati thy: ~r~regc~ing ~:rct~.n~n~e ~~s .fir..*~•~c~.t:C~C~ ~t a reg~iar ~°xeetiraq ~~ the CS,Cy C~-.;nci~,. v~ s~.~c? p~i~> held on th,€~ lst da~~ tit ~.~~~i~., ~.~16~, ~r~d was aq~ain c~n~s3.~~eret~ b~ said C~unc:i.~ a~ its rec~u' a.r ~4ertinc~ ~~~I ~: nn thy: ' nth ~.ay :~ ~ A:~~ ~. ~ ~ ~- ~~5, grad ~~, s~i>.: r.,ee*~.ng vas 6_yrr~~ed ~nci a~~?~4~rc~<~ b;;; ~:~~: ~~~r1.Ic~+rira~, va~.~,. t:~ *,~+~.t NC~1~S, CCnsfi:CILN~E~::.$~:.~~ :. ~•k .. L•.i.l.~ i~ \3C i. ia~ LrV N.6~13wZ ~3 r ~ March 20, 1868 Mr. Kieuk Yang, Actuary Section 23 State of California Fublic Employees' Retirement System 1416 Ninth Street Sacramento, California 95809 Dear Mr. Yang: On March 18, 1968 the City Council adopted a resolution declaring it~e intention to amend the contract for employees' retirement to include Sections 21251. 5 and 21251. 6 of the Retirement Law. In accordance with the in8tructions of your letter of February 26 to our City Attorney, a certified copy of the resolution ie enclosed, together with a certified excerpt of the City Council's action. When you have the necessary material for final action by the City Council, will you please :send it to me. Very truly your, Doris M. Brown Clerk of the Council t~:m~ Enclosures f .: ~ RESOLUTION 68-35 DECLARING INTENTION TO APPROVE AN AMENDMENT TO CC~TTRACT EETWEEN THE HOARD OF AD~+tiNISTRATION OIp' THE PUBLiC EMPLOYEES' RETIREMENT SYSTEM AND TFE CITY OF SANTA ANA WHEREAS, the Public Etttployeers' Retirement Law permits the partacipation of public agencies and their employees in the Public Employeees' Retirement Systesa by the execution of a contract and eats forth the procedur® by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and 6VHERFAS, one of the steps required in the procedure to amend this contract is the adoption by the legislative body of th+s public agesnc:y of a resolution giving notice of the intention to approve an amendment to said contract, which resolution shall contain a sut'arttary of the changes propos®d in said contract; and WHEREAS, the following is a sutmmary of the: proposed changes: 1. Retirement allowances payable for time com~tencing on the first day of the calendar month coinciding with or next following the effective dater of this amendment to or on account of any member who retired on or prior to July 1, 1956, ar® hexreby increeased by $10.04 a month plus a pe-rce:ntage varying according to date of retirement and years of se+rvice to a n-aximum of 596. 2. Rebtireenent allowances payable for time co:~encing on the effectiv® date of this amendment to or on account of any person whose r®tirement became effective on or prior to December 31, 1961, are hereby increased according to a sliding scale ranging from two percent for those whose retirement became effective during the eighteen months ending Dece,+mber 31, 1961, to a maximum of teen percent for tholes whose retirement becaete effe+etive July 1, 1957, or earlier but not to exceed the sum of $50 per month, a.s provided in Government Coda Section 21251.6 added by Chapt®r 2099, Statutes of 1963. NOW, THER$B'ORE, BE TT RSSOLVEDs That the City Council of the City of Santa Ana gives, and it does hereby give ncatiee of intention to approve an amesndment being attached hereto, marked "Exhibit A" and by this resference made a part hereof. PASSED AND ADOPTED 'by