BILL ANALYSIS Ó
AB 1144
Page 1
ASSEMBLY THIRD READING
AB 1144 (Hall)
As Amended April 29, 2013
Majority vote
PUBLIC EMPLOYEES 5-2 APPROPRIATIONS 12-5
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|Ayes:|Bonta, Jones-Sawyer, |Ayes:|Gatto, Bocanegra, |
| |Mullin, Rendon, | |Bradford, |
| |Wieckowski | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Hall, |
| | | |Ammiano, Pan, Quirk, |
| | | |Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Allen, Harkey |Nays:|Harkey, Bigelow, |
| | | |Donnelly, Linder, Wagner |
| | | | |
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SUMMARY : Establishes, for the City of Carson, a specific
vesting schedule and employer contribution amount for annuitant
health care premiums under the Public Employees' Medical and
Hospital Care Act (PEMHCA). Specifically, this bill :
1)Provides a schedule for specified employer contributions for
postretirement health benefits for an employee of the city
based on the employee's completed years of credited service.
2)Specifies the employer contribution shall be mutually agreed
upon through collective bargaining by the City of Carson and
the exclusive representatives of city employees.
EXISTING LAW :
1)Establishes PEMHCA under the administration of the California
Public Employees' Retirement System (CalPERS). If a
contracting agency elects to cover their employees for health
care under PEMHCA, they have the following options to choose
from in determining contribution amount for annuitants:
a) A contracting agency could opt to make the employer
contribution amount equal for both active employees and
annuitants. Under this option, an employee who retires and
AB 1144
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meets the definition of annuitant becomes 100% vested and
receives an employer contribution amount equal to what the
active employees receive.
b) A contracting agency that joins PEMHCA on or after
January 1, 1986, has the option to pay a lesser employer
contribution amount for annuitants than for active
employees as long as the agency increases its contribution
for annuitants each year until it equals the agency's
contributions for active employees. Based on the formula,
it may take 20 years for the lesser contribution amount to
equal the active employee contribution amount. Under this
option, an employee who retires and meets the definition of
annuitant becomes 100% vested and receives an employer
contribution amount equal to the lesser contribution
amount.
c) A contracting agency has the option to establish a
pre-set "vesting schedule" of specific percentages based on
an employee's credited years of service to determine the
employer contribution amount for annuitants. Under this
option, an employee would have to work at least 10 years to
qualify for an employee contribution and would have to work
20 years to become 100% vested.
2)Permits Mariposa County to provide a higher employer
contribution for health benefits for its retirees than for its
active employees. This must be executed through a memorandum
of understanding (MOU) or by a resolution adopted by a
majority of its County Board of Supervisors.
3)Permits the City of San Diego to contribute to postretirement
health care coverage for the San Diego Police Officers
Association members, and also for unclassified or
unrepresented employees with at least 10 years credited
service. The employer contribution amount is subject to an
MOU, and applies only to those employees retiring on or after
the effective date of the MOU. In addition, the City of San
Diego is permitted to establish different vesting schedules
for employees in the same category with similar job duties,
notwithstanding other provisions of PEMHCA.
4)Permits school employers to base the contracting agency's
postretirement health benefit on credited years of service as
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determined by an MOU which is mutually agreed upon through
collective bargaining.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill would result in minor and absorbable costs
for CalPERS.
COMMENTS : Vesting is the amount of time in employment needed to
be eligible to receive employer contributions towards the cost
of retirees' monthly health premiums. The vesting requirements
for employer-paid retiree health benefits are different for
CalPERS' State, California State University, judicial, public
agency, and school members.
According to the author, "The City of Carson does not have a
vesting schedule for their post-retirement medical program. The
vesting schedule agreed upon through the collective bargaining
process between the City and their respective bargaining units
adopted a post-retirement local service vesting schedule of 10
years, decreasing the pre-set schedule of vesting schedule
requirement from 20 years of service to 10 years. This vesting
schedule is not currently authorized by law and would require
legislative action to authorize an exemption from the pre-set
vesting schedule currently in statute."
This bill is similar to AB 1346 (Pan) of this year which creates
a specific vesting schedule and employer contribution amount for
annuitant health care premiums for the Sacramento Metropolitan
Fire District.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0000430