BILL ANALYSIS AB 1667 Page 1 Date of Hearing: May 5, 2010 ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL SECURITY Alberto Torrico, Chair AB 1667 (Swanson) - As Amended: April 27, 2010 SUBJECT : Public employment: County of Alameda. SUMMARY : Implements the retirement provisions of a recently negotiated bargaining agreement between Alameda County and the Alameda County Deputy Sheriff's Association (DSA). This agreement eliminates the current 3% at 50 formula for all new deputies hired after April 17, 2010, and instead allows newly hired deputies to choose between the basic 2% at 50 formula or a 3% at 55 formula which requires additional employee contributions, as specified. Specifically, this bill : 1)Requires deputies and unrepresented safety employees first hired after April 17, 2010, to make a written election to be covered under either a 2% at 50 formula or a 3% at 55 formula. The 3% at 50 formula will no longer be available to new hires. 2)Specifies that this irrevocable election must be made within 45 calendar days of beginning employment with the county. 3)Specifies that if a new deputy fails to make an election within the 45 days, the deputy will be deemed to have elected the 2% at age 50 formula. 4)Allows the Board of Supervisors of the County of Alameda (Board) to provide a different retirement formula for members of other safety bargaining units or other unrepresented safety employees if agreed to in a negotiated memorandum of understanding. This agreement may require a member to pay all or part of the required member or employer contributions. 5)Prohibits the Board from requiring that a bargaining unit be divided solely for the purpose of providing different retirement benefits. The Board may, however, separately negotiate retirement benefits with a bargaining unit if the members of that bargaining unit so elect. FISCAL EFFECT : Unknown. AB 1667 Page 2 COMMENTS : According to the author, "Alameda County recognizes the need to address what has been identified as a looming statewide problem in need of a timely fix; the future costs associated with the provision of retirement benefits to public sector employees. In its effort to avoid negative consequences or runaway retirement costs, Alameda County has conscientiously pursued modifications to the retirement benefits for its respective employee bargaining units. To that end, the County recently reached agreement with the Deputy Sheriff's Association that will result in substantial long-term savings to County taxpayers." Based on information provided to the Committee, the terms of the bargaining agreement are as follows: The DSA contract expired on March 7, 2009. There are four classes represented by the DSA. They are: Deputy Sheriff Recruit; Deputy Sheriff I; Deputy Sheriff II; and Sergeant. There are 1,004 total authorized positions. The County and DSA began negotiating a successor memorandum of understanding (MOU) in May 2009. The new MOU was adopted by the Board on January 26, 2010. The new six-year contract that expires on March 14, 2015 provides for no salary increases for the contract's first three year and then incrementally aligns the DSA salaries with the median of similarly-sized law enforcement agencies during the final three years. The DSA also agreed to share in 10% of the health premium costs effective plan year 2010. Furthermore, the contract will eliminate the current 3% at 50 safety pension arrangement for all new deputies hire after April 17, 2010, replacing it with the basic 2% at 50 formula. New deputies may opt for a 3% at 55 formula which will require an additional employee contribution of 5% of salary annually for five years until vested and 3% of salary annually thereafter until retirement. Currently, deputies pay up to 15% of salary towards their pensions. The DSA agreed to jointly support state legislation necessary to accomplish this change in the retirement formula. REGISTERED SUPPORT / OPPOSITION : AB 1667 Page 3 Support County of Alameda (Sponsor) Deputy Sheriffs' Association of Alameda County Opposition None on file Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916) 319-3957