the City Council of the City of Santa Ana at its regular meeting held on they,-8th day of March, 1968. ATTEaTs ~a~T(]M MaMT('_H4F.T. M w. nRnu~]~L....._~. MAYOR ~c~~ THE coUNCIL STATE o~ CALIYo'oRNIA} eovNTY o~ ORA3liGE } SS cITY og SANTA ANA } I, DORI9 M. BROWN, do hereby certify that I sm the Clerk of the Council of the City of Santa Anaj that the foregoing Resolution was introduced to said Council at its regular meeting held on the ?nth day of March, 19b8, and was at said meeting passed end adopted by tYae following vote, to wits AYES, COUNCiLMENs Brooke, Carlson, Griset, Markel, Thur>~an NO~:S, COUNCILMENa Herrin, McMichael ABSENT, COUNCiLd~N s ~,'~e LERK OP" THE COUNCIL ` ~ 7 pp np ~a q~ t~p~ r~ x ! ~~ ~f d:' a.+'.. ,~Y 7,3.,3 ..~ ~~L ~S.-1 a ",'. a~a;~ 7~`~~~i ~ ~~,~ ee t~ ~r y- r~r ~ •)~J.;_k..~.6,r .. ~ «„r,_..i.hs,~ ~L..t,i. .a;bY .,1r-3}F...e`~'; ~',~~~ ti i,l~! r,It `~< t;"::.~''~' :r" ",~ :'fi'n rr u~ ~~~~ ~'t~e i~~~. oaf A~{.irzi~t:~~Lxvrzy ~~'~a~~lic ~+1.Q~m~e+ :c~t.a.z*tat .st~a:~z1 x:rc~~ra.~tz»~' ~=f~rz~d ~t±~ €~~ ~~t~x'd, ~~ t~a~ ~:tT~' c.3~ k~a:,1T~ ~" t~i+~ ~:~.~' : z:.'~ v~~ ~':~~ ~k~, ~~r~ai~xaf`tem ref~r~ed ':c~ ~~ ~'uli~ ~c~zzcy ~>~v~.z~ s~~~r~c~ ~.z~Atc~ a cc~z~t~rzct a~rx~:aa~z° ~~t.~ r~~' -~~~rz~z~Y~~r ~, 1`~~b, e+f f®~ti~~ Ju~l.,y ~s ~.'9~a7, ~~ ~~ ~ex~s~ aka ~ctfv~ '~ a~+sr 1, 2~.~1, ,~arzswy 1, ~95~t, ~rs~te~zia~r 1, x.956, ~ul~ 1, ~.~~, +~vrzr 1, 2;7, ~~ftcber ]., 1~b3, A.ax`~"L 1, ~62~, ~z~ I~~brv~.xh,~ 1, 195, ~ri~iclA ~r~vir~es ~csr rt3.ci~4a~ticrr: cif ~blia ~~ncY ~r~ e$azt~i ~~~tmza, ~aat end ,~'~.~.ic A~ ~n~;~ &~~x~by urn .~ ~tz2lax~: :~« ~'zzrz~~,r~~~~;,~ ~. th~~~°a IJ z~x~ ~~+~x~b~ ~tr.~kerz .~rr~~ ~z~~.~ czztr~ct ~~ ~xac~t~d ~.~~'~~tirr~ July ~., ~.9~7, azte~ ~s at~rs~sz~c~t'f ~.~.~'~.ctiv~ C3et<~.1'~~* ~., 19.51, ~~ra,;a€ary ~., 195, ~~~at~,~ber 1, ~.95~a, a,czl~{ 1, 1959, r~~~x° 1, 164, ~~:;:.-~.~zn~r 1, 1.!3, .A~a,l ~., 19aIt, ~. ~~r~az*szz~ry~ 1, 1965, zz.n~z ~:r~ 4~;~z^~~S,y r~s.jlc~~ i~, i~,he ~'c~11~~.zx a°~,~r:~;-t~~ n~:bax~€! ]. tr~~esz;~°. ~.1 ~.~xclz~i~~t 1.. .~~.2 ~~sta~ ~z~ t~€s~ zzr~tzrs~i.n wtziCt`. ~~~ ,~#'iz3~f lzz tl;~ 'r~b~,j,C °-~~l~v~es~ z +~t~.a*~nL ~.,.~ s~ia~~.1 Y~~zzv t,}yea c~,~:azzi~~~ z~t3 c~~~i.za~c~ t~ter+~ira un1e~ t~t~a~rw~szzr ~~~,~.~ ~.c~ll~ ;;~r~~3~~d. "`t~c~x`s1 rat ~.z~~r~nt ~~+~,~ ~.~~1 ~z~~zz ,~~~ &'~ ~a~r ~c~ll~rze~sur~ rxaz~b~rts ~nsi ~;~~ 51 ~'ar laa~l ~src~'#ty r~ez~b~ra. w ~~t13~ ~''9kiiG;~ sr~~.l i~~z"`~1lC~t~tft 7.t1 t~38 ~'u1ic ,z~lctf~ea ~ ~~t.~r~zn~zzt :,~rste t~a~ tzid l~ft;~r J~1~ la 1~t~7, a~~:~ixz~ its ~~lm~~~~ ~~ ix~3z~- ~t~z• ~srav~d~t3, z~~b+~x°as of ~~,ic~ ~y~t~ ub~~~3t t~ X11. ~a~rc~vi>~i.an~ ref ~~,,~ ~;.~t~1iC °~"~~z,+1n,y~~~' `a~*t~t•~znnt :~~z~ ~xrs~Yat ~rae~~ ~~ a~n1y a;:.~ t~rz l~ctiarz o£ ~ ~~ar-tx'~~t~: raz:~ ~~?e~:<zi~ ~rm,~ sr~ z~~~ ~res~r:ic~~d ~ car t~~rc~in a~rzd f~ca rsll ~zrz~~~rl~~z~ts t~? ~~ic3 ~J~z~ t:~r~~~#.~:vr e~asct~d ~zc~pt ~uct~ ~~ bar ~~~~~~ ~~'r~tTi~it~rz t~eva~" ~~°a3.y c~z~l.~ ~~z t~ ~l~cto ~f' c~ratrz~ct~cx a~~tze~. ~s. 3. ~.alca~e~a cad ~'ub].fC ,~;nc~ irz ttz~ ,~'dl~.o~r. ~1~~~~~ dv31a4"~ F`xt~~~,t~ ~~zzll b~e~~e TMi~.*~~ez'e ¢~~' ~s~~.d ri~t.re.:r~+z~t ~rt~zaz ~.xc~~t ttatzz~e irz ~s~e~ zaazct~ cla~z~ arzd ~:~7 ~fiZ~ r~ ~€clax~t ~a;~ 2~tr car t~z~.~ a~;~earz~snts ~. ~.~cl ~'.