BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 54
          Author:   Hancock (D)
          Amended:  2/13/13
          Vote:     27 - Urgency

           
           SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM.  :  4-0, 2/11/13
          AYES:  Beall, Walters, Block, Gaines
          NO VOTE RECORDED:  Yee


           SUBJECT  :    Retirement:  county employees

           SOURCE  :     Alameda County


           DIGEST  :    This bill authorizes Alameda County to provide a 2%  
          at 65 retirement benefit formula for new employees covered by a  
          memorandum of understanding (MOU) adopted on or before December  
          31, 2012.

           ANALYSIS  :    

          Existing law:

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

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

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          3. 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.

          4. 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 existing retirement benefit  
             formulas.

          5. 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.

          This bill:

          1. Authorizes 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 provides a  
             retirement benefit of approximately 2% at 65 for new members  
             after a resolution approving the formula is passed by the  
             Board of Supervisors.

          2. 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 three-year final  
             compensation factor.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   Local:  
           No

           SUPPORT  :   (Verified  2/12/13)

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


           ARGUMENTS IN SUPPORT  :    According to Alameda County's  

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          representative, this bill "represents the culmination of  
          contract negotiations between Alameda County and SEIU 1021."

          SEIU Local 1021 states that this bill "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."


          JA:d  2/12/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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