BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 752|
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UNFINISHED BUSINESS
Bill No: SB 752
Author: Correa (D), et al
Amended: 8/24/09
Vote: 27 - Urgency
PRIOR SENATE VOTES NOT RELEVANT
ASSEMBLY FLOOR : 78-0, 9/1/09 - See last page for vote
SUBJECT : County employees retirement: Orange County
SOURCE : Orange County Board of Supervisors
Orange County Employees Association
DIGEST : Assembly Amendments delete the Senate version of
bill relating to Solano County pension issues. This bill
now implements a recently negotiated bargaining agreement
between Orange County and the Orange County Employees'
Association (OCEA). This agreement implements a second
tier option for new non-safety employees and gives
incumbent non-safety employees a one-time election to enter
the new lower tier, for prospective service only.
ANALYSIS : The County Employees Retirement Law of 1937
permits counties and districts, as defined, to provide
retirement benefits to their employees pursuant to its
provisions. The law permits the board of supervisors or
the governing body of a district in Orange County, by
resolution adopted by majority vote and pursuant to a
memorandum of understanding, as specified, to make certain
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formulas for the calculation of benefits for general or
safety members applicable to the employees of a bargaining
unit comprised of general members, safety members, or
employees of the Probation Services Unit and Probation
Supervisory Management Unit, as specified, and requires the
affected members, subject to certain conditions, to pay
some or all of those additional contributions, as
specified.
This bill:
1. For employees first hired after the adoption of a
resolution by the board of supervisors, or the
governing body of a district within the county,
authorizing this option:
A. Requires employees to make a written election
between two specified pension calculations, the
current 2.7% at age 55 formula or the newly offered
1.62% at age 65 formula which also includes a
Defined Contribution (DC) component;
B. Specifies that this irrevocable election must
be made within 45 calendar days of beginning
employment with the county; and,
C. Specifies that if a new employee fails to make
an election within the 45 days, the employee will be
deemed to have elected the 1.62% at age 65 formula.
2. For current employees in the 2.7% at age 55 formula:
A. Allows, within 180 calendar days of approval of
the resolution, employees to make a one-time written
election to have all future service calculated under
the 1.62% at age 65 formula; and,
B. Requires employees electing the 1.62% at age 65
formula to sign an affidavit stating they fully
understand the impact of terminating the 2.7% at age
55 formula and that the election is irrevocable.
3. For current employees who move into a position
covered by the 2.7% at age 55 formula after adoption
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of the resolution:
A. Requires employees to make a one-time written
election between the two formulas, the 2.7% at age
55 formula or the 1.62% at age 65 formula, within 45
calendar days of becoming eligible for the 2.7% at
age 55 formula;
B. Requires employees electing the 1.62% at age 65
formula to sign an affidavit stating they fully
understand the impact of terminating the 2.7% at age
55 formula and that the election is irrevocable;
and,
C. Specifies that failure to make an election
within 45 calendar days will be cause for
termination of employment.
4. Requires any current county employee electing the
1.62% at age 65 formula to include the signature of
the designated beneficiary of the employee's pension
acknowledging the election or to include a written
declaration that one of the following is applicable:
A. The beneficiary has no identifiable community
property interest in the benefit;
B. The employee does not know the whereabouts of
the beneficiary;
C. The beneficiary has refused to sign the written
acknowledgement; or,
D. The beneficiary is incapacitated due to a
mental or physical condition.
5. Specifies that a person who knowingly provides false
information in the written declaration is subject to a
civil penalty of not less than $1,000 and not more
than $25,000.
6. Allows employees electing the 1.62% at age 65 formula
to receive a contribution from the county or district
to a DC plan.
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7. Specifies that these provisions do not apply to
safety members.
8. Allows the county to require employees electing the
1.62% at age 65 formula to pay additional member
contributions beyond the normal rate of contribution
required under current law.
9. Specifies that these additional contributions will
not result in an additional benefit to the member but
do become part of the accumulated contributions of the
member for the following purposes only:
A. Funding the annuity portion of the member's
retirement allowance; or,
B. Withdrawal of contributions by the member upon
terminating membership in the retirement system.
10. Specifies that the date of membership for new hires
making an election between the two specified pension
calculations will be retroactive to the date of hire.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 9/1/09)
Orange County Board of Supervisors (co-source)
Orange County Employees Association (co-source)
ARGUMENTS IN SUPPORT : According to the Orange County
Employees' Association, "SB 752 allows miscellaneous
employees in Orange County to voluntarily opt-in to a new
hybrid retirement plan for new and general members of the
retirement system. The optional hybrid plan includes a
1.62% at age 65 Defined Benefit Plan as well as a Defined
Contribution Plan?Current employees will have the option of
staying in the 2.7% at age 55 plan or electing the new
hybrid plan. No employee will be forced out of the 2.7% at
55 plan. This is part of a collectively-bargained agreement
between the parties. OCEA believes that SB 752, which
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implements this agreement, is in all parties' best
interest."
Other supporters state, "The County of Orange is pleased to
join with the OCEA in supporting SB 752. The agreement is
an innovative partnership of the OCEA and the County to
address the needs of our workforce while remaining
responsible stewards of taxpayer dollars."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Caballero, Charles Calderon, Carter, Chesbro,
Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore,
Duvall, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning,
Nava, Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Buchanan, Vacancy
DLW:nl 9/16/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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