BILL ANALYSIS                                                                                                                                                                                                    Ó






          SENATE PUBLIC EMPLOYMENT & RETIREMENT     BILL NO:  SB 54
          Jim Beall, Chair         HEARING DATE:  February 11, 2013
          SB 54 (Hancock)    as amended   2/06/13       FISCAL:  NO

           RETIREMENT:  COUNTY EMPLOYEES  
           
          HISTORY  :

            Sponsor:  Alameda County

            Other legislation:  AB 340 (Furutani)
                         Chapter 296, Statutes of 2012


           SUMMARY  :

          SB 54 would authorize Alameda County to provide a 2% at 65  
          retirement benefit formula for new employees covered by a MOU  
          adopted on or before December 31, 2012.   URGENCY BILL  .  
           
           BACKGROUND AND ANALYSIS  :
          
          1)   Existing law  :

             a)   establishes the Alameda County Employees' Retirement  
               Association (ACERA), a public retirement system governed  
               by the County Employee's Retirement Law of 1937 ('37  
               Act).

             b)   provides that all employees of the employer who are  
               in the same retirement classification (such as "general"  
               members) receive the same retirement benefit plan.

             c)   requires substantive changes to public retirement  
               systems in California pursuant to the Public Employee's  
               Pension Reform Act of 2013 (PEPRA), including to those  
               systems established under the '37 Act county retirement  
               law.

             d)    makes reforms pursuant to PEPRA, including that  
               California public retirement systems offer a 2% at 62  
               retirement benefit formula to new miscellaneous (or  
               general) members as of January 1, 2013, in lieu of prior  
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          Date:  2/06/13                                          Page  
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               existing retirement benefit formulas.

             e)   authorizes a limited exception to allow public  
               employers to provide a defined benefit pension plan  
               other than the PEPRA plan to new members on or after  
               January 1, 2013, but only if the alternative plan has a  
               lower retirement benefit formula and lower normal cost  
               than PEPRA and is approved by the Legislature after  
               being bargained between employer and employee  
               representatives.




          2)   This bill  :  
             
             a)    would authorize Alameda County, subject to a MOU  
               approved prior to December 31, 2012, to provide a  
               different retirement formula in lieu of the PEPRA  
               formula.  The formula would provide a retirement benefit  
               of approximately 2% at 65 for new members after a  
               resolution approving the formula is passed by the Board  
               of Supervisors.

             b)   would permit Alameda County to provide a different  
               retirement benefit formula to different bargaining units  
               within the general members retirement class.  Thus, some  
               employees could have a new 2% at 65 formula while other  
               employees in the same class that had not agreed to the  
               formula would have PEPRA's 2% at 62 formula.

             c)   requires employees subject to the 2% at 65 formula to  
               be subject to all other requirements of PEPRA, including  
               the cap on pensionable compensation and the 3-year final  
               compensation factor.

             d)   is an  URGENCY BILL  .

           COMMENTS  :

          1)   Proposed Author's Amendments  :  
           
          The committee is informed that the author will offer  
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          Date:  2/06/13                                          Page  
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          amendments to remove provisions of SB 54 that would permit  
          providing retirement benefits by bargaining unit.  Under  
          current law, retirement benefits are generally required to be  
          provided by member classification not by bargaining unit.   
          The proposed amendments would conform to current law.

          2)   Arguments in Support  :

          According to Alameda County's representative, SB 54  
          "represents the culmination of contract negotiations between  
          Alameda County and SEIU 1021."

          SEIU Local 1021 states that SB 54 "will save money for county  
          taxpayers and will strengthen the (Alameda County) pension  
          system."

          CSAC notes that "SB 54 is the product of local employees  
          coming together with Alameda County to achieve savings that  
          will protect local jobs and services."

          3)   SUPPORT  :

            Alameda County (Sponsor)
            California State Association of Counties (CSAC)
            Service Employees International Union, Local 1021 (SEIU)

          4)   OPPOSITION  :

            None to date                                                 
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          Glenn A. Miles
          Date:  2/06/13                                          Page  
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