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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
County Manager’s Office
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DATE:
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June 6, 2011
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BOARD MEETING DATE:
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June 21, 2011
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SPECIAL NOTICE/HEARING:
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None
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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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David S. Boesch, County Manager
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SUBJECT:
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Adoption of Employer and Employee Retirement Contribution Rates for FY 2011-12
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RECOMMENDATION:
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Adopt a Resolution setting the employer and member contribution rates for the San Mateo County Employee’s Retirement Association for FY 2011-12 in accordance with Government Code Sections 31453 and 31454.
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BACKGROUND:
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Adoption of the attached resolution will set employer and employee contributions rates for the 2011-12 fiscal year. The resolution includes rates for current employees as well as those hired on or after July 10, 2011, who will earn benefits under new benefit formulas. The Board of Retirement approved the recommended rates. County staff has incorporated the rates in budget planning. This agenda item is to facilitate formal adoption of the rates as required by Government Code Sections 31453 and 31454. All rates for current formulas in FY 2011-12 are unchanged from those paid in FY 2010-11.
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If additional benefit formulas are approved later in labor negotiations, rates for those formulas will be presented at that time.
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DISCUSSION:
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Section 31453 of the 1937 Act requires the Board of Retirement to conduct periodic actuarial valuations of the retirement system:
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§ 31453. Actuarial Valuations; Recommendations; Adjustment in rates. (a) An actuarial valuation shall be made within one year after the date on which any system established under this chapter becomes effective, and thereafter at intervals not to exceed three years. The valuation shall be conducted under the supervision of an actuary and shall cover the mortality, service, and compensation experience of the members and beneficiaries, and shall evaluate the assets and liabilities of the retirement fund.
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Section 31454 requires the Board of Supervisors to adopt the recommended rates within a certain time period:
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§ 31454. Adjustment of interest, contributions, and appropriations. (a) The board of supervisors shall, not later than 90 days after the beginning of the immediately succeeding fiscal year, adjust the rates of interest, the rates of contributions of members, and county and district appropriations in accordance with the recommendations of the board, but shall not fix them in amounts that reduce the individual benefits provided in this chapter.
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The Board of Retirement recommends contribution rates for FY 2011-12 as set forth in the attached SamCERA letter and resolution. The resolution has been reviewed and approved by County Counsel as to form and content.
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The Resolution has been reviewed and approved as to form and content by County Counsel.
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Approval of this resolution contributes to the Shared Vision 2025 outcome of a Collaborative Community by managing the financial assets of the County and maintaining the appropriate level of contributions to the retirement fund.
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FISCAL IMPACT:
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The County’s budgeted appropriation for retirement contributions is $144.8 million for FY 2011-12, most of that in the General Fund ($114.2 million). This figure includes the County’s employer contribution of $138.5 million plus the amount of employee contributions the County covers pursuant to negotiated MOUs with employee bargaining units of $6.3 million.
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The total contribution has been reduced by approximately $5.3 million with the net elimination of 208 positions in the FY 2011-12 Recommended Budget, which includes 52 positions eliminated during FY 2010-11.
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