HomeMy WebLinkAboutPREPAYMENT OF PERS EMPLOYER CONTRIBUTIONS it
10 _03
Council/Agency Meeting Held:
Deferred/Continued to: p .
A proved ❑ Conditionally Ap roved ❑ Denied Ci lerk' igna H irL01+ r 3 p CE3
Council Meeting Date: 6/1.9/2006 Department 1D Number: FN 06-003
CITY Of HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION:
SUBMITTED TO: HONORABLE MAYOR AND CITY OUNCIL MEMBERS
SUBMITTED BY PE LOPE ULBRETH-GRAFT, PA;'CITY ADMINISTRATOR
PREPARED BY DANIEL T. VILLELLA, CPA, FINANCE DIRECTOR
SUBJECT: PREPAYMENT OF PERS EMPLOYER CONTRIBUTIONS
Statement of Issue,funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue:,.
The Public Employees Retirement System (PERS) is offering a 3.66% discount toyagencies;
that:pay 100% of the employer's contribution for the 2006-2007 PERS fiscal year: The"
estimated savings for 2006-2007 if the City participates in this program is $180,078.
Funding Source:
Cash is, available.within-the various funds that usually have PERS obligations. Any amounts,
paid prior to the obligation date for these benefits in the fiscal year 2006-2007 are considered
prepayments of expenses and can be refunded if necessary.
Recommended Action: Motion to:
Authorize Daniel T.. Villella, CPA, Finance Director to .approve the Public Employees
Retirement System LUMP SUM PAYMENT REQUEST for fiscal year 2006-2007 authorizing
the lump sum prepayment of PERS Retirement Employer's Contribution in the amount of
$8,300,730 for Safety employees and $3,008,132 for Miscellaneous employees to be paid by
July,15, 2006:
Alternative Action(s):
Make the traditional twenty-six biweekly payments throughout the twelve months.
REQUEST FOR ACTION
MEETING DATE: 6/19/2006 DEPARTMENT ID NUMBER:FN 06-00'3
Analysis:
Thee City has,been advised that again PERS is offering a,3.66% discount to.agencies paying
100% of the employer's share for the 2006-2007 fiscal year by July 15, 2006. Based on'this
information, the City requested the PERS Actuarial & Employer Services Division to calculate
the lump sum payment for the Safety employees (Attachment 1) and the 'Miscellaneous
employees,(Attachment,2).
This information is based on the most recent annual valuation and assumes payment made
between July 1 and July 15, 2006. The amount of pre-payment required is approximately
.166% less than the total of the twenty- six biweekly payments. This reduced amount was
calculated by PERS discounting future payments by their expected rate of return-of.:7.75%.
Safety Miscellaneous Total
Normal - Over 26 Pay Periods $ 8,616,382 $ 3,122,522 $ 11,738,904 ,
Prepay Entire Amount by July 15', 2006 8,300,730 3,008,132 11,308,862
Gross Savings 315,652 . 114,390 430,042
Interest'Loss=Assuming Earnings Rate of 4.25% (249,964)
Net Savings $ 180,078
The decrease in.savings from last year is due to the high interest rate earnings expected in
fiscal year 2006-2007. Last year, we estimated savings to the City of $265,695 based on the
City's investments earning an interest rate of 3.25%. The updated estimated savings for the
present fiscal year is $230,000 due a slightly higher interest rate of 3.25%.
With 'your -approval, the finance Director can approve the LUMP SUM - PAYMENT
REQUESTS and a check will be processed in the amount of $11,308,862 ($8,300,730 for
Safety,employees and $3,008,132 for Miscellaneous employees).
Environmenta'I Status..
4 Not applicable.
Attachment(s):
City Clerk's
Page Number No. Description
{ 1. Prepayment of the Employer Contributions for,Fiscal Year 2006-07 -
Safety Plan
$x fr 2. Prepayment of the Employer Contributions for Fiscal Year 2006-07
., � ,.... .. ' Miscellaneous Plan
G\RCA\RCA-.Finance\FN 06-003 PERS Prepayment 2006-20071.doc -2-
6/6/2006 11:28 AM
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Actuarial & Employer Services Branch
P.O. Box 942709
Sacramento, CA 94229-2709
Telecommunications Device for the Deaf-(916) 795-3240'
FAX (916) 795-3005
May 2,.2006
Employer Number 0097 ^. ..
