BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 226
Lou Correa, Chair Hearing date: August 30, 2010
AB 226 (Torrico) as amended 8/27/10 FISCAL: NO
COUNTY EMPLOYEES RETIREMENT - SACRAMENTO COUNTY
HISTORY :
Sponsor: County of Sacramento
Prior legislation: None
ASSEMBLY VOTES :
Not relevant; this is a new bill.
SUMMARY :
This bill would :
1)Clarify the characterization of compensation paid to a
retiring member that was deferred or modified based on
concessions in an executed collective bargaining agreement
between the County of Sacramento and a county employee
bargaining unit between July 1, 2010 and September 1, 2010;
2)Allow implementation of the memorandum of understanding (MOU)
between Sacramento County and the Sacramento County Deputy
Sheriffs' Association (SCDSA), which represents approximately
1,150 safety employees, and the Law Enforcement Management
Association (LEMA), which represents approximately 94 safety
employees; and
3)This is an URGENCY BILL .
BACKGROUND :
1)Existing law :
a) allows public employers and employee representatives to
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collectively bargain over wages, including benefits, and
working terms and conditions;
b) authorizes various safety retirement formulas,
including the 3% at age 50 safety retirement formula, which
is the retirement formula for currently-employed deputy
sheriff members of the SCDSA and the LEMA; and
c) sets forth the required member contributions for safety
retirement benefits but allows those contributions to be
higher (i.e., employer pays less) or lower (i.e., employer
pays more), as agreed to in a MOU.
ANALYSIS :
2) This bill would:
a) provide that compensation paid to a retiring member to
restore compensation the member would have been entitled to
receive pursuant to a collective bargaining agreement
executed on or before July 1, 2010, that was subsequently
deferred or otherwise modified as a result of a
concessionary amendment executed prior to September 1,
2010, must be considered pay rate or salary and not
considered to have been paid for the purpose of enhancing a
member's retirement benefits; and
b) ratify an agreement between the County of Sacramento
and the SCDSA and the LEMA. Specifically, the agreement:
1. Changes the retirement tier for safety employees from
3% at age 50 to 3% at age 55;
2. Maintains the 3-year highest compensation average and
statutory cost-of-living adjustment (COLA) of up to a 2%
annually;
3. Implements a new safety tier for employees who first
become members of the retirement system following
ratification of the agreement; and
4. Provides for the doubling of the employee contribution
for represented members of the SCDSA.
1) COMMENTS :
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Postponement of Increase in Compensation
The agreement includes a provision that postpones an increase
in compensation for specified general employees for 1 year.
In exchange, the county has agreed that the postponement will
not affect the final compensation calculation of employees
who retire the following year. Thus, the benefits of
employees who gave up the increase during that period will be
unharmed.
This provision is consistent with past practice and statutory
requirements enacted when state employees agreed, through
bargaining, to give up pay in exchange for personal leave
time. In those cases, the agreements and related statutes
specified that the employees' final compensation would not be
reduced as a result of having their pay cut. Therefore,
their benefits were unharmed.
This is also consistent with recent laws and Executive Orders
that ensure state employees who are furloughed do not have
their retirement benefits affected by the furloughs.
2) Arguments in Support
According to sponsor:
These changes result from recently negotiated labor
agreements that will prevent layoffs without increasing
our pension obligations. This bill will enable
Sacramento County to establish a new lower retirement
tier for some of our new county law enforcement
employees of 3 percent at age 55 with a three-year
highest compensation average, and a retiree COLA not to
exceed 2 percent annually.
The agreement addresses the legitimate interests of all
parties while generating financial savings and
preserving services for the people of Sacramento County.
The measures will collectively result in a savings for
the Sheriff's Department of $3.7 million this year, and
$2 million a year ongoing. This plan is department
specific - any savings and/or cuts will remain with the
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Sheriff's Department and will not affect other
departments. These agreements are fully funded by
employee give backs and should not result in increased
long-term liability for the County.
3) SUPPORT :
County of Sacramento (Sponsor)
American Federation of State, County and Municipal
Employees (AFSCME), AFL-CIO
Honorable John McGinness, Sheriff, Sacramento County
Sacramento County Deputy Sheriffs' Association (SCDSA)
Law Enforcement Management Association (LEMA)
4) OPPOSITION :
None to date
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Date: 8/27/10 Page 4