~r~~an (~~z~.n z~~f'~xr~d tc. ~zs 1oc~l s~a~'et~r r~'za~:x°s~}~ Via. :~ca~~l ~ol~c~zan ~~~«~r~~n rf~x~x°~d ~c°, ~ 1€~c~2 ~~~`~t x~~~~slze~~}8 c. .=:z,lm~~zs r?t~x~~ t1tz 3rac~1 ~zzi`~ty ~ta~rb~z°~ (~zez"e~n re~'~rrt t~, a~ z~3.~~e1}.zanea~z~ ;~~~zzr~}. :: ssclta~.ttarz ~~ t~t~ ;rlery~~~ e~.~1uc~~~ f'z~~., t?x~~s~rt~hi;~ t~ ~€~id ~~et:re- :t ~;~~r, ttz~ ~'slla~sizz* ~z~~~l~~~~a ~!-;~1~. ~s~~at ~ecc~~z~e r:~~~~4~ cif tt~~e ~~t~.zw~P~,~zzt ~~e~~: ~ • . A nt I~ .__ ~i~ , ::. I;. '~"~ frAetfa:~ of f'it~al +~oenstation to rov'id~d for each mar of ex~ed~t~ t~ea~sr~.cs ~.~ s :~~ccllat~c~€s~e rae~r ~a~n r~~t5.rec~rtt ~~ r~.,~~st.al ret:i.r~Tstt a~ egaall e ~~~J astei e3~a11 ~ a~~~l~er~ ~.~ ;:~~av~d ir; :~ect~on G1.2~1.1 cif ~ai~3 ~~et~.rement :~,av. >'. ~:~e f'ractfon saz fi:n~-~. ~c~tsscngat~.vr ~ be ~:eav~.de~d fQr c~~c~~ ;~~€ af' cres~~.tsd aerv~.ce ~~ s 1ere~1 ~af'~t~ ~T~b~Y' ~~;a~.3. ~ c~ters,ncd f.r~ ac.~a~~°~ar~e~s with ect~otz 212;Z.~a caf ~ai~ :~t~ro~n~ apt. Vii. ~:s~~~f~.ta ors 8tE2cc~ur~t a~' x°lor ser~ri.ce z~s'.1 bes 1=J:: of t>t~o frar:tion af` fir~a3, cs~~~~en~at~o~t :z?~e~c:ified ~'or ~,i~cel~acxe~r~ua trs~~kserc f.n r~.~°~- ;,~rs~~r~ !t ~b~sve, ~}u,t co;a~tec in accar+~a~ce w~,tix ~~ctoti X253 caf paid >~etrnt ~~ ors 'etr 3.c~c~s1 ea.~'et~ s,~e~Y,~rs ~sall ~c i~ of tea f r~.ct~.ars ~~~~:~~.f~ta~sr~ ire caorc~~r~co w;~~~ ~~.~~~:~~~ ~. ?'. ~~rntr~.~uticanas faze a~:i.~ce~,l.a~uos a local ~afet~* s~ets~ s~~sa12 ~=ab~cct to ~~tf.4tua ~`~>~l grad 2J?7.~ ~+.~ ca-id r~et.ir~rearstnt f:.~w ~• ~'~'te falloatj,.n~: a:~dition;~.l ~33'C1zY~:.~~t3T~i5 d~ tC.O ~,~blic ;~zxlta~'~8 ~ ~it~)t~.°Y'e~ sent ~~~s ~:ic~: e.~pl;~ Qrs~ ~~nora el,octf~rt: oP ~ cent~°~ctir~~ a ~~a2.1 ~~ tss ttte ~~.u1,ic ~~enr.~ ~ne~ ~t~ lc~ee~t a, `~ectiora 2~2~.1 (~~ef ~.nin; "fir;~l ccs~~en~atcsti" ox'1 ~~~~ ~~a~e ref ~ ~€~ro~ trf three r~onseaxstiv~ ~~). ~,. eat~otti 2~,?~~.1 (~rs:a~ri~sin ,~~ ~ga~.n~.r`;sy~x~t,~.s~nt allowt'~€~o vf`' "LDZK~.6JlJ ~~~ ~~+.r ~~~' CH2I'G~i~ ~C"t,,~it~o,~1! c. =~ectlon ~13b'~.,1 ~rErov'i~fn ~ ~~. desat~~ L?~e~efbt u~tx tieat~ ci. ~'ieCt~:pr3 2~2~ (~re~~riin fsar i~clus~ivn crf cc}rrs~~s~~.~;~,~n ,.t~a~t ~.f.iC S.rg ee}k~at~t~e~°,aor~~ ~a~~~r+e cc~ ,:~rsatior~ 3.~ a, ~,c~tar). ~. ~~ec*,ion a3C?~x.~ (z:av~,~it~~ far an electiozz ~;~ taes~r~r~s tc aatatri- ~«atffi a~ rece~.v~ c~,rr~rst ~~rv~c+~ cre~it tr~r tine eervace renc3~ore+d -.~rf.~+r to tr~~a~) . f• ~eGtiats ~~~~~".`~ ~~res,ct~n~;. for ale Q ~~ t3e rtf.t,3.urs, vo].ut'sL~.ry~ ret~;reraer~t ~~ .~<~:r local ~~f~ty ~se;~~rtt ~ti~ ~nef'ft ~~a~n~ ccr~-u~e:~cin~ ~'t'1aDr to ~~~ ~~; ~s,~b~cct tc~ act~~ar~.al €iia~ccrur~t}. ~;. ~ectiar~ 2~3L.1 (~~v~.~:in~ ~'or cred_itirt~ prior service coot otherwise cres~ita'h~.e e~Aen tho :a,'tr hay I'J or z~oz*~e ~ca~°~ of currec~~t ~crv~.es~). h. :~~ct~.ar~ 2136. 5 ~ ~,~z~c3vi4:~.n~ s~ r~rthly= allo~ancet in l~e~a e-f ttte bsa~.c e~eatt~ be~safit .tar carta~.n c:~r~r.~rorffi of a r~e~her ~a ~3es in nnZo~`- ta:~ot after q;z~li.t;'~itt !°ar valun'ta er~erwcse rr:~t~.resdset~t). i. ~~ction ~'13~~-7 (~~'cYV~;.~.tir-~ i°e~r ~f.1o~r~a~c~a fear ~~r°tr~,,vors of s~ser~~ere resv~ared ~cntier ttte ~'°~s;ra sa+~rt s~eatts ~e~'are ret~.rer~ent}. l1~ Cf f ordU t {~~~f. / /,~~ I R~~ F ~ :r ~A ~' ~~.RQ~i fr.~~„~~#ri 6~'~.+v~r*. ~rf~ YtX6Q rs ~r4iRJi~.irM s~i~ ~n~wia M. ir~t~ cad ~t9, `~,-~~.~,~ ~., ~~~~.~~ ~3.~~3.~ ~~Y~~~~c~~ far ~a ~ ~ab~,i~ .~anea~r ~~a.