Pension Fund for
Pleasant Hill Recreation & Park District Part-Time Employees
Updates: 6/23/10; 5/15/10; 4/15/10; 3/15/10; 2/13/10; 1/5/2010; 12/15/09; 11/15/09; 10/15/09; 9/15/09; 8/15/09; 7/17/09; 6/15/09; 5/18/09; 4/16/09; 3/18/09; 2/17/09; 1/15/2009
In 1992, a federal law went into effect, which required that all employees of public agencies have access to retirement plans. Pleasant Hill Recreation & Park District’s full-time employees were already covered under the CALPERS retirement plan. For its part-time employees, PHR&PD chose a FICA-Alternative Plan through the California Recreation Districts Employee Benefit Plan (CRDEB), of Palm Desert, California. This plan also covered ten other recreation and park districts throughout the state of California.
Employees contributed 3.75% of their payroll amounts to the plan, matched by 3.75% from PHR&PD. PHR&PD participated in the retirement plan from 1992 through 2004 without any problems.
In 2004, the Administrator of the CRDEB plan passed away. Following a review of the financial records and an official audit, it was substantiated that funds were missing from the CRDEB accounts and that the reports the District was receiving and reviewing were in error. The amount of funds missing from the account was approximately $700,000. Pleasant Hill Recreation & Park District calculated that its loss was approximately $283,682.
As soon as this was discovered, the PHR&PD Board of Directors took immediate action. The Board encouraged all districts in the CRDEB plan to file legal action against the estate of the Administrator. Due to the complicated nature of the estate and the issues concerning the Plan Administrator, it took two years to reach closure.
Upon advice of counsel, and because the assets of the estate were rapidly diminishing and insufficient to pay the claims, the District agreed to final settlement of the lawsuit against the Administrator and the estate of the Administrator for $100,000. PHR&PD received $40,100. Those funds were deposited in the Local Agency Investment Fund (LAIF). The LAIF is an investment alternative available to local governments and special districts through the California State Treasurer.
On September 7, 2006, the District Board approved a plan to appoint Public Agency Retirement Services (PARS) as the 457(a) FICA (Social Security) Alternative Retirement Plan’s Trust Administrator. As a Trust Administrator, PARS handles agency and participant inquires; performs monthly valuations of participant accounts; administers the distribution process; handles all reporting to the agency, the participant, and the State Controller; and assures that the Trust complies with federal and state government reporting requirements.
PARS provides PHR&PD with monthly financial reports and a detailed quarterly financial and investment report. Upon receipt, these reports are reviewed by the General Manager and the Accounting Supervisor. On a quarterly basis, the Board of Directors reviews them along with the District’s quarterly financial reports.
Pleasant Hill Recreation & Park District has retained the law firm of Chang, Ruthenberg & Long to facilitate the distribution and management of the assets of the former employee benefit plan. The financial institutions in which the Plan funds are deposited have been identified and efforts have been undertaken concerning the release and transfer of the Plan funds. Once all the Districts have executed a new agreement with the new trustee and administrator for the purpose of restoring the former plan, all efforts will go toward accessing the assets from First Bank and American Funds, the holders of the Plan’s assets.
By early January 2009, executed resolutions that name new trustees and administrators and that authorize action to recover access to Plan assets are expected from secretaries of the participating Boards of Directors.
At that time, Chang, Ruthenberg & Long will register the new trustees as representatives of the Plan. The trustees will then request copies of the monthly or quarterly statements from the last date for which we have records to the most recent report date. Once the trustees have examined the statements and prepared a report with recommendations to the participanting Districts, each District will decide whether it will pull out of the multiple District plan with its allocated share of the assets or stay in the multiple District plan for the purpose of restoring the integrity of the Plan.
Once the funds have been released by the financial institutions, the District will determine with more precision the amount of the Plan funds that are to be allocated to the affected District employees. This information will enable the District Board of Directors to take steps toward the goal of reimbursing participating employees. Once fund balances are known for each employee, distribution will occur through the new Plan Administrator rather than the Pleasant Hill Recreation & Park District.
