"Agreement and Election to Prefund Other Post Employment Benefits Through Calpers" - California

Agreement and Election to Prefund Other Post Employment Benefits Through Calpers is a legal document that was released by the California Public Employees' Retirement System - a government authority operating within California.

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Download "Agreement and Election to Prefund Other Post Employment Benefits Through Calpers" - California

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CALIFORNIA EMPLOYERS’ RETIREE BENEFIT TRUST PROGRAM ("CERBT")
AGREEMENT AND ELECTION
OF
(NAME OF EMPLOYER)
TO PREFUND OTHER POST-EMPLOYMENT
BENEFITS THROUGH CalPERS
WHEREAS (1) Government Code Section 22940 establishes in the State Treasury the
Annuitants' Health Care Coverage Fund for the prefunding of health care coverage for
annuitants (Prefunding Plan); and
WHEREAS (2) The California Public Employees' Retirement System (CalPERS) Board
of Administration (Board) has sole and exclusive control and power over the
administration and investment of the Prefunding Plan (sometimes also referred to as
CERBT), the purposes of which include, but are not limited to (i) receiving contributions
from participating employers and establishing separate Employer Prefunding Accounts
in the Prefunding Plan for the performance of an essential governmental function (ii)
investing contributed amounts and income thereon, if any, in order to receive yield on
the funds and (iii) disbursing contributed amounts and income thereon, if any, to pay for
costs of administration of the Prefunding Plan and to pay for health care costs or other
post-employment benefits in accordance with the terms of participating employers'
plans; and
WHEREAS (3) _____________________________________________________
(NAME OF EMPLOYER)
(Employer) desires to participate in the Prefunding Plan upon the terms and conditions
set by the Board and as set forth herein; and
WHEREAS (4) Employer may participate in the Prefunding Plan upon (i) approval by
the Board and (ii) filing a duly adopted and executed Agreement and Election to Prefund
Other Post-Employment Benefits (Agreement) as provided in the terms and conditions
of the Agreement; and
WHEREAS (5) The Prefunding Plan is a trust fund that is intended to perform an
essential governmental function within the meaning of Section 115 of the Internal
Revenue Code as an agent multiple-employer defined benefit plan as defined in
Governmental Accounting Standards Board (GASB) Statements for Accounting and
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
(OPEB Standards) consisting of an aggregation of single-employer plans, with pooled
administrative and investment functions;
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Page 1 of 10
CALIFORNIA EMPLOYERS’ RETIREE BENEFIT TRUST PROGRAM ("CERBT")
AGREEMENT AND ELECTION
OF
(NAME OF EMPLOYER)
TO PREFUND OTHER POST-EMPLOYMENT
BENEFITS THROUGH CalPERS
WHEREAS (1) Government Code Section 22940 establishes in the State Treasury the
Annuitants' Health Care Coverage Fund for the prefunding of health care coverage for
annuitants (Prefunding Plan); and
WHEREAS (2) The California Public Employees' Retirement System (CalPERS) Board
of Administration (Board) has sole and exclusive control and power over the
administration and investment of the Prefunding Plan (sometimes also referred to as
CERBT), the purposes of which include, but are not limited to (i) receiving contributions
from participating employers and establishing separate Employer Prefunding Accounts
in the Prefunding Plan for the performance of an essential governmental function (ii)
investing contributed amounts and income thereon, if any, in order to receive yield on
the funds and (iii) disbursing contributed amounts and income thereon, if any, to pay for
costs of administration of the Prefunding Plan and to pay for health care costs or other
post-employment benefits in accordance with the terms of participating employers'
plans; and
WHEREAS (3) _____________________________________________________
(NAME OF EMPLOYER)
(Employer) desires to participate in the Prefunding Plan upon the terms and conditions
set by the Board and as set forth herein; and
WHEREAS (4) Employer may participate in the Prefunding Plan upon (i) approval by
the Board and (ii) filing a duly adopted and executed Agreement and Election to Prefund
Other Post-Employment Benefits (Agreement) as provided in the terms and conditions
of the Agreement; and
WHEREAS (5) The Prefunding Plan is a trust fund that is intended to perform an
essential governmental function within the meaning of Section 115 of the Internal
Revenue Code as an agent multiple-employer defined benefit plan as defined in
Governmental Accounting Standards Board (GASB) Statements for Accounting and
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
(OPEB Standards) consisting of an aggregation of single-employer plans, with pooled
administrative and investment functions;
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NOW, THEREFORE, BE IT RESOLVED THAT EMPLOYER HEREBY MAKES THE
FOLLOWING REPRESENTATION AND WARRANTY AND THAT THE BOARD AND
EMPLOYER AGREE TO THE FOLLOWING TERMS AND CONDITIONS:
A. Representation and Warranty
Employer represents and warrants that it is a political subdivision of the State of
California or an entity whose income is excluded from gross income under Section 115
(1) of the Internal Revenue Code.