~~ ~~t~,b aid +~~aa~ ~~ ~'~1 t3~~ ~'~llc~w~.~~ ~~rr~t,~.~~~ ~-~` ~ ~a~.~r3~~ rte ~a ~+@~"~+ ~~~~~ ~ ~ai.d ~t ~Q~ ~~~~~' ~~~ ~~~ i~~ 4 ~~$~~~ ~ aa~'atg ~~a ~~' aa~.d ~~s {~.~ ~..~~~ p~~ce~+t ~~t~. J~r~~ s ~.~'T7 pan ~~ ~~" ~~~ 13.~b~3~3.~g (~~ 9.~6~ ~ezaa~t ~~ ~~~uxa'~ a~' ~~~ ~.fi.il~.~~ ,~~~ ~u~~r~rz~t ~ex~r#.ce ~enas~i~~s R ,a. ~ r~asa~abl.~ aaa~~t per anus, ~a ~'~.~~ ~ ~~~ to gar cz~~ ~,~` tn~s~+sr~.ng said ~~s~e~ as ~t a~fen~ 'the 1.~ v~ a~~.ic ~er~* nab ~~~u~i ~ nay ~f a~i~ ~-~~ua~~t~~ cr ~~' tk~n #a~x~r~d~~s3. ~.zav~r~t~.~at.cn awl ~~lua#,~.~n xqu~ by 1aWy pra~ide~. that ea~:+~ ao~znt ~i~~,~ ~ der~ined r,r~ the ba~~.~ 4S a n~nber e+.f ~,g ~blica ~~ ~ ars ~~~~d an a pa.l~ t~ fiae dka~i~t~d ~~~ ya~~ c~'~t~~ ~r~a ~~~ saf ~s~~ ar o~ t~ti.th respect tht~ tixa~ ~~~+r ~~ ~ie#.at~.t~ni tin the e~~'eetve dam ~~ said part~.ci~s~t3.t3~, .P,~t. ~'t~x~ 732-3 ~ ~ I ~r~1~~~t~~~ ~~a i~:~ of 1~~~~ c~,f ~~:~ ~ ~~ ~"'~ ~ i~=ci s~ ~~i~ad ter at~~i ~i ~~r~.L~~-~;s ~; '~~ ~+ ~~ ~~ ~~ ~' ccs~~:~.~u~~.ar~ .~ pfd ft~ ~~z~~~dy ~ .~t~~ ~~~.~. ~~ ire ~ca~tst~:~s c~~tr~,'~ut~~n~e ` ~: la~~ ~ b~+ bar ~~t~~ +~ ~~~ air t~~~ i~ o~ awe, x~r~iv~ cox f3` ,~ ~w~':> .~ ~ #~~ ~~-~ Ret., ~'~~ 7~2-fit 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- • • 3. What are some private industry approaches to cost-of-living adjustments for retired employees? The large majority of private companies involved in pension plans separate from Social Security have some type of system devised to deal with the general rise in cost of living. Al though automatic adjustments based on the Consumer Price Index (CPI) are not as prevalent in private industry, plans such as profit-sharing and variable annuities equal and in most cases surpass the percentage rise in cost of living. Private management, prompted by increasing union pressure, has begun to realize that the retired employee pension must have enough flexibility to cope with the ever increasing inflationary trends. As stated in the July 1966 issue of "Business Management", the AFL-CIO has already spelled out its goals in this area. Among them: pensions that are based on an employee's earnings as well as his years of service; that provide from 2~3 to 3~4 of low-paid employees' regular wages; that contain cost-of-living adjustments; anc~ that provide for survivor benefits and early vesting. One of the most popular plans currently being used in private companies is the variable annuities plan. Under this arrangement, retired employees receive part of their retirement pay in the form of a fixed annuity - a certain amount of money stipulated i.n advance, payable for life. They receive the other part in the form of variable anr.:uities. A company invests the variable annuity portion of its pension money entirely in corrLmon stocks. A retired employee then receives income that fluctuates from year to year in accordance with fluctuations in the market value of the stocks. The variable annuity usually makes up 25~ to 50~ of the total pension. The courts have declared that this system is not in violation of that portion of the Internal. Revenue Code that prohibits retirement plans from producing indeterminable benefits. A few of the companies involved in this plan are: Chemstrand, American Airlines, Boeing Company, General Mills, Pan-American World Airways, Rohm and Haas Company, Carnegie