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THE CITY OF 2 CITY COUNCIL AGENDA REPORT pL E ASANTON. May 15, 2012 Administrative Services TITLE: ADOPT A RESOLUTION OF INTENTION AND INTRODUCTION OF ORDINANCE TO AMEND THE CONTRACT BETWEEN THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY OF PLEASANTON TO INCLUDE SECTION 20475 (DIFFERENT LEVEL OF BENEFITS), SECTION 21363.1 (3% @ 55 FULL FORMULA) AND SECTION 20037 (THREE-YEAR FINAL COMPENSATION) PROVIDING A DIFFERENT TIER OF RETIREMENT BENEFITS FOR NEW EMPLOYEES COVERED BY PLEASANTON POLICE OFFICERS' ASSOCIATION SUMMARY Recently, the City and Pleasanton Police Officers' Association (PPOA) adopted an updated Memorandum of Understanding (MOU) which includes the implementation of a different tier benefit for new employees. The 3% @ 55/three-year final compensation program will result in substantial savings in the long term for the City; yet allows the organization to remain competitive in attracting and retaining high quality candidates. The California Public Employees' Retirement System (CaIPERS) requires that the City initiate the process to implement this new tier benefit by disclosing the new employer rate and adopting a Resolution of Intention and Introduction of an ordinance to amend contract. RECOMMENDATION Adopt the resolution of intention and introduce an ordinance to amend the contract between CaIPERS and the City of Pleasanton to implement the new tier of retirement benefit for new employees covered by the PPOA. FINANCIAL STATEMENT The Total Employer Contribution Rate for the new second tier plan is 20.057% of second tier payroll in accordance with the valuation report prepared by CaIPERS. This compares favorably to the first tier plan that the City currently has where the Total Employer Contribution Rare for existing employees in the 2012/13 FY is 24.706% of first tier payroll.