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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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County Counsel
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DATE:
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March 7, 2007
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BOARD MEETING DATE:
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March 27, 2007
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SPECIAL NOTICE/HEARING:
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No
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Thomas F. Casey III, County Counsel
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SUBJECT:
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Government Code §31658 Additional Retirement Credit
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RECOMMENDATION: Adopt a resolution (1) accepting Milliman Incorporated’s statement of actuarial impact upon future annual costs of implementation of Government Code §31658 Additional Retirement Credit and (2) directing the County Manager to make the report publicly available and to place the consideration of implementing Government Code §31658 on the Board of Supervisor’s April 10, 2007 agenda.
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VISION ALIGNMENT:
Commitment: Responsive, effective and collaborative government
Goal(s): Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.
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BACKGROUND:
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If made effective by a resolution adopted by the Board of Supervisors, Government Code §31658 authorizes eligible employees with at least five years of service credit to purchase up to five additional years of SamCERA service credit (ARC time) in order to increase their retirement pensions. Section 31658 mandates that the employee must pay an amount that “at the time of commencement of purchase, in the opinion of the [retirement] board and the actuary, is sufficient to not place any additional financial burden upon the retirement system.” The collective bargaining agreements with AFSCME and SEIU provide that by early April, the County Manager is to present an update to the Board regarding the implementation of Section 31658 for the Board’s determination.
Pursuant to statutory mandates, the County Manager’s office requested the Milliman actuarial firm to provide an analysis of the actuarial impact upon future annual costs of the implementation of the ARC time benefit.
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DISCUSSION:
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Attached is Milliman's statement of the actuarial impact upon future annual costs of the implementation of Government Code §31658. The actuarial report reviews ARC time costs for active members in the various SamCERA membership plans. The Milliman report’s conclusion is that, “The expected cost of adopting the ARC provision is zero. That is, there is no expected increase in the County’s contribution rate or Unfunded Actuarial Accrued Liability. As with the regular actuarial valuation, the ultimate cost depends on how well actual experience matches the assumptions.”
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The Milliman report is being presented today in accordance with the statutory requirement that an actuarial report be “made public at a public meeting at least two weeks prior to the adoption of any increases in public retirement plan benefits.” This matter will be brought back to the Board of Supervisors for consideration on April 10, 2007.
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FISCAL IMPACT:
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None
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