Approve and authorize the Chairman to sign the following documents: (1) County of Shasta Flexible Benefit Plan, restated effective January 1, 2017; (2) County of Shasta Retiree Health Premium Reimbursement Plan; and (3) VALIC Retirement Services Company Retirement Plan for Government Employees and associated adoption agreement.

By approving the attached documents the Board of Supervisors will implement the Shasta County 401(a) plan as agreed in collective bargaining with our labor partners.

For employees hired on or after January 1, 2017 the Plan allows the County to a match an employee contribution to a 457 deferred compensation plan of up to three percent of gross salary in a 401(a) deferred compensation plan.  In return new employees will not receive any more than the statutory contribution toward CalPERS healthcare premiums after retirement.  Employees hired prior to January 1, 2017 will be permitted to make a one-time election to shift to the 401(a) plan. 

The implementation accomplishes the following: (1) The County meets the CalPERS requirement to make the same contribution for all employees and retirees; (2) Under the 401(a) plan, the actuary estimates that the current unfunded liability for other postemployment benefits (OPEB) liability will be eliminated in 25 years, whereas if the County continued its current funding for OPEB, the unfunded liability would double; (3) By netting retiree payments for dental and vision insurance against the healthcare contribution for retirees through the County of Shasta Retiree Health Reimbursement Plan, the County will be able to perform the required administrative functions without increasing staff due to the offsetting savings in the dental and vision accounts receivable process; and (4) Gives the Auditor-Controller, or his or her designee, the authority to sign the documents and approve amendments to Schedule A of the County of Shasta Retiree Health Reimbursement Plan.   

The Board could choose not to address the OPEB unfunded liability at this time, but that is not recommended as the liability would continue to grow.

There could be a positive impact to the County General Fund associated with approval of the recommendation.