DATE: 05/07/2025
TO: Honorable Mayor and City Council Members
FROM: Human Resources Department
2025-193
REQUEST FOR CITY COUNCIL ACTION
SUBJECT:
APPROVAL OF VARIOUS ACTIONS ESTABLISHING THE CITY’S INTENTION TO AMEND ITS AGREEMENT WITH CALPERS TO PROVIDE FOURTH LEVEL 1959
SURVIVOR BENEFITS FOR SWORN POLICE EMPLOYEES
EXECUTIVE SUMMARY:
This staff report asks the City Council to conduct a second reading of Ordinance 3414, amending its contract between the City and the California Public Employees’ Retirement System (CalPERS) to provide Fourth Level 1959 Survivor Benefits for its sworn Police employees, with employees paying for the entire additional cost. It also amends Resolution 2024-118, the Resolution governing compensation and benefits of nonrepresented Executive Group employees, to clarify that the Police Chief will also receive the Fourth Level 1959 Survivor Benefit.
RECOMMENDED ACTION:
That the City Council:
a. Conduct second reading of Ordinance No. 3414, an ordinance authorizing an amendment to the contract between the City Council of the City of Corona and the Board of Administration of the California Public Employees’ Retirement System.
b. Adopt Resolution No. 2025-039, amending Resolution 2024-118 to clarify that the Police Chief will also receive the Fourth Level 1959 Survivor Benefit.
BACKGROUND & HISTORY:
The CalPERS 1959 Survivor Benefit Program allows eligible survivors to receive a monthly allowance when CalPERS members not covered by Social Security pass away before retirement. There are five (5) levels to the benefit program, each varying in the dollar amount of monthly payments to survivors eligible for the benefit. Benefits are lowest for survivors at Level 1 and highest at Level 5. Currently, the City of Corona provides sworn Police employees with Level 3 survivor’s benefits.
On April 2, 2025, the City Council adopted Resolution 2025-020, establishing the City’s intention to amend its agreement with CalPERS to provide the Fourth Level 1959 Survivor benefit to sworn Police employees. It also conducted the first reading of Ordinance 3414, an ordinance authorizing the amendment to the City’s contract with CalPERS to implement this benefit enhancement.
ANALYSIS:
As part of the new Memoranda of Understanding (MOUs) approved with the Corona Police Employees Association (CPEA) and Corona Police Supervisors Association (CPSA) in December 2024, the City agreed to amend its contract to provide the Fourth Level Survivor benefit. CPEA and CPSA agreed to pay the full additional benefit cost through payroll deductions so that there is no new cost to the City. Shifting from the Third Level to the Fourth Level in the Survivor Benefit program will increase survivors' monthly payments if a covered CalPERS member passes away before retirement.
Provision of this benefit enhancement requires an amendment to the City’s CalPERS contract. The actions outlined in this report are the second and final actions required by the City Council to implement the necessary contract amendment. Accordingly, it is recommended that the City Council conduct the second reading of Ordinance 3414, amending the CalPERS contract to add the Fourth Level Survivor Benefit for Police sworn employees.
Additionally, because the sworn position of Police Chief is included in the City’s Police Safety CalPERS plan, that position will now have the Fourth Level Survivor Benefit. To provide consistency between the amended CalPERS contract and the existing Resolution 2024-118 governing compensation and benefits of non-represented Executive Group employees, it is recommended that the Council adopt Resolution 2025- 039, amending Resolution 2024-118 to clarify that the Police Chief will also receive the Fourth Level 1959 Survivor Benefit. The effective date of this amendment will be June 14, 2025, to correspond to the effective date of the CalPERS contract amendment.
Next steps and timeline:
May 7, 2025: Second Reading and Adoption of Final Ordinance June 6, 2025: Effective Date of Ordinance
June 14, 2025: Effective Date of CalPERS Contract Amendment FINANCIAL IMPACT:
The cost of this contract amendment for Fourth Level of 1959 Survivor Benefits is as follows, as identified in the actuarial variation for this plan amendment, which is attached (Exhibit 3). The City’s first-year payment is zero, as noted below:
1. First-Year Employer Normal Cost $ 10,762
2. Five-Year Amortization of Unfunded Liability/Excess
Asset Payment (fixed for 5 years) ($50,643)
3. First-Year Total Employer Cost $ 0
Costs for this benefit are pooled among the participating public agencies. As the actuarial report notes, at this time, both the Third Level pool and the Fourth Level pool have surplus funded ratios, at 472.4% funded and 103.3% funded, respectively. Going forward, the report states that “the pool’s net cost will vary from year to year, depending on actual experience at the rate at which the existing surplus is amortized to offset ongoing employer normal costs”.
While costs will vary over time going forward, there is no anticipated financial impact to the City’s budget associated with this action because those costs will be funded by employee contributions in accordance with the CPEA and CPSA 2025-2027 Memoranda of Understanding and the Executive Compensation and Benefit Resolution. As long as the provisions in these documents remain unchanged, costs to the City for this benefit will remain at zero, as the employees in these groups will fund those costs through payroll deduction.
ENVIRONMENTAL ANALYSIS:
This action is exempt pursuant to Section 15061(b)(3) of the Guidelines for the California Environmental Quality Act (CEQA), which states that a project is exempt from CEQA if the activity is covered by the commonsense exemption that CEQA applies only to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. The approval of this action will not result in a significant effect on the environment. Therefore, no environmental analysis is required.
PREPARED BY: LORI SASSOON, CHIEF TALENT OFFICER
ATTACHMENTS:
1. Exhibit 1 – Resolution No. 2025-039
2. Exhibit 2 – Ordinance No. 3414
3. Exhibit 3 – Fourth Level Survivor Benefit Valuation Jan 2025