Volume 23Issue 10

Decmber 2018

P.O. Box 26515, San Jose, Ca. 95159-6515

Visit our website at www.sjrea.org

Another year of this Association’s looking after pension and medical benefits has come and gone quickly, and no nicer way to celebrate than with a fun holiday party at Mariani’s restaurant on December 5th. Attendance approached 200 and everyone seemed to enjoy the new location. For those who could not make it this year, we have a few pictures in this newsletter, compli-ments of Bob Silverstein, our resident photographer. And kudos, as always, to the irrepressible

Joan Lockwood for putting the luncheon together.

Before the usual updates, recognition of the many staff/retiree/volunteers that make things happen is in order. A hearty thanks to the entire Office of Retirement Services, headed up by Director Roberto Pena and Deputy Director Donna Busse. They are always there to help retirees on a daily basis. Second, your SJREA Board of Directors. Whether it’s the logistics for the monthly meetings, getting out the newsletters, attending City meetings on medical plan issues or just meeting to talk strategy, the seventeen members on the Board put in the time; and I for one am very appreciative of their commitment.

The Board also wishes to commend Carol Bermillo for her many years of service overseeing the medical plan programs in the Office of Retirement Services. Carol now works at Human Resources (Personnel to you old timers!) where she continues to deal day to day with many issues affecting retirees.

The last group I would like to recognize is the team that handled the Measure B and Healthcare lawsuits and Settlement Negotia-tions. Joan Gallo, George Rios, Susan Devencenzi, Evet Lowern( all retired from the City Attorney’s Office), Board Member and then VP Maurice Stevenson, and Anita Phagan. Also Brooke Myhre in the early phases. The literally hundreds of hours devoted to the resolution of these lawsuits should be appreciated by all. I have nothing but admiration and gratitude to all of them for their efforts. I don’t even have to say, “Your checks in the mail” as all service was delivered gratis.

Now for the usual updates:

• IRS SECTION 415 LAWSUIT. Nothing new since last month’s report. We will see how the City responds to the Plaintiff’s amended complaint. Maybe the impacted retirees will get a “stocking stuffer” in terms of a City offer to negotiate, but probably no such City movement until well after the first of the year.

• SETTLEMENT AGREEMENT: PRE –MEDICARE REIMBURSEMENT PROGRAM. Subject to Holiday Post Office schedules, eligible retirees should be receiving their letters soon. The SJREA newsletter will include additional reminders over the next few months. The Settlement Agreement requires eligible retirees to sign and return the City’s release form before a check will be cut, and there is a 180 day submittal time limit.

• MEASURE B LAWSUIT DONATIONS. The request form is once again included in this newsletter. If you made a voluntary donation to support our legal challenge of Measure B, complete the request form and mail to the P.O. Box as noted. You can choose to have all, none, or only a portion of your contribution returned. Please note the timelines for sending in the request. We have received many calls from members who do not have records of their contribution. The Association has good records, so just make your election on the form and send it in.

That’s it for now. We have a very informative presentation lined up for the January 10th Membership Meeting. Prabhu Palani, the Chief Investment Officer for both Federated and Police and Fire Portfolios will be on hand to discuss asset allocation, risk manage-ment and expected returns over the next few years. Prabhu’s slides will be shown after the Board and Officer elections. Hope to see you there. In the meantime, the entire Board of Directors wishes everyone the Happiest of Holiday Seasons and all the best in the coming year.

Looking Ahead | Moving Forwardby Bob Leininger, SJREA President

Page 2December 2018

Holiday LuncheonHoliday Luncheon

and a Happy New Year From the Board of Directors

Visit our website at www.sjrea.org to see all of the Holiday Fun...

Page 3December 2018

Jay CastellanoSJREA Board Member and Retirement Board Member

For those of you who I’ve not yet had the pleasure of meeting, I am Jay Castellano, a five-year veteran of the San Jose Retired Employees Association (SJREA), board and a retiree of the City of San Jose after having worked there for almost 33 years, from 1979 to 2012. I am the new retiree representative on the Federated City Employees Retirement System (FCERS) board, succeeding Ed Overton who generously and professionally served employees and retirees for 43 year as the Director of Retirement Services and as an FCERS board member. I am happy to provide my first quarterly report to the SJREA, continuing Ed’s long-time practice of highlighting activi-ties of the FCERS board.

