Agenda - 10-20-2009 - 4f - Laserfiche WebLink

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2 Under the provision, the furloughed employee is entitled to all of the same benefits to which he or she was entitled on the workday immediately preceding the furlough. The employee will suffer no diminution of retirement average final compensation based on furlough, and the retirement average final compensation will be calculated based on the undiminished compensation. During a furlough period, the County will pay both employee and employer contributions to the Retirement System on behalf of the furloughed employee as though the employee were in active service. Any compensation and contributions lost due to voluntary furlough prior to the approval of the resolution will be reported to the Retirement System. Employees contribute 6.00% of annual salary to the Retirement System. The County contributes 4.88% of annual salary for non-law enforcement employees and 4.86% of annual salary for law enforcement employees. Therefore, the County will be responsible for paying up to 10.88% of the personnel savings generated by the voluntary furlough program to the Retirement System so employees will be considered in active service during the furlough period. This payment totals approximately $1,160 for the employees who have participated in the program to date. The Board's approval of the attached resolution will allow additional employees who previously declined to participate in the program due to the impact on their retirement earnings to benefit from this new leave option and contribute to the savings generated by this program. Staff continues to anticipate that cost savings attributed to the voluntary furlough program will yield approximately $50,000 in FY 2009-10. This original estimate included approximately $44,400 in salary savings, $3,400 in federal and state income tax savings and $2,200 in savings from employer contributions to the Retirement System. FINANCIAL IMPACT: To achieve the projected cost savings for FY 2009-10, the total salary savings from employees participating in the voluntary furlough program must increase from approximately $44,400 to $51,600. The salary savings combined with savings from federal and state income taxes on this amount (approximately $4,000) would result in a total personnel services cost savings of $50,000 after the County pays the employee and employer contributions to the Retirement System (approximately $5,600) for each furloughed employee. RECOMMENDATION(S): The Manager recommends the Board adopt "A Resolution To Elect To Provide Furloughed Employees Who Are Members Of The Local Governmental Employees Retirement System Undiminished Retirement Benefits"; and authorize the Chair to sign the resolution.