Memorandum of Understanding with Unit 12 - Dpa - State of California
Memorandum of Understanding with Unit 12 - Dpa - State of California
Memorandum of Understanding with Unit 12 - Dpa - State of California
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B. The legislative language would allow an employee in the Second Tier to exercise the Tier1 right <strong>of</strong> election at any time after the effective date <strong>of</strong> this legislation. An employee whomakes this election would then be eligible to purchase past Second Tier service. Theparties will work <strong>with</strong> CalPERS to establish more flexible purchase provisions foremployees. These include, but are not limited to, increasing the installment period from 96months (8 years) to 144 months (<strong>12</strong> years) or up to 180 months (15 years), and allowingemployees to purchase partial amounts <strong>of</strong> service.C. New employees who meet the criteria for CalPERS membership would be enrolled in theFirst Tier plan and have the right to be covered under the Second Tier plan <strong>with</strong>in 180 days<strong>of</strong> the date <strong>of</strong> their appointment. If a new employee does not make an election for SecondTier coverage during this period, he or she would remain in the First Tier plan.D. Employees who purchase their past service would be required to pay the amount <strong>of</strong>contributions they would have paid had they been First Tier members during the period <strong>of</strong>service that they are purchasing. As required by CalPERS law, the amount will then includeinterest at 6 percent, annually compounded.11.3 Retirement Formula for Safety MembersA. The Union and the <strong>State</strong> (parties) agree new age benefit factors on which serviceretirement benefits are based for employees <strong>of</strong> this unit who are safety members <strong>of</strong> thePublic Employees’ Retirement System (CalPERS). The parties further agree that theprovisions <strong>of</strong> this article will be effective only upon the CalPERS board adopting aResolution that will employ, for the June 30, 1998 valuation and thereafter, 95% <strong>of</strong> themarket value <strong>of</strong> the CalPERS’ assets as the actuarial value <strong>of</strong> the assets, and to amortizethe June 30 excess assets over a 20 year period, beginning July 1, 1999. The partiesagree to jointly request the CalPERS board to extend the 20 year amortization period in theevent the cost <strong>of</strong> these benefits or unfavorable returns on investments results in anincreased employer contribution by the <strong>State</strong>.B. The age benefit factor at age 55 for members <strong>of</strong> this Union will be 2.5% <strong>of</strong> compensationfor each year <strong>of</strong> service. These improved benefit factors will apply to employees who retiredirectly from <strong>State</strong> service on and after January 1, 2000, and for service rendered as aSafety member prior to and after that date.C. The Union agrees that the rate <strong>of</strong> contribution for Safety members who are subject to thenew 2.5% @ 55 formula shall be no greater than 8% <strong>of</strong> monthly compensation in excess <strong>of</strong>$238, effective on and after July 1, 2001.D. The new retirement formula for safety members is depicted on the following chart:71BU <strong>12</strong>(99-01)