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Agenda Item No: 1.d
PLACENTIA CITY COUNCIL AGENDA REPORT
Meeting Date: September 8, 2026
Submitted by: Alice Burnett
From: Human Resources
Subject:
APPROVE AN ADDENDUM TO THE DEFINED CONTRIBUTION PLANS FOR DESIGNATED MISCELLANEOUS EMPLOYEES PARTICIPATING IN THE 2.0% AT 60 OR
2.0% AT 62 RETIREMENT FORMULA UNDER CALPERS
Financial Impact:
There is no budget impact to approve the attached addendum.
Summary:
The City maintains a defined contribution plan for designated miscellaneous employees who participate in retirement formulas under CaIPERS that are less favorable than the retirement formula historically provided by the City. The plan was established in 2016 in response to the implementation of the Public Employees' Pension Reform Act (PEPRA) and the resulting differences between the City's retirement formulas.
The purpose of the defined contribution plan is to provide a supplemental retirement benefit that helps bridge the difference between applicable CaIPERS retirement formulas. The plan has also been used as a recruitment and retention tool for designated hard -to -fill executive and miscellaneous positions where the applicable CaIPERS retirement formula may otherwise make it more difficult for the City to recruit experienced candidates from other public agencies.
The supplemental benefit is provided through a defined contribution account rather than through the CaIPERS pension system. As a result, the City's contribution to the defined contribution plan does not increase the employee's CaIPERS pensionable compensation or create an additional pension liability. This allows the City to provide a targeted recruitment and retention benefit while maintaining greater control over long-term pension costs.
The plan currently includes separate tiers based on the employee's retirement formula and the circumstances under which the employee became eligible for the supplemental benefit. The City Council last approved an amendment to the plan in February 2024, when the plan was transitioned from Public Agency Retirement Services (PARS) to MissionSquare Retirement Solutions and the eligibility provisions and contribution structure were updated.
As part of the City's ongoing administration of the plan, Staff has reviewed the current participant tiers and identified employees and employee groups who have separated from City 1 employment. The proposed amendment will update the plan to remove those former employees and groups and allow applicable tiers that are no longer needed to be closed. The amendment is an administrative update to accurately reflect current eligibility and participation in the plan. It does not change the benefits or contribution rates for current eligible participants.
Recommended Action:
It is recommended that the City Council:
1. Approve the amendment to the City of Placentia 401(a) Defined Contribution Plan administered by MissionSquare Retirement Solutions for designated miscellaneous employees participating in the City's 2.0% at 60 or 2.0% at 62 retirement formulas under CaIPERS; and
2. Authorize the Acting City Administrator, or designee, to execute all necessary documents to update the plan.
Strategic Plan Statement:
This action supports Goal No. 5: Organizational Excellence by promoting transparency, accountability, and responsible stewardship in the administration of the City's employee benefit programs.
Discussion:
The City's defined contribution plan was established as a supplemental benefit following the implementation of PEPRA and changes to the retirement formulas applicable to miscellaneous employees. The plan was initially designed to address situations where employees hired by the City had been recruited or hired with the expectation of a different retirement benefit and subsequently became subject to the City's 2.0% at 60 formula.
The plan was later expanded to provide a supplemental benefit for designated positions that were difficult to recruit and retain and, subsequently, for designated executive positions participating in the PEPRA 2.0% at 62 formula. The intent has remained to provide a targeted retirement benefit that assists the City in recruiting and retaining qualified employees while avoiding an increase in the City's long-term CaIPERS pension liability.
In February 2024, the City Council approved an amendment to transition administration of the plan from PARS to MissionSquare Retirement Solutions and to update the plan's eligibility provisions and contribution structure.
Staff has now completed an additional review of the plan's tiers and current participants.
Several employees and employee groups identified in the existing plan have since separated from City employment and are no longer eligible for participation. The proposed amendment will remove those individuals and groups from the applicable tiers and permit tiers that no longer have eligible participants to be closed.
This amendment is intended to keep the plan document consistent with the City's current workforce and ensure that future administration of the plan accurately reflects the City's approved eligibility requirements. There are no proposed changes to the contribution rates or benefits of current eligible participants.
Financial Summary:
The proposed amendment is administrative in nature and is not anticipated to result in a 2 material fiscal impact. The amendment will not change the contribution rates or benefits applicable to current eligible participants.
Attachments
MissionSquare Addendum 100417 Misc 401 a.docx
3 Mayor
CHAD P. WANKE
Mayor Pro Tem
JEREMY B. YAMAGUCHI
Councilmembers:
THOMAS HUMMER
KEVIN KIRWIN
WARD L. SMITH
The People are the City
401 East Chapman Avenue - Placentia, California 92870
Addendum to the
MissionSquare Retirement Money Purchase Plan
City of Placentia 401(a) Plan, Plan Number 100417
Section V. Covered Employee Classifications:
City Clerk:
ROBERT S. MCKINNELL
City Treasurer
KEVIN A. LARSON
Acting City Administrator
ROSANNA RAMIREZ
1. The following group or groups of Employees are eligible to participate in the plan:
Tier I: (Note: Tier 1 is closed to any new entrants)
i. Police Services Officer
Tier II:
ii. Closed to new participants
iii. Any employee participating in Tier II as of 12/31/23 is "grandfathered".
Tier III:
ii. Miscellaneous Executive Director Employees
Section VI. Contribution Provisions
A. Fixed Employer Contributions.
Tier I:
i. Police Services Officer — 7% of base compensation
Tier II:
ii. Not applicable. All Tier II employees have separated from service Tier III:
iii. 4.00% of base compensation
Name: Rosanna Ramirez
Signature
Title: Acting City Administrator
Date
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