HomeMy WebLinkAbout05.c. Receive update of Contra Costa County Employees' Retirement Association (CCCERA) refund of applicable employee contributions made by Legacy status employees Page 1 of 2
Item 5.c.
CENTRAL SAN
May 3, 2022
TO: ADMINISTRATION COMMITTEE
FROM: TEJI O'MALLEY, HUMAN RESOURCES AND ORGANIZATIONAL
DEVELOPMENT MANAGER
REVIEWED BY: ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: RECEIVE UPDATE OF CONTRA COSTA COUNTY EMPLOYEES'
RETIREMENTASSOCIATION (CCCERA) REFUND OF APPLICABLE
EMPLOYEE CONTRIBUTIONS MADE BY LEGACY STATUS EMPLOYEES
In 2012, the State of California passed the Public Employees' Pension Reform Act (PEPRA)which
significantly changed the level of pension benefits for employees that were hired after 2013 and who did
not have reciprocal service with another agency pre-2013.
Simultaneously, the state also passed a trailer bill, AB 197, that changed the definition of pensionable
compensation for employees hired pre-2013 or with reciprocal service hired post 2013, often referred to
as "Legacy" employees. The changes that AB 197 implemented have been litigated for several years, and
in July of 2020, the California Supreme Court issued a unanimous decision upholding the changes set
forth in AB 197 which impacted how contribution rates are calculated.
I n December of every year, Contra Costa County Employees' Retirement Association (CCCERA)
conducts an actuarial valuation to determine the contribution rates for employees and employers and those
rates are implemented by all CCCERA employers 18 months after the adoption of the valuation by the
CCCERA Board of Trustees. The rates are calculated based on several factors such as:
• Statute
• Benefit Level
• Demographic Assumptions (age, gender, mortality, etc.)
• Economic Assumptions (investment return, projected payroll, inflation rate, etc.)
• Actual Experience (actual performance against assumptions, investment gains and losses, etc.)
Once the contribution rates have been determined, the District applies and collects the contributions on
any compensation items that have been determined to be pensionable by CCCERA and remits the
payment to CCCERA.
With the passage of AB 197 and now the Supreme Court Decision, certain elements of compensation are
no longer pensionable and should not have been included in the calculations. The fact that some of these
changes were implemented retroactively, now require a refund of the contributions.
Both terminal pay and stand-by pay have now been determined to be non-pensionable. Terminal pay items
included any payments made to the employee at the time of retirement and those contributions were made
May 3, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 147 of 150
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through June 30, 2015.Any contribution rates calculated and collected after June 30, 2015, were not
inclusive of any terminal pay items. Stand-by pay was also included in the calculation of the contributions
up through March 31, 2021.
The principal amount owed to current and former District employees in the aggregate, for terminal pay is
$89,677 and stand-by pay is $141,203. CCCERA is currently calculating the refunds owed to each
employee along with any interest owed and will be issuing these refunds directly to employees in the
summer of 2022.
Staff will be available to answer questions or provide clarification during the meeting.
Strategic Plan Tie-In
GOAL THREE:Fiscal Responsibility
Strategy 2—Ensure integrity and transparency in financial management
May 3, 2022 Regular ADMIN Committee Meeting Agenda Packet- Page 148 of 150