Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Subject: Adoption of Employer and Member Retirement Contribution Rates for FY 2026-2027
RECOMMENDATION:
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Adopt a resolution setting employer and member contribution rates and rates of interest for the San Mateo County Employees’ Retirement Association (SAMCERA) for all members and employers for fiscal year 2026-2027 in accordance with the schedules set forth in Attachment A and Government Code Sections 31453 and 31454.
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BACKGROUND:
Government Code Section 31453 requires the Board of Retirement to conduct periodic actuarial valuations of the retirement system and to recommend contribution rates to the Board of Supervisors at least 45 days prior to the beginning of the succeeding fiscal year. Section 31454 requires the Board of Supervisors, not later than 90 days after the beginning of the immediately succeeding fiscal year, to adjust the rates of contributions of all members and all participating employers in accordance with the recommendations of the Board of Retirement.
Adoption of the proposed resolution will set employer contribution rates for FY 2026-2027 for all employers for all plans under the San Mateo County Employees’ Retirement Association (“SamCERA”). In addition, the proposed resolution will set the member contribution rates for all such plans. The actuarial valuation is also submitted with this memorandum as Attachment B.
The County’s planned supplemental contributions, including the $50,000,000 payment made in FY 2024-25 and an additional $50,000,000 scheduled for FY 2029-30, should stabilize the average contribution rate at a minimum of 27 percent of payroll through 2035, with any amounts paid above the statutory rate deposited into the County Supplementary Contribution Account.
DISCUSSION:
The Board of Retirement and the SamCERA Chief Executive Officer recommend the contribution rates as set forth in the schedules submitted with this memorandum as Attachment A to the attached resolution. The rates have been previously communicated to staff of the County, Court and the San Mateo County Mosquito and Vector Control District.
Pursuant to the County’s January 2025 Memorandum of Understanding (MOU) with SamCERA regarding retirement system funding, authorized by this Board in Resolution No.808800, the County may make supplemental contributions in excess of the Statutory Contribution Rate (SCR) to accelerate the reduction of unfunded actuarial accrued liability, among other benefits. SamCERA places these deposits in the County Supplementary Contribution Account (CSCA). In the absence of the supplemental contributions deposited to the CSCA, the County's SCR would have increased to 30.71 percent of payroll for FY 2026-2027, however, when the value of the County's CSCA account is factored in the calculation, the County's contribution rate is reduced further by 4.86 percent to 25.85 percent of payroll.
The resolution has been reviewed and approved by the County Attorney as to form.
COMMUNITY IMPACT:
The adoption of the employer and member retirement contribution rates will positively impact the County’s ability to continue to provide retirement benefits to its employees in a fiscally responsible manner so that retirees will be able to age in place gracefully.
FISCAL IMPACT:
The County’s budgeted retirement contributions, to meet the MOU requirement of 27 percent of payroll, will approximately be $231,300,000 in FY 2026-2027. This figure includes the County estimated statutory contribution of $214,900,000, statutory contributions from non-County funds totaling $5,300,000 (First 5, SamCERA, Local Agency Formation Commission, and County Library), and $11,100,000 from the General Fund.