CalPERS Contract Amendment July 16, 2013 Agenda Item 16.2

Background 2012 – City reached agreement with majority of bargaining units on lower benefit retirement tiers 2012 – City reached agreement with majority of bargaining units on lower benefit retirement tiers November 2012 – Ordinance modifying the CalPERS contract for new Fire and Miscellaneous employees effective December 28, November 2012 – Ordinance modifying the CalPERS contract for new Fire and Miscellaneous employees effective December 28, December 2012 – City adopted new MOU with POA which included reduced retirement benefits December 2012 – City adopted new MOU with POA which included reduced retirement benefits January 2013 – pension reform implemented January 2013 – pension reform implemented

Optional Benefits and PEPRA PEPRA does not address most optional benefits PEPRA does not address most optional benefits Optional Benefits to be eliminated Optional Benefits to be eliminated Credit for Unused Sick Leave Post-Retirement Survivor Allowance Post-Retirement Survivor Allowance to Continue After Remarriage

Fiscal Impact No fiscal impact to the Pendency Plan budget for FY 2013/14 No fiscal impact to the Pendency Plan budget for FY 2013/14 Reduction in Employer contribution rate gradual as new employees replace existing employees Reduction in Employer contribution rate gradual as new employees replace existing employees Fiscal Year 2015/2016 earliest impact to Employer rate due to 2-year lag in actuarial rate setting methodology Fiscal Year 2015/2016 earliest impact to Employer rate due to 2-year lag in actuarial rate setting methodology

Implementation Timeline June 25 - Adopted Resolution of Intention to Approve an Amendment to the CalPERS Contract June 25 - Adopted Resolution of Intention to Approve an Amendment to the CalPERS Contract Next Step – Adopt Ordinance authorizing amendment of the contract Next Step – Adopt Ordinance authorizing amendment of the contract August 15 – Ordinance becomes effective August 15 – Ordinance becomes effective August 16 – CalPERS Contract Amendment becomes effective August 16 – CalPERS Contract Amendment becomes effective

Recommendation Adopt an Ordinance authorizing an amendment to the CalPERS contract to establish a third tier retirement plan for new Police safety employees pursuant to Govt Code Section Adopt an Ordinance authorizing an amendment to the CalPERS contract to establish a third tier retirement plan for new Police safety employees pursuant to Govt Code Section