Fremont City Council Meeting: 06/09/26 07:00 PM
3300 Capitol Avenue Div/Dept: Human Resources
Fremont, CA 94538 Category: Labor Relations
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5743) DOC ID: 5743
Updated: 6/5/2026 10:50 AM by Alberto Quintanilla Page 1 Amendment to CalPERS Contract – Resolution of Intent and Introduction of an Ordinance to Amend the City's Contract with the California Public Employees' Retirement System to Adjust Employee Cost-Sharing for Safety New Members under the Public Employees’ Pension Reform Act of 2013
Contact Persons:
Name: Tina Gallegos
Title: Human Resources Director
Div/Dept: Human Resources Human Resources
Phone: 510-494-4652
E-Mail: [email protected]
Executive Summary: Staff is requesting the City Council approve an amendment to the City’s contract with the California Public Employees’ Retirement System (CalPERS) to modify employee retirement cost sharing provisions for employees in safety positions and classified as “New Members” under the Public Employees’ Pension Reform Act of 2013 (PEPRA). This includes members of the Fremont Association of Management Employees (FAME), Fremont Police Association (FPA), Fremont Police Management Association (FPMA), Fremont Professional Firefighters, International Association of Fire Fighters, Local 1689 (IAFF), and Battalion Chiefs, International Association of Fire Fighters, Local 1689 (IAFF-BC).
The proposed amendment to the City’s CalPERS contract is needed to comply with the cost-sharing terms that were negotiated and agreed to by the City and the affected employee bargaining groups in 2013 and further amended in 2019. The intent of the 2013 agreements and 2019 amendments was for Safety New Members to make an additional cost- sharing contribution, above the statutorily required minimum, for a total employee retirement contribution of 12%.
To comply with CalPERS’ requirements, the City Council must adopt a Resolution of Intention to Approve an Amendment to Contract and introduce an Ordinance Authorizing an Amendment to contract. The City Council will consider adoption of the final Ordinance Authorizing an Amendment to contract at its meeting of July 14, 2026.
Background: Government Code section 20516 authorizes contracting agencies and employees to agree to employee retirement cost sharing provisions through amendments to a CalPERS contract.
Council Staff Report (ID # 5743) Meeting of June 9, 2026 Updated: 6/5/2026 10:50 AM by Alberto Quintanilla Page 2
In 2013, the City and its safety bargaining groups agreed that both Classic and New Members would contribute a total employee retirement contribution amount of 12%, consisting of the statutory employee contribution required by law and an additional employee cost share.
In 2019, the City amended its CalPERS contract to memorialize this additional employee contribution of 0.75% for Safety New Members effective June 15, 2014. At that time, the required 50% of normal cost contribution under PEPRA equaled 11.25%, resulting in a combined employee contribution of 12%.
Effective July 1, 2025, CalPERS increased the required 50% of normal cost contribution for Safety New Members from 11.25% to 11.75%. Combined with the existing 0.75% additional contribution, the total employee contributions increased to 12.5%. (Beyond the agreed upon amounts in the Safety labor union MOUs).
Discussion/Analysis: The City and the affected Safety bargaining groups have confirmed that the original intent of the 2013 agreement on this matter was to cap the Safety New Members contribution at a combined total 12%.
The City and its safety bargaining groups have entered side letter agreements to clarify the parties’ intent and reduce the additional employee cost share from 0.75% to 0.25% for Safety New Members.
To formalize and preserve the agreed-upon employee retirement contribution level for Safety New Members, the City must amend its contract with CalPERS. Under the proposed amendment:
• Safety New Members will continue contributing 50% of normal cost as required by PEPRA and Government Code section 7522.30 (currently
11.75%); and
• The additional employee contribution under Government Code section 20516 will be reduced to 0.25%, effective as soon as
administratively feasible.
The proposed amendment will restore the total employee contribution rate for Safety New Members to 12%, consistent with the parties’ longstanding agreement.
Council Staff Report (ID # 5743) Meeting of June 9, 2026 Updated: 6/5/2026 10:50 AM by Alberto Quintanilla Page 3 The City and the Safety bargaining units acknowledge that the statutory required contribution for New Members could exceed 12%. In the future, as the requirement contribution fluctuates, the City will adjust the additional contribution so that the total Safety New Member contribution will be the greater of:
1. The PEPRA minimum contribution required by law; or
2. 12%.
The City will adjust the additional employee contribution accordingly to remain compliant with applicable law.
As part of the CalPERS contract amendment process, the City Council must adopt a Resolution of Intention to Approve an Amendment to Contract and introduce an Ordinance Authorizing an Amendment to Contract.
Fiscal Impact: The proposed actions are intended to implement and maintain the agreed-upon employee retirement contribution level for Safety New Members and are not expected to create a significant fiscal impact on the City beyond existing retirement contribution obligations. Payroll deductions and CalPERS reporting procedures will be updated upon implementation of the amendment to the City’s contract with CalPERS.
Environmental Review: This action is not a project as defined by Pub. Res.
Code Section 21065 and California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(2), as an administrative, fiscal, personnel and policy action. The action is further exempt under CEQA Guidelines Section 15378(b)(4), as the creation of a government funding mechanism or other government fiscal activity that does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
ATTACHMENTS:
• Amendment Resolution of Intention Letter
• ORDINANCE CalPERS Contract Amendment 2026
• Amendment to Contract Draft, 2026 - Exhibit A
Recommendation: Staff recommend that the City Council:
1. Adopt a Resolution of Intention stating its intent to amend the City’s contract with CalPERS to reduce the additional employee cost share Council Staff Report (ID # 5743) Meeting of June 9, 2026 Updated: 6/5/2026 10:50 AM by Alberto Quintanilla Page 4 contribution for Safety New Members from 0.75% to 0.25%, effective as soon as administratively feasible.
2. Introduce an Ordinance authorizing an amendment to the City’s contract with CalPERS.