BILL ANALYSIS
AB 1651
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Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1651 (De La Torre) - As Amended: March 2, 2010
Policy Committee: P.E.R. &
S.S.Vote: 4-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill ensures that school employees and local safety members
of the California Public Employees' Retirement System (CalPERS)
who are subject to mandatory furloughs are credited with the
same amount of service and compensation they would have received
absent the furlough. Specifically, this bill:
1)Requires that the calculations for CalPERS retirement
allowances for school employees and local safety members that
are subject to mandatory furloughs include, as credit for
service and compensation, the amount of service and
compensation that would have been credited and paid had the
employee not been subject to mandatory furloughs.
2)Specifies that "mandatory furlough" applies to furloughs
required by either their employer or by a memorandum of
understanding entered into on or after July 1, 2008.
FISCAL EFFECT
1)Unknown, probably minor administrative costs to CalPERS to
revise pension calculations and provide notices of changes
(CalPERS fund).
2)No state pension costs. Restorations of service credits could
result in minor future increases in employer contributions
paid by school district and contracting agency employers -
totaling several hundreds of thousands of dollars per year
statewide - to cover increase in unfunded liability.
COMMENTS
AB 1651
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1)Rationale . According to the sponsor, the California School
Employees Association, this bill is intended to provide
classified school employees, local police officers, and
firefighters with full retirement service credit if they are
furloughed as a result of the state budget crisis. The
sponsor asserts that this measure is a parity bill that
provides the school employees and local safety members with
the same protection that state employees, court employees,
California State University employees, officers of the
executive branch, and judges receive through legislation
signed into law last year.
2)Background . Under existing law, a full-time school or local
safety employee that is furloughed but still accrues at least
10 months, 1,720 hours, or 215 days of service will earn a
full year of retirement service credit. However, part-time
school and local safety employees, and those full-time
employees hired or retired mid-year who are furloughed and
unable to reach the 10-month, 1,720 hours, or 215 day
threshold, will experience a reduction in the overall amount
of service credit accrued. Many classified school employees
are part-time.
3)Related legislation . AB 399 (Brownley), Chapter 240, Statutes
of 2009, ensures that all state employees (executive,
legislative, judicial, and California State University)
subject to mandatory furloughs during the 2008-09 and 2009-10
fiscal years receive the same amount of retirement service
credit and final compensation he or she would have received
absent the furlough.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081