Pensionable Pay Corrections, August 16, 2018—This matter concerns Federated members who were overpaid (351) and others who were underpaid (48) due to errors in the City’s reporting to the Office of Retirement Services (ORS) of pensionable pay information that was then used in the members’ benefit calculations.

The board approved and provided direction to staff to do the following:

• For members who were underpaid, they were compensated in their August 2018 benefit payments for past underpayments, plus COLAs and interest, for a total of $376,349. Correct (higher) benefit payments moving forward began with the August 2018 retirement paychecks. • For members who were overpaid, the total overpayment of $1,795,902 (as of March 31, 2018) will not be recovered from the members. That amount will be referred back to the plan sponsor (the City) and added to the Federated plan’s total unfunded liability of about $2 billion. Correct (lower) benefit payments moving forward began with the October 2018 retirement paychecks.

Preliminary Pension Valuation Results & Economic Assumptions, November 2018—The process for the next actuarial review has begun. The actuarial review will determine the plan’s total actuarial liabilities and the amount of contribu-tions during the 2019-20 fiscal year needed from the City and from active employees to fund future needs.

Here are highlights from the board’s discussion with the actuary. This information will be used to develop the next actuarial report in early 2019.

• The board approved the assumed price inflation rate of 2.50% (unchanged). • The board approved the assumed wage inflation rate of 3.25% (unchanged). • The board approved lowering the discount rate (assumed rate of return) from 6.875% to 6.750%.

If you have any follow-up questions on the above items, you’re welcome to contact me at jay_castellano@hotmail.com. I’ll either respond or refer your question to ORS. To view the full meeting agendas and complete minutes, visit https://www.sjretirement.com/Fed/Meetings/Schedules.asp.

SJREA - RETIREMENT BOARD REPORT

Reminder.....Have you moved or changed your email address? If so, don’t forget to inform us. You can update your information by sending it to newslettersjrea@gmail.com

The San Jose Retired Employees Association’s legal challenge to Measure B is now settled.This Settlement Agreement concerning Measure B and Retiree Health Lawsuits was of utmost importance to Federated retirees and we could not have accomplished it without your help.

When litigation began, SJREA did not have funds to defend our member retirees, but with the help of your contribution to the Special Fund, we were able to prevail. The City has now reimbursed SJREA for most of our legal costs and we want to offer retirees who made voluntary donations the opportunity to be reimbursed.

We are offering two choices. Your contribution can be returned to you or it can be retained in the SJREA Special Fund.

Only written responses will be honored if you are requesting a refund of your donation.In order to process your request for a refund in a timely manner, we need to receive your request no later than January 31, 2019. Refund processing will begin in February 2019.

Please fill out this form below and mail to SJREA, P.O. Box 26515, San Jose, CA 95159-6515

P.O. Box 26515, San Jose, Ca. 95159-6515

________________________________________________________________

No I do not want my contribution returned.

Yes please return my contribution in the amount of $

Name:Please Print

Address:

Signature:

Phone:

Date:

Association Officers Bob Leininger, President 408-448-3070Blein4@gmail.com

John Pletsch, 2nd V.P. 408-274-2992jeplet@sbcglobal.net

Joan Lockwood, Secretary 408-371-1989 joanL49@msn.com

Donna Jewett, Treasurer 408-264-6780 d.jewett@sbcglobal.net

Sue Bradford-Moore, Assistant Treasurer 408-723-7965 BradfordMoore@aol.com

NEXT MEETING: January 10, 2019 TIME: Board Meeting 9:00-10:30 am Membership Meeting 10:30-12:00 pm PLACE: Leininger Center 1300 Senter Road PROGRAM: Board Elections / ORS Federated Portfolio

WOULD YOU LIKE TO RECEIVE YOUR NEWSLETTER EARLIER? Sign up to receive it through e-mail. Send a note to: newslettersjrea@gmail.com

OFFICE OF RETIREMENT SERVICES1737 North 1st Street, Suite 600 • San Jose, CA 95112-4505

1-408-794-1000 or 800-732-6477www.sjretirement.com

If you change your mailing address, phone number, or e-mail address, please send to SJREA, P.O. Box 26515, San Jose, Ca. 95159-6515 or newslettersjrea@gmail.com.

January 10th - Board Elections/ORS Federated PortfolioSave the Dates: