BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 54| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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. CONTINUED SB 54 Page 2 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 CONTINUED SB 54 Page 3 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 **** END **** CONTINUED