B. Adoption and Approval of the Agreement; Effective Date; Amendment
(1) Employer's governing body shall elect to participate in the Prefunding Plan by
adopting this Agreement and filing with the CalPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to:
CalPERS
CERBT (OPEB)
P.O. Box 1494
Sacramento, CA 95812-1494
Filing in person, deliver to:
CalPERS Mailroom
CERBT (OPEB)
400 Q Street
Sacramento, CA 95811
(2) Upon receipt of the executed Agreement, and after approval by the Board, the
Board shall fix an effective date and shall promptly notify Employer of the effective date
of the Agreement.
(3) The terms of this Agreement may be amended only in writing upon the agreement
of both CalPERS and Employer, except as otherwise provided herein. Any such
amendment or modification to this Agreement shall be adopted and executed in the
same manner as required for the Agreement. Upon receipt of the executed amendment
or modification, the Board shall fix the effective date of the amendment or modification.
(4) The Board shall institute such procedures and processes as it deems necessary to
administer the Prefunding Plan, to carry out the purposes of this Agreement, and to
maintain the tax exempt status of the Prefunding Plan. Employer agrees to follow such
procedures and processes.
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C. Other Post-Employment Benefits (OPEB) Cost Reports and Employer Contributions
(1) Employer shall provide to the Board an OPEB cost report on the basis of the
actuarial assumptions and methods prescribed by the Board. Such report shall be for
the Board’s use in financial reporting, and shall be prepared at least as often as the
minimum frequency required by applicable GASB OPEB Standards. This OPEB cost
report may be prepared as an actuarial valuation report or, if the employer is qualified
under GASB OPEB Standards, may be prepared as an Alternative Measurement
Method (AMM) report.
(a)
Unless qualified under GASB OPEB Standards, to provide an AMM
report, Employer shall provide to the Board an actuarial valuation report.
Such report shall be for the Board's use in financial reporting, and shall be
prepared at least as often as the minimum frequency required by GASB
OPEB Standards, and shall be:
1) prepared and signed by a Fellow or Associate of the Society of
Actuaries who is also a Member of the American Academy of
Actuaries or a person with equivalent qualifications acceptable to the
Board;
2) prepared in accordance with generally accepted actuarial practice and
GASB OPEB Standards; and,
3) provided to the Board prior to the Board's acceptance of contributions
for the valuation period or as otherwise required by the Board.
(b)
If qualified under GASB OPEB Standards, Employer may provide to the
Board an AMM report. Such report shall be for the Board’s use in
financial reporting, shall be prepared at least as often as the minimum
frequency required by GASB OPEB Standards, and shall be:
1)
affirmed by Employer’s external auditor, or by a Fellow or
Associate of the Society of Actuaries who is also a Member of the
American Academy of Actuaries or a person with equivalent
qualifications acceptable to the Board, to be consistent with the
AMM process described in GASB OPEB Standards;
2)
prepared in accordance with GASB OPEB Standards; and,
3)
provided to the Board prior to the Board's acceptance of
contributions for the valuation period or as otherwise required by
the Board.
