FROM: Debby Cherney, Chief Executive Officer
Amy McInerny, Chief Financial Officer
SUBJECT: Updated Participating Employer Agreement with CSAC
RECOMMENDATION:
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Approve the Participating Employer Agreement with California State Association of Counties effective July 1, 2025; Authorize the Chief Executive Officer to execute the agreement, subject to non-substantive changes approved by Chief Counsel.
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BACKGROUND:
On August 28, 1981, the California State Association of Counties (CSAC) adopted a resolution for inclusion in SBCERA, and on October 1, 1981, SBCERA admitted CSAC as a participating employer. In 2024, SBCERA discovered employees of various CSAC affiliated entities have been included and reported as members of SBCERA, with the requisite employer and employee contributions being made. The affiliate entities are not technically Participating Employers of SBCERA, and there are some discrepancies in the documentation as to whether the employees of those affiliates are actually employees of CSAC. In all instances, CSAC provided documentation that the employees who are SBCERA members receive a W-2 from CSAC.
Staff, with the assistance of Hanson Bridgett, and CSAC, with its counsel, have negotiated a new plan sponsor agreement, a copy of which is attached as Exhibit A. This agreement provides for the following key terms:
1. After July 1, 2025, any affiliate of CSAC, will be required to be an approved participating employer of SBCERA if it elects to cover future employees of such affiliate under SBCERA.
2. CSAC will be transferred to its own cost group, effective July 1, 2025.
3. A list of employees of CSAC, active, deferred, and retired, shall be agreed upon between SBCERA and CSAC. For CSAC to enroll any new employees on or after July 1, 2025, CSAC will be required to certify that such employee is performing services primarily for CSAC. CSAC will be required to cooperate with SBCERA data requests to ensure compliance. If an employee is not primarily performing services for CSAC, but is performing such services for one or more affiliates, such employee’s SBCERA membership will be terminated, and the employee contributions refunded to them. Employer contributions shall be maintained in the trust and allocated to the unfunded actuarial liability for the benefit of the cost group of CSAC General.
4. Other basic terms, rights and obligations that apply to all SBCERA Plan Sponsors are set forth in the agreement.
CSAC has informed SBCERA that they concur with the terms of the agreement, and intend to proceed. Staff requests that the Board approve the Participating Employer Agreement with California State Association of Counties effective July 1, 2025, and authorize the Chief Executive Officer to execute the agreement, subject to non-substantive changes approved by Chief Counsel.
BUDGET IMPACT:
Costs for this item are included in the current year administrative and/or non-administrative budget.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Debby Cherney
Barbara Hannah
Amy McInerny
ATTACHMENTS:
Exhibit A: Proposed Agreement