Corporation, Twrarner, Lambert Pharmaceutical Company and Kewanee Oil Company. In Chemstrand and Kewanee Oil, 95~ of the employees voluntarily signed up for the program at its inception, nearly 15 ,years ago, and the vast majority still remain today. Only one known company which started the .program has abandoned it. Following are the results of several variable annuity plans: Chemstrand Flan. An employee who retired on $200. ($133. fixed and $67. variable) in 1953 would today be making in excess of $260. The cost of living has increased 16p in this period, while the employee's total pension has increased 30~. Kewanee Oil Compan~~ Plan. An employee who retired on $200. ($100, fixed and $100. variable) in 1957 would today make in excess of $276. The cost of living has increased 13p while the pension 380. The companies that use a variable annuity plan hale found that it has several distinct advantages. First it provides considerable protection against inflation and increases in the standard of living. Second, it reduces the necessity for frequent or periodic -2- // • ~ improvements in benefits. Finally, when the .costs are once paid, they are paid for good. Several insurance companies offer private industry pension plans that have built-in cost-of-living adjustment provisions. Aetna Life offers a plan that bases cost-of- living adjustments on the Consumer Price Index (CPI). The maximum amount that retire- ment income may be increased annually is determined by the employer when the plan is instituted. Plans providing for maximum annual increases ranging from 2~ to 5~ are available as are plans with no maximum, For example, if an employer selects a 4p maximum and the CPI rises 3p, pension benefits will also be; increased 3~. If the CPI rises 4•~ or more, the full maximum increase in pension benefits will be made. Aside from the various plans that exists in the private realm, two of the largest government entities, the Federal Civil Service and the Military, have built-in cost- of-living adjustment provisions. An automatic adjustment will be given to all of the above retired employees, when the cost of living, based on the CPI, increases 3~ or over and remains at this level for three consecutive months. The adjustment is based on what the highest percentage cost-of-living increase was during that three month period. Therefore, if these circumstances do occur, the retired employee will be guaranteed at least a 3% adjustment. Many of the pension plans in private companies are based on profit sharing. Although cost-of-living adjustments are not an integral part of profit-sharing, it is certain that as inflationary trends continue, the value of the shares will also increase. The Sunday, March 10, Los Angeles TIMES ran a comprehensive story on pension funds with the fo-_lowing excerpts related to our present concern: Of the pensions aeaoti- ated by collective bargain- ing, the employer; pay full costs in E0;'o of the cases. About hvo-thirds of the unilateral plans are sup- ported by company contri- butions only. Contributions made to a pension fund kw a corpora- tion are a business es- pense and, themfore, can be deducted from income for tax purpo::es. The in- come from pension fund in~•estments is ta::-free. An empIoye's contribu- tion to a pension fund is part of his tasable income, ho:c•ever. His tax advan- tage comes when he gets his pcrsion since he does not have to pay tales on the income derived from his contribc,tions. He is supposed to pay tai: on the pension derived from his emplo::er's contril,ution, however. StanIev S. S;n•rey, a~~i=.