COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Employee and Public Services

DATE:

January 8, 2004

BOARD MEETING DATE:

January 27, 2004

TO:

Honorable Board of Supervisors

FROM:

Mary Welch, Director, Employee and Public Services

SUBJECT:

Termination Of The Applicability Of Government Code Section 31676.16 Effective March 12, 2005 To Specified General Members Of The County Retirement System And Implementation Of Government Code Section 31676.14 Applicable To Specified General Members Of The County Retirement System Effective March 13, 2005 And Implementation Of Government Code Section 31621.9.

Recommendation

Adopt a resolution terminating the applicability of Government Code Section 31676.16 effective March 12, 2005 to specified general members of the County retirement system, making Government Code Section 31676.14 applicable to specified general members of the County retirement system effective March 13, 2005 and making Government Code Section 31621.9 applicable to San Mateo County.

Background

On June 10, 2003, this Board adopted Resolution 066003, which provided that General members' benefits for those members in Plan 1, Plan 2 or modified Plan 2 (also known as Plan 4) are to be calculated in accordance with Government Code section 31676.16 (2% at 55) until March 2005. It further provided that effective March 2005, the County will implement Government Code section 31676.16 (2% at 55.5). Because the implementation of 2% at 55.5 was contingent on enactment of legislation enabling implementation at the 1/120 employee contribution design, the Board did not formally adopt Government Code section 31676.16 at that time. That legislation has now been enacted.

This enhancement is only applicable to active or deferred general members who are in Plans 1, 2, or modified Plan 2 (also known as Plan 4). General employees are already sharing in the cost of the improved benefit through a 1% payroll deduction and will continue to do so with an additional 1% effective August 29, 2004 and an additional 1% effective March 13, 2005.

Discussion

The resolution presented for your consideration and adoption does the following for members of the general retirement Plans 1, 2 and modified Plan 2: (1) terminates the existing 2% at 55 schedule of retirement benefits effective March 12, 2005; (2) makes a new schedule of retirement benefits (2% at 55½) become effective March 13, 2005; (3) makes the March 13, 2005 formula for calculation of retirement benefits applicable to all general service credit earned back to the date of entry into said Plans; (4) continues the employee cost sharing contribution requirement set forth above and (5) continues to allow certain employees who retire prior to March 13, 2005 and whose benefits are lower under 2% at 55 to elect at the time of retirement that their retirement be calculated under the 31676.1 formula and entitles those employees to a refund of cost sharing contributions (6) makes the normal rates of contribution for General members be that which will provide an average annuity at age 55 equal to 1/120 of the final compensation become effective on March 13, 2005.

Vision Alignment

This item keeps the commitment of responsiveness, effective and collaborative government through goal number 20; Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

Fiscal Impact

Estimated cost for this enhanced retirement benefit is $12 million total for Fiscal Years 2004-05 and 2005-06.