BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 398
Nell Soto, Chair Hearing date: June 9, 2003
AB 398 (Mullin) as amended April 24, 2003FISCAL: NO
'37 ACT: SAN MATEO COUNTY: DIFFERENT RETIREMENT BENEFITS
FOR VARIOUS GROUPS OF COUNTY EMPLOYEES
HISTORY :
Sponsor: American Federation of State, County and
Municipal Employees (AFSCME)
Prior legislation: None
ASSEMBLY VOTES :
PER & SS 9-0 5/07/03
Assembly Floor 76-0 5/12/03
SUMMARY :
Would authorize 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.
BACKGROUND AND ANALYSIS :
1) Existing law , under the County Employees Retirement Act
of 1937 ('37 Act):
a) authorizes counties to provide retirement benefits to
general members and safety members of a county,
b) establishes an alternative retirement plan for San
Mateo County known as Retirement Plan 3, and
c) 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.
2) This bill :
a) would authorize the Board of Supervisors of San Mateo
David Felderstein
Date: 5/21/03 Page 1
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,
b) 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,
c) requires that these provisions would not be operative
until adoption by the Board of Supervisors of San Mateo
County,
d) eliminates a provision requiring that re-employment
occur within 2 years of termination, and
e) make technical, nonsubstantive changes to that
provision.
FISCAL EFFECT :
Unknown
COMMENTS :
1) 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:
A) 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
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Date: 5/21/03 Page 2
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.
B) 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
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.
C) Change the employee cost basis from 1/240 to 1/120 .
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Date: 5/21/03 Page 3
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% @ age 61.25 benefit and the 2% @ age 55
benefit have an employee contribution basis formula of
1/120. The 2% @ age 55.5 benefit, which is a richer and
more costly benefit than either 2% @ age 61.25 or 2% @ age
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.
2) OPPOSITION :
None to date
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David Felderstein
Date: 5/21/03 Page 4