To: HONORABLE MAYOR AND From: Boards of Administration for

CITY COUNCIL the Police & Fire Department

Retirement Plan

Subject: Ordinance to Update the Medical Date: 05-07-03

Examination Procedures, to Clarify

the Calculation of Disability

Retirement Allowances, and to

Clarify the Calculation of Survivorship

Benefits Payable Because of a Service-

Connected Death

RECOMMENDATION

Approval of an ordinance amending Chapter 3.36 of Title 3 of the San Jose Municipal Code (Police and Fire Department Retirement Plan) to update the medical examination procedures for disability retirement applications, to clarify the calculation of disability retirement allowances, and to clarify the calculation of survivorship benefits payable because of a service-connected death.

BACKGROUND

At its August, 2002 meeting, the Board of Administration for the Police and Fire Department Retirement Plan (the Board) authorized sending a plan amendment covering the above recommendation to Employee Relations to be discussed with the San Jose Police Officers Association (SJPOA) and the International Association of Firefighters (Local 230) for their approval.

ANALYSIS

Currently, the San Jose Municipal Code (SJMC) provides that if there is a conflict in the medical reports submitted in connection with a disability retirement application, the Board will appoint a review panel from a list of physicians provided by the Santa Clara County Medical Society. This procedure has not been used since the Board retained its own Medical Director pursuant to plan amendments adopted in 1996. At the current time, the Board relies on its Medical Director to determine which physicians should examine a disability retirement applicant. The Medical Director then reviews all the medical opinions, writes a summary for the Board, and determines work restrictions, if any, which would apply should the member continue working. The proposed ordinance would change the SJMC to reflect the current process.

In addition, the proposed ordinance would update and clarify the calculations of nonservice-connected disability benefits, service-connected disability benefits, and survivorship benefits payable in the event of a service-connected death so these calculations would clearly track the provisions of the Internal Revenue Code. The changes would not affect the actual amount of any disability retirement benefit or survivorship benefit and, therefore, would not increase the distribution from the retirement fund. Implementation of the changes would have no effect on contribution rates.

PUBLIC OUTREACH

Not applicable.

COORDINATION

This memorandum has been coordinated with the City Attorney’s Office, the Budget Office, and the Office of Employee Relations. The Office of Employee Relations has provided a copy of the draft ordinance to SJPOA and Local 230. Those bargaining units have approved this change to the Retirement Plan.

COST IMPLICATIONS

There are no cost implications with this Plan change.

BUDGET REFERENCE

In accordance with the Mayor's Budget Strategy, this proposal meets the following General Principle:

ü Continue to streamline, innovate, and simplify operations

No appropriation action is required.

CEQA

Exempt, PP03-05-152

EDWARD F. OVERTON

Secretary, Board of Administration