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THE CITY OF 2 "' CITY COUNCIL AGENDA REPORT pLEASANTONo September 18, 2012 Administrative Services TITLE: ADOPT A RESOLUTION IMPLEMENTING EMPLOYEE CONTRIBUTIONS TOWARDS CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM FOR INTERNATIONAL ASSOCIATION OF FIREFIGHTERS LOCAL 1974 AND MANAGEMENT EMPLOYEES COVERED BY THE MANAGEMENT/CONFIDENTIAL EMPLOYEES COMPENSATION AND BENEFITS PLAN SUMMARY On August 28, 2012 the City Council approved the tentative agreement reached with the International Association of Firefighters Local 1974 (IAFF) which is effective through June 30, 2014. One provision of the successor agreement involves employee contributions towards the CaIPERS retirement program. Employees covered by IAFF will begin contributing 6% of the Employer Paid Member Contribution (EPMC) effective September 1, 2012. On July 6, 2013, IAFF employees' contributions will increase to the full 9% member contribution rate. Since July 9, 2011 management employees have been contributing 4% towards the CaIPERS retirement program. Effective September 1, 2012 the management group will increase payment of member contributions to the full rate (8% for non-safety managers and 9% for safety managers). CaIPERS requires the governing body adopt a resolution outlining the different percentages of member contributions paid by City to implement these changes. RECOMMENDATION Adopt resolutions implementing employee contributions towards CaIPERS pension program for IAFF Local 1974 and management employees. FINANCIAL STATEMENT As of September 1, 2012, the increased employee contributions are expected to result in approximately $273,000 of savings attributable to IAFF Local 1974 (Pleasanton only) and $335,000 of savings attributable to management employees, for total savings of approximately $608,000 in the current fiscal year (2012/13FY). This total savings compares favorably with approximately $530,000 of savings assumed in the 2012/13FY adopted budget. Starting with the 2013/14FY, when employee contributions for IAFF members increase to the full 9%, the expected annual savings is approximately $563,000 (Pleasanton only) and, with management employees already at 8% for non- safety managers and 9% for safety managers, the expected annual savings is $403,000, for a total annual savings of approximately $966,000.