SamCERA - Ventura Notice

Court Ordered Recalculation of Retirement Benefits
San Mateo County Employees' Retirement Association 100 Marine Parkway, Suite 125, Redwood Shores, CA 94065-5208 e-mail: SamCERA@co.sanmateo.ca.us May 10 2004

Background:  Your SamCERA retirement benefit is based on your final average compensation earned during a consecutive 12-month period¹ times your years of service credit times a factor for your age.

Prior to 1998, SamCERA excluded certain items of special pay from final compensation on the basis that they were not received by everyone in the same job classification.

Twenty California counties operate retirement systems under the County Employees’ Retirement Law of 1937.  Like SamCERA, all of those County retirement systems excluded various items of special pay in accordance with the law as interpreted by the California Courts at that time. 

The practice of excluding special pay was successfully challenged in court in 1997 and was changed by SamCERA at that time for all active members.  The Court has now ordered SamCERA to include the following items of special pay in the re-calculation of retirement benefits for eligible members: 

 [Pay codes used until 1975 in brackets.] / (Pay codes used after 1975 in parentheses.)

The Court did not include terminal pay cash outs of vacation, holiday, comp time or sick leave; nor third party payments of insurance premiums; nor employer pick-ups of employee contributions; nor overtime. 

Payroll Research & Benefit Recalculation Process:  Only those members who earned one or more of the special pay items listed above during their final compensation period will receive a benefit increase.  Likewise, the survivor of such member will receive a benefit increase.

SamCERA will begin the lengthy process of researching County payroll records for approximately 3,000 retirees and their survivors on May 1^st to determine who is eligible for a benefit increase.  Many of these payroll records exist only on microfilm and microfiche. 

Questionnaire:  Sometime during the next eight months, SamCERA will send you a questionnaire about the special pay codes listed above.  Please return that questionnaire to SamCERA within 20 days after you receive it in order to help expedite the research on your records.

Those who retired before 1976 will be the first to receive the questionnaire because SamCERA has decided to focus on the older retirees first.  Be patient, your questionnaire will arrive when SamCERA is preparing to start research on those who retired around the same time you did.  All back payments will include interest so no member will end up receiving less as a result of any delay.

Once you return your questionnaire, it will take SamCERA approximately 90-days to research your County payroll records and to perform any necessary benefit recalculations. 

Written Notice: As soon as your records have been researched and any necessary calculations have been completed, SamCERA will mail you written notice of (1) the results of the payroll research, (2) your benefit increase, if any, based upon whether or not SamCERA has been able to establish that you received any of the newly-included special pay items listed above during your final compensation period, and (3) when payment of the benefit increase will begin.

Challenge:  If you disagree with the results of SamCERA’s payroll research and calculations, you will have 30-days after you receive written notice of the results to provide SamCERA with written documentation showing that you received any of the newly included special pay items listed above during your final compensation period, that would support your challenge.

Benefit Increase:  If you received newly included special pay during the period used to calculate your final compensation, you will receive (1) a one-time lump-sum payment for the sum of the increased benefits you would have received between the later of your date of retirement or March 19, 1995 and the date of payment, plus 7% simple interest and (2) an increased monthly retirement benefit from now on.  Likewise, the survivor of a member who received such special pay will receive the lump sum payment & monthly benefit increase.

Collection of Additional Member Contributions:  If you do not receive a benefit increase, you will not have to pay any additional member contributions.

If you do receive a benefit increase, SamCERA will collect additional member contributions, including interest, equal to your share of the cost of the present value of the benefit enhancement as calculated at the time the lump sum retroactive benefit is paid.²

To the extent that the County was contractually or statutorily obligated to pick up your member contributions, SamCERA will not collect those contributions.

Your additional member contributions will be deducted from your lump sum benefit payment.  If the additional member contribution exceeds your lump sum payment, the unpaid balance, plus 7% simple interest, will be deducted only from your monthly court ordered benefit increase.

If you have questions:  All communications regarding this matter must be in writing. 

SamCERA will not respond to any telephone inquiries regarding the recalculation of your retirement benefit.

There is absolutely nothing you can do to speed up the process, other than to return the questionnaire as soon as it is mailed to you.

Please be patient.  This project is very complex and must be managed with great care and attention to detail to ensure that it is as accurate as possible while at the same time as expeditiously as is prudent to try and minimize any unnecessary delay. 

Thank you.

Respectfully,

Sid McCausland, Chief Executive Officer

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¹          A special note to those individuals who retired prior to January 1, 1972 and those individuals who retired from SamCERA’s non-contributory Plan 3:  Your “final compensation” was based on 36 months of compensation, consisting of 3-sets of 12-consecutive-months, which need not be contiguous.

²          Members of SamCERA’s non-contributory Plan 3 will not have to contribute toward the cost of the court ordered benefit increase.