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OCII approves resolution of intention to amend CalPERS contract to reflect additional employee contribution
Summary
The commission approved a resolution of intention to begin the process to amend its CalPERS contract so a third employee cost-sharing contribution (1.25% effective July 2016) is treated as pretax and properly incorporated; staff said the action is an administrative step and does not affect retiree pensions or benefits.
The Commission on Community Investment and Infrastructure on June 5 approved a resolution of intention to amend its contract with the California Public Employees’ Retirement System (CalPERS) to incorporate a previously agreed employee contribution and to confirm pretax treatment.
OCII staff said the action is the first administrative step toward amending the CalPERS contract to reflect a third employee cost-share tier: a 1.25% contribution that went into effect in July 2016. Monica (OCII staff) explained the agency previously negotiated two incremental employee contributions in 2015 and treated employee contributions on a pretax basis pursuant to memoranda of agreement (MOAs) with unions. The current CalPERS contract did not incorporate the third contribution, in part because of administrative burdens in processing a new contract. The resolution of intention starts the formal amendment process, followed by an election for affected employees and a final resolution to the commission.
Staff emphasized that this action does not change retiree pensions or retiree health benefits and is not retroactive on the CalPERS contract side; OCII has been treating the employee contributions as pretax under MOAs while completing contract amendments. Monica also said employees who request a refund will receive funds associated with the third contribution if the contract amendment proceeds.
Oscar James, a public commenter and former redevelopment employee, urged the commission to ensure employees retain strong retiree health benefits and encouraged staff to preserve or improve benefit quality.
Commissioners questioned whether retiree benefits or other departments are affected and whether the change is administrative; staff confirmed the action is administrative and that the whole staff will vote on the election required for the change to be implemented. Commissioner Rosales moved the resolution of intention and Commissioner Singh seconded; roll call vote was 3 ayes, 1 absent and the motion carried.
The commission’s approval authorized staff to proceed with the election and subsequent steps to finalize a CalPERS contract amendment reflecting the additional 1.25% employee contribution and its pretax treatment.
