BILL ANALYSIS
AB 1651
Page 1
ASSEMBLY THIRD READING
AB 1651 (De La Torre)
As Amended May 28, 2010
Majority vote
PUBLIC EMPLOYEES 4-1 APPROPRIATIONS 12-5
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|Ayes:|Torrico, Furutani, |Ayes:|Fuentes, Ammiano, |
| |Hernandez, Ma | |Bradford, |
| | | |Charles Calderon, Coto, |
| | | |Davis, |
| | | |Monning, Ruskin, Skinner, |
| | | |Solorio, |
| | | |Torlakson, Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey |Nays:|Conway, Harkey Miller, |
| | | |Nielsen, Norby |
| | | | |
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SUMMARY : Ensures that specified 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 specified 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" includes any time period
on or after July 1, 2008, during which a member is directed to
be absent from work without pay as designated by either their
employer or by a memorandum of understanding entered into on
or after July 1, 2008, for the purpose of achieving budgetary
savings.
3)Requires employers to notify CalPERS and, if applicable, the
county superintendent of schools of the terms and conditions
AB 1651
Page 2
of any mandatory furlough, as specified, and to provide
CalPERS with any additional information they may require to
ensure proper implementation of this provision.
EXISTING LAW : 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 fiscal years 2008-09 and 2009-10 receive the
same amount of retirement service credit and final compensation
he or she would have received absent the furlough.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
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 : According to CalPERS, "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. Most school employees are part-time."
According to the sponsor, the California School Employees
Association, this bill, "?would provide classified school
employees, local police officers and firefighters with
retirement service credit if they are furloughed as a result of
the state budget crisis. AB 1651 is essentially a parity bill
that provides these important employee groups 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."
AB 1651
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Supporters conclude, "AB 1651 recognizes the deep pain that
state budget cuts have had on all employee groups across the
state and at different levels of government. Employees are
suffering. They are being laid off, losing health benefits,
having their hours reduced and are being furloughed. AB 1651
would prevent employees from also suffering a loss in their
service credit when they are furloughed and also losing their
pay for the day. It also corrects an inequity in providing
retirement service credit protection to some furloughed
employees and not others."
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0004674