Adopt Resolution No. 2026-03 authorizing the establishment of a Premium Pay benefit for all part-time employees of 7.5% of base pay.

Federal law requires employers to cover all employees under Social Security, a qualified retirement plan, or an OBRA deferred compensation plan. Upon incorporation, the City of Canyon Lake opted out of Social Security by entering into a Section 218 agreement with PERS. Currently, full-time administrative employees are enrolled in PERS, full-time Fire employees in PARS, and part-time administrative employees in an OBRA plan with Nationwide.

With the City Council’s direction to establish a Police Department, staff aims to attract and retain experienced employees. Competitive pay and benefits are key to successful recruiting.

On September 1, 2021, City Council adopted Resolution No. 2021-39 to provide PARS for full-time Fire personnel. On November 8, 2023, Resolution No. 2023-40 updated the plan’s contribution tiers (see chart below). On December 10, 2025, Resolution No. 2025-53 extended PARS coverage to full-time Police personnel. Since PARS does not cover part-time employees, these staff currently have no comparable benefit.
 

Tier 1

Employee Classification	Hired As of Date	Length of Employment	Employer Contribution Rate	Employee Contribution Rate
Fire Safety Management	12/1/2021	N/A	15%	0%

 

Tier 2

Employee Classification	Hired as of Date	Length of Employment	Employer Contribution Rate	Employee Contribution Rate
Fire Safety Employees	12/1/2021	1+ years	12.5%	2.5%

 

Tier 3

Employee Classification	Hired as of Date	Length of Employment	Employer Contribution Rate	Employee Contribution Rate
Fire Safety Employees	7/1/2023	<1 year	7.50%	7.50%

Staff recommends adding a Premium Pay benefit of 7.5% to all part-time Fire, Police and City employees’ base pay, with a required 7.5% offsetting contribution to the City’s OBRA deferred compensation plan. This mirrors Tier 3 of the PARS plan and provides a similar benefit for part-time staff.

All full-time Fire and Police personnel participate in the PARS Defined Contribution Plan. The proposed Premium Pay benefit for all part-time employees would provide 7.5% of base wages, with a matching 7.5% contribution to an OBRA deferred compensation account, consistent with PARS Tier 3.