BILL ANALYSIS
AB 1406
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Date of Hearing: May 6, 2009
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Ed Hernandez, Chair
AB 1406 (Emmerson) - As Amended: April 2, 2009
SUBJECT : County boards of retirement: Orange County and San
Bernardino County.
SUMMARY : Expands the current authority provided to the boards
of retirement of Orange County and San Bernardino County to
appoint specified personnel outside the civil service system to
include additional positions and classifications. Specifically,
this bill :
1)Allows the boards of retirement of Orange County and San
Bernardino County, which operate retirement systems
established under the County Employees' Retirement Law of 1937
('37 Act), to appoint, outside the county civil service
system, supervisors and employees who have specialized
training and knowledge in the following areas:
a) Pension and benefit member services;
b) Investment reporting compliance;
c) Investment accounting;
d) Pension benefit tax reporting;
e) Pension benefit financial accounting; and,
f) Pension law.
EXISTING LAW authorizes the boards of retirement of Orange
County, and San Bernardino County upon adoption by the board of
retirement, to appoint, outside of the county civil service
process, the following positions: an administrator, an assistant
administrator, a chief investment officer, subordinate
administrators, and senior management employees next in line of
authority to subordinate administrators, and legal counsel.
These employees are classified as "at will" employees are
considered employees of the retirement system, not the county,
and are subject to the terms and conditions of employment
established by the retirement board.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "AB 1406 would allow both
AB 1406
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the Board of Retirement of the San Bernardino County Employees'
Retirement Association (SBCERA) and the Board of Retirement of
the Orange County Employees' Retirement System (OCERS) to
directly hire supervisors and employees with specialized
training and knowledge, instead of having to hire these
employees within the civil service system. This bill would
allow both counties to better recruit qualified employees for
these positions in a more timely manner.
"Current law allows SBCERA and OCERS to hire their own
administrator, management employees, investment officers and
legal counsel rather than having to hire from the list of
applicants available under the civil service process. However,
existing law does not include this quick and efficient hiring
process for the supervisors and employees with specialized
training and knowledge who serve the tens of thousands of active
and retired members and their beneficiaries. Unfortunately,
both counties' Board of Retirement are experiencing a high
turnover rate with their supervisors and employees with
specialized training and knowledge. These employees obtain
training and expertise at the expense of the Boards of
Retirement and then leave to take a better paying position with
the counties. The continuous instability for these positions
are hurting the overall service levels that SBCERA and OCERS are
able to provide to their members and beneficiaries."
Supporters state, "In these economically challenging time,
SBCERA has been able to maintain a superior level of service to
our members due to extensive training of specialized employees.
AB 1406 offers these employees the opportunity to remain with
SBCERA as SBCERA employees rather than County employees and
maximize their professional training to the benefit of our
members."
This bill is similar to AB 2666 (Plescia) of 2008, which would
have authorized the San Diego County board of retirement to
adopt provisions classifying personnel appointed to administer
the retirement system as employees of the retirement system
instead of county employees. These employees would have been
subject to the terms and conditions of employment established by
the board of retirement. This bill died on the Senate inactive
file.
It is the Committee's understanding that, unlike the San
Bernardino County employees, the Orange County employees have
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not taken a support position on this bill. The Committee,
therefore, may want to consider amending the bill to delete
Orange County from its provisions. If an agreement can be
reached with those employees at a later date, the author could
amend Orange County back into the bill.
REGISTERED SUPPORT / OPPOSITION :
Support
San Bernardino County (Sponsor)
Safety Employees' Benefit Association
San Bernardino County Board of Supervisors
San Bernardino County Professional Firefighters
San Bernardino Public Employees Association
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957