City Mandates Future Hires to Contribute Entire 8% to CalPERS

However, existing employees will continue to pay only 1 percent.

Written by AMY FAN / Published May 4, 2012  

The city council recently adopted a resolution requiring city employees hired on or after January 1, 2012 to pay the entire employee-paid member contribution to CalPERS, the retirement system for public employees.

The decision was codified by the unanimous approval of Resolution 11-4782, which was placed on the consent calendar on December 20, 2011.

As a result, City Hall will no longer pay the employee-paid member contribution (EPMC), eight percent of an individual’s salary, to CalPERs for new hires.

“Due to drastic changes in the economy, local government agencies are making changes to pension plans and restructuring pension plan costs in order to reduce long term obligations,” Eva Hauffen, personal analyst, wrote in her report to the city manager.

This decision immediately impacts whoever becomes the administrative services director. The city is currently searching for a new city administrator, following City Manager Jose Pulido’s second major reorganization of City Hall.

Additionally, the city council adopted Resolution 11-4781.

The resolution makes permanent a rule that current employees make a one percent EMPC, while the city pays the remaining balance, or seven percent.

That policy was adopted when the city council approved the budget in 2010. City leaders again signaled their support of the policy in August 2011.

While employees will be asked to pay more toward their retirement funds, retirement benefits will not likely be reduced.

That question was addressed by Councilmember Vincent Yu in 2010.

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One comment

  1. Panama

    The City currently reports the value of Employer Paid Member Contributions (EPMC) to CalPERS as additional compensation upon which employees’ retirement benefits are based. Employees reimburse the City for the cost of this benefit. When the EPMC amount increased from seven percent to eight percent with the adoption of the 2.7%@55 retirement formula for all non-sworn employees, the City did not adopt the CalPERS required resolution to reflect the increase in EPMC. Adoption of this resolution corrects the records with CalPERS.

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