BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 89|
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THIRD READING
Bill No: AB 89
Author: Hill (D)
Amended: 9/2/11 in Senate
Vote: 27 - Urgency
SENATE PUBLIC EMPLOYMENT & RETIRE. COMM. : 5-0, 6/27/11
AYES: Negrete McLeod, Walters, Gaines, Padilla, Vargas
SENATE APPROPRIATIONS COMMITTEE : 8-0, 8/15/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Steinberg
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR : 75-0, 5/26/11 (Consent) - See last page
for vote
SUBJECT : Retirement: public employees
SOURCE : Author
DIGEST : This bill allows the County of San Mateo to
implement a memorandum of understanding providing lower
retirement tiers for new safety employees represented by
the Deputy Sheriffs Association
Senate Floor Amendments of 9/2/11 remove language requiring
public pension systems and employers to adhere to federal
limits on pensions.
Senate Floor Amendments of 8/22/11 clarify that any changes
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to the employee contribution payment requirement agreed to
in the memorandum of understanding (MOU) may not be
effective until approved in an MOU
between the county board of supervisors and the employee
organization, and make a technical correction.
ANALYSIS : The County Employees Retirement Law of 1937
('37 Act) authorizes counties and districts to establish
retirement systems pursuant to its provisions in order to
provide pension benefits to employees. The '37 Act
authorizes the Board of Supervisors of the County of San
Mateo to provide any retirement benefits for some, but not
all, general members or safety members of a county. The
law authorizes a resolution adopted pursuant to these
provisions to require members to pay all or part of the
contributions by a member or employer, or both, that would
have been required if specified provisions relating to the
calculation of retirement benefits, as adopted by the board
or governing body, had been in effect during the period of
time designated in the resolution.
This bill:
1. Allows San Mateo County to implement an MOU providing
lower pension tiers for new safety members represented
by the Deputy Sheriffs Association.
2. Specifies that any changes to the employee payment
requirement for represented employees must be approved
in an MOU between the county board of supervisors and
the employee organization.
Comments
The County of San Mateo has recently negotiated a new
six-year MOU with the Deputy Sheriffs Association that will
require new hires to choose reduced retirement formulas of
either two percent at age 50, or three percent at age 55
(the formula for current employees is three percent at age
50). This bill provides the statutory authority for the
county to implement this new retirement formulas.
Employees will be able to choose between the two new
formulas. It is expected that the County of San Mateo will
save nearly $23 million in pension costs over the next 10
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years.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Retirement benefits unknown future
savingsSpecials*
San Mateo pension potentially millions in
future savings Local
formula
* Public Employees' Retirement System and State
Teachers' Retirement System
* Judges Retirement System and Legislators'
Retirement System
SUPPORT : (Verified 8/15/11)
California Federation of Teachers
California Public Employees' Retirement System
County of San Mateo
Peace Officers Research Association of California
ARGUMENTS IN SUPPORT : According to information provided
by the author's office and the County of San Mateo, a
recently negotiated MOU with the Deputy Sheriffs
Association will require new hires to choose reduced
retirement formulas of either two percent at age 50, or
three percent at age 55 (the formula for current employees
is the three percent at age 50 formula). Employees who
choose the three percent at age 55 formula will also pay a
larger share of the cost in employee contributions.
ASSEMBLY FLOOR : 75-0, 5/26/11 (Consent)
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
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Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Carter,
Chesbro, Conway, Cook, Dickinson, Donnelly, Eng, Feuer,
Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Roger Hern�ndez, Hill, Huber, Hueso,
Huffman, Jeffries, Knight, Lara, Logue, Bonnie Lowenthal,
Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel
P�rez, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams,
Yamada, John A. P�rez
NO VOTE RECORDED: Campos, Cedillo, Davis, Gorell, Jones
CPM:mw 9/6/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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