January 15, 2009 Update
The law firm of Chang, Ruthenberg & Long sent out resolutions for adoption by District Boards of Directors. As of this date, five Districts including Pleasant Hill Recreation & Park District have returned notarized originals of their certificates authenticating adoption of the agreement. One District, Fulton El-Camino, has returned signed certificates, but they were not notarized. In addition, certificates showing adoption of the agreement from Auburn Recreation & Park District and Jurupa Area Recreation & Park District have not yet been received. As soon as those certificates are returned, the firm is ready to send the forms to First Bank and American Funds to access the funds.
Next Update will be posted: On or before February 16, 2009.
February 17, 2009 Update
As of February 17, notarized original certificates of adoption are still outstanding from two districts, Auburn and Jurupa. The general managers of both Districts have confirmed that they are presenting the resolutions to their boards in February; Jurupa on February 12, and Auburn on February 26. While both boards are expected to approve the resolutions, our attorney, Chang, Ruthenberg & Long still must wait for their certifications. Once they are in hand, the next steps will be:
- Send them on to First Bank and to American Funds
- Register two new trustees, Robert Berggren and Cal Camara
When those steps have been accomplished the new trustees will regain control of the assets.
Next update will be posted: On or about March 18, 2009
March 18, 2009 Update
Chang, Ruthenberg & Long have received the certificates from all nine Districts participating in the CRDEB Plan, showing that the Boards of Directors for each District have adopted the resolution appointing Cal Camera and Bob Berggren as the new trustee-administrators for the Plan and authorizing the new administrators to take action to restore access to the Plan's assets.
Correspondence has been completed to the financial institutions that contain the Plan's assets to complete the registration of the new trustee-administrators as authorized agents for the account of this trust.
Next Update will be posted: On or about April 16, 2009
April 16, 2009 Update
The assets of the Plan are currently held by two financial institutions, American Funds and 1st Bank. American Funds has acknowledged the two new trustees in writing. 1st Bank has orally acknowledged them and is in the process of recognizing them as having signature authority over the Plan’s assets.
Once both institutions have formally recognized new trustees Cal Camera and Bob Berggren, the goal is to modify the Plan from being a single multi-employer Plan into separate Plans for each participating Agency. Once these have been established, the accounts of each District’s employees would then be transferred to the respective District’s plan and trust. This would than allow each individual District to deal with closing their plan and distributing the assets to the employees without the cumbersome requirement of needing all other participating Agencies to agree on the correct course of action.
The agreement for the legal work necessary to modify the plan has been sent to all participating Agencies. When all have approved in writing this next phase will begin.
May 15, 2009 Update
The Pleasant Hill Recreation & Park District Board of Directors agreed to an extension of the Retainer Agreement with Chang, Ruthenberg & Long. The participating Districts have agreed to split up the Plan and trust into comparable local District plans and trusts. In splitting the plan, each District will have to adopt the current Plan document as its own plan and become the employer- sponsor of its district plan and trustee of its district trust. The accounts of the district’s employee and former employee participants then would be transferred to the respective district plan and trust. At that point, each District will decide how to proceed from that point forward with its district plan.
Pleasant Hill Recreation & Park District will be making employees whole and then transferring the qualified plan to the District’s current plan through PARS. These funds would then become available to all former employees at this point should they choose to request a distribution or rollover of their account balance. To carry out this transitional split-up of the Plan, Chang, Ruthenberg, & Long will need to be retained for additional legal services.
The next steps include:
- Examine the Plan’s asset accounts and participant account records to determine the amount of the Plan’s current assets, identify the participants belonging to each of the Districts, and determine the value of the accounts that belong to each district.
- Prepare a resolution (with accompanying amendment) amending the Plan to allow the split-up of the Plan and agreeing to split-up the Plan.
- Prepare the adoption agreement by which each district will assume its part of the Plan and trust.
- Prepare the mutual release and waiver.
