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COUNTY OF SAN MATEOInter-Departmental Correspondence |
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DATE: |
October 6, 2003 |
BOARD MEETING DATE: |
October 28, 2003 |
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TO: |
Honorable Board of Supervisors |
FROM: |
Tom Huening, Controller |
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Mary Welch, Director, Employee & Public Services Department |
SUBJECT: |
Actuarial Study to Determine the Impact of Future Annual Costs to the Retirement System as Required by Government Code Section 31658 Prior to Board Consideration and/or Authorization in the County of San Mateo |
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Recommendation |
Adopt a resolution authorizing an actuarial study to determine the impact of future annual costs on the retirement system as well as the employee costs for purchasing additional retirement service credit from SamCERA as the first step in assessing whether this Board of Supervisors will opt to make Government Code Section 31658 applicable in the County of San Mateo. |
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Background |
San Mateo County is a "37 Act" County. Under the County Employees Retirement Law of 1937, retirement benefits are calculated, in part, based upon years of service credit.
In September 2003, the Governor signed into law an optional benefit improvement for county employees. This option is only available if the local county board of supervisors enacts an enabling resolution making Section 31658 applicable in that county.
If this new provision is enacted, it would allow active members of retirement systems (employees) subject to the '37 Act to receive service credit for up to five years of employment not otherwise covered by a pension plan, upon payment of specified additional contributions by lump sum or by installment payments over a period not to exceed ten (10) years. Employees choosing to exercise this option would be required to complete these payments within 120 days after their effective date of retirement. The employee's cost for the service credit purchase under these provisions would be determined by the retirement board and an actuary, so as not to place any additional financial burden upon the county or its retirement system. |
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Discussion |
As the Employee & Public Services Department and the Controller's Office share the responsibility for the maintenance of personnel information, the benefits provided to employees and the delivery of the County payroll, we present this benefit option for your consideration.
This Board of Supervisors is empowered to adopt an enabling resolution that would make Section 31658 of the Government Code effective in the County of San Mateo. However, the law is not operative in any county until the local board of supervisors: 1) secures the services of an enrolled actuary to provide a statement of the actuarial impact upon future annual costs before authorizing increases in public retirement plan benefits, 2) publicly releases the actuarial report regarding the future annual costs at least two weeks prior to the adoption of any increases in public retirement plan benefits, and, 3) adopts an enabling resolution to implement the new provision. The County Counsel memo that describes this code section is attached for your review.
With approval of this resolution, the actuarial services required as a first step before consideration of an enabling resolution for Section 31658 of the Government Code will be taken. |
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Vision Alignment |
This resolution will contribute to Shared Vision 2010, specifically Prosperity Vision #20, "Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain." |
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Fiscal Impact |
The Net County Cost for the actuary's study would be an amount not to exceed $9,500, or approximately $2.00 per employee. The expenditure would be charged to the Non-Departmental General Fund account.
Attachment: County Counsel Memo re: AB 55 |