Score: +5 (10/2/5)
Santa Clara County Grand Jury • 2011-2012 • Agency Response
Response to: City of Monte Sereno

S of Monte Acorporated Man in Councilmember: Marshall Anstandig*

Published: September 05, 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. City Response The City partially disagrees with the finding. There are positions in the public sector that do not have comparable private sector counterparts. Therefore, making a broad comparison is not accurate.
Related Recommendations (1)
R1
Page 2
The Cities should adopt pension plans to extend the retirement age beyond current retirement plan ages. <b>City Response</b> The recommendation has not yet been implemented. The City will consider adopting a two tier pension plan
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. <b>City Response</b> The City agrees with the finding.
Related Recommendations (2)
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.
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. <b>City Response</b> The recommendation has not yet been implemented. The City will consider adopting a two tier pension plan
F3 Page 3
Retroactive Benefit enhancements were enacted by Cities using overly optimistic ROI and actuarial assumptions without adequate funding in place to pay for them. City Response The City partially disagrees with the finding. Although many cities may have enacted pension benefit enhancements over the last several years, the City of Monte Sereno has not enacted any pension enhancements for the past 13 years.
Related Recommendations (1)
R3
Page 3
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. <b>City Response</b> The recommendation has not yet been implemented. The City Staff will recommend an update to the City's fiscal policy with a statement that addresses this recommendation during the City's routine budget process.
F4 Page 3
The Cities are making overly generous contributions toward the cost of providing Benefits. <b>City Response</b> The City agrees with this finding.
Related Recommendations (1)
R4A
Page 3
The Cities should require employees to pay the maximum employee contribution rate of a given plan.
F5 Page 4
The Cities are not fully funding OPEB benefits as evidenced by large unfunded liabilities and small funded ratios. <b>City Response</b> The City agrees with this finding.
Related Recommendations (1)
R5
Page 4
The Cities should immediately work toward implementing policy changes and adopting measures aimed at making full OPEB ARC payments as soon as possible.
F6 Page 4
The City of San Jose permits the transfer of pension trust fund money, when ROI exceeds expectations, to the SRBR, despite that fact that the pension trust funds are underfunded. <b>City Response</b> Not applicable.
Related Recommendations (1)
R6
Page 4
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%.
F7 Page 4
The Cities' defined benefit pension plan costs are volatile. Defined contribution plan costs are predictable and therefore more manageable by Cities. <b>City Response</b> The City agrees with this finding. City of Monte Sereno Responses to Civil Grand Jury Report Dated June 13, 2012 <b>Recommendation</b> 7 The Cities should transition from defined benefit plans to defined contribution plans as the new tier plans are implemented. City Response The recommendation has not yet been implemented. The City will consider limiting the City's contribution toward pension when adopting a two tier pension plan within 12 months. The City contracts with CalPERS to administer the pension benefit for existing employees. The City's ability to offer a defined contribution plan is dependent on the plan options offered by CalPERS.
No recommendations for this finding

Agency Responses 2

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.

No Responses Found 14

Government entities assigned to respond to this report. No response documents have been linked in our database.

Campbell City
Cupertino City
Gilroy City
Los Altos City
Los Altos Hills City
Milpitas City
Morgan Hill City
Mountain View City
Palo Alto City
San Jose City
Santa Clara City
Santa Clara County County
Saratoga City
Sunnyvale 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.