Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Manager
Subject: Adoption of Employer and Member Retirement Contributions Rated for FY 2019-2020.
RECOMMENDATION:
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Adopt a resolution setting employer and member contribution rates for the San Mateo County Employees’ Retirement Association for all members and employers for fiscal year 2019-2020 in accordance with 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. 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 attached resolution will set employer contribution rates for FY 2019-2020 for all employers for all plans. In addition, it will set the PEPRA Plan 7 member contribution rates. Plan 7 member rates are adjusted annually in accordance with the statutory requirement that these rates be 50% of the Gross Normal Cost Rate as set forth in SamCERA’s annual valuation. All other plan member rates are not adjusted on an annual basis and will remain at the current rate.
DISCUSSION:
The Board of Retirement and the SamCERA Chief Executive Officer recommend the contribution rates as set forth in 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 2013 Memorandum of Understanding (MOU) regarding retirement system funding, the County may pay more than the Statutory Contribution Rate (SCR) to address the unfunded liability. SamCERA places these payments in a Supplementary Contribution Account (CSCA). The County's SCR would have increased to 36.70% of payroll for FY 2019-2020, however, when the value of the County's CSCA account is factored in the calculation, the County's contribution rate is reduced to 33.85% of payroll. The blended fixed rate the County intends on contributing is 37.14%. The additional contributions needed to reach 37.14% can be accomplished by making one lump sum payment of $19.7 million.
The resolution has been reviewed and approved by County Counsel as to form and content.
Approval of this resolution contributes to the Shared Vision 2025 outcome of a Collaborative Community by managing the financial assets of the County and maintaining the appropriate level of contributions to the retirement fund.
FISCAL IMPACT:
The County’s budgeted retirement contributions will approximate $253.7million in FY 2019-2020. This figure includes the County statutory contribution of $194.8 million, statutory contributions from non-County funds totaling $4.1 million (First 5, SamCERA, LAFCo and County Library), and $54.7 million from the General Fund for the accelerated pay down of the unfunded liability, which includes the annual lump sum contribution of $10 million and the amount needed to achieve the blended fixed rate of 37.14%.