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Committee advances ordinance updating rules for purchasing prior public service credit
Summary
The committee sent an ordinance to the full Board updating administrative-code rules that let city employees purchase prior public service credit; the ordinance includes new provisions for transfers from deferred-tax accounts and relies on actuarial normal-cost calculations.
An ordinance to amend the administrative code sections governing purchase of prior public service credit was presented to the Government Audit & Oversight Committee on Monday by Claire Murphy, executive director of the San Francisco Employees' Retirement System (SFERS). The changes would modernize long-unused purchase provisions, allow transfers of deferred-tax qualified funds (such as IRAs) to buy covered service credit, and accommodate changes in CalPERS practice and recent federal tax-law adjustments.
Murphy explained the charter directs the retirement system’s consulting actuary to set a ‘normal cost’ for a year of service; that cost, expressed as a percentage of payroll, determines the member charge for purchased time and will be published annually. Murphy said the current normal-cost figure is just under 16 percent of pay and that the retirement board’s process will publish the required charge each year in advance of July 1 adjustments.
Deborah Newman of the Budget Analyst's Office told supervisors the charter requires three-fourths Board approval for this ordinance, said there are no direct city costs, and recommended approval. Supervisor Sophie Maxwell asked for a provision ensuring periodic legislative review; Murphy agreed to add the item to the retirement board’s policies for review within five years.
The committee voted to forward the ordinance to the full Board with a recommendation (motion by Supervisor Maxwell). The item will return to the Board for the required three-fourths approval.