Employer Name,: CITY OF HUNTINGTON BEACH-,
Rate Plan: SAFETY
Re: Lump Sum Payment to prepay 2006-2007 employer contribution rate
Dear Requestor: _
As,,requested,'2006-2007 employer contribution rate information on your lump sum payment follows.
:If you are aware of others interested in this information (i.e.payroll staff, county court
employees, port districts, etc,), please inform them.
The.information is based on the most recent annual valuation and assumes payment made between July,-
1':and.July 15, 2006 and no further contractual or financing changes taking effect before June-30;2007.
The change in.your 2006-2007 employer contribution rate after you make the proposed lump sum
` payment,.is displayed in the"Change to Total Employer Rate" line'below.
As of June 30, 2004 $
2006-07,Employer Contributions ($) mid year $8,616,382 28.556%
2006-07 Employer Payment ($) beg year* $8,3001730 * N/A .
2006-07 Revised Employer Contrib ($)mid year $0 00/0
Change to Total Employer Contribution-Rate (28.556%)
* Pay this amount(see attachmeno. Your pre-payment 2006-2007 Employer Contribution is from
your June 30, 2004 actuarial valuation report. It has been reduced by a half year interest credit at the
7.75% actuarial assumed interest rate (resulting in an approximate 3.66% discount). To the extent your
actual 2006-2007 payroll or CalPERS actual 2006-07 net investment earnings differ from our
assumptions, we anticipate the differences will be reflected in your 2009-2010 and later employer
contribution rates.` If your rate plan is in a risk pool, these earnings and payroll
differences will be shared by all employers in that risk pool, under current practice.
To initiate.this change, the enclosed Lump Sum Payment Request must be completed and returned to the
Fiscal Services Division with a wire transfer or a check.between July 1 and July 15.' A copy should be .
sent for us:
If'you have.questions, please call (888) CalPERS (225-7377).
Richard.Santos,
Associate Pension Actuary, CalPERS
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Actuarial &Employer Services Branch
P.O. Box 942709 .
Sacramento, CA 94229-2709
Telecommunications Device for the Deaf-(916)795-3240
FAX(916)795-3005
• •
LUMP SUM PAYMENT REQUEST"
Please complete and return this form to the following address,with a copy to the address above..
j. CaIPERS
Fiscal Services Division
Attn: Susan Patchett
P O Box 1982
Sacramento,CA 95809-1982
If.a wire transfevis being'used after March 8, 2006, it should go to the following account:
ABA#0260-0959-3
Bank of America Sacramento Main
555 Capitol Mall,Suite 1555
Sacramento,CA 95814
For credit to State of CA,CalPER$
Account#01482-80005
Please e-mail your actuary and Susan Patchett (Susan. Patchett(@CalPERS.CA.GOV) on the day of.the
wire.
- Employer Name: CITY'OF`HUNTINGTON BEACH
",Employer Number: 0097' '
Member Group or Plan: SAFETY PLAN
C6verage:Grou0 affected by the Payment(choose one within the affected plan): 74001, 75001, 76001 "
Amount: $8,300,730
-.-,Purpose:- To prepay the 200672007 employer contribution rate
Bases)t9 which payment is"applied: N/A
In recognition of,our payment please revise our employer contribution rate effective July 1, 2006:
Name and Title:`.(Please Print):
Signature: Date:
Mailing'Address:
Street Address:
City/State/Zip:
Telephone Number:. Fax Number:
E-mail Address:
ACTO PP 2-2006:
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Actuarial & Employer Services Branch
P.O. Box 942709
Sacramento, CA' 94229-2709
Telecommunications Device for the Deaf-(916)795-3240
FAX (916) 795-3005
May.2;2006
Employer Number: 0097
Em„ployer'Name : CITY OF HUNTINGTON BEACH
Rate-Plan:, MISCELLANEOUS
Re:-Lump,Sum<Payment to prepay 2006--2007 employer contribution rate
Dear Re uestor:
As requested, 2006-2007 employer contribution rate information on your lump sum payment follows.
' 3f you are aware of others interested in this information (i.e. payroll staff, county court
employees, port districts, etc.), please inform them.
The,information is based on the most recent annual valuation and assumes payment made between July
I and July 15;;2006 and no further"contractual or financing changes taking effect before June 30, 2097.
The change,in your 2006-2007 employer contribution rate after you make the proposed lump sum
payment, is displayed in the"Change to Total Employer Rate" line below.