- tant secretary of the trea- sury for to-e policy, e.~ti- mated that ti12 federal government In<c., about S3 billion a year from the tax shelter granted corporate pension payment :. To get this tas benefit for a pension plan, an employer must file a state- ment «•ith the Internal Revenue Service saying the plan is permanent, that the money- raises[ ~ci11 be u;eiI for the e~clusiye benefit of the eriploye~ and that the benefits paid mint not fa, or any one Group of ~rorfiers •over another in the same plan. The IRS has issue d about 10,000 fa~-orable rulin~~ on pension plans since 1931, t~•itlz the num- ber approved each year grocvir,g rapidly. In 196:, for instance, 1 x,533 ne«= plans were an;~roved. The number approved in 1967 was ?0,000. In enforcing its rues, the IP.S is chiefly con- cerned that companies do not divert teo much into pension funds or use the tax shelter to pay off one group of em~~loy-es at the ehpen~e of others. Lower Financing ':1lthouah no pub 1 i c funds are utilized directly to finance private pen- sion, practically- aII pri- vate plans hac-e met the qualifications for special incorr~e tax treatment," tiVirtz pointed out. "3s a result, a given pension systen: can be financed by a 30"0 lov: er rate of contri- butions." • F'or cot•pcratioris that choose to administer their own pension plans instead of turning them over to p r o f e~~ional managees, this tax advantage can pay bid dividends. -3 /,~ t • • Obviously, .it is difficult to specifically state private industry's approach to this matter of p~°oviding meaningful stability to the pension dollar. There are countless different programs with various funding procedures employed. We do know that attempts to combat dollar dilution in industry and amongst unions is quite common and is gaining ever-increa:~ing interest. Finally, the basic question which I feel must be answered is whether or trot such amendments are necessary, equitable and are in good faith in terms of our organizational obligations. s / ~) i ~/ ~~~ PUBLIC EMPLOYEES' RETIREMENT SY TEM NDMENTS AFF CTI G R TIR FD MEMB ERS TN S T RY SURVEY CITIES. _ Section 21251.5 Section 21251.6 Anaheim No Yes Berkeley Yes Yes Burbank Yes Yes Fremont No No Fresno Garden Grose Not Contracting Agency Glendale Not Contracting Agency Hayward No Yes Huntington Beach No N No Inglewood o Yes No Yes Long Beach Yes Yes Pasadena No No Riverside No Yes Sacramento Not Contracting Agency San Bernardino N San Jose o Not Contracting Agency Yes Santa Monica No No Stockton Yes Yes Torrance No No Other Orange County Cities Buena Park No No Costa Mesa Not Contracting Agency Fullerton Yes Yes Newport Beach No No Orange No No ~o • Tfl~ CITY 0~ SflflTfl flOfl CALIFORNIA March 14, 1.968 Please aclclress relies tu: MEMO TO: City Council FROM: City Manager SUBJECT: FURTHER CONSIDERATION OF MY RECOMMENDATION FOR CHANGES I:N THE RETIREMENT SYSTEM CONTRACT Accompanying this memorandum is material which was developed by the Personnel Office in an attempt to answer the questions which were raised by