City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: MARCH 1, 2022 FROM: HUMAN RESOURCES WARDS: ALL
SUBJECT: ADOPT A RESOLUTION FOR PAYING AND REPORTING THE VALUE OF EMPLOYER PAID MEMBER CONTRIBUTIONS FOR EMPLOYEES IN THE Service Employees International Union GENERAL UNIT and Service Employees International Union Refuse UNIT ISSUES:
Adopt a Resolution to memorialize the Service Employees International Union General and Service Employees International Union Refuse Units Memoranda of Understanding changes to pension benefits provided through the California Public Employees’ Retirement System related to Employer Paid Member Contributions.
RECOMMENDATIONS:
That the City Council adopt a Resolution for paying and reporting the value of Employer Paid Member Contributions for members of the Service Employees International Union General and Service Employees International Union Refuse Units effective July 3, 2015.
BACKGROUND:
The Memoranda of Understanding (MOU) with the Service Employee International Union (SEIU) General unit covering July 2013 through June 2016 approved by City Council on December 3, 2013, and the SEIU Refuse unit covering July 2014 through June 2016 approved by City Council on November 18, 2014, contained changes to the City’s Employer Paid Member Contributions (EMPC) for the California Public Employees’ Retirement System (CalPERS) Tier 1 employees hired before June 7, 2011. The provision incrementally required the employees to continue paying the employee contribution in 2014 and 2015 which was previously paid by the City. Employees in Tier 1 in the General SEIU unit began paying 2% of the employee contribution in December 2013, an additional 2% in July 2014 and 2% in July 2015. The Refuse Unit Tier 1 employees began paying 4% in November 2014 and an additional 2% in July 2015. Tier 1 employees in both groups continued picking up CalPERS costs in subsequent MOUs for an additional 1% in January 2019 and the final 1% in January 2020, for a total of 8%. Currently, the Resolution for the changes to the EPMC for 2015 are not on file with CalPERS and an adoption of the Resolution is required by CalPERS.
DISCUSSION:
Effective with the first pay period following July 1, 2015, which corresponds with July 3, 2015, SEIU-General and SEIU-Refuse employees in Tier 1 paid an additional 2% of the employee contribution for a total of 6%.
Additionally, approved Resolution 23404 memorialized an additional 1% of the employee contribution effective January 11, 2019 and approved Resolution 23531 memorialized the final 1% of the employee contribution effective January 10, 2020 for a total of 8%. The City no longer pays any of the EPMC for this group.
These pension reform changes were implemented with all other employee groups and memorialized in their respective MOUs or the City’s Fringe Benefit and Salary Resolution in an effort to continue to reduce retirement costs to the City.
STRATEGIC PLAN ALIGNMENT:
This council item contributes to Strategic Priority 5 – High Performing Government and Goal 5.1. – Attract, develop, engage and retain a diverse and highly skilled workforce across the entire City organization and aligns with each of the City’s Strategic Cross-Cutting Threads.
Community Trust – These Resolutions, which require employees to increase their share of EPMC to CalPERS and decrease the City’s contributions, ensures public trust and the long-term financial health to the City and the community.
Equity – Cost sharing of pension costs is a fair and equitable method to distribute the burden of rising pension costs. These measures were extended equally to all other bargaining groups and unrepresented employees.
Fiscal Responsibility – Decreasing EPMC creates an immediate cost reduction for the City using a phased approach reducing the burden from the City.
Innovation – CalPERS cost-sharing is a creative solution to meet the City’s current and changing needs. This change provides the City with an opportunity to save money by requiring employees to share a portion of the employer costs.
Sustainability & Resiliency – Riverside is committed to meeting its obligations required by CalPERS in order to sustain a healthy employee pension and long-standing partnership.
FISCAL IMPACT:
There is no fiscal impact associated with this report. The estimated savings resulting from the SEIU and SEIU Refuse employees contributing the full employer contribution to CalPERS retirement were incorporated into the 2015 fiscal year budget.
Prepared by: Rene Goldman, Human Resources Director
Certified as to
availability of funds: Edward Enriquez, Chief Financial Officer/City Treasurer Approved by: Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachment: CalPERS Resolution effective July 3, 2015.
SEIU & SEIU Refuse CalPERS EPMC ● Page 2