BILL ANALYSIS
AB 398
Page 1
ASSEMBLY THIRD READING
AB 398 (Mullin)
As Amended April 24, 2003
Majority vote
PUBLIC EMPLOYEES 9-0
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|Ayes:|Negrete McLeod, Levine, | | |
| |Chan, Correa, Kehoe, | | |
| |Laird, Maldonado, | | |
| |Nakanishi, Spitzer | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Authorizes the Board of Supervisors (Board) of San
Mateo County (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.
Specifically, this bill :
1)Specifies that the Board may provide a different formula for
calculation of retirement benefits for any subgroup of members
within a classification, including bargaining units or
unrepresented groups.
2)Requires that these provisions would not be operative until
adoption by the Board.
3)Eliminates a provision requiring that re-employment occur
within two 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 the 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 two years of termination.
AB 398
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FISCAL EFFECT : Unknown
COMMENTS : As part of its recently completed and ratified labor
negotiations, the Board 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
five 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 two years or less. If the gap
is two 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 5-year waiting period
regardless of whether the employee is rehired within two years
of their separation date. Agreement was reached with employee
organizations in negotiations to jointly support this proposed
legislation.
2)Allow negotiated retirement enhancements to be implemented by
individual bargaining units: The County has reached agreement
with two of the three safety unions and three of the seven
non-safety unions on enhanced retirement benefits.
Negotiations are under way with the other 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 the
County hopes to reach agreement with the other unions, it may
not be able to do so.
AB 398
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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. 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.
Analysis Prepared by : Clem Meredith / P.E., R. & S.S. / (916)
319-3957
FN: 0000817