members of the City Council when this matter was discussed at your last meeting. The problem of interpretation of the $10 minimum increase continues t:o be a complicated one for me to understand, but I do believe that the accompanying memorandum does explain the situation and eliminates the seeming contradictions of the resolution drawn by the State department. On the othE~r questions as to comparability with public and private in- dustry, thE~ information contained in the report certainly is not definitive, but I think: is indicative of the fact that the majority, as well as the trend, of g>rograms supports the contention that we should continue to adjust the incomes of retired employees rather than retain them on a fixed dollar amoLlnt. I think thE~ only question not specifically commented upon in the accompany- ing material lies in the question raised as to whether it would not be more equitable f:or the anticipated future costs of such increases for retired employees t:o be included in the actuarial studies and charged against the two contributing parties, the employee as well as the employer. It is my belief that: this is actually what is happening at the present time. As I indicated t:o the City Council in my original presentation, the quadrennial surveys take into account any changes in actuarial tables, any changes in the earning power of invested funds, and any changes which occur as to the specific measures of liability against either of the contracting parties, employee oz' employer. The result of each of the two actuarial studies made within the last 10 years has resulted in material decreases in per- centages of: charge allocated to both the employees and the employers. The greatest effect making such a reduction possible has been the increased earning po~ier of the money invested. In this instance, such moneys consti- tute not or.~ly the current investments of the City and its employees, but • City Council Page 2 also the moneys invested by the City in the name of its retired employees on past occasions and the money deposited by these retired employees during the period of time prior to their retirement. In my opinion, the procedure which is being recommended does actually take into account the gains made by the contributions of all three of the enumerated parties, employee, employer and retired employee, and that unless we take an action to increase the retired employees benefits, he is actually being deliber- ately penalized and refused the increased value or earning capacity of the money which is deposited. Likewise, the City of Santa Ana is foregoing the advantage of making available to him the increased earning capacity of the money which the City deposited to his account during the period of time when he was an employee. Certainly, when the actuarial studies are made of each 4-year period, all of these considerations are taken into account, and the new contribution rates are computed to include these prior commitments. I would again urge that the City Council adopt the resolution and provide for the increases permissible under the revisions to our contract. a Carl J Thornton City Manager CJT:ms i kF- t ,~ ~ IVIEMO,~tAl~DUM ~ To: __ BrucE;_ Spra~~, Assist. City Manag ~ ~ Date _Februa 2 1 68 From: D. E. Bott, Director of Personnel ~~ Subject: PUBLIC