June 15, 2009 Update
Documents have been drawn and distributed to each of the nine Districts that had participants in the Plan. These include a resolution amending the Plan to allow the split-up into separate plans for each respective employer group, an adoption agreement for each agency to assume its share of the Plan assets, and a mutual release and waiver.
These documents have been placed on the agenda for the next scheduled Board meeting (6/25/09) for the PHRPD Board to discuss, review and approve. If approved, this will allow funds that belong to the employees of PHRPD to be transferred into a separate plan that is under the direction of the PHRPD. This is a significant accomplishment as a major contributor to the delay in achieving progress in clearing the issues with the old Plan was the need to obtain agreement from all nine employer participants for the correct course of action.
The District is also engaging Chang, Rutherford & Long to assist them individually to clear the remaining issues that will allow these funds to be made available to the participant members.
July 17, 2009 Update
The Board of Directors approved the amending of the CRDEB Plan to allow the split-up of the Districts into separate, individual plans at the June 25 Board Meeting. As of this time, three other Districts have also approved the documents and resolutions to amend the original plan.
Our District is now working with the law firm of Chang, Ruthenberg & Long to re-qualify the plan by preparing a new Plan document with the ultimate goal of transferring the funds and making employees accounts entirely “whole” to the Public Agency Retirement System (PARS). Discussions have already taken place with PARS on the administration of this transfer to them. No final decisions have been made at this time as PARS is considering whether and how this administration would take place. If PARS did not take on the affected employees, the District would have to hire a Third Party Administrator to distribute the funds to the employees.
August 15, 2009 Update
Within the next few weeks, the District expects to receive documents drawn by Chang, Rutherford & Long that, once approved, will establish a separate approved plan for the District’s share of assets transferred from the CRDEB Plan. These CRDEB funds will than be increased by a separate District contribution to once again equal the entire account value as stated on the December 31, 2004 valuation statement prepared by CRDEB. Another District contribution will also be made to reflect an additional earnings value to the current date.
The current administrator for the District’s FICA alternative plan is PARS. PARS has agreed to establish individual accounts to receive rollovers for each of the former CRDEB participants. This could not be accomplished until these funds were in an approved plan. Once funds are held by PARS, they will become available for distribution to each participant upon request.
September 15, 2009 Update
The Pleasant Hill Recreation & Park District did receive the documents drawn by Chang, Rutherford & Long (Chang) to establish a separate plan for the District’s share of assets transferred from the CRDEB Plan. These documents were agenda items on the September 10, 2009 Board Meeting for review and approval. At this meeting, however, the Board members decided that they needed additional information from Chang in regard to the new plan prior to its approval. This agenda item will be immediately re-scheduled to the next Board meeting following receipt of information.
October 15, 2009 Update
All agencies that participated in the original CRDEB plan must approve a replacement plan in order for the CRDEB plan to be terminated and funds transferred to each respective agency. The Pleasant Hill Recreation & Park District Board did approve a plan in which to transfer the District’s share of the CRDEB plan’s assets. At this point the District cannot proceed further since some of the other agencies have not yet approved replacement plans.
November 15, 2009 Update
Updated information is not available at this time. Response from attorney is anticipated in the near future.
December 15, 2009 Update
The District continues to work with the last two agencies that have not returned the necessary paperwork and is now investigating options to possibly continuing the process without them. Pleasant Hill Recreation & Park District has already completed the paperwork and is anxious to finalize the process that will then allow employees to access their funds.
January 5, 2010 Update
Pleasant Hill Recreation & Park District is pleased to report that all the remaining Districts have filed and executed the required paperwork and have signed the documents. The next step is to prepare instructions for the transfer of the plan funds to the District’s account. This will involve transferring monies from accounts at American Funds and First Bank to the checking account at First Bank. After Pleasant Hill Recreation & Park District receives the monies from the defunct plan, employees will be made “whole” again by the transfer of their assets (deficit amount plus interest) to PARS (Public Agency Retirement Services.) After funds are held by PARS, they will become available for distribution to each participant upon request.
