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Action Item # 7, 2012 November 15 Pension Reform Act AB340
Implementation of Pension Reform 2 to complyEmployees covered by negotiated MOU have until contract expiration d)amount of the current social security benefit base)Future employees will
have their pension capped at $110,100 (or the c)costs, up to 8% of pensionable wagesFuture employees shall have 2% @ 62 Plan and pay 50% of normal b)up to 8% of pensionable wagesCurrent
employees on 2.7% @ 55 Plan must pay 50% of normal costs, a)Provisions of PEPRA affecting District employees:•exception of charter cities, judges and the legislaturePEPRA covers the
TDPUD and all public employers with the •effective date of January 1, 2013 with was signed into law by the Governor in September 2012 Public Employees’ Pension Reform Act (PEPRA) –AB340
•Background / History
New Information Implementation of Pension Reform 3 Results in no increased cost to the District•Minimizes financial inequality between new and current employees•Mitigates financial effects
on employees••structure which:All employee groups have agreed to proposed pension •immediately District and all employee groups want to comply with AB340 •
New Information Implementation of Pension Reform 4 Employment contract must be changed by Ordinance-relinquished benefitsWill receive 2.64% for flexible spending benefit for previously
-District contribution to CalPERS will be reduced from 14.88% to 8.74%-Will increase contribution to CalPERS from 1.86% to 8%-For General Manager•funded from District’s reduced costsEmployees
will receive 1.89% for flexible spending benefit -District contribution to CalPERS will be reduced from 14.88% to 9.49%-Will increase their contribution to CalPERS from 2.61% to 8%-For
current represented and unrepresented employees•to 3 employee groups each with different relinquished benefitstructure will begin on 1/1/13 and applies sProposed retirement
New Information Implementation of Pension Reform 5 overturned in courtsis in to 2.7% plan if AB340 -buyemployee for rovisions P-District contribution matchingwith a fund ontribution
cefined Employees will pay into a new d-CalPERS costs (6.05%)District will pay remaining -(will be adjusted annually)wages to CalPERS estimated 6.05% of base Will pay -For future employees•
New Information Implementation of Pension Reform 6 W number of 2.2% was released today-CPI-Unrepresented employees do not have a contract-W) built into their contracts-CPIUnion employees
and GM have a COLA (October 2012’s -Unrepresented employees COLA•
Fiscal Impact Implementation of Pension Reform 7$49,200 below budgetThe FY13 budget included 3.0% for COLA; actual is 2.2%, •savings, in today’s dollars, per year, per employee lower
than current employees, amounting to about $4,000 For future employees, District cost will be approximately 6% •to the District for existing employeesThis pension structure implementing
AB340 is cost neutral •
Recommendations Implementation of Pension Reform 8 beginning 1/1/13 Authorize a 2.2% COLA for unrepresented employees •General Manager’s employment agreement 3 and Amendment #1 to the
-Approve Ordinance 2012•future unrepresented employeesApprove the changes to pension calculations for current and •employeesimplementing pension changes for current and future Approve
the changes to the MOU with IBEW 1245 •
Union Represented Employees Implementation of Pension Reform 9 36.43% 36.43%Total28.43%31.07%District Contribution5.36% 8.00%Employee ContributionGeneral
Manager36.43% 36.43%Total28.43%30.72%District Contribution5.71% 8.00%Employee ContributionUnrepresented Employees36.43% 36.43%Total28.43%30.32%District
Contribution6.11% 8.00%Employee Contribution1/1/13Current