BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 398|
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CONSENT
Bill No: AB 398
Author: Mullin (D)
Amended: 4/24/03 in Assembly
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 5-0, 6/9/03
AYES: Soto, Ashburn, Escutia, Karnette, Oller
ASSEMBLY FLOOR : 76-0, 5/12/03 - See last page for vote
SUBJECT : County employees' retirement: San Mateo County
SOURCE : American Federation of State, County and
Municipal
Employees
San Mateo County
DIGEST : This bill authorizes 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.
ANALYSIS :
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
CONTINUED
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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.
This bill:
1.Specifies that the San Mateo County Board of Supervisors
may provide a different formula for calculation of
retirement benefits for any subgroup or members within a
classification, including bargaining units or
unrepresented groups.
2.Requires that these provisions will not be operative
until adoption by the Board.
3.Eliminates a provision requiring that re-employment occur
within two years of termination and also makes technical,
nonsubstantive changes to that provision.
Comments
As part of its recently completed and ratified labor
negotiations, the Board agreed to sponsor legislation to
effectuate the following 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
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must start a new five-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
five-year waiting period. In order to enhance the
County's ability to recruit former employees back into
County service, they 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 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.
Agreement was reached with the American Federation of
State, County and Municipal Employees, Service Employees
International Union, the Building and Construction Trades
Council (BCTC), the Organization of Sheriff's Sergeants
and the Probation and Detention Association (PDA) to
jointly support this proposed legislation. BCTC is
affiliated with Operating Engineers Local 3 and the PDA
is affiliated with Teamsters Local 856. The County's
Deputy Sheriff's Association 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 1/120 formula.
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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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/11/03)
American Federation of State, County and Municipal
Employees (co-source)
San Mateo County (co-source)
California Teamsters Public Affairs Council
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,
Calderon, Canciamilla, Chavez, Chu, Cogdill, Cohn,
Corbett, Correa, Cox, Daucher, Diaz, Dutra, Dutton,
Dymally, Firebaugh, Frommer, Garcia, Goldberg, Hancock,
Harman, Haynes, Jerome Horton, Shirley Horton, Jackson,
Keene, Kehoe, Koretz, La Malfa, La Suer, Laird, Leno,
Leslie, Levine, Lieber, Liu, Longville, Lowenthal,
Maddox, Maldonado, Matthews, Maze, McCarthy, Montanez,
Mountjoy, Mullin, Nakanishi, Nakano, Nation, Negrete
McLeod, Nunez, Oropeza, Pacheco, Parra, Pavley, Reyes,
Richman, Ridley-Thomas, Runner, Salinas, Samuelian,
Simitian, Spitzer, Steinberg, Strickland, Vargas,
Wiggins, Wolk, Wyland, Yee, Wesson
TSM:cm 6/11/03 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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