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<br /> <br />Item # 7.2. <br /> <br />MEMORANDUM <br /> <br />TO: Mayor and City Council <br /> <br />FROM: Lori Johnson, Finance and Administrative Services Director <br /> <br />DATE: August IS, 2005 <br /> <br />SUBJECT: Cliff Anderson PERA Financial Impact <br /> <br />Fire Chief Bruce West is requesting that Cliff Anderson change from PERA Coordinated to <br />PERA Police and Fire pension plan. Mr. West asked that I provide information on the <br />financial impact of this change. <br /> <br />Below is a table showing the employer contribution rates for both the PERA Coordinated <br />and Police and Fire pension plans. These rates were adopted as part of the pension bill <br />approved by the legislature this past special session. As you can see from the far right <br />column of the table, savings in the first two years offset the increases in the next three years <br />so there is no material change in the amount of the City's contribution over the first five <br />years. Thereafter, assuming the contribution rates do not change, there is a small increase in <br />the City's annual cost. <br /> <br /> Employer Contribution Annual Cost Difference <br /> Police & Social Coord. & Coordinated To Police & <br />Year Coordinated Fire Security S. S. Fire <br />2005 5.53% 9.30% 6.20% 11.73% <br />2006 6.00% 10.50% 6.20% 12.20% (1,037) <br />2007 6.25% 11.70% 6.20% 12.45% (458) <br />2008 6.50% 12.90% 6.20% 12.70% 122 <br />2009 6.75% 14.10% 6.20% 12.95% 701 <br />2010 7.00% 14.10% 6.20% 13.20% 549 <br /> <br />Notes. 1. Cost difference based on 2006 estimated pay of 61,000; no COLA applied to <br />future years. <br />2. PERA may adjust the contribution rates beginning in 2011. <br />3. Social Security tax is not paid under the Police & Fire plan. <br />4. Medicare tax of 1.45% applies under Coordinated or Police & Fire pension <br />plan. <br /> <br />S:\Council\Lori\2005\PERA Cliff Anderson.doc <br />