BILL ANALYSIS Ó
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SENATE THIRD READING
SB
95 (Committee on Budget and Fiscal Review)
As Amended April 11, 2016
Majority vote. Budget Bill Appropriation Takes Effect
Immediately
SENATE VOTE: 23-13
SUMMARY: Amends the 2015-16 Budget Act to provide legislative
ratification for the memoranda of understanding (MOU) agreed to
by the state and Bargaining Unit (BU) 6. Specifically, this
bill provides legislative ratification for the MOU for BU 6
represented exclusively by the California Correctional Peace
Officers Association (CCPOA).
EXISTING LAW:
1)Establishes the Ralph C. Dills Act, which requires the state
to collectively bargain with the exclusive representatives of
employee groups (i.e. BUs) regarding wages and working
conditions, and to define negotiated agreements in MOUs.
2)Establishes the California Department of Human Resources
(CalHR) as the official representative of the Governor in all
matters related to collective bargaining with state employees.
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3)Requires that any MOU between the state and an exclusive
representative must be ratified by the Legislature.
4)Establishes the California Public Employees' Retirement System
(CalPERS), which administers health and retirement benefits
for state employees.
5)Requires the Legislative Analyst's Office (LAO) to analyze all
state MOUs and to provide analyses of an MOU and its fiscal
impact to the Legislature within 10 days of receipt of an MOU
from CalHR.
6)Provides that fully vested state retirees (e.g., with 20 or
more years of state employment) are entitled to an employer
contribution for retiree health care equal to 100% of the
weighted average premium of the four health plans most highly
utilized by all members. Dependents are eligible for a
contribution based on 90% of the average additional premiums
paid for dependents during the benefit year in which the
formula is applied. This is referred to as the 100/90
formula.
7)Requires that Medicare-eligible retirees enroll in Medicare
and choose a Medicare-coordinated health plan. Since these
plans may be cheaper than non-Medicare (or "Basic" plans),
thus resulting in some portion of the employer contribution
going unused, current law requires that any unused portion of
the 100/90 formula contributions may be applied to reimburse
retirees for the costs of Medicare Part B premiums. These
reimbursements are made in the form of an additional payment
to the retiree on the retirement warrant up to the cost of the
Part B premium. Whether or not a retiree receives the
Medicare Part B reimbursement in full or in part depends upon
the cost of that retiree's health plan.
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8)Provides that most state employees (those hired after 1985 or
1989, depending on class) must work for 10 years to receive
50% of the 100/90 formula, with an additional 5% per year of
service until, after 20 years, they are vested to receive 100%
of the 100/90 formula. Individuals hired prior to 1985 or 1989
could be subject to either five-year or 10-year vesting for
full coverage of the 100/90 formula.
9)Provides that retirees who were covered in certain BUs while
actively employed will receive an employer retiree health
contribution based on the 80/80 formula (i.e., 80% of the
weighted average premium of the four health plans most highly
utilized by all members).
10)Provides that the employer contribution for active state
employee health care shall be determined through collective
bargaining. In its MOU effective 2011 to 2013, BU 6 (CCPOA)
agreed to a flat dollar amount, as specified.
FISCAL EFFECT: According to CalHR, this bill results in the
following costs:
1)Fiscal Year 2015-16: $26.1 million ($26.0 million General
Fund)
2)Total Incremental Cost: $501.6 million ($498.8 million
General Fund)
3)Total Budgetary Cost: $1,094.5 million ($1,088.4 million
General Fund)
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COMMENTS: The following information summarizes the general
provisions of the MOU provided by CalHR:
Number of Employees: The BU 6 agreement affects approximately
26,835 full-time equivalents.
Health Benefits
1)Employer Contribution for Active State Employees
a) Effective the pay period following ratification, the
state's monthly health benefit contribution for each
employee shall continue to be a flat dollar amount equal to
80% of the weighted average of the basic health benefit
plan premiums of the four largest enrolled basic health
plans. For each employee with enrolled family members, the
employer shall continue to contribute an additional flat
dollar amount equal to 80% of the weighted average of the
additional premiums. The flat dollar amounts shall be
increased as appropriate pursuant to the formulas on
January 1, 2017, and January 1, 2018.
