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CITY OF SAN LEANDRO STAFF REPORT DATE: July 5, 2011 TO: Lianne Marshall, Interim City Manager FROM: racy Vesely, Finance Director 4ouise Keniston, Senior Human Resources Analyst SUBJECT PROJECT/PROJECT DESCRIPTION: APPROVED AND FORWARDED TO CITY COUNCIL 3)�\, r- � Lianne Marsh Interim City Mana r RESOLUTION APPROVING CITY COUNCIL PAYMENT OF THE EMPLOYEE CONTRIBUTION PORTION OF THE CITY'S CALPERS RETIREMENT PLAN. SUMMARY AND RECOMMENDATION City Council may consider approving a resolution that authorizes the Mayor and all City Councilmembers to fully pay their Employee Contribution amount of 7% or 8% for the City's CalPERS retirement plan. BACKGROUND The City of San Leandro participates in the CalPERS retirement system (Safety Plan for sworn public safety employees and the Miscellaneous Plan for all non sworn employees and elected officials). Contributions toward this benefit include both the Employer Contribution amount (the amount the City pays toward the benefit) and the Employee Contribution amount (the amount the employee contributes toward the benefit). Currently, the City of San Leandro pays for all or a portion of the Employee Contribution amount, known as the Employer -Paid Member Contribution (EPMC). Council action, which became effective May 16, 2006, changed the amount of EMPC paid for newly -hired Miscellaneous Plan members, phasing the contribution level based on CalPERS service credit. Prior CalPERS service credit is applied to reduce employee -paid contributions. Year 1 = Employee pays 75% of the total Employee Contribution amount, City pays 25% Year 2 = Employee pays 50% of the total Employee Contribution amount, City pays 50% Year 3 = Employee pays 25% of the total Employee Contribution amount, City pays 75% Year 4 = Employee pays 0% of the total Employee Contribution amount, City pays 100% The amount of the Employee Contribution is either 7% or 8% of salary and is based on the retirement formula to which an individual employee is entitled. Effective May 6, 2010, the retirement formula for new Miscellaneous Plan members was reduced from 2.5% at 55 to 2% at 55; thereby the formula for the Employee Contribution amount changed from 8% to 7% for such new members.