Benefits

Benefit Summary for the Employees Retirement System (As of June 30, 2006)

This section provides a brief summary of the benefits provided by the City of Fresno Employees Retirement System. For more detailed information please refer to the Summary Plan Description; email Retire@fresno.gov; or call the Retirement Office at (559) 621-7080 to speak to a Retirement Counselor.

Eligible Employees

All non-Fire and Police full-time permanent employees who enter service after July 1, 1952, and are certified from a civil service list are eligible for membership in the City of Fresno Employees Retirement System.

Service Retirement

All members of the Employees Retirement System are eligible for a service retirement if they have at least 5 years of service and are at least age 55. Service retirement benefits are based on your years of service with the City of Fresno, your age, and your final average salary.

Use the benefits calculator to estimate your retirement benefit amount.

Final Average Salary

Your final average salary (FAS) is an average of your compensation earnable over your highest three consecutive years using today’s pay rather than the pay you actually earned. That value of FAS is used with the following formula to calculate your benefit amount.

Benefit: Sum of (1) and (2) times (3)

2% of FAS times years of service, not-to-exceed 25 years
1% of FAS times years of service in excess of 25 years
Age Factor Table (file size: 32 KB)

Important News!
Benefit Estimates are now available in MemberDirect. Press here to go to our MemberDirect site and produce your own real-time benefit estimate.

Or, you can try the Employee Benefit Calculator for an estimate.

Before you retire, it is important that you contact the Retirement Office to make an appointment with a retirement counselor to discuss the options available for retirement.

Deferred Retirement Option Program (DROP) – Employees Retirement System

An employee who meets the qualifications for a service retirement (age 55 with 5 years of service) may elect to participate in the DROP program. On entering DROP, the employee’s accrual of retirement benefits is frozen and his/her benefit amount is calculated. The resulting amount plus any retirement COLAs and interest at an annual rate approved by the Board, is then deposited monthly into the employee’s DROP account while the employee continues to work for a period up to maximum of 10 years.

At retirement, when the employee actually leaves City service, the monthly amount being deposited into the DROP account becomes the employee’s monthly retirement benefit amount and, in addition, the employee then makes a decision about how to distribute the balance of the DROP account.

Please try the DROP Projection Calculators for an estimate of what DROP could mean for you.

Disability

A disability retirement is a benefit available to a City employee who becomes unable to perform their duties by reason of bodily injuries or sickness. There are two types of disability retirement: ordinary (non service connected) and service connected.

Ordinary Disability

If you become permanently disabled and are no longer able to perform your job duties and the disability is not job related, you may be eligible for an ordinary disability retirement. To qualify you must have been employed by the City for at least ten years.

If you are granted an ordinary disability retirement, your allowance will be the highest of the following: (1) 33 1/3% of your final average salary, (2) 1.8% multiplied times your years of service multiplied times your final average salary, or (3) your service retirement allowance (if you are already eligible for a service retirement).

Service-Connected Disability

If you become permanently disabled to the point that you can no longer perform your job duties, the disability was caused primarily by the performance of your job, and you have completed at least 10 years of service, you may be eligible to receive a service connected disability.

If you are granted a service connected disability retirement, your allowance will be the highest of the following: (1) 33 1/3% of your final average salary, (2) 1.8% multiplied times your years of service multiplied times your final average salary, or (3) your service retirement allowance (if you are already eligible for a service retirement). A portion of your service connected disability may be eligible for some favorable IRS tax treatment.

Contribution Rates

The basic provision for contribution rates for both the City and the Employee are outlined in the Fresno Municipal Code and may not be changed by the Retirement Board. Normal or basic rates depend upon the employee’s age at entry into the System. The rates are such as to provide an average annuity, at age 55, of 1/150 of Final Average Salary (FAS) for each of the first 25 years of service, plus 1/300 of FAS for each year of service after 25. Member cost-of-living rates are designed to pay for one-half of the future cost-of-living increases.

Both employer and employee rates are recalculated by the independent actuary as a component of the Annual Actuarial Valuation Study, and the results of those calculations are reviewed and adopted by the Employee’s Retirement Board at a public hearing each year.

Contribution Rates as of June 30, 2006 (file size: 57 KB)

Cost of Living Adjustment (COLA)

The Municipal Code provides that the Retirement staff must research the percentage change in Consumer Price Index (US city-average for urban wage earners and clerical works – all items) and propose that percent to the Retirement Board as the COLA to be adopted for the following fiscal year. This procedure must be complete by the end of April each year for implementing in July. The COLA is limited to a five percent (5%) maximum change per year and any excess over 5% is banked for the retiree for use in a year where the percent of CPI change is less than 5%.

Death Before Retirement

Before eligible to retire for disability (less than 5 years)

If you should die while still working and before you have qualified to retire (5 years of service and attainment of age 55), your beneficiary will receive the following benefit:

One month’s salary for each year of service, not-to-exceed six months.
Return of contributions with interest.

While eligible for service retirement:

If you should die while still working and after you have qualified to retire (5 years of service and attainment of age 55), your qualified beneficiary (refer to Summary Plan Document) will receive fifty percent (50%) of the service retirement benefit you had earned as a monthly payment for life or may have the option to choose the benefit outlined above.

