Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors, acting as the Governing Board of the San Mateo County In-Home Supportive Services Public Authority
From: Colleen Chawla, Chief, San Mateo County Health
Lee Pullen, Director, Aging and Disability Services
Subject: Amendment to the Agreement Providing for the Public Authority’s Participation in the California Public Employees’ Retirement System.
RECOMMENDATION:
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Acting as the Governing Board of the San Mateo County In-Home Supportive Services (IHSS) Public Authority, adopt a resolution giving notice that the Board of Supervisors, intends to approve an amendment to the agreement providing for the Public Authority’s participation in the California Public Employees’ Retirement System (CalPERS).
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BACKGROUND:
California Welfare and Institutions Code (WIC) section 12301.6 authorizes County Boards of Supervisors to provide for the delivery of In-Home Supportive Services (IHSS) either by contracting with a nonprofit consortium or by establishing a Public Authority (PA). On September 21, 1993, the Board of Supervisors adopted Ordinance No. 03508, which created a PA for the delivery of IHSS. Pursuant to WIC section 12301.6, the PA is a public entity separate from the County. There are currently 19 full-time PA employees in San Mateo County.
Social Security coverage is available to state and local government employees through a voluntary but irrevocable federal-state agreement authorized by Section 218 of the Social Security Act. Employees covered under a Section 218 Agreement have the same coverage and benefit rights as employees mandatorily covered for Social Security and Medicare. The County of San Mateo completed an application and agreement with the State of California pursuant to Section 218, and the State signed the agreement in 1957, but PA employees were not included.
In June 2021, your Board approved Resolution 078260, which authorized the PA to include its positions in the State of California’s Section 218 Social Security agreement, providing for the coverage of the PA’s employees under the old age, survivors, disability, and health insurance system established by the Federal Social Security Act. The Agreement covers positions, not individuals. If the position is covered for Social Security and Medicare under a Section 218 Agreement, then any employee filling that position is subject to Social Security and Medicare taxes and is entitled to the corresponding benefits for such withholdings.
DISCUSSION:
California Public Employees’ Retirement System (CalPERS) is the official Social Security Administrator for the State of California’s Section 218 Agreement as well as the PA’s pension administrator. The 2021 Board resolution and agreement with CalPERS made sure that PA employees continued to participate in the Social Security program and that the withholdings and payment of benefits were in compliance with federal and state requirements.
This amendment to the agreement with CalPERS, mandatory after signing the 218 Agreement, acknowledges that PA employees will now receive both pension and Social Security benefits in retirement. The amendment changes the terms of the pension agreement with CalPERS to the 2% @ 60 Supplemental formula instead of the 2% @ 60 Full formula for classic (pre-PEPRA) members, and 2% @ 62 Supplemental formula instead of 2% @ 62 Full formula for post-PEPRA local miscellaneous members. Local miscellaneous members are those employed by a public agency contracted with CalPERS, but who are not involved in law enforcement, fire suppression, the protection of public safety, etc. Upon the effective date of the amendment, employees will be covered under the Supplemental formula.
Under the Full formula, the employer and employees contributed toward survivor pension benefits. With the 218 Agreement, however, survivor benefits will be discontinued through the CalPERS pension plan and will be provided through Social Security. The amendment to the agreement with CalPERS does not change the employer or employee contributions toward employees’ pensions.
CalPERS provided the Resolution of Intention and does not permit edits or modifications to the text. CalPERS also provided a Certification of Compliance with Government Code Section 7507, which must be signed by the Clerk of the Board. The form requires two certifications: (1) adoption of the retirement benefit change may not go on the consent calendar, and (2) the future costs of changes in retirement benefits or other postemployment benefits shall be made public at a public meeting at least two weeks prior to the adoption of any changes in public retirement plan benefits or other postemployment benefits. This amendment does not affect the future cost of retirement benefits; it only changes the formula to recognize retirement benefits from Social Security. CalPERS will send a sample resolution for your Board’s approval at a later time, which will include language approving execution of the amendment.
The resolution has been reviewed by County Attorney. The language is required by CalPERS and may not be edited.
It is anticipated that 100% of PA positions will be covered by this amendment.
PERFORMANCE MEASURE:
|
Measure |
FY 2024-25 Actual |
FY 2025-26 Estimated |
|
Percentage of PA positions covered by the amendment to the agreement with CalPERS |
100% 19 positions |
100% 19 positions |
COMMUNITY IMPACT:
This amendment ensures that PA employees will continue to be eligible for the same coverage and benefits as employees mandatorily covered for Social Security. This amendment to the agreement with CalPERS ensures that equitable retirement benefits for all PA classifications will continue uninterrupted.
FISCAL IMPACT:
This amendment does not change the employer or employee contributions toward the pension program for PA employees. There is no net County cost.