BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1346|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 1346
Author: Pan (D)
Amended: 4/25/13 in Assembly
Vote: 21
SENATE PUBLIC EMPLOY. & RETIRE. COMMITTEE : 3-1, 6/10/13
AYES: Beall, Block, Yee
NOES: Walters
NO VOTE RECORDED: Gaines
SENATE APPROPRIATIONS COMMITTEE : 5-2, 6/24/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 50-21, 5/20/13 - See last page for vote
SUBJECT : Public employees: post-retirement health benefits
SOURCE : California Professional Firefighters
DIGEST : This bill authorizes the Sacramento Metropolitan Fire
District (SMFD) to contract under the Public Employees Medical
and Hospital Care Act (PEMHCA), administered by the California
Public Employees' Retirement System (CalPERS), for a retiree
health care vesting schedule that is not currently available in
law. This new schedule is subject to, and dependent upon, a
memorandum of understanding (MOU) between the SMFD and the
affected SMFD employees' exclusive representative.
ANALYSIS :
CONTINUED
AB 1346
Page
2
Existing law:
1. Establishes PEMHCA, administered by CalPERS, to provide
health coverage for employees and annuitants of the state and
the California State University.
2. Allows a school or local agency employer to contract with
CalPERS for PEMHCA and requires the employee or annuitant
contribution, when added to the employer contribution, to
cover the total cost of the PEMHCA coverage premium.
3. Defines an annuitant as one who, among other requirements,
retires from the system within 120 days of separation from
public employment.
4. Does not allow contracting employers to provide PEMHCA
coverage to active employees without also covering retired
annuitants. However, with respect to the employer
contribution for annuitants, provides specified options
available to the contracting agency, including:
A. An equal employer contribution amount for both active
employees and annuitants. Under this option, an employee
who retires and meets the definition of annuitant becomes
100% vested and receives an employer contribution amount
equal to what the active employees receive; or
B. For a contracting agency that joins PEMHCA on or after
January 1, 1986, 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, as specified; or
C. A pre-set "vesting schedule" based on an employee's
credited years of service to determine a set percentage of
the employer contribution amount for annuitants. Under
this option, an annuitant would have at least 10 years of
CalPERS credited service to qualify for 50% of the
employer contribution and would need 20 years to become
eligible for 100% of the employer contribution. At least
five years must be with the employer providing PEMHCA.
AB 1346
Page
3
D. Allows under the 10-20 year vesting schedule, an
employer contribution of 100% if the annuitant retired for
disability or if the annuitant had 20 years of service,
all with the employer providing PEMHCA, regardless of the
length of separation from service prior to retirement.
1. Provides specified and individual variations to the above
options and requirements under separate statutes specific to
the City of San Diego, school employers, Alameda County
Transportation Improvement Authority, and Mariposa County.
These statutes are subject to collective bargaining
agreements.
This bill:
1. Requires SMFD to pay 25% of the employer contribution for an
SMFD annuitant after five years of credited service and
increases the employer contribution by 5% each year until the
employer contribution reaches 100% after 20 years of credited
service.
2. Requires the employer contribution to be determined pursuant
to a MOU that is not subject to impasse procedures.
3. Allows all of the employees' years of credited CalPERS
service to be used to determine the employer contribution but
requires that at least five years of service must have been
with the SMFD.
4. Requires SMFD to provide notification to CalPERS of the MOU
and any additional information, as requested, to CalPERS.
5. Specifies that the new vesting schedule applies to employees
who retire for service on or after the effective date of the
MOU.
6. Specifies that employees who retire for disability or who
retire for service with 20 or more years of service with
SMFD, regardless of the number of days between separation
from employment and retirement, will receive 100% of the
employer contribution.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
AB 1346
Page
4
According to the Senate Appropriations Committee:
Unknown potential savings in health care benefits (Local
Fund).
Minor, absorbable administrative costs to CalPERS (Special
Fund).
SUPPORT : (per Senate Public Employment and Retirement
Committee analysis of 6/10/13 -- unable to reverify at time of
writing)
California Professional Firefighters (source)
Professional Engineers in California Government
ARGUMENTS IN SUPPORT : According to this bill's sponsor,
California Professional Firefighters (CPF), this bill "strikes
the appropriate balance between much needed cost savings for
SMFD and the assurance and security of a vested retiree health
care contribution for the firefighters of SMFD."
CPF also states that, "The provisions of AB 1346 exemplify how,
in difficult economic times, employers and employees can work
together at the bargaining table to achieve compromises. This
bill appropriately protects those firefighters who have
faithfully delivered life and property saving services to their
communities, while at the same time, provides much needed cost
savings to the employer and subsequently the taxpayer who fund
those services."
ASSEMBLY FLOOR : 50-21, 5/20/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bloom, Blumenfield,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Cooley, Daly,
Dickinson, Eggman, Fong, Frazier, Garcia, Gatto, Gomez, Gray,
Hall, Roger Hernández, Levine, Lowenthal, Medina, Mitchell,
Mullin, Nazarian, Pan, Perea, V. Manuel Pérez, Quirk,
Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Weber,
Wieckowski, Williams, Yamada, John A. Pérez
NOES: Allen, Bigelow, Conway, Dahle, Donnelly, Beth Gaines,
Gorell, Grove, Hagman, Harkey, Jones, Linder, Maienschein,
Mansoor, Melendez, Morrell, Nestande, Olsen, Wagner, Waldron,
Wilk
NO VOTE RECORDED: Fox, Gordon, Holden, Jones-Sawyer, Logue,
AB 1346
Page
5
Muratsuchi, Patterson, Vacancy, Vacancy
JL:k 6/26/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****