Memorandum of Understanding with Unit 12 - Dpa - State of California

B. The legislative language would allow an employee in the Second Tier to exercise the Tier1 right of election at any time after the effective date of this legislation. An employee whomakes this election would then be eligible to purchase past Second Tier service. Theparties will work with 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 (12 years) or up to 180 months (15 years), and allowingemployees to purchase partial amounts of 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 within 180 daysof the date of 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 ofcontributions they would have paid had they been First Tier members during the period ofservice 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 State (parties) agree new age benefit factors on which serviceretirement benefits are based for employees of this unit who are safety members of thePublic Employees’ Retirement System (CalPERS). The parties further agree that theprovisions of this article will be effective only upon the CalPERS board adopting aResolution that will employ, for the June 30, 1998 valuation and thereafter, 95% of themarket value of the CalPERS’ assets as the actuarial value of 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 of these benefits or unfavorable returns on investments results in anincreased employer contribution by the State.B. The age benefit factor at age 55 for members of this Union will be 2.5% of compensationfor each year of service. These improved benefit factors will apply to employees who retiredirectly from State 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 of contribution for Safety members who are subject to thenew 2.5% @ 55 formula shall be no greater than 8% of monthly compensation in excess of$238, effective on and after July 1, 2001.D. The new retirement formula for safety members is depicted on the following chart:71BU 12(99-01)