May 13, 2005
(For Board: May 27, 2005)

REPORT OF THE RULES, POLICY AND INDUSTRIAL
RELATIONS COMMITTEE/COMMITTEE OF THE WHOLE

Honorable Board of Directors
Golden Gate Bridge, Highway
  and Transportation District

Honorable Members:

A meeting of the Rules, Policy and Industrial Relations Committee/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Friday, May 13, 2005, at 9:50 a.m., Acting Chair Pahre presiding.

Committee Members Present (5): Acting Chair Pahre; Directors Brown, Eddie, Hernández and Martini
Acting Chair Pahre appointed Directors Brown and Eddie Committee Members Pro Tem for this meeting only.
Committee Members Absent (4): Chair Harrison; Vice Chair Murray; Director McGoldrick; President Middlebrook (Ex Officio)
Other Directors Present (5): Directors Ammiano, Cochran, Kerns, Moylan and Stroeh

Committee of the Whole Members Present (10): Directors Ammiano, Brown, Cochran, Eddie, Hernández, Kerns, Martini, Moylan, Pahre and Stroeh
Committee of the Whole Members Absent (9): Directors Dufty, McGoldrick, Murray, Reilly, Sandoval, Shahum; Second Vice President Boro; First Vice President Harrison; President Middlebrook

Staff Present: General Manager Celia G. Kupersmith; District Engineer Denis J. Mulligan; Auditor-Controller Joseph M. Wire; Attorney Madeline Chun; Deputy General Manager/Bus Division Susan C. Chiaroni; Deputy General Manager/Ferry Division James P. Swindler; Deputy General Manager/Administration and Development Teri W. Mantony; Human Resources Director Larry Daniel; Public Affairs Director Mary C. Currie; Assistant Clerk of the Board Karen B. Engbretson; Assistant Clerk of the Board Patsy Whala

Visitors Present:  Former Director Stanley M. Smith

  1. Authorize Filing a Resolution with California Public Employees’ Retirement System (CalPERS) to Amend the Pension Plan to Allow District Employees to Purchase Service Credit on a Pretax Basis

 
In a memorandum to the Committee, Deputy General Manager/Administration and Development Teri W. Mantony and General Manager Celia Kupersmith reported on staff’s recommendation to authorize filing a resolution with California Public Employees’ Retirement System (CalPERS), that will amend the pension plan in which most District employees participate, to allow a participant to “buy” various types of service credit to enhance their retirement pension.  The types of service credit include, but are not limited to, prior service credit, military service credit, additional retirement service credit (new airtime option) and re-deposits of previously withdrawn member contributions.  This enhancement would also allow an employee to make contributions for time missed during a long, unpaid absence from work due to an industrial injury or long-term illness.  Presently, these purchases can be done through payroll, but the employee does not have the advantage of purchasing these service credits on a pretax basis. 

The report further stated that, in accordance with Section 414(h)(2) of the Internal Revenue Code (IRC), an employer may “pick up” member pension contributions and consider them employer contributions for tax reporting purposes, even though the contribution is funded by a deduction from the employee’s salary/wages.  This Code Section allows the employee to defer the income tax liability on the portion of salary/wages utilized for pension contributions until the pension benefit is distributed to the employee during retirement.  Filing the resolution with CalPERS to extend IRC Section 414(h)(2) to employee service credit purchases, would enable the District to allow employees purchase member service credit on a tax-deferred basis. 

The report also stated that service credit purchases are an elective benefit that is paid for at the employee’s own expense.  The cost of offering this option would not increase costs to the District; however, in accordance with the 2004 Union Coalition contract settlement, the District does pay a portion of an employee’s expenses for service credit purchased due to an industrial injury.  A copy of the report, including the attachment, is available in the Office of the District Secretary.

(With the arrival of Director Ammiano, the Committee became a Committee of the Whole)

Staff recommended, and the Committee concurred by motion made and seconded by Directors EDDIE/BROWN to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Rules, Policy and Industrial Relations Committee recommends that the Board of Directors authorize filing a resolution with the California Public Employees’ Retirement System (CalPERS) to allow District employees enrolled in the CalPERS pension plan to purchase service credit, to include, but not be limited to, prior service credit, military service credit, additional retirement service credit (new airtime option), re-deposits of previously withdrawn member contributions, time missed during a long, unpaid absence from work due to an industrial injury or long-term illness, and redeposit monies in the plan on a pretax basis through payroll deductions.            Action by the Board – Resolution

NON-CONSENT CALENDAR

AYES (10):        Directors Ammiano, Brown, Cochran, Eddie, Hernández, Kerns, Martini, Moylan, Pahre and Stroeh
NOES (0):          None 

[The above recommendation was forwarded to the Board of Directors meeting of May 13, 2005, for action.]

2.         Public Comment

There was no public comment.

3.         Adjournment

All business having been concluded, the meeting was declared adjourned at 9:55 a.m.

Respectfully submitted,       

 

Barbara L. Pahre, Acting Chair
                                                            Rules, Policy and Industrial Relations Committee

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