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pre -1999 levels. Regarding the employee contribution matter, it is important to note that <br /> similar to Social Security, CaIPERS payments are divided between the employer and <br /> employees. The employee contribution (or EPMC) is set at 8% for non - safety <br /> employees and 9% for public safety employees. The employer rate fluctuates with <br /> market conditions and other actuarial assumptions (see Exhibit F for historical and <br /> future projected employer rates). It is also important to note, that as an outcome of <br /> labor negotiations, many cities including Pleasanton (in early 1990's), agreed to assume <br /> the employee share of the program. This action proved to be financially sound since <br /> CaIPERS costs were minimal when compared to the cost of other benefits and salary <br /> increases. However, in light of the recent CaIPERS increases, employers, including <br /> Pleasanton, are going back to the bargaining table in an attempt to reach agreement on <br /> renewing employee contributions. The depth of these employee contributions vary by <br /> organization and local financial conditions. <br /> On an organizational level, negotiations with the PCEA have resulted in a tentative <br /> agreement for employees to contribute 2% of the CaIPERS EMPC. In addition, <br /> department heads, middle managers and confidential employees will contribute 4% of <br /> the EPMC to CaIPERS. And, as you know, last fall, Livermore - Pleasanton firefighters <br /> (IAFF) agreed to pick -up 2% of the employer rate. And finally, the City Manager will <br /> now pick -up the full 8% EPMC to CaIPERS effective immediately. Cumulatively, these <br /> adjustments represent an annual savings of approximately $812,000. <br /> City management plans to continue pursuing EPMC contributions from other labor <br /> groups as labor contracts expire. While staff recognizes that increasing employee <br /> contributions is an easy "fix" for those who seek reform, staff intends to pursue cost <br /> offsets, including increasing employee contributions in a manner that assures the <br /> financial security of the City and cooperation of its employees. The City's goal is to <br /> reach the full EPMC contribution within a realistic timeframe. The next round of labor <br /> negotiations will be with the POA, whose contract expires in May of 2011, followed by <br /> IAFF fire employees in December of 2011. <br /> Page 8 of 9 <br />