BILL ANALYSIS Ó
SB 373
Page 1
Date of Hearing: June 8, 2011
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Warren T. Furutani, Chair
SB 373 (DeSaulnier) - As Amended: June 1, 2011
SENATE VOTE : 40-0
SUBJECT : Retirement: Contra Costa County.
SUMMARY : Eliminates the sunset date on provisions allowing
Contra Costa County, as agreed to in a Memorandum of
Understanding (MOU) with the Contra Costa County Deputy
Sheriffs' Association (DSA), to provide a lower tier of benefits
to employees who either elected to participate in the lower tier
prior to 2007, or who were first hired and placed in the lower
tier since 2007.
EXISTING LAW :
1)Authorizes counties operating retirement system pursuant to
the County Employees' Retirement Law of 1937 ('37 Act) to
provide retirement benefits to general members and safety
members of a county retirement system, and generally requires
that the benefits be the same for all members of a retirement
category (such as "safety" or "general").
2)Authorizes the Board of Supervisors of Contra Costa County to
provide different retirement benefits for different bargaining
units of safety employees represented by the DSA if agreed to
in a MOU, the unrepresented groups of safety employees in
similar job classifications, and the supervisors and managers
of those employees.
3)Authorizes the Board of Supervisors in Contra Costa County, by
resolution or ordinance and subject to the provisions of the
applicable MOU, to terminate increased benefits above the
basic level, as specified, for employees who elect by written
notice to terminate the higher benefits and thereby receive a
lower tier of benefits.
4)Requires the Board of Supervisors, prior to adopting such an
ordinance, to provide a written explanation of the effect and
impact of the lower tier for each member requesting a
SB 373
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termination of increased benefits, and to specify how the
retirement allowance for employees electing the lower tier of
benefits will be calculated.
5)Prohibits an employee who elects the lower benefit tier from
rescinding that election, except as specified.
6)Provides that these provisions sunset as of January 1, 2012.
FISCAL EFFECT : Unknown.
COMMENTS : According to the sponsor, Contra Costa County
(County), "In 2006, the Contra Costa County DSA and the County
successfully worked together on legislation that allows for
different safety retirement benefits to members of the DSA and
permits a process whereby safety employees can negotiate
different safety retirement benefits. This legislation, SB 524
(Torlakson), Chapter 633, Statutes of 2006, established the
necessary provisions that created Tier C.
"Tier C is a compromise negotiated between the County and the
DSA that promoted the best interests of the deputies and lowered
the County's long-term structural costs for retirement benefits.
Tier C created a less expensive retirement benefit for the
County that has resulted in a larger amount of take-home pay for
newer deputies, putting more money in the wallets of law
enforcement and other first-responders, while at the same time
reducing the county's structural cost of retirement benefits.
The continued use of Tier C is also good for the financial
stability for the County and for taxpayers.
"Unfortunately, because of the sunset date in current law, as of
January 1, 2012, safety employees and the County will no longer
be able to benefit from the compromises that Tier C
established?The purpose of this bill is to indefinitely extend
the necessary provisions to keep Tier C in effect."
According to information provided to the Committee by the
sponsor, there is currently a 5.65% difference in the cost to
the County for employees in Tier A versus employees in Tier C.
For each $80,000 deputy - Tier C saves the County approximately
$4,534 per year. For example, 100 Tier C deputies would cost
the County $453,366 less a year than Tier A, and 500 of them
would be $2.3 million less.
SB 373
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Currently, the County reports that of the 619 current sworn
staff, 507 are in Tier A and 112 are in Tier C. As each Tier A
employee retires or separates, the County realizes permanent
savings for every new employee hired into Tier C.
REGISTERED SUPPORT / OPPOSITION :
Support
Contra Costa County (Sponsor)
Contra Costa County Deputy Sheriffs Association
Peace Officers Research Association of California
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957