City Council Study Session Agenda and Packet 2017 05 09

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SUBJECT: POLICE MASTER PLAN WITH COMPENSATION AND BENEFITS DATE: MAY 9, 2017 PAGE 6 OF 17 the Employer contributions (ER) and the Employee contributions (EE), Social Security and Medicare benefits if offered, and other retirement information. For Sworn Police Officers, the Grand TOTAL (ER+EE) retirement contributions in Louisville (18.15%) is higher than Erie's (16.0%) and Brighton's (17.45%), but lower than others, including Commerce City, Englewood, Littleton and Longmont, which are all at 20.00%. Louisville's rate (18.15%) is 1.74% less than the average of the other jurisdictions (19.89%). However, Louisville's total Employer contribution for Sworn Officers, at 13.15%, is higher than all comparable jurisdictions except Golden's, which is 14.45%, and 2.59% higher than the average employer only contributions of other jurisdictions (10.56%). For General Employees, the total contribution (ER+EE) in Louisville (18.15%) is slightly higher than the average total contribution for General Employees for other jurisdictions (18.05%). It should be noted that Erie's only mandatory contribution for General Employees is 6.2% for Social Security and 1.45% for Medicare, or a total of 7.65%. However, if Erie's General Employees contribute to a 401, Erie matches up to 5%, which could total 12.65% for TOTAL ER Contributions and 17.65% for the GRAND TOTAL. If this optional contribution is included in Erie's contributions, the average contribution for general employees is 19.16%, or 1.01% higher than Louisville's rate of 18.15%. Louisville's total Employer contribution of 13.15% for general employees, "TOTAL ER Contribution", is still higher than the average of 12.94% for other jurisdictions, with Louisville's rate higher than Brighton, Erie, Golden, Lafayette, and Longmont, but lower than Broomfield, Commerce City, Englewood, and Littleton. This information suggests it may be appropriate to update Louisville's retirement contribution rates to ensure they remain competitive for today's market. The March 2017 unemployment rate in Colorado was at 2.6%, which is the lowest in 41 years. Several options are outlined below for your consideration. Option 4: Join the Public Employers Retirement Association (PERA) to enhance the retirement benefit for all City employees. The Colorado PERA program provides retirement and other benefits to employees of the State of Colorado; all school districts; the judicial system; and many special districts, municipalities, and other local government agencies. PERA is a 401(a) defined benefit retirement plan that is sometimes referred to as a pension plan. For most members PERA serves as a substitute for Social Security. PERA provides benefits to members when they retire, are disabled, or to the survivors of a member. PERA members may take advantage of voluntary PERA programs such as the PERAPIus 401(k) and 457 Plan as well as the Life Insurance program. CITY COUNCIL COMMUNICATION