2)Employer Contribution for Future Retirees
a) Employees first hired on or after January 1, 2017, will
receive an employer contribution for retiree health
benefits based on an "80/80" formula. Retirees and their
dependents enrolled in a basic health benefit plan will
receive an employer contribution equal to 80% of the
weighted average premium of the four largest basic health
benefit plans based on state active employee enrollment.
Retirees and their dependents enrolled in a Medicare health
benefit plan will receive an employer contribution equal to
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80% of the weighted average premium of the four largest
Medicare health benefit plans based on state retiree
enrollment.
3)Prefunding of Other Post-Employment Benefits
a) Beginning July 1, 2016, the state and BU 6 members will
prefund retiree healthcare with the goal of reaching 50%
cost sharing of actuarially determined total normal cost
for employer and employees by July 1, 2018. The state and
employees will each make the following contributions:
i) Effective July 1, 2016, 1.3% of pensionable
compensation.
ii) Effective July 1, 2017, an additional 1.3% for a
total of 2.6% of pensionable compensation.
iii) Effective July 1, 2018, an additional 1.4% for a
total of 4.0% of pensionable compensation.
4)Post-Employment Health and Dental Benefit Vesting Schedule
a) All employees first hired on or after January 1, 2017,
will be subject to an extended vesting schedule providing
50% of the employer contribution upon completion of 15
years of state service, increasing 5% for each additional
year of service, until the employee is 100% vested at 25
years of state service.
5)Medicare Part B Supplemental Benefit
a) All employees first hired on or after January 1, 2017,
will no longer be eligible to use the employer contribution
for retiree health benefits for Medicare Part B premiums.
Compensation
1)General Salary Increase (GSI)
a) Effective the first day of the pay period following
ratification by the Legislature and the membership, all BU
6 represented classifications shall receive a 3% GSI.
b) Effective July 1, 2017, all BU 6 represented
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classifications shall receive a 3% GSI.
c) Effective July 1, 2018, all BU 6 represented
classifications shall receive a 3% GSI.
2)Retention and Recruitment Incentives
a) Effective the first day of the pay period following
ratification by the Legislature and the membership,
increases the annual incentive, payable semi-annually, for
Avenal, Ironwood, Chuckawalla Valley, Calipatria and
Centinela State Prisons from $2,400 to $2,600. This
provision also establishes the same incentive for Pelican
Bay, California Correctional Center and High Desert state
prisons.
3)Senior Peace Officer Pay Differential
a) Effective July 1, 2016, increases each step of the
Senior Peace Officer Pay Differential by 1%.
4)Uniform Allowance
a) Increases the annual uniform allowance from $530 to $950
for full time employees, excluding Medical Technical
Assistants (MTA).
b) Increases the annual uniform allowance from $305 to $546
for MTAs.
Miscellaneous
1)New Sections
a) Establishes a Health and Safety Grievance Process
(Article 6.16).
b) Effective May 1, 2016, and depending on available
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departmental funds, permits the cash out of up to 80 hours
of leave per year (Article 10.22).
c) Incorporates Side Letter 10 regarding Retired Annuitants
(Article 18.01).
d) Establishes a process and criteria for Correctional
Counselor I to request a transfer between institutions
(Article 20.06).
e) Establishes a voluntary overtime process for
Correctional Counselor I (Article 20.07).
f) Provides Correctional Counselor desktop computers with
internet access. (Article 20.08).
g) Prohibits a furlough program or a mandatory Personal
Leave Program during the term of the agreement (Article
27.05).
DURATION
BU 6 - Three years - July 3, 2015 through July 2, 2018.
Support: California Correctional Peace Officers Association
Opposition: None on File.
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Analysis Prepared by:
Genevieve Morelos / BUDGET / (916) 319-2099 FN: 0002768