BILL ANALYSIS
SB 871
Page 1
SENATE THIRD READING
SB 871 (Hollingsworth)
As Amended October 7, 2010
2/3 vote. Urgency
SENATE VOTE :Vote not relevant
SUMMARY : This bill makes various changes to implement the 2010
Pension Reform provisions agreed to as part of the 2010-11
budget package. Specifically, this bill :
1)"Rolls back SB 400 pension benefits" by adopting pension
benefit levels that existed before SB 400 of 1999 for various
classifications of State employees. These reduced benefit
levels would only apply to new state employees as of November
10, 2010, in bargaining units that did not currently have a
Memorandum of Understanding (MOU) with the State. This change
will not apply to existing employees. The chart below details
how the benefit levels would change for various employee
classifications:
-----------------------------------------------------------
|Retirement |Current Retirement |Proposed Formulas |
|Category |Formulas | |
|-------------------+-------------------+-------------------|
|Miscellaneous; |2% at Age 55 (up |2% at Age 60 (up |
|including CSU, |to 2.5% at 63) |to 2.418% at age |
|and Judicial | |63 |
|-------------------+-------------------+-------------------|
|Industrial |2% at Age 55 (up |2% at Age 60 (up |
| |to 2.5% at 63) |to 2.418% at age |
| | |63 |
|-------------------+-------------------+-------------------|
|State Safety |2.5% at Age 55 |2% at Age 55 |
|-------------------+-------------------+-------------------|
|Peace Officer and |3% at Age 50 |2.5% at Age 55 |
|Firefighters in | | |
|CSU, Legislative | | |
|and Judicial | | |
-----------------------------------------------------------
2)"End Pension Spiking" by imposing a three-year final
compensation formula to calculate retirement final benefits
for all new State employees, as of November 10, 2010 that are
SB 871
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members of a bargaining unit that are not currently subject to
an existing MOU with the State. This change conforms to
agreements made in recent MOU's and will result in all new
state employees being subject to this calculation method.
Existing employees will maintain the one-year final
compensation formula for calculating retirement benefits.
3)Urgency Clause. Declares this bill take effect immediately as
an urgency statute.
EXISTING LAW : SB 400 of 1999 established more generous
retirement formulas for state employees that were subsequently
adopted through collective bargaining agreements and other
actions by the Department of Personnel Administration.
FISCAL EFFECT : Unknown, but potentially very large savings to
CalPERS, which should reduce pressure to increase future state
contributions to that system.
COMMENTS : This bill would impact the following bargaining
units, which currently do not have an MOU with the State:
Bargaining Unit 1: Administrative, Financial and Support Staff
(SEIU)
Bargaining Unit 2: Attorney and Administrative Law Judges
(CASE)
Bargaining Unit 3: Professional Educators and Librarians (SEIU)
Bargaining Unit 4: Office and Allied (SEIU)
Bargaining Unit 6: Corrections (CCPOA)
Bargaining Unit 7: Protective Service and Public Safety (CSLEA)
Bargaining Unit 9: Professional Engineers (PECG)
Bargaining Unit 10: Professional Scientific (CAPS)
Bargaining Unit 11: Engineering and Scientific Technician
(SEIU)
Bargaining Unit 13: Stationary Engineers (IUOE)
Bargaining Unit 14: Printing Trades
Bargaining Unit 15: Allied Services (SEIU)
Bargaining Unit 17: Registered Nurses (SEIU)
Bargaining Unit 20: Medical and Social Services (SEIU)
Bargaining Unit 21: Education Consultants and Library (SEIU)
The following bargaining units have an MOU in effect and have
already adopted pension changes consistent with this bill:
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Bargaining Unit 5: Highway Patrol (CAHP)
Bargaining Unit 8: Firefighter (CDF)
Bargaining Unit 12: Craft and Maintenance (IUOE)
Bargaining Unit 16: Physician, Dentist and Podiatrist (UAPD)
Bargaining Unit 18: Psychiatric Technician (CAPT)
Bargaining Unit 19: Health and Social Services/Professional
(AFSCME)
Analysis Prepared by Christian Griffith / BUDGET / (916)
319-2099
FN: 0007214