RANCHO CALIFORNIA WATER DISTRICT Employee Policy & Procedure Manual

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1 1.0 POLICY The District has contracted with the California Public Employees Retirement System (CalPERS) in order to provide employees with retirement and other benefits. The District s retirement program is governed by CalPERS law and may change from time to time to comply with this law. Information regarding CalPERS is contained in the District resolution(s) providing participation. Each eligible employee will receive a brochure on Member Benefits in his or her new hire orientation package. Bulletins are issued by CalPERS, and posted periodically. Statements are received by employees annually from CalPERS. Contributions made by the District and/or the employee, together with interest earned from investments, provide for death, disability, and service retirement benefits..0 ELIGIBILITY All eligible employees participate in CalPERS upon hire. Part-time employees who are scheduled to work 0 hours per week or more, and where the appointment is for one (1) year or longer, participate in CalPERS upon hire (see policy #7, section 5.3, Hiring & Termination for definitions of full-time and part-time employees). Employees not meeting the above criteria, such as student interns, temporary or seasonal employees who work six (6) months or less, will have contributions made by the District into the non-regular employee deferred compensation program at percentages required under state and federal law. Exclusion from CalPERS eligibility includes: a. Special contract exclusions. b. Employees who work less than half-time. c. Employees who work half-time or more, but who will work six (6) months or less. d. Temporary or seasonal full-time employees who will work six (6) months or less. 3.0 CONTRIBUTIONS FOR CALPERS CLASSIC MEMBERS 3.1 Classic Member defined as all existing CalPERS members as of December 31, 01, will retain the existing benefit levels for future service with the same employer. Because the new member determination is made on an appointment-by-appointment basis, classic members will be tested against the new member definition upon each new appointment and, in some cases, may become new members for services under a new appointment. 3. CalPERS requires both an employer and employee contribution. This calculation is identified as a percentage of salary. The District s (employer s) contribution rate is adjusted each July 1 st for the new fiscal year based on actuarial calculations prepared by CalPERS which take into account projected pension liability, current and projected CalPERS investment performance, and other factors. 3.3 The employee total contribution rate to CalPERS is currently a percentage of the Page 1 of 5

2 employee s gross salary and bonus, exclusive of overtime as negotiated by the PERS contract 55 formula) plus.936% for the cost share of enhanced contract amendment. The actual percentage contributed by employees toward either the employer and/or member contribution is subject to the meet and confer negotiation process. Refer to the current Memorandum of Understanding (MOU) for the appropriate bargaining unit to determine the current contribution by employees and the District toward the employer and/or employee (member) contribution. 3.4 The District also reports the value of any Employer Paid Member Contribution (EPMC) (currently 8%) as special compensation to CalPERS. Therefore, the ending salary for determination of retirement pay will include the amount of EPMC reported as special compensation in the 1 month period selected for determining the retirement benefit. 3.5 Overtime is not subject to CalPERS, as is the case with additional vacation or sick pay. Additional vacation and sick pay is that amount above the regular 80 hours of pay received during a normal two () week pay period. 3.6 CalPERS requires that eight percent (8%) of the rental fee paid to provide uniforms to those employees requiring uniforms, be considered an employee contribution. This employee contribution for uniforms is paid in full by the District on behalf of the employee. 3.7 The District also provides additional CalPERS benefits, such as the 59 survivor benefit, COLA, and other contract options. For the current District CalPERS contract options, please see the Human Resources Department. 3.8 The District contributions made on behalf of the employee to CalPERS are applied to retirement only. These contributions are not readily available for personal use while an employee is working at the District (see section 8.0 of this policy for withdrawal options on separation of employment). In addition, any employee contributions made toward the Employer contribution are not available for personal use while an employee is working at the District. 3.9 Employees must meet the current retirement criteria of age 50 and five (5) years of service as defined by CalPERS law in order to receive any portion of the Employer contribution (see section 8.0 of this policy). 4.0 CONTRIBUTIONS FOR CALPERS NEW MEMBERS 4.1 New Member defined as: 1. A new hire who is brought into CalPERS membership for the first time on or after January 1, 013, and who has no prior membership in any California Public Retirement System as defined in applicable law.. A new hire who is brought into CalPERS membership for the first time on or after January 1, 013, and who was a member with another California Public Retirement System prior to January 1, 013, and is not eligible for reciprocity. Page of 5

