Part 2 — VEBA - ESTABLISHMENT, PURPOSE AND FUNDING

Effective March 31, 2017, pursuant to applicable agreements between the city, the San José Police Officers' Association, and the San José Fire Fighters, IAFF Local 230, a VEBA meeting the requirements of IRC Section 501(c)(9), as approved by the Internal Revenue Service, shall be established to provide post- retirement healthcare benefits to new employees and, upon approval of the Internal Revenue Service, to those members other than tier 2 members who make a one-time irrevocable election to be covered under this Chapter 3.57 rather than continuing to be covered under Parts 14 and 15 of Chapter 3.36 of Title 3 of San José Municipal Code. Such irrevocable election shall be executed as provided under the procedures established under this Chapter 3.57.

(Ord. 29879.)

The VEBA established under this Chapter 3.57 shall have the following sources of funding:

A.

Effective March 25, 2018, tier 2 members and new employees shall make mandatory contributions equal to four percent (4.0%) of base salary. To the extent a Tier 2 member made member contributions to the benefit programs provided under Part 14 and Part 15 of Chapter 3.36 of the San José Municipal Code prior to the effective date of this Subsection, an amount determined to be equal to the member's prior retiree healthcare contributions under the terms of Parts 14 and 15 of Chapter 3.36 of Title 3 of the San José Municipal Code, without any interest on such amounts, shall be contributed by the city to the Tier 2 member's account under the VEBA.

B.

Effective March 25, 2018, members other than members described in Section 3.57.200.A., shall make mandatory contributions equal to five percent (4.0%) of base pay.

C.

There are no required contributions by the City to the VEBA.

D.

Effective upon IRS approval of one-time irrevocable election process for Tier 1 members and upon IRS approval of the ability to transfer funds in such manner, including ability to transfer funds from the Police & Fire Plan and the applicable 115 trust to the VEBA and upon completing the irrevocable election process to become covered under the VEBA, an amount determined to equal the member's prior retiree healthcare contributions under the terms of Parts 14 and 15 of Chapter 3.36 of Title 3 of the San José Municipal Code, without any interest on such amounts, shall be contributed by the City to the member's account under the VEBA.

(Ords. 29879, 30044, 30007.)

A.

The Plan and the Trust established by this Chapter shall be administered by the VEBA advisory committee which shall be the sole authority to enforce the Plan and the Trust.

B.

The advisory committee shall be responsible for the operation of the Plan in accordance with its terms, and shall determine all the questions arising out of the administration, interpretation, and application of the Plan and the Trust, including making decisions on behalf of the City as to the choice and nature of investments to be available under the Plan. All such determinations shall be conclusive and binding on all persons.

C.

The advisory committee shall have the authority to enter into agreements on behalf of the City for the administration of the Plan, for custodial agreements for funds, and for investments under the Plan where the fees to be paid under such an agreement are to be paid by the participants or where there is no amount to be paid by the City under the agreement.

D.

The advisory committee shall be selected by Plan members. The number of members on the committee, qualifications, selection process and term of office shall be established by a negotiated agreement among between the City and all labor groups participating in the Plan, including unrepresented members. Once agreement is reached, the matter shall be referred to and adopted by resolution of the City Council in the form of a resolution.

(Ords. 29879, 30007.)