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Home My WebLink About4.02 RevisePersonnelSystem AGENDA STATEMENT CITY COUNCIL MEETING DATE: October 18,2005 CITY CLERK File # DEïJ[5][Q]-[!:E][Q] ~'50--60 SUBJECT: Revisions to the Personnel System Report Prepared by: Julie Carter, Assistant to the City Manager ATTACHMENTS: I. Resolution Fixing Employer's Contribution Rate Under the Public Employees' Medical and Hospital Care Act. 2. Resolution Fixing Employer's Contribution Rate Vesting Requircment For Future Retirees Under the Public Employees' Medical and Hospital Carc Act. 3. Resolution Adopting an Employer Pickup Resolution Pre-Tax Payroll Deduction Plan for Service Credit Purchases. ~(Conttibution Code 14). \; I. Adopt Resolutions. RECOMMENDATION,)š FINANCIAL STATEMENT: Sufficient funds have been included in the City's Fiscal Year 2005- 2006 budget to cover the cost associated with funding City provided health and welfare benefits. There is no fiscal impact to adopting the employer pick-up Resolution. DESCRIPTION: Resolution Fixing Emvlover's Contribution Rate Under the Public Employees' Medical and Hospital Care Act The City currently contracts with the California Public Employees' Retirement System (CalPERS) for the provision of health benefits as do a number of other public agencies. CalPERS al10ws each participating agency to designate the amount to be conttibuted by the employer. The City is required by CalPERS to contribute the same premium amount for current (active) employees as it does for retired employees. Presently, the City contributes $922.19 per month per employee/retire for medical insurance. Premium amouvts that cxcccd the City's maximum contribution are paid directly by the employee/retiree. During the Fiscal Year 2005-2006 health and welfare benefit discussions City employces agreed to the City Council's proposal to increase the City's current health contribution of $922.19 to $967.29 which, as agreed is a SO/50 split of the increase to the Kaiser Family premiums starting with the 2006 calendar year. The SO/50 cost split agreement continues for three fiscal years (through Fiscal Year 2007-2008). It is necessary for the City to amend the City's Benefit Plan cstablishing the maximum medical insurance conttibution at $967.29 effective January I, 2006. Premium adjustments in future years will require the adoption of resolutions based on the SO/50 CitylEmployee split formula and yet to be determined monthly premIUms. COPIES TO: I Db -z.- ITEMNO.~ It is also necessary to adopt two separate CalPERS Resolutions fixing the employer's contribution under the Public Employees' Medical and Hospital Care Act (PEMHCA). The attached Resolutions (Attachmcnt 1 and 2) increase the City's contribution from $922.19 per month to $967.29 for current (active) employees and current/future retirees. The proposed increase is cffective with the January I, 2006 premium statements fÌom CalPERS. Sufficient fuvds have been established by the adoption of the Fiscal Year 2005-2006 Budget to cover City paid health and welfare benefits. Resolution Adopting an Emplover Pickup Resolution Pre-Tax Payrol1 Deduction Plan for Service Credit Purchases. (Contribution Code 14) As mcntioned abovc, the City of Dublin contracts with thc California Public Employees' Retirement System (CaIPERS) to provide health and retirement benefits for its full-time employees. During the 2003 Icgislativc scssion, AB 719, known as the "Air-Time" bill was signed into law thus allowing City employees to purchase up to five years of service credit at the emplovee' s expense. Several City employees have expressed interest in purchasing service credit through this option. By adopting the attached Resolution (Attachment 3), it will givc City cmployees the option to make contributions on a pre- tax or post-tax basis much like an IRA. The Employer Pickup Resolution Pre-Tax Payroll Deduction Plan for Service Credit Purchases (Attachment 3) has no financial impact to the City of Dub1in but will serve as a tax bencfit to those employces electing to purchase additional service credit. Staff recommends the City Council adopt the attached Resolutions. F;\CùutlciJ RepOfls\Revisjons 10 the Personnel System 2006 health.doc . 2 r::o 2. RESOLUTION NO. - 2005 \Ob~ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * FIXING THE EMPLOYER'S CONTRIBUTION UNDER THE PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL CARE ACT WHEREAS, Government Code Section 22892(a) provides that a local agency contracting under the Public Employees' Medical and Hospital Care Act shall fix the amount of the employer's contribution at an amouvt not less than the amount required uvder Section 22893(1) of the Act; and WHEREAS, the City of Dublin is a local agency contracting under the Act. NOW THEREFORE BE IT RESOLVED that the employer's contribution for each employee or annuitant shall be the amount necessary to pay thc cost of his/hcr cnrollment, including the enrollmcnt of his/her family members, in a health benefit plan, up to a maximum of $967.29 dollars per month plus administrative fees and Contingency Reserve Fuvd assessments. BE IT FURTHER RESOLVED that the changes contained herein shaH be effective January I, 2006. PASSED, APPROVED AND ADOPTED this 18th day of October, 2005. AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk Attachment 1 :rtErY\ '-\. -z.. 1011 ß lo'=> 2%~ RESOLUTION NO. - 2005 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * FIXING THE EMPLOYER'S CONTRIBUTION VESTING REQUIREMENT FOR FUTURE RETIREES UNDER THE PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL CARE ACT WHEREAS, Government Code Section 22892(a) provides that a local agency contracting under the Public Employees' Medical and Hospital Care Act shall fix the amount of the employer's contribution at an amount not less than the amouot required under Sectioo 2289 (1) of the Act; and WHEREAS, the City of Dublin is a local agency contracting uvder the Act. NOW THEREFORE BE IT RESOLVED that the employer's contribution for each active and retired employee first hired on or after April 1, 2004 shall be the amouvt necessary to pay the cost of hisfher enrollmcnt, including thc cnrollment ofhislher family members, in a health bencfit plan, up to a maximum of $967.29 dollars per month plus administrative fees and Contingency Reserve Fund asscssments. BE IT FURTHER RESOLVED that the changes contained herein shall be effective January 1, 2006. PASSED, APPROVED AND ADOPTED this 21st day of June, 2005. AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk Attachment 2 3~L.\ RESOLUTION NO. - 2005 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* ADOPTING AN EMPLOYER PICKUP RESOLUTION PRE-TAX PAYROLL DEDUCTION PLAN FOR SERVICE CREDIT PURCHASES (CONTRIBUTION CODE 14) WHEREAS, the Board of Administration of the California Public Employees' Retirement System (CalPERS) at thc April 1996 meeting approved a pre-tax payrol1 deduction plan for service credit purchases under the Internal Revenue Code (IRC) section 414(h)(2); and WHEREAS, the City of Dublin has the authority to imp1ement the provisions of IRC section 414(h)(2) and has determined that even though implementation is not required by law, the tax benefit offered by this section should be provided to those employees who are mcmbcrs of CaIPERS; and WHEREAS, the City of Dublin elects to participate in the pre-tax payroll deduction plan for al1 employees in the following CalPERS coverage groups: Miscellaneous Group NOW, THEREFORE, BE IT RESOLVED: T. That the City of Dublin will implement the provisions of IRC section 414(h)(2) by making cmployee contributions for service credit purchases pursuant to the California State Government Code on behalf of its employees who arc members of CalPERS and who have made a binding irrevocablc clcction to participate in the pre-tax payrol1 deduction plan. "Employee contributions" shal1 mean those contributions reported to CalPERS which are deducted ITOm the salary of employees and are credited to individual employee accouvts for service credit purchases, thereby rcsulting in tax deferral of employee contributions. n. That thc contributions made by the City of Dublin to CaIPERS, although designated as employee contributions, are being paid by the City of Dublin in lieu of contributions by thc employees who are members ofCaIPERS. m. That the employees shall not have the option of choosing to receive the contributed amouvts directly instead of having them paid by the City of Dublin to CaIPERS. IV. That the City of Dublin shall pay to CalPERS the contributions designated as cmployee contributions ITom the same source of funds as used in paying salary, thereby resulting in tax deferral of employce contributions. V. That the effective date for commencement of the pre-tax payroll deduction plan cannot be any earlier than the date the completed resolution is received and approved in CalPERS. Attachment 3 l1 oo~ VI. That the governing body of the City of Dublin shall participate in and adhere to requirements and restrictions of the pre-tax payroll deduction plan by reporting pre-tax payroll deductions when authorized by CalPERS for those employees of the above stated Coverage Groups who have elected to participatc in thc plan. PASSED, APPROVED AND ADOPTED this 18th day of October, 2005. AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk Attachment 3