3 3. A member who was a member of a California Public Retirement System prior to January 1, 013, and who is rehired by a different CalPERS employer after a break in service of greater than six months. 4. CalPERS requires both an employer and employee contribution. This calculation is identified as a percentage of salary. The District s (employer s) contribution rate is adjusted each July 1 st for the new fiscal year based on actuarial calculations prepared by CalPERS which take into account projected pension liability, current and projected CalPERS investment performance, and other factors. 4.3 The employee total contribution rate to CalPERS is currently a percentage of the employee s gross salary and bonus, exclusive of overtime.as negotiated by the PERS contract 6formula). The actual percentage contributed by employees toward either the employer and/or member contribution is subject to the meet and confer negotiation process. Refer to the current Memorandum of Understanding (MOU) for the appropriate bargaining unit to determine the current contribution by employees and the District toward the employer and/or employee (member) contribution. 4.4 Overtime is not subject to CalPERS, as is the case with additional vacation or sick pay. Additional vacation and sick pay is that amount above the regular 80 hours of pay received during a normal two () week pay period. 4.5 CalPERS requires that eight percent (8%) of the rental fee paid to provide uniforms to those employees requiring uniforms, be considered an employee contribution. This employee contribution for uniforms is paid in full by the District on behalf of the employee. 4.6 The District also provides additional CalPERS benefits, such as the survivor benefit, COLA, and other contract options. For the current District CalPERS contract options, please see the Human Resources Department. 4.7 The District contributions made on behalf of the employee to CalPERS are applied to retirement only. These contributions are not readily available for personal use while an employee is working at the District (see section 8.0 of this policy for withdrawal options on separation of employment). In addition, any employee contributions made toward the Employer contribution are not available for personal use while an employee is working at the District. 4.8 Employees must meet the current retirement criteria of age 5 and five (5) years of service as defined by CalPERS law in order to receive any portion of the Employer contribution (see section 8.0 of this policy). 5.0 SERVICE RETIREMENT The earliest retirement age with CalPERS is 50. An employee is eligible to retire from the District and collect CalPERS retirement income any time after age 50 for Classic Members and 5 for New Members, providing the employee meets the minimum Page 3 of 5

4 requirement of having five (5) years of service to vest in CalPERS. Classic Member Formula: Retirement monthly income is determined by age at retirement, years of credited service, and the 1 highest paid consecutive months of compensation. The basic benefit will be.7% of final compensation for each year of credited service upon retirement at age 55. If retirement is earlier than age 55, the percentage of final compensation for each year of service is decreased. The current negotiated final compensation for Classic Members in both bargaining units is based on the highest 1 months of compensation including EPMC as described in section 3.3 above. Employees are encouraged to attend CalPERS retirement planning meetings or schedule a personal appointment with the local CalPERS office to obtain personalized retirement planning advice. Early retirement options are available on the CalPERS website, New Member Formula: Retirement monthly income is determined by age at retirement, years of credited service, and the final three (3) years of compensation. The basic benefit will be % of final compensation for each year of credited service upon retirement at age 6. If retirement is earlier than age 6, the percentage of final compensation for each year of service is decreased. The current negotiated final compensation for New Members in both bargaining units is based on the final three (3) years of compensation. Employees are encouraged to attend CalPERS retirement planning meetings or schedule a personal appointment with the local CalPERS office to obtain personalized retirement planning advice. Early retirement options are available on the CalPERS website, DISABILITY RETIREMENT 6.1 Definition Disability retirement consists of a monthly retirement allowance paid to the member for life or until recovery from the disabling injury or illness. The member must be substantially incapacitated from the performance of his or her duties. This substantial incapacity must be due to a medical condition of permanent or extended and uncertain duration, based on a competent medical opinion. 6. Eligibility Members with five (5) years of CalPERS credited service are eligible to apply for disability retirement. There is no minimum age requirement. See the CalPERS website, for formulas. 7.0 DEATH BENEFITS 7.1 Death Prior To Retirement a. Basic Death Benefit -this benefit is a refund of the member s accumulated employee contributions, plus six (6) month s salary, provided he or she has been a member of Page 4 of 5

5 CalPERS for six (6) years or more. For those who die before completing six (6) years of membership, the benefit is one (1) month s salary for each year of membership, plus refund of employee contributions. The salary referred to is that earned during the year preceding death. Prior service does not count toward this benefit. Please refer to 153 of the California Public Employees Retirement Law. b. 57 Survivor Benefit -employees with five (5) or more years of service who have reached the minimum age for service retirement have further death protection under the 57 Survivor Benefit. Under this benefit, the surviving spouse can elect to receive either the basic death benefit or a monthly income equal to one-half (½) the unmodified retirement allowance the employee was eligible for on the date of his or her death. Upon death or remarriage of the spouse, the benefit will continue to be paid to natural or adopted unmarried children under the age of 18. Please refer to 1546 of the California Public Employees Retirement Law. c. 59 Survivor Benefit -the District has contracted with CalPERS to provide Benefit Level, in addition to the 57 Survivor Benefit. This benefit is only available to members not covered under Social Security. The monthly allowance is available to eligible survivors of members covered by this benefit program who died before retirement. For the specific benefit amount, contact CalPERS or Human Resources. 7. Death After Retirement There is a death benefit of $500 for the survivor if death occurs after retirement in addition to any payments, which might be made under an optional retirement benefit chosen by the member at his or her retirement. For the specific benefit amount, contact CalPERS or Human Resources. 8.0 TERMINATION OF EMPLOYMENT 8.1 Upon termination of employment, an employee with five (5) or more years of service may: a. Leave his or her employee contributions with CalPERS and elect to receive the retirement benefit he or she has earned upon attaining retirement age; or b. He or she may withdraw his or her employee contributions (plus interest), thus terminating his or her membership in the CalPERS System and receiving no retirement benefits upon attaining retirement age. Employees who are working for another CalPERS agency may be restricted from withdrawing the employee contributions. 8. Upon termination of employment, an employee with less than five (5) years of service credit may have the employee contributions refunded or leave them on deposit, but will not receive any retirement benefits in the future unless they are employed by another CalPERS agency and become vested. Page 5 of 5