At its regular meeting on April 9, the Cypress City Council voted 4-1 in favor of accepting language proposed by Public Agency Retirement Services (PARS) for a supplemental retirement plan (SRP) to implement an early retirement program.
The lone nay vote was cast by Councilman Phil Luebben, who did not explain his reason.
The resolution was deemed necessary by City Attorney William Wynder because the language proposed by PARS replaces standard language that the City of Cypress includes in most City agreements.
Council members argued over why PARS would be unwilling to accept the standard language. However, City Attorney Wynder conveyed that he did not deem the difference in language worth blocking the City moving forward with PARS on the SRP.
According to a staff report:
The early retirement incentive offered by the SRP offers the City an opportunity to address the fiscal challenges created by the loss of Redevelopment, economic conditions and CalPERS projected increases.
CalPERS is the California Public Employees’ Retirement System. For the five-year period ending December 31, 2011, CalPERS investments earned a return of 0.4%. The retirement fund does not have enough money to meet its projected future pension obligations. Its board recently voted to require participant agencies, such as the State of California and local municipalities, to contribute more to the system in order to shore up its finances.
To be eligible for the PARS plan, a Cypress City employee must:
- be at least fifty years old as of June 30, 2012;
- be eligible to retire from CalPERS with at least five years of City service as of June 30, 2012;
- retire from CalPERS on or before July 1, 2012.
The incentive will be 7% of final pay. A number of different ways to receive the benefit will be available to choose from.
A total of 33 current City employees are eligible. PARS estimates that nine may take advantage of the incentive. If all nine of those positions remain empty for five years, PARS projects savings to the City of $3.1 million.
File photo by C.E.H. Wiedel of Cypress Civic Center.
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