BILL ANALYSIS
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THIRD READING
Bill No: AB 1651
Author: De La Torre (D)
Amended: 5/28/10 in Assembly
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 4-2, 6/28/10
AYES: Correa, Corbett, Ducheny, Liu
NOES: Ashburn, Hollingsworth
SENATE APPROPRIATIONS COMMITTEE : 7-4, 8/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Walters, Wyland
ASSEMBLY FLOOR : 51-22, 6/2/10 - See last page for vote
SUBJECT : Public Employees Retirement Law: furloughs:
retirement
credit
SOURCE : California School Employees Association
DIGEST : This bill gives classified school employees and
local police and firefighters the same retirement service
credit they would have received absent any furlough.
ANALYSIS :
Existing Law
1.Known as the Public Employees' Retirement Law (PERL)
CONTINUED
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provides pension benefits based in part upon credited
service. The PERL provides that credit for service
generally is accrued based upon service rendered and
compensated in a fiscal year, and that time during which
a member is absent without compensation is not allowed
for computing service.
2.Provides that a state employee (executive, legislative,
judicial, and California State University) who is a
member of the California Public Employees' Retirement
System (CalPERS), and 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 had the
employee not been subject to mandatory furloughs.
3.Provides that a trial court employee who is a member of
CalPERS, and 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 had the employee not been subject
to mandatory furloughs.
This bill:
1.Provides that an employee of a county office of
education, a school district, a school district that is a
contracting agency, a community college district, or a
local safety member, as specified, who are members of
CalPERS, and subject to mandatory furloughs receive the
same amount of retirement service credit and final
compensation value he or she would have received had the
employee not been subject to the mandatory furlough.
2.Specifies its provisions affect those persons subject to
mandatory furloughs occurring on or after July 1, 2008 as
directed by the employer, or by memorandum of
understanding between the employer and employee
bargaining unit.
Background
On December 12, 2008, the Governor implemented a furlough
of state employees for two days per month from February 1,
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2009 through June 30, 2010. On July 1, 2009, the Governor
added another furlough day through June 30, 2010.
A member's retirement allowance is computed based on
benefit formula, final compensation and service credit.
Although the benefit formula is unaffected by a furlough,
there might be an impact on service credit accrual, under
certain limited circumstances. To help mitigate this
concern, AB 399 (Brownley), Chapter 240, Statutes of 2009,
was subsequently enacted and required that the mandatory
furloughs not impact a state employee's service credit or
benefit for retirement purposes.
As a result of budgetary reductions, declining local trial
court revenues and to achieve savings, the Judicial Council
sought and achieved legislation that authorizes trial court
closures of one day per month for the transaction of
judicial business, until July 1, 2010.
The court closure results in one furlough day of trial
court employees each month. However, because the furloughs
could impact service credit accrual, under certain limited
circumstances for trial court employees who are CalPERS
members, SB 75 (Senate Budget and Fiscal Review Committee),
Chapter 342, Statutes of 2009, was enacted which requires
that for all retirement purposes, credit for service and
compensation earnable by trial court employees who are
members of CalPERS and who are subject to mandatory
furloughs, be based on the amount that would have been
credited had the employee not been subject to mandatory
furloughs.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Increase in employer -- Unknown, potentially $150
annually -- Local
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contributions
Admin costs -- Potentially less
than $75 -- Special*
SUPPORT : (Verified 8/17/10)
California School Employees Association (co-source)
California Professional Firefighters (co-source)
American Federation of State, County and Municipal
Employees, AFL-CIO (co-source)
Association of California School Administrators
Association of California State Supervisors
California Association of School Business Officials
California Federation of Teachers
California Labor Federation
California Public Employees' Retirement System, Board of
Administration
California School Boards Association
California State Employees Association
California State University Employees' Association
California Teachers Association
CDF Firefighters Local 2881
Faculty Association of California Community Colleges
Laborer's International Union of North American, Locals 777
and 792
San Francisco Unified School District
Service Employees International Union, State Council
ARGUMENTS IN SUPPORT : 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
(CSU) employees, officers of the executive branch and
judges receive through legislation signed into law last
year."
As examples, the sponsor states that the law "provides
retirement service credit for education employees who work
in the CSU system, but not if they work in local K-12
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schools or in California's community colleges. Current law
gives this retirement service credit protection to
California Highway Patrolmen, but not police officers who
work in cities and counties. Firefighters who are employed
through the Department of Forestry are protected, but not
firefighters who service our local communities."
Other supports such as the Association of California School
Administrators, the California School Boards Association
and the California Association of School Business Officials
contend that with reductions in payroll due to budgetary
cuts, this bill will help mitigate losses already incurred
by classified school employees through lay offs, loss of
health benefits and salary reductions.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Bass, Beall, Block,
Blumenfield, Bradford, Brownley, Buchanan, Caballero,
Charles Calderon, Carter, Chesbro, Cook, Coto, Davis, De
La Torre, De Leon, Eng, Evans, Feuer, Fong, Fuentes,
Furutani, Galgiani, Hall, Hayashi, Hernandez, Hill,
Huber, Huffman, Jones, Bonnie Lowenthal, Ma, Mendoza,
Monning, Nava, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Skinner, Solorio, Swanson, Torlakson,
Torres, Torrico, Yamada, John A. Perez
NOES: Anderson, Bill Berryhill, Blakeslee, Conway, DeVore,
Emmerson, Fletcher, Gaines, Garrick, Gilmore, Hagman,
Harkey, Jeffries, Logue, Miller, Niello, Nielsen, Norby,
Silva, Smyth, Tran, Villines
NO VOTE RECORDED: Tom Berryhill, Fuller, Knight, Lieu,
Nestande, Audra Strickland, Vacancy
CPM:cm 8/17/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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