TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Aram Kouyoumdjian
SUBJECT: See Below DATE: August 19, 2026
Approved
Date:
8/19/26
COUNCIL DISTRICT: Citywide
SUBJECT: Amendment to the Contract with the California Public Employees’ Retirement System (CalPERS) to Allow Employees in the Deputy Chief Investment Officer Classification in the Office of Retirement Services to Enroll in CalPERS Retirement Benefits
RECOMMENDATION
Approve an ordinance to amend the City of San José’s contract with the California Public Employees’ Retirement System (CalPERS) to allow employees hired into the Deputy Chief Investment Officer classification in the Office of Retirement Services on or after the effective date of the amendment to enroll in the CalPERS defined benefit pension plan with an anticipated effective date of October 25, 2026.
SUMMARY AND OUTCOME
This action amends the City’s contract with CalPERS to allow employees hired into the Deputy Chief Investment Officer classification in the Office of Retirement Services (ORS) to enroll in the CalPERS defined benefit pension plan.
BACKGROUND
On November 4, 2014, Measure G was passed by the voters of San José. Measure G excluded the Chief Executive Officer, the Chief Investment Officer, and investment professional staff in ORS from being members of the City’s defined benefit pension or retiree healthcare plans under City Charter Section 1101(a)(12). However, this exclusion did not apply to any incumbents filling those positions as of November 4, 2014.
COUNCIL AGENDA: 9/1/26
FILE: 26-893
ITEM: 3.3
HONORABLE MAYOR AND CITY COUNCIL
August 19, 2026
Subject: Amendment to the Contract with the California Public Employees’ Retirement System (CalPERS) to Allow Employees in the Deputy Chief Investment Officer Classification in the Office of Retirement Services to Enroll in CalPERS Retirement Benefits
Accordingly, investment staff hired after the implementation of Measure G had been mandatorily placed into the City’s defined contribution plan (Tier 3) until 2019, when City Council approved mandating incumbent and future eligible ORS investment staff to enroll in CalPERS benefits. Incumbents in those investment staff classifications were required to join CalPERS and were no longer eligible to participate in the Tier 3 plan.
The process of amending the City’s contract with CalPERS was completed in 2020, and at that time all impacted employees were enrolled in CalPERS.
In 2025, ORS and the Human Resources Department created a new Deputy Chief Investment Officer classification within the investment group of ORS, and ORS has begun recruiting for this position. There is currently no employee in the new Deputy Chief Investment Officer classification. During the August 11, 2026 City Council meeting, the City Council approved a Resolution of Intention to Amend the CalPERS contract. CalPERS required this resolution to begin the process of amending the contract to allow employees in the Deputy Chief Investment Officer classification in ORS to be eligible to enroll in the CalPERS defined benefit pension plan, and adoption of this action is the next step in that process.
ANALYSIS
The ordinance sets forth the process for amending the City’s contract with CalPERS, including providing the City Clerk with authorization to execute the Amendment to the Contract. It is anticipated that the proposed amendment will become effective on October 25, 2026. The proposed amendment to the City’s contract with CalPERS would have the effect of allowing employees hired into the Deputy Chief Investment Officer classification in ORS on or after October 25, 2026 to enroll in the CalPERS defined benefit pension plan. As noted above, there is currently no employee in the new Deputy Chief Investment Officer classification.
The current retirement accrual formula for Public Employees’ Pension Reform Act (PEPRA) benefits is the same as the City’s Federated Tier 2, which is 2.0% per year of service with a normal retirement at 62 years of age. The Fiscal Year 2026-2027 Employer PEPRA normal cost contribution rate is 7.93% and the PEPRA Employee rate is 7.75%. These rates are paid on a bi-weekly basis.
EVALUATION AND FOLLOW-UP
If the City Council approves the proposed ordinance for publication, the ordinances will be placed on the City Council agenda for final approval on September 15, 2026 and should become effective on October 25, 2026.
HONORABLE MAYOR AND CITY COUNCIL
August 19, 2026
Subject: Amendment to the Contract with the California Public Employees’ Retirement System (CalPERS) to Allow Employees in the Deputy Chief Investment Officer Classification in the Office of Retirement Services to Enroll in CalPERS Retirement Benefits
COORDINATION
This memorandum was coordinated with the City Attorney’s Office.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the September 1, 2026 City Council meeting.
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No board, commission, or committee recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
Aram Kouyoumdjian
Director of Human Resources and City
Manager’s Office of Employee Relations
For questions, please contact Bill Gold, Assistant to the City Manager, City Manager’s Office of Employee Relations, at (408) 535-8150.