As of June 30, 2004 $
: 2006-07 Employer Contributions ($) mid year . $3,122,522 7.849%
2006-07 Employer Payment ($)"beg year* $3,008,132 * N/A
2006-07 Revised Employer Contrib ($) mid year $0 00/0 "
Change to Total-Employer Contribution Rate (7.849 /o)
o
*. Pay this'amount(see attacMnent) Your pre-payment 2006-2007 Employer Contribution is from
your June 30,-2004 actuarial valuation report. It has been reduced by a half year interest credit at the
7.75% actuarial assumed interest rate (resulting in an approximate 3.66% discount). To the extent your
actual 2006-2007 payroll or CalPERS actual 2006-07 net investment earnings differ from our
assumptions, we anticipate the differences will be reflected in your 2009-2010 and later employer
contribution rates. If your rate plan is in a risk pool, these earnings and payroll
differences will,be shared.by all employers in that risk pool, under current practice.
To initiate this change, the"enclosed Lump Sum Payment Request must be completed and returned to the'
Fiscal Services.Division with a wire transfer or a check between July 1 and July 15.. A copy should be
sent to.us:
If you have questions, please call(888) CalPERS (225-7377):
Richard Santos i
Associate,Pension Actuary, CalPERS '
" Actuarial &Employer Services Branch
P.O. Box 942709
Sacramento, CA 94229-2709
Telecommunications Device for the Deaf-(946)795=3240`
TAX(916)795-3005
LUMP SUM PAYMENT REQUEST
Please complete and return this form to the following address,with a'copy to the address above.
CalPERS
Fiscal Services Division
Attn: Susan Patchett
P O Box 1982
` - Sacramento,CA 95809-1982
If a wire transfer is being used after March 8, 2006, it should go to the following'account:
ABA#0260=0959-3
Bank of America Sacramento Main
555 Capitol Mall,Suite 1555
Sacramento,CA 95814
For credit to State of CA,Ca1PERS
-Account#01482-80005
Please e-mail your actuary-and Susan Patchett (Susan Patchett@CalPERS.CA.GOV) on the day of the
' wire..
Employer Name: CITY OF HUNTINGTON BEACH'
Employer Number: 0097
Member Group or Plan: MISCELLANEOUS PLAN
'Coverage Group affected by the Payment(choose one within the affected plan): 70001
Amount._ $3,008,132
Purpose:' To prepay the.2006-2007 employer contribution rate
Base(s)'to 4ich payment is applied: N/A
In recognition of our payment please revise our employer contribution rate effective July 1,2006>
Name and-Title: (Please Print):
Signature: Date:
Mailing Address: .
Street'Address
GityjState%Zip- :.
Telephone Number: Fax Number:
` E-mail Address:.
2 'CT,O PP 2=2006
RCA ROUTING SHEET
INITIATING DEPARTMENT: FINANCE 4
SUBJECT: Prepayment of the PERS Employer Contributions
COUNCIL MEETING DATE: June 19, 2006
4 RCA-.ATTACHMENTS F .. &� STATUS
w,
Ordinance (w%exhibits & legislative draft if applicable)` Attached El
Not Applicable
` Resolution (w/exhibits*& legislative draft if applicable) Attached El
Not Applicable
Tract Map; Location Map and/or other Exhibits Attached. ❑
Not Applicable
Attached ❑
Contract/Agreement (w/exhibits if applicable) Not Applicable
(Signed in full by the City Attomey)
Attached ❑
Subleases, Third Party Agreements, etc. Not Applicable
(Approved as to form by City Attorney)
Attached ❑.
Certificates of.Insurance(Approved by the City Attomey) Not Applicable
Attached ❑
Fiscal'Impact Statement.(Unbudget, over $5,000) Not Applicable
Attached ❑
Roads (If applicable) . Not Applicable ®;
Attached ❑
Staff Report (if applicable) Not Applicable ® ' .
Attached
"Commission, Board or Committee Report (If applicable) Not Applicable
. .
Findings/Conditions for Approval and/or Denial Attached El
Not Applicable'
EXLANTIO ;FOR` ISSING ATTACH TS
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RE\/IEWED : R .: ;`,RETURNED FORWARDED
Administrative Staff ( ) ( )
Assistant City Administrator (Initial) ( ) ( )
City Administrator (Initial)
CityClerk ( )
EXPLANATION:FOR'RETURN,OF ITEM .. . .,* ,y.
Only)(Below Space For City Clerk's Use
RCA Author; Robert Sedlak x5907
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