(2) The Board may reject any OPEB cost report for financial reporting purposes
submitted to it, but shall not unreasonably do so. In the event that the Board
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determines, in its sole discretion, that the OPEB cost report is not suitable for use in the
Board's financial statements or if Employer fails to provide a required OPEB cost report,
the Board may obtain, at Employer's expense, an OPEB cost report that meets the
Board’s financial reporting needs. The Board may recover from Employer the cost of
obtaining such OPEB cost report by billing and collecting from Employer or by deducting
the amount from Employer's account in the Prefunding Plan.
(3) Employer shall notify the Board of the amount and time of contributions which
contributions shall be made in the manner established by the Board.
(4) Employer contributions to the Prefunding Plan may be limited to the amount
necessary to fully fund Employer's actuarial present value of total projected benefits, as
supported by the OPEB cost report for financial reporting purposes acceptable to the
Board. As used throughout this document, the meaning of the term "actuarial present
value of total projected benefits" is as defined in GASB OPEB Standards. If Employer’s
contribution causes its assets in the Prefunding Plan to exceed the amount required to
fully fund the actuarial present value of total projected benefits, the Board may refuse to
accept the contribution.
(5) No contributions are required. Contributions can be made at any time following the
effective date of the Agreement provided that Employer has first complied with the
requirements of Paragraph C.
D. Administration of Accounts, Investments, Allocation of Income
(1) The Board has established the Prefunding Plan as an agent plan consisting of an
aggregation of single-employer plans, with pooled administrative and investment
functions, under the terms of which separate accounts are maintained for each
employer so that the Employer's assets will provide benefits only under the Employer's
post-employment benefit plan(s).
(2) All Employer contributions and assets attributable to Employer contributions shall be
separately accounted for in the Prefunding Plan (Employer’s Prefunding Account).
(3) Employer’s Prefunding Account assets may be aggregated with prefunding account
assets of other employers and may be co-invested by the Board in any asset classes
appropriate for a Section 115 Trust.
(4) The Board may deduct the costs of administration of the Prefunding Plan from the
investment income or Employer’s Prefunding Account in a manner determined by the
Board.
(5) Investment income shall be allocated among participating employers and posted to
Employer’s Prefunding Account as determined by the Board but no less frequently than
annually.
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(6) If Employer's assets in the Prefunding Plan exceed the amount required to fully fund
the actuarial present value of total projected benefits, the Board, in compliance with
applicable accounting and legal requirements, may return such excess to Employer.
E. Reports and Statements
(1) Employer shall submit with each contribution a contribution report in the form and
containing the information prescribed by the Board.
(2) The Board shall prepare and provide a statement of Employer’s Prefunding Account
at least annually reflecting the balance in Employer's Prefunding Account, contributions
made during the period and income allocated during the period, and such other
information as the Board determines.
F. Disbursements
(1) Employer may receive disbursements not to exceed the annual premium and other
costs of post-employment healthcare benefits and other post-employment benefits as
defined in GASB OPEB Standards.
(2) Employer shall notify CalPERS in writing in the manner specified by CalPERS of the
persons authorized to request disbursements from the Prefunding Plan on behalf of
Employer.
(3) Employer's request for disbursement shall be in writing signed by Employer's
authorized representative, in accordance with procedures established by the Board.
The Board may require that Employer certify or otherwise establish that the monies will
be used for the purposes of the Prefunding Plan.
(4) Requests for disbursements that satisfy the requirements of paragraphs (2) and (3)
will be processed monthly.
(5) CalPERS shall not be liable for amounts disbursed in error if it has acted upon the
written instruction of an individual authorized by Employer to request disbursements. In
the event of any other erroneous disbursement, the extent of CalPERS' liability shall be
the actual dollar amount of the disbursement, plus interest at the actual earnings rate
but not less than zero.
(6) No disbursement shall be made from the Prefunding Plan which exceeds the
balance in Employer’s Prefunding Account.
G. Costs of Administration
Employer shall pay its share of the costs of administration of the Prefunding Plan, as
determined by the Board.
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