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Agenda Item
ASR
Control 10-000718 |
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MEETING DATE: |
05/18/10 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
All Districts |
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SUBMITTING
Agency/Department: |
County Executive Office (Approved) |
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Department contact
person(s): |
Robert J. Franz (714) 834-4304 |
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Mitch Tevlin (714) 834-6748 |
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Subject:
Report On OCERS - Pensionable
Pay Items
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ceo Concur |
County
Counsel Review |
Clerk of the Board |
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Concur |
N/A |
Discussion |
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3 Votes Board Majority |
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Budgeted: No |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: N/A |
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Funding Source: N/A |
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Prior Board Action: N/A
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RECOMMENDED ACTION(S):
Receive and file OCERS "County Pension Status - Pensionable Pay Items" presentation by OCERS, CEO Steve Delaney.
SUMMARY:
The Orange County Employees Retirement System (OCERS) has reported that since 2001, due to a programming error built into their present "Pension Gold" financial information system, the data reported to OCERS actuary did not include the entire member salary paid to active members.
Specifically, while properly reporting active members base salary amounts to the actuary for future pension benefit projections, certain premium pay components to that salary were inadvertently excluded.
BACKGROUND INFORMATION:
Each year the Orange County Employees Retirement System (OCERS) uses the services of a professional actuary to estimate the ongoing cost of its pension plan by valuing both plan assets and liabilities. Such estimates allow OCERS to continually monitor the status of the plan and make corrections and modifications where necessary to ensure actual experience and future assumptions remain closely related.
While undertaking plan data diagnostics in preparation for the December 31, 2009 experience valuation, OCERS encountered a data anomaly related to pensionable salary. Pensionable salaries for employees with other premium pay elements were being under reported. A partial list of the omitted salary components is presented below:
Bilingual Premium Pay
Motorcycle Pay
Emergency Dispatch Pay
Field Training Officer Pay
Shift Differential Pay
Confined Space Pay
Uniform Allowance
FINANCIAL IMPACT:
Using Segal's December 31, 2008 valuation for comparison purposes, the Actuarial Accrued Liability would have increased by $228 million for all of OCERS plan sponsors if all of the pensionable pay items had been included in the valuation. At the time this staff report was written, specific County of Orange financial impacts had not yet been identified. County staff estimate the annual cost increase to range between $6 million and $7 million begining July 1, 2011.
STAFFING IMPACT:
N/A
EXHIBIT(S):
1. OCERS Letter
2. Segals Letter