Death After Retirement

If you die after retirement and leave a qualified beneficiary, that beneficiary will receive a benefit which depends upon the option you have chosen at your retirement. Please refer to the Summary Plan Document for an explanation of your retirement options or call the Retirement Office (559-621-7080) for an appointment with a Retirement Counselor who will explain the options and show you calculations of what each one would mean for you.

Health and Welfare

The Retirement Office is only involved with the health care plans as a conduit to deduct the Health care premiums from the retiree’s monthly benefit amount and forward those premiums to the respective health plan on the retiree’s behalf.

The City of Fresno provides active employees with health care coverage through one of two health care plans: the City of Fresno Health and Welfare Trust which covers all City of Fresno employees including those blue collar workers who choose to participate and a Blue Collar plan provided through the union for blue collar workers.

The City does not fund health coverage for retirees; however, employees are given the option of continuing in one of the City health plans after retirement at their own expense. At age 65, the City’s health plan becomes secondary to Medicare for those who are Medicare eligible. Premium levels become more expensive at age 65 for those who are not eligible for Medicare.

Health premiums are set by the Health and Welfare Board for the Health and Welfare Trust Plan and by the provider selected for the Blue Collar Plan. The health premiums may be viewed on the following linked pages:

(HEALTH & WELFARE TRUST)

Post Retirement Supplemental Benefit (PRSB)

On August 27, 1998, the City Council adopted the Post Retirement Supplemental Benefit (PRSB) Program which is an arrangement among the City, the active employees, and the retirees to share any surplus earnings of the System. Annually, after an actuarial study has been performed, the Retirement Board will review the availability of surplus earnings in the System and determine whether a benefit can be paid to eligible PRSB recipients. If a surplus is declared by the Board, PRSB benefit payments will be calculated for eligible recipients and payments for the following calendar year will begin in January.

Reciprocity

Reciprocity is an agreement between the City of Fresno and the California Public Employees’ Retirement System (PERS) which provides certain benefits to members who move between one or more systems that have reciprocity with PERS. Over 1,200 governmental agencies in California have reciprocal agreements with PERS. If you have eligible service in a reciprocal system, your CFRS contribution rate, creditable service required to “vest,” and benefit amount could be more favorable if you elect to use reciprocity.

Under current law, you must begin employment with the new reciprocal agency within 180 days after terminating employment with the prior agency to be eligible for reciprocity. In addition, you must leave your contributions on deposit with the prior agency’s system until you retire. (Separate accounts are maintained by each individual retirement system.) You must retire from all systems simultaneously, at which time you will receive benefits separately from each system based on that system’s formula, but all systems will confer and will use your highest final average salary from any of the systems.

If you worked for a PERS-covered employer in the past and withdrew your PERS contributions, you may be eligible to redeposit your contributions and restore your PERS service credit. If you would like additional information regarding PERS-covered employment, contact PERS at (800) 352-2238 or visit their website at: http://www.calpers.ca.gov.

For more detailed information:
Reciprocity Handbook | Reciprocity Coordination with Other Public Retirement Systems

Divorce/Termination of Registered Domestic Partnership

California is a community property state and retirement benefits earned while married or in a registered domestic partnership are considered assets that are divisible in a divorce action or the dissolving of a registered domestic partnership.

If you are considering one of these actions please read the Community Property Guidelines and be sure to address your retirement benefits in your settlement agreement. Have the Retirement Office review any proposed domestic relations order before it is submitted to the court to insure it is written in a manner which the Retirement Office can administer.

Please refer to the sample domestic relations orders (DRO) on this website for examples of orders which comply with the requirements of the Retirement Office.

Terminating Employment

Withdrawal of Contributions

When you terminate employment for any reason (other than a retirement for service or disability), you may request a refund of the retirement contributions you contributed to the System and any interest earned.

Contributions and Interest Rollover

As an alternative to receiving a refund of contributions, you may rollover the pre-tax portion of your account balance to an IRA or another employer’s qualified plan. Post-tax contributions cannot be rolled over and will be paid to you as a separate check.

Reciprocal Systems

If you terminate employment from the City of Fresno and begin employment within 180 days at another government agency within California, you may be eligible for Reciprocity. Refer to the Reciprocity section above for more detailed information.

Deferred Retirement (Vesting)

You are eligible for a deferred retirement if you have at least five years of service with the City of Fresno. Upon termination, Deferred Retirement eligibility allows you to leave your contributions on account with CFRS and qualify for benefits on the date you become age-eligible. Review the vesting section of your retirement handbook for further details.

When you apply for retirement benefits at a later date, you are entitled to receive the benefits based on your actual years of City service and the salary in effect at your retirement date for the position you held at the City.

If you are terminating employment, please contact the Retirement Office at (559) 621-7080 for an appointment with a benefits counselor. During this appointment you will have an opportunity to discuss the rollover payment method and its advantages, as well as receive the required rollover forms.

City of Fresno's Deferred Compensation Program