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Meeting Date:
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10/16/2019 - 3:00 PM
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Category:
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Action Items
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Type:
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Action
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Subject:
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14.11 BUSINESS: Resolution No. 09:19-20 - Resolution of the Board of Trustees of the Perris Union High School District Implementing a Supplementary Employee Retirement Plan and Approval of the Supplemental Employee Retirement Plan Service Agreement with Keenan & Associates
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Strategic Plan:
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Enclosure
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File Attachment:
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Summary:
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A Supplementary Employee Retirement Plan (SERP) is a program designed to create incentives that effectively and efficiently increase and accelerate the retirement rate, in excess of the natural attrition rate. This is accomplished by enhancing the retirement benefits of the participating employees. A SERP generates fiscal savings as a result of the salary differential of a retiring employee and a new-hire or by non-replacement of a retiring employee.
The Perris Union High School District offered a local retirement incentive in 2017-18 and a formal SERP, most recently in 2012-13. The District has been looking into the possibility of offering a retirement plan as a way to create fiscal savings within the budget and multi-year projections, and as a way to enhance retirement benefits for long-term employees. In order to ensure that a SERP would be an effective tool for the District, multiple factors were considered including enrollment projections, staffing projections, the expected number of retirees without providing any incentives, the expected number of retirees if an incentive were implemented, employee age and service demographics, and the potential non-replacement for certain positions.
The District has determined that offering a SERP to employees is in the best fiscal interest of the District. A SERP will be an important cost savings measure given the budgetary shortfall in 2020-21 and beyond. To be eligible for the SERP, Certificated employees must at least be fifty-five (55) years of age and have completed at least five (5) years of service to the District by June 30, 2020. Classified employees, including Confidential employees must at least be fifty-five (55) years of age and have completed at least ten (10) years of service to the District by June 30, 2020. Eligible Certificated employees shall be offered two (2) plan options: A District contribution to fund the SERP equal to 70% of base salary, or 50% of base salary including a Health Reimbursement Account (HRA). Eligible Classified employees shall be offered two (2) plan options: A District contribution to fund the SERP equal to 50% of base salary, or 30% of base salary including a HRA. Employees who elect the option including the HRA will receive $5,000 per year, for five (5) years or until age 65, whichever comes first. Employees electing to participate in the SERP will be required to submit an irrevocable letter of resignation by January 15, 2020 with an effective no later than June 30, 2020. If the District determines that enrollment in the SERP does not provide a financial savings, the District may rescind the plan on or before January 17, 2020. If the District chooses to rescind the SERP, employees may revoke their letters of resignation on or before January 24, 2020.
Upon obtaining approval from the Board of Trustees, the District will send announcement letters detailing the plan options, schedules for orientation meetings and individual counseling sessions, and important timelines for the plan window.
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Funding:
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The savings generated from this item will be included in the 2020-21 adopted budget and multi-year projections.
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Recommendation:
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It is recommended that the Board of Trustees adopt Resolution No. 09:19-20 - Resolution of the Board of Trustees of the Perris Union High School District Implementing a Supplementary Employee Retirement Plan.
It is also recommended that the Board of Trustees approve the Supplemental Employee Retirement Plan Service Agreement with Keenan & Associates.
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Approvals:
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Recommended By:
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Signed By:
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Candace Reines - Deputy Superintendent
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Signed By:
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Grant Bennett - Superintendent
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Vote Results:
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| Original Motion | Member David Nelissen Moved, Member Dr. Jose Luis Araux seconded to approve the Original motion 'It is recommended that the Board of Trustees adopt Resolution No. 09:19-20 - Resolution of the Board of Trustees of the Perris Union High School District Implementing a Supplementary Employee Retirement Plan.
It is also recommended that the Board of Trustees approve the Supplemental Employee Retirement Plan Service Agreement with Keenan & Associates.'. Upon a Roll-Call Vote being taken, the vote was: Aye: 5 Nay: 0. | | The motion Carried 5 - 0 | | | | | Dr. Randall Freeman | Yes | | Anthony T. Stafford, Sr. | Yes | | Edward Garcia, Jr. | Yes | | David Nelissen | Yes | | Dr. Jose Luis Araux | Yes | |
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