February 13, 2010 Update
The remaining Districts have filed and executed the required paperwork and have signed the documents. This required paperwork was completed at the end of December, 2009. Trustees Cal Camara (Hesperia Recreation District) and Bob Berggren (Pleasant Hill Recreation & Park District) have now submitted their signatures and the necessary paperwork to American Funds and First Bank to combine the accounts into one fund to ascertain exactly how much money remains. Currently the monies are drawing interest in various accounts at these two financial institutions. One account is needed in order to effectively divide the shares among the Districts. Once the funds are transferred, Districts will be sent their pro-rata share of the existing funds.
March 15, 2010 Update
The District has received its final allocation of funds from the old CRDEB plan. District and PARS representatives have met and the District has received from PARS a list of specific documents required from the District in order for PARS to accept these funds and establish an account for each participant. Once transferred, these funds would then be available for distribution upon request by the plan participants.
The District is proceeding as quickly as reasonably possible to complete all necessary documents for the transfer to PARS and has engaged an attorney to prepare some of the required documents, meanwhile compiling other requested information to complete this transfer to PARS. A significant amount of time and effort by District staff was required, since each of the over-1400 individual employee’s collective contributions had to be identified and totaled for the 12 years the plan existed. In addition, an earnings allowance for each account balance was calculated and applied for the Jan 1, 2005 thru Dec 31, 2009 time period.
April 15, 2010 Update
Final versions of the agreement between PARS and the District to establish the accounts and perform the administrative duties of the new trust account are currently being drawn. The check to fund individual accounts back to their full value as of Dec 31, 2004, with additional incremental earnings for the 2005-09 period, is being written for approval at the April 22, 2010, Pleasant Hill Recreation & Park District Board Meeting.
After signed agreements and funds have been received by PARS, these funds will be available for distribution or rollover to all participants. The District is realistically hopeful that this will all be accomplished within the next few weeks.
May 15, 2010 Update
The check to fully fund each member’s account back to its full value as of Dec 31, 2004, with additional, incremental earnings, has been drawn and is in route to PARS. PARS has established separate individual accounts for each member to credit this payment being received.
PARS will be sending distribution packets to all members no longer employed with the District in order for them to request distribution of their account balance. Employees that are still employed with the District will have a permanent additional retirement account established with PARS and will receive annual statements for their individual account activity. If the employee already has an existing PARS account they will now receive two annual statements, one for each separate account being maintained at PARS.
These new PARS accounts, like all other District retirement plans, may not be accessed by the employee while the employee is still employed with the District.
Any former CRDEB member who has changed his/her mailing address within the past few years is encouraged to contact Mark Blair at the Pleasant Hill Recreation & Park District Office (925)-682-0896 ext 27 to provide the new, current address information.
June 23, 2010 Update
PARS will be mailing distribution packets on or around July 1, 2010, to all members who are no longer employed by the District. Members can have their funds either distributed directly to them or rolled over into other retirement accounts at their option.
Former CRDEB members who are not currently employed by the District and who have not received a distribution packet by July 15, 2010, are encouraged to contact Mark Blair at the District Office (925)-682-0896 ext 27 to provide current address information.
About Pleasant Hill Recreation & Park District
Pleasant Hill Recreation & Park District was established in 1951 by citizens who desired recreational opportunities and park facilities in their community. Pleasant Hill Recreation & Park District serves over 40,000 people within the community, an area about 20% larger than of the City of Pleasant Hill. There are approximately 100,000+ persons who participate in programs, visit District facilities, or volunteer on an annual basis.
Today, the District includes over 269 acres of park land including 11 park sites, three pools, two community center facilities, a senior center complex, a cultural center, an historic site, trails, and open space areas. During the year the District offers over 2,300 enrichment classes, programs, activities, and sponsors numerous clubs and organizations.
PHR&PD is one of the largest employers of part-time staff in the Pleasant Hill area, such as lifeguards, swim instructors, summer school instructors, teachers, recreation leaders, and staff for many summer recreation and park programs. The District employs over 400 employees on an annual basis, some return each summer while others go back to college and other endeavors.
|