EMPLOYEES' RETIREMENT SYSTEM AMENDMIIJTS AFFECTING RETIRED MEMBERS Continuing advances in the cost of living pose particular difficulties for persons who must live within the bounds of a fixed income and it is requested that consideration be given for increasing retirement benefits for those City employees who have already retired to help offset the increased living costs and inflationary trends. Considerable interest has been expressed by elected representatives of the Santa Ana City Employees' Association relative to adding certain amendment provisions which are available to retired members under our Public Employees' Retirement System contract. These amendments are described below: 8.04 This applies to all employees who retired prior to July 1, 1956 a~zd adds an automatic 3~ to their annuity. If they retired prior to July 1, 1955, they would receive 4~ and those retiring prior to July 1, 1954 would receive 5~, 8.07 Tkiis applies to all employees who retired prior to December 31, 1961, ar~d adds an automatic 2~ to their annuity and is scaled upward for earlier retirements as follows: Prior to July 1, 1960 4~ Prior to July 1, 1959 6~ Prior to July 1, 1958 8~ Prior to July 1, 1957 10~ No increase can exceed $50.00 per month. These provisions may be elected by contracting agencies and affect retired members exclusively. :Earlier amendments affecting retired members were elected in 1951 and 1956. Each amendment has undergone a separate actuarial valuation in order to determine the cost increase ~to an agency's current service contributions. The number of retired persons who would be affected by the increases and the annual dollar increase is summarized as follows: Section 21251 5 Number of Annual Employees Increase Affected Service retirerrients Ordinary disabilities Industrial disabilities Industrial deaths 1957 Survivors ~7 $4905.24 4 590.28 3 540.00 2 185.52 $6,221.04 Section 21251 6 Number of Annual Employees Increase Affected ~ $ 9,432.24 4 459.24 7 1,184.64 3 736.32 $11,812.44 Attached is a last of the persons on the retirement rolls and the amount of increase under each provision. Attachment ~~ ` J •I • ' • ~ .~ , ~ , .. ` STATE OF CALIFORNIA RONALD REAGAN, Governor PUBLIC EMPLOYEES' RETIREMENT SYSTEM 1416 NINTH STREET, IP. O. BOX 1953 ~.. y' SACRAMENTO, CALIFORNIA 95809 ;tl~ . STANLEY B. FOWLER, President OTTO PALOMBO, Vice President DR. LESTER BRESLOW DONALD GALLAGHER A. W. "JOE" HISLOP RICHARD A. LIFSES WILLIAM G. MAAS JOHN D. PORTER LUCY E. RITTER GORDON P. SMITH JOSEPH L. WYATT, JR. '~Tr. i~~illiam L. I'~iock Cit~j Attorney Ci ty of Santa Ana 308 City Hall Santa Ana., California. fear ivlr. Mock: Reply to Section 23 February 26, 1968 ~~~~odr~p FEB 2 ? 1968 Atwrney City of Santa Ma ?~Ie are enclosing two co:~ies of Resolution of Intenty~on (Form 122) to amend your a.gency~s contract to include Sections 2121.5 and 212[1.6 of the Retirement i,aw. Form 9~~9, C .r ; f; mat; on of Governin B ~ f < ~ '-` ~' ~ ' ` ` ----- -~--~aT_...5 ~, t ~ ~.,, Action, is also enclosed. When }Tour governing bony has adcpted the enclosed resolution, an executed coot' thereof should be returned to- this office w-.th the Forrn 949 certification attached thereto and we w-i.ll forward the material necessary for final action. Yours truly, O ` _ v" -w~_/ Kisuk Yan? Actuary I,„r : er ends.