Santa Clara County Grand Jury • 2011-2012 • Agency Response
Response to: City of Monte Sereno

Town of Los Gatos Office of the Town Manager*

Published: September 13, 2012 5 pages
Ver PDF original

Findings and Recommendations 7 findings

F1 Page 2
Public sector employees are eligible for retirement at least 10 years earlier than is common for private sector employees. Los Gatos Response: Agree
Related Recommendations (1)
R1
Page 2
The Cities should adopt pension plans to extend the retirement age beyond current retirement plan ages. Will Not Be Implemented Not Yet But In Future Requires Further Analysis Implemented Los Gatos has implemented for miscellaneous (non- sworn) employees and intends to engage in negotiations for sworn when the current union agreement expires.*
F2 Page 2
Campbell, Gilroy, Los Altos Hills, Los Gatos, Milpitas and Palo Alto have adopted second tier plans that offer reduced Benefits, which help reduce future costs, but further changes are needed to address today's unfunded liability. Santa Clara County and the cities of Cupertino, Los Altos, Monte Sereno, Morgan Hill, Mountain View, San Jose, Santa Clara, Saratoga and Sunnyvale have not adopted second tier plans. Los Gatos Response: Agree
Related Recommendations (3)
R2A
Page 2
Santa Clara County and the cities of Cupertino, Los Altos, Monte Sereno, Morgan Hill, Mountain View, San Jose, Santa Clara, Saratoga and Sunnyvale should work to implement second tier plans. Will Not Be Implemented Requires Further Analysis Not Yet But In Future <b>Implemented</b> Not applicable to Los Gatos. Santa Clara County Grand Jury Report: An Analysis of Pension and Other Post-Employment Benefits Summary of Town of Los Gatos Response August 30, 2012
R2B
Page 3
For Gilroy, Los Gatos, Milpitas and Palo Alto, which have not implemented second tier plans for MISC and Public Safety second tier plans should be implemented for both plans. Will Not Be Implemented Requires Further Analysis Implemented Not Yet But In Future Los Gatos has implemented for miscellaneous (non- sworn) employees and intends to engage in negotiations for sworn when the current union agreement expires.*
R2C
Page 3
All Cities' new tier plans should close the unfunded liability burden they have pushed to future generations. The new tier should include raising the retirement age, increasing employee contributions, and adopting pension plan caps that ensure pensions do not exceed salary at retirement. Will Not Be Implemented Requires Further Analysis Not Yet But In Future Implemented Re Retirement age, see
F3 Page 4
Retroactive Benefit enhancements were enacted by Cities using overly optimistic ROI and actuarial assumptions without adequate funding in place to pay for them. Los Gatos Response: Agree
Related Recommendations (1)
R3
Page 4
The Cities should adopt policies that do not permit Benefit enhancements unless sufficient monies are deposited, such as in an irrevocable trust, concurrent with enacting the enhancement, to prevent an increase in unfunded liability. Will Not Be Implemented Requires Further Analysis Not Yet But In Future Implemented Los Gatos has not implemented this recommendation yet but staff will make this recommendation for Council adoption prior to the end of FY 2012/13.*
F4 Page 4
The Cities are making an overly generous contribution toward the cost of providing Benefits. Los Gatos Response: Agree
Related Recommendations (2)
R4A
Page 4
The Cities should require all employees to pay the maximum employee contribution rate of a given plan. Will Not Be Implemented Requires Further Analysis Not Yet But In Future Implemented Los Gatos has implemented this recommendation.
R4B
Page 4
The Cities should require employees to pay some portion of the Past Service Cost associated with the unfunded liability, in proportion to the Benefits being offered. Will Not Be Implemented Requires Further Analysis Not Yet But In Future Implemented Further analysis is required to understand the impacts. The analysis will be conducted prior to the end of FY 2012/13.* . . . Santa Clara County Grand Jury Report: An Analysis of Pension and Other Post-Employment Benefits Summary of Town of Los Gatos Response August 30, 2012
F5 Page 5
The Cities are not fully funding OPEB benefits as evidenced by large unfunded liabilities and small funded ratios. Los Gatos Response: Agree
Related Recommendations (1)
R5
Page 5
The Cities should immediately work toward implementing policy changes and adopting measures aimed at making full OPEB ARC payments as soon as possible. Implemented Not Yet But In Future Requires Further Analysis Will Not Be Implemented Los Gatos has implemented this recommendation and currently has a long-term plan in place.
F6 Page 5
The City of San Jose should eliminate the SRBR program or amend the SRBR program to prevent withdrawal of pension trust money whenever the pension-funded ratio is less than 100%. Los Gatos Response: Not applicable.
No recommendations for this finding
F7 Page 5
The Cities' defined benefit pension plan costs are volatile. Defined contribution plan costs are predictable and therefore more manageable by the Cities. Los Gatos Response: Agree
Related Recommendations (1)
R7
Page 5
The Cities should transition from defined benefit (DB) plans to defined contribution (DC) plans as the new tier plans are implemented. Will Not Be Implemented Implemented Not Yet But In Future Requires Further Analysis Los Gatos does not have authority to change the CalPERS DB plan to a DC plan. However, should CalPERS implement this recommendation, Los Gatos will conduct further analysis.*

No Responses Found 1

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Los Gatos City

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.