BILL ANALYSIS �
AB 2053
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Date of Hearing: April 26, 2012
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Warren T. Furutani, Chair
AB 2053 (Allen) - As Introduced: February 23, 2012
SUBJECT : Postemployment health benefits: the San Francisco Bay
Area Rapid Transit District.
SUMMARY : Provides the San Francisco Bay Area Rapid Transit
District (BART) with the ability to establish a vesting
requirement for post-retirement health benefits coverage that is
different than what is allowed under current law for contracting
agencies. Specifically, this bill :
1)Allows BART to make contributions for postretirement health
benefits for members of the district board of directors, the
districts' unrepresented employees, and for any unit of
employees whose terms and conditions of employment are
determined through collective bargaining, based on years of
service performed for the district.
2)Requires employer contributions for postretirement health
benefits for unrepresented employees to conform with
eligibility criteria and schedules in approved bargaining
agreements for represented employees.
3)Prohibits any agreement reached from providing an employer
contribution for retiree healthcare for employees with less
than 10 years of service with BART except in cases where an
employee retires for disability.
4)Requires any agreement reached to provide full employer
contribution for employees with 15 or more years of service
with BART. Full contributions for employees who retire for
disability with less than 15 years of service is allowed.
5)Specifies that these provisions apply to BART employees first
hired on or after July 1, 2013, or on the date specified in
the bargaining agreement.
6)Specifies that these provisions do not apply to employees who
retire prior to the effective date of the bargaining
agreement, and, in the event the bargaining agreement
AB 2053
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establishes a retroactive effective date, these provisions
would not apply to any employee who retired prior to the
effective date of the MOU.
7)Requires BART to provide the California Public Employees'
Retirement System (CalPERS) with notification of each
agreement or personnel action applying these new requirements,
and any additional information necessary to implement the
proposed change.
EXISTING LAW establishes the Public Employees' Medical and
Hospital Care Act (PEMHCA) under the administration of CalPERS.
If a contracting agency elects to cover their employees for
health care under PEMHCA, they have the following options to
choose from in determining contribution amount for annuitants:
1)A contracting agency could opt to make the employer
contribution amount equal for both active employees and
annuitants. Under this option, an employee who retires and
meets the definition of annuitant becomes 100% vested and
receives an employer contribution amount equal to what the
active employees receive.
2)A contracting agency that joins PEMHCA on or after January 1,
1986, has the option to pay a lesser employer contribution
amount for annuitants than for active employees as long as the
agency increases its contribution for annuitants each year
until it equals the agency's contributions for active
employees. Based on the formula, it may take 20 years for the
lesser contribution amount to equal the active employee
contribution amount. Under this option, an employee who
retires and meets the definition of annuitant becomes 100%
vested and receives an employer contribution amount equal to
the lesser contribution amount.
3)A contracting agency has the option to establish a pre-set
"vesting schedule" of specific percentages based on an
employee's credited years of service to determine the employer
contribution amount for annuitants. Under this option, an
employee would have to work at least 10 years to qualify for
an employee contribution and would have to work 20 years to
become 100% vested.
FISCAL EFFECT : Unknown.
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COMMENTS : According to the author, "Like many public agencies,
BART has had funding issues over the years and has sought to
resolve its fiscal problems through layoffs and wage concessions
from its rank and file employees. Through these concessions and
changes in work rules the District has saved significantly.
Some projections of these savings are in excess of $100 million.
Unfortunately, many of the cuts have had a real detrimental
impact on BART workers and the public that relies on them to get
to and from work, school, and other places they need to go. To
avoid these results in the future we need to find creative ways
to save money that don't negatively impact the important transit
services BART provides and that don't economically harm the
workforce."
This bill is similar to AB 2510 (Fletcher), Chapter 600,
Statutes of 2010 which provided the City of San Diego with the
ability to establish a vesting requirement for post-retirement
health benefits coverage that is different than what is allowed
under current law for contracting agencies.
This bill is also similar to AB 1506 (Kuehl), Chapter 326,
Statutes of 1995, which authorized the Santa Monica Community
College District and the Mt. San Antonio Community College
Districts to establish their own schedule of employer
contributions for post-retirement health benefit coverage under
PEMHCA.
REGISTERED SUPPORT / OPPOSITION :
Support
California Conference Board of the Amalgamated Transit Union
(Sponsor)
American Federation of State, County and Municipal Employees
AB 2053
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Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957