Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  16-001322

 

MEETING DATE:

11/08/16

legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

Human Resource Services   (Approved)

Department contact person(s):

Tracy Vonada (714) 834-2081 

 

 

Renee Catanzariti (714) 834-2564

 

 

Subject:  Approve the Amended 1992 Defined Benefit Retirement Plan Document

 

      ceo CONCUR

County Counsel Review

Clerk of the Board

          Concur

Approved Resolution to Form

Consent Calendar

 

 

3 Votes Board Majority

 

 

 

    Budgeted: N/A

Current Year Cost:   N/A

Annual Cost: N/A

 

 

 

    Staffing Impact:

No

# of Positions:           

Sole Source:   N/A

    Current Fiscal Year Revenue: N/A

  Funding Source:      N/A

County Audit in last 3 years: No

 

 

    Prior Board Action:          04/01/2014 #24, 12/13/2005 #20

 

RECOMMENDED ACTION(S):

 

 

1.

Approve the Amended 1992 Defined Benefit Retirement Plan Document.

 

2.

Authorize the Chief Human Resources Officer or designee, as the Plan Administrator to administer the plan on behalf of the County as authorized by the Plan Document and authorize the same to execute any underlying agreements necessary for the proper function of the Plan and make any changes to the Plan as required by a regulatory agency or by law or as necessary to be consistent with the County’s Personnel and Salary Resolution and any other Board directives or resolutions as expressed by the Board. 

 

 

 

 

SUMMARY:

 

Approve Amended 1992 Defined Benefit Retirement Plan Document to provide administrative clarification regarding the benefit interest rate and provide for the continued administration of the 1992 Defined Benefit Retirement Plan.

 

 

 

 

 

BACKGROUND INFORMATION:

 

The 1992 Defined Benefit Retirement Plan for Extra-Help employees was established to meet the requirements of the Omnibus Budget Reconciliation Action of 1990 and Internal Revenue Code 3121(b)(7)(F).  The plan was closed to new participants in 2002 and frozen for participation, benefit accrual and credited service in 2008.   The County adopted the County of Orange Extra Help 3121 Employee Deferred Compensation Plan (the “New Plan”) as a replacement plan for the 1992 Defined Benefit Retirement Plan. 

 

Human Resource Services requests that your honorable Board approve the amendment of the 1992 Defined Benefit Retirement Plan Document to clarify the Plan Year to be the fiscal year beginning on July 1 and ending on June 30 and that the “applicable interest rate” is equal to the annual interest rate on 30-year Treasury securities.  Benefits under the 1992 Defined Benefit Retirement Plan have been calculated with the Plan Year being based on the fiscal year beginning on July 1 and ending on June 30.  To be consistent with the administration of the 1992 Defined Benefit Retirement Plan, Mercer Investment, the County’s consultant, and County Counsel have advised the 1992 Defined Benefit Retirement Plan Document should be clarified to reflect that the Plan Year is the same as the fiscal year.  The “applicable interest rate” that is used for purposes of determining actuarial equivalence of the benefit under the 1992 Defined Benefit Retirement Plan is clarified to state that this rate is based on the annual interest rate for 30-year Treasury securities (as specified by the Commissioner of Internal Revenue in revenue rulings, notices or other guidance published in the Internal Revenue Bulletin) for the month of November that immediately precedes each July 1st.

 

 

Prior Board Action:

 

On December 13, 2005, your honorable Board approved the Second Amendment to the County of Orange 1992 Defined Benefit Retirement Plan to continue the winding-down of the Plan by freezing further benefit accrual and changing the normal form of benefit payment under the Plan to a lump sum.  Additionally, the Second Amendment made certain changes as required by applicable regulations under the Internal Revenue Code including an updated definition of actuarial equivalent and rollover provisions.

 

On April 1, 2014, your honorable Board approved the amended 1992 Defined Benefit Retirement Plan Document to incorporate prior amendments approved by your Board and bring the Plan into compliance with the Pension Protection Act of 2006, IRS Section 415 Compensation, and the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act) that provides tax and pension benefits to Service members who are disabled while on active duty for more than 30 days and to their Survivors if they die on active duty.

 

 

 

FINANCIAL IMPACT:

 

N/A

 

STAFFING IMPACT:

 

N/A

 

 

 

ATTACHMENT(S):

 

Attachment A – Amended 1992 Plan Document
Attachment B – Redline Amended 1992 Plan Document