BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 752|
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THIRD READING
Bill No: SB 752
Author: Wiggins (D)
Amended: 5/28/09
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 7-0, 4/27/09
AYES: Correa, Ashburn, Benoit, Ducheny, Liu, Padilla,
Wiggins
SENATE APPROPRIATIONS COMMITTEE : 12-0, 5/28/09
AYES: Kehoe, Cox, Corbett, Denham, DeSaulnier, Hancock,
Leno, Oropeza, Runner, Walters, Wyland, Yee
NO VOTE RECORDED: Wolk
SUBJECT : Public employees retirement: Solano County
SOURCE : Solano County Board of Supervisors
DIGEST : This bill specifies that before a county issues
a pension obligation bond, the court and county will
jointly approve and submit a list that designates the
employer of all affected employees to the Public Employees'
Retirement System (PERS). After PERS prepares a
computation of assets and liabilities, the county and court
will enter into a written agreement that contains terms by
which the court will remit funds to the county subsequent
to the issuance of any future pension obligation bond.
ANALYSIS : Existing PERS law requires that, in the case
of a trial court located within a county contracting with
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PERS for retirement benefits, the trial court and the
county must participate under a joint contract with PERS,
resulting in pooled assets and liabilities, a single
employer contribution rate and a single benefit package.
AB 233 (Escutia), Chapter 850, Statutes of 1997, created
the Task Force on Trial Court Employees and altered the
funding mechanism for local trial courts, transferring
funding responsibility from the counties to the state.
Proposition 220 of 1998 authorized the voluntary
unification of each county's superior and municipal courts
into a one-tier trial court system.
SB 2140 (Burton), Chapter 1010, Statutes of 2000, granted
the courts the status of independent employers, making
trial court staff member employees of the courts. Prior to
SB 2140, the trial court staffs were county employees. SB
2140 included provisions addressing retirement, health
benefits, and Social Security coverage.
This bill, before the 5/28/09 amendments, applied only to
Solano County. Information furnished to the Senate Public
Employment and Retirement Committee by Solano County
indicates that the courts now function independently of the
counties in many respects. They provide their own capital
needs, devise and fund their own budgets, maintain their
own checking accounts, etc.
The Solano County Board of Supervisors believes that other
functions, such as retirement functions, should also be
administered by the courts.
In 2004, Solano County issued pension obligation bonds to
pay off its unfunded liabilities. This significantly
reduced the county's employer contribution rates for
benefits contracted with PERS, which are calculated
according to the amounts needed to amortize any unfunded
liability. Since the assets and liabilities of the trial
court and the county are currently pooled, the employer
contribution rate for the trial courts was also
significantly reduced as a result of the pension bonds,
even though the pension bonds did not reduce the unfunded
liability of court employees. Consequently, the state
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realized a significant reduction, though unwarranted, in
employer contributions as a result of the county pension
bonds. Separating the assets and liabilities of Solano
County and the trial court employees would result in the
trial court employees contracting separately with PERS and,
therefore, paying a higher employer contribution rate.
There are currently 38 counties contracting with PERS for
retirement benefits. Although Solano and butte Counties
both issued pension obligation bonds to reduce their
liabilities to the retirement system, it is not known how
many counties may issue bonds in the future. With the
5/28/09 amendments, it should assist the counties.
The author's office indicates the following were involved
in the 5/28/09 amendments: Solano County, PERS, Judicial
Council and SEIU.
Similar Legislation
This bill is similar to SB 73 (Aanestad) which would have
required that the assets and liabilities of Butte County
and Solano County and their respective trial courts be kept
in separate accounts under their existing joint contract.
That bill was held on the Assembly Appropriations Suspense
File.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/29/09)
Solano County Board of Supervisors (source)
DLW:cm 5/29/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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