San Jose Municipal Code Part 2 Veba - Establishment, Purpose and Funding

Effective June 16, 2017, pursuant to applicable agreements between the City and City employees, 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 for all persons, hereinafter in this chapter specified, who may become members thereof pursuant to the provisions of this Chapter 3.58.

(Ords. 29904, 30017.)

The VEBA established under this Chapter 3.58 shall have the following sources of funding:

A. Except for new employees represented by the Operating Engineers, Local 3 and the Association of Building, Mechanical, and Electrical Inspectors that were hired before September 27, 2013, effective on the date established by the City, new employees shall make mandatory contributions equal to two percent (2.0%) of base salary.

B. Effective on the date established by the City, members other than those described in Section 3.58.200.A, shall make mandatory contributions equal to four and one-half percent (4.5%) of base pay.

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

D. Effective upon IRS approval of the ability to transfer funds from the Federated Plan and any applicable 115 trust to the VEBA, and upon completing the irrevocable election process to become covered under this Chapter 3.58, an amount determined to equal the member's prior retiree healthcare contributions under the terms of Parts 16 and 17 of Chapter 3.28 of Title 3 of the San José Municipal Code, without any interest on such amounts, shall be from the Federated Plan and applicable 115 trust to the member's account under the VEBA.

E. New employees in Unit 99, Unit 81 and Unit 82 are not eligible members of Chapter 3.58 and may not participate in the benefits under Chapter 3.58. Further, in the event an unrepresented member in Unit 99, Unit 81 and Unit 82 who is eligible to make, and makes, an irrevocable election under Part 16 and/or Part 17 of Chapter 3.28, such member shall not make contributions to this Chapter 3.58 and benefits to such members shall be limited to an amount determined to equal the member's prior retiree healthcare contributions under the terms of Parts 16 and 17 of Chapter 3.28 of Title 3 of the San José Municipal Code, if any.

(Ords. 29904, 30017, 30044.)

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. 29904, 30017.)