HomeMy WebLinkAbout08.a.2) re Term. Calculation from CCCERACentral Contra Costa Sanitary District g
' BOARD OF DIRECTORS
POSITION PAPER
Board Meeting Date: December 2, 2010
Subject: CONSIDER DIRECTING STAFF TO REQUEST TERMINATION
CALCULATION FROM CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT
ASSOCIATION
Submitted By: Initiating Dept✓Div.:
Randy Musgraves, Administrative
Director of Administration
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
Mu raves,
Dir ctor of
Administration
tM. Kelly,
G eneral Manager
ISSUE The Board of Directors has requested information regarding terminating the
District's participation with the Contra Costa County Employees' Retirement Association
(CCCERA). A termination calculation of the District's initial terminal funding obligation
is a necessary step in determining if termination is in the District's best interest.
CCCERA requires this calculation be conducted by their actuarial consultant, and the
cost is expected to exceed staff authority.
RECOMMENDATION Provide direction to staff.
FINANCIAL IMPACTS The termination calculation is estimated to cost $50,000 to
$100,000.
ALTERNATIVES /CONSIDERATIONS
calculation at this time.
Do not direct staff to request a termination
BACKGROUND As previously directed by the Board, staff is preparing a white paper
that will describe public retirement plan options to CCCERA. At the November 18, 2010
Board Meeting, staff was requested to provide the Board with the required steps to
terminate the District's participation with the CCCERA. The major steps required for the
District to terminate with CCCERA, according to State law and CCCERA Policy follow;
the first two can be performed concurrently:
• The District must select another public retirement system in order to transfer and
submit member information to them for conduct a financial and benefit analysis.
• Perform a termination calculation of the District's initial terminal funding
obligation. This must be done by CCCERA's actuarial consultant based on
CCCERA's Termination Policy. The District would contract directly with
CCCERA's consultant, and be responsible for the cost of the study.
H:Wdministrative Director's Directory\Position Paper Drafts\2010 \CCCERA Termination Position Paper 12 2 201o.doc
POSITION PAPER
Board Meeting Date: December 2, 2010
subject.: CONSIDER DIRECTING STAFF TO REQUEST TERMINATION
CALCULATION FROM CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT
ASS OCIATION
• A simple majority of the District's officers and employees (active members) must
sign a petition requesting that they be withdrawn from CCCERA.
• The District Board must adopt a Resolution indicating a desire to terminate its
relationship with CCCERA as of a specific date.
• Current retirees stay with CCCERA; employer signs termination agreement with
CCCERA and remains liable for its share of the UAAL to ensure current retirees'
benefits are funded.
The termination calculation is a necessary step in determining if it is in the District's best
interest to change public retirement systems. If the Board directs staff to have a
termination calculation performed, staff will inform CCCERA and bring a contract with
CCCERA's actuarial consultant back for Board approval. The District would pay the
consultant directly for the termination calculation. Also, the District should obtain its
own actuarial consultant to evaluate the work performed by the CCCERA's Actuary.
This is important because the termination calculation will determine the District's assets
and liabilities for District retirees and active employees.
RECOMMENDED BOARD ACTION Provide direction to staff.
HAAdministrative Director's Directory\Position Paper Drafts\2010 \CCCERA Termination Position Paper 12 2 2010.doc