FROM: Barbara Hannah, Chief Counsel
SUBJECT: Apply the Member Crediting Rate as outlined in Actuary & Audit Policy No. 002 to corrective distributions resulting from the Board's implementation of Alameda County Deputy Sheriff's Assoc. v. Alameda CERA (2020) 9 Cal.5th 1032.
RECOMMENDATION:
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Approve and apply the Member Crediting Rate as outlined in Actuary & Audit Policy No. 002 to corrective distributions resulting from the Board's implementation of Alameda County Deputy Sheriff's Association v. Alameda CERA (2020) 9 Cal.5th 1032.
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BACKGROUND:
On August 6, 2020, the SBCERA Board of Retirement adopted several Resolutions implementing the ruling in Alameda County Deputy Sheriff's Association v. Alameda CERA (2020) 9 Cal.5th 1032. For those affected by the implementation of the Court's ruling, the adopted Resolutions permitted a corrective distribution to active and deferred members, as well as retirees with a "PEPRA-excluded pay item", who retired prior to July 30, 2020, provided the member's contributions exceeded any retirement benefit payments associated with that portion of the payment. The adopted Resolutions also directed staff to make a corrective distribution for those active, deferred and retirees who retired on or after July 30, 2020, for the "Alameda-excluded pay items".
The Board's approach in determining the appropriate interest rate to credit the corrective distribution of contributions is a policy choice. Staff recommends applying the Member Crediting Rate as outlined in the Actuary & Audit Policy No. 002, at the historical rate applied during the years contributions were reported to SBCERA on a now excluded item. Exhibit A is a copy of the policy; Exhibit B is the historical crediting rate. The member Deposit Reserve is credited semi-annually at the Member Crediting Rate, which currently is the lesser of the assumed investment earnings or the six-month T-bill rate as of the last public auction.
Staff recommends th...
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