BILL ANALYSIS
AB 398
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Date of Hearing: May 7, 2003
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Gloria Negrete McLeod, Chair
AB 398 (Mullin) - As Amended: April 24, 2003
SUBJECT : County employees' retirement: San Mateo County.
SUMMARY : Authorizes the Board of Supervisors of San Mateo
County to provide retirement benefits for some, but not all,
general members or safety members of that county.
Specifically, this bill :
1)This bill would authorize the Board of Supervisors of San
Mateo County, by resolution, ordinance, contract or contract
amendment, to provide retirement benefits for some, but not
all, general members or safety members of that county.
2)The bill would specify that the Board of Supervisors may
provide a different formula for calculation of retirement
benefits for any subgroup of members within a classification,
including bargaining units or unrepresented groups.
3)Requires that these provisions would not be operative until
adoption by the Board of Supervisors of San Mateo County.
4)Eliminates a provision requiring that re-employment occur
within 2 years of termination and would also make technical,
nonsubstantive changes to that provision.
EXISTING LAW
1)Authorizes counties to provide retirement benefits to general
members and safety members of a county.
2)Establishes an alternative retirement plan for San Mateo
County known as Retirement Plan 3.
3)Provides that a member who has elected or transferred to Plan
3 and is terminated but is later re-employed will receive
credit for service rendered prior to termination, if the
reemployment occurs within 2 years of termination.
AB 398
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FISCAL EFFECT : Unknown
COMMENTS : The following background information was provided by
author and sponsors:
As part of its recently completed and ratified labor
negotiations, the San Mateo County Board of Supervisors agreed
to sponsor legislation to effectuate four provisions:
1) Bridge service credit for employees who return to County
employment.
Employees who enter County service may elect to enroll in
the regular "contributory" retirement plan, or enroll in
the "non-contributory" Plan 3 in which there is no employee
contribution. Many employees enroll in Plan 3 because they
do not plan on retiring from County employment and want to
maximize take home pay. At a later date, many employees
wish to change to the contributory plan. Employees may
move from Plan 3 to the contributory plan after they have 5
years of County service.
Currently, if an employee enrolls in Plan 3, resigns from
County employment and later is re-employed with the County,
he/she must again be covered under Plan 3 and must start a
new 5 year waiting period, unless the period of time
between the separation and re-employment is 2 years or
less. If the gap is 2 years or less, he/she can count the
prior Plan 3 time toward the 5 year waiting period. In
order to enhance our ability to recruit former employees
back into County service, we wish to eliminate the two-year
limitation and allow prior Plan 3 service to count toward
the five year waiting period regardless of whether the
employee is rehired within 2 years of their separation
date.Agreement was reached with our employee organizations
in negotiations to jointly support this proposed
legislation.
2) Allow negotiated retirement enhancements to be
implemented by individual bargaining units.
We have reached agreement with two of our three safety
unions and three of our seven non-safety unions on enhanced
retirement benefits. We are in negotiations with the other
AB 398
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unions regarding the same enhancements. Currently, if a
retirement enhancement is implemented, it must be
implemented for all bargaining units in the same category
(safety or non-safety). Although we hope to reach
agreement with the other unions, we may not be able to do
so.
Agreement was reached with the American Federation of
State, County and Municipal Employees (AFSCME), Service
Employees International Union (SEIU), the Building and
Construction Trades Council (BCTC), the Organization of
Sheriff's Sergeants (OSS) and the Probation and Detention
Association (PDA) to jointly support this proposed
legislation. The BCTC is affiliated with Operating
Engineers Local 3 (OE3) and the PDA is affiliated with
Teamsters Local 856. The County's Deputy Sheriff's
Association (DSA) is currently voting on the County's
offer.
3) Change the employee cost basis from 1/240 to 1/120.
In negotiations that concluded this past November, three
non-safety unions proposed implementation of the 2%@55.5
retirement enhancement. The County agreed to implement
this benefit in March, 2005, contingent on legislation that
would change the employee contribution basis from the
current 1/240 formula to a 1/120 formula.
Both the current 2%@61.25 benefit and the 2%@55 benefit
have an employee contribution basis formula of 1/120. The
2%@55.5 benefit, which is a richer and more costly benefit
than either 2%@61.25 or 2%@55 has a 1/240 formula for
employee contributions. This means that employees make
much lower contributions for the richer benefit and the
County makes much higher contributions.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
(Sponsor)
Opposition
AB 398
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None on file
Analysis Prepared by : Clem Meredith / P.E., R. & S.S. / (916)
319-3957