BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 2053
Gloria Negrete McLeod, Chair Hearing date: June 11, 2012
AB 2053 (Allen) as introduced 2/23/12 FISCAL: YES
BAY AREA RAPID TRANSIT DISTRICT: RETIREE HEALTH CARE VESTING
HISTORY :
Sponsor: California Conference Board of the Amalgamated
Transit Union
Other legislation: SB 1294 (Berryhill) 2012
Currently in Assembly PER&SS Committee
AB 2510 (Fletcher),
Chapter 600, Statutes of 2010
ASSEMBLY VOTES :
PER & SS 6-0 4/26/12
Appropriations 17-0 5/09/12
Assembly Floor 75-0 5/17/12
SUMMARY :
Authorizes the San Francisco Bay Area Rapid Transit District
(BART) to make contributions for postretirement health
benefits through the Public Employees' Medical and Hospital
Care Act (PEMHCA) subject to a vesting requirement, as
specified, which is different than that allowed under current
law for CalPERS contracting agencies. Any new vesting
schedule under this bill would be negotiated with employee
representatives. Furthermore, no schedule would be valid if
it provides a benefit to employees with less than 10 years of
service. Nor would it be valid if it fails to provide a 100
percent contribution to employees with 15 or more years of
service.
BACKGROUND AND ANALYSIS :
1)Current law :
a) permits CalPERS contracting agencies to provide
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health insurance coverage to their employees and
annuitants under PEMHCA.
b) requires contracting agencies who desire to
participate in PEMHCA to authorize their participation
by resolution of their governing boards. The resolution
must also set forth the employer contribution for the
PEMHCA health benefits.
c) requires contracting agencies to cover their retirees
under the same terms and conditions as their active
employees, as specified.
d) establishes vesting schedules that set forth the
employer contribution available to the employee for
postretirement health benefits based on the employee's
years of service.
e) provides postretirement health benefits, depending on
the type of PEMHCA contract, to employees who retire
from service from the local public employer with whom
they have five or more years of service.
1)This bill :
a) allows BART to make contributions for postretirement
health benefits for its board of directors, its
unrepresented employees, and for any unit of employees
whose terms and conditions of employment are determined
through collective bargaining, subject to three
conditions:
i. Contributions will be based on credited years of
service with BART;
ii. For represented employees, contributions will be
set through collective bargaining agreements;
iii. For unrepresented employees, contributions will
be in accordance with the same eligibility criteria
and schedule provided for in the agreement applicable
to represented employees.
b) invalidates any postretirement healthcare employer
contribution agreement that:
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iv. Provides an employer contribution to employees
with less than 10 years of service with BART;
v. Fails to provide a full employer contribution
for employees with 15 or more years of service with
BART;
vi. Clarifies that the employer may provide partial
or full coverage without regard to years of service in
cases of disability retirement.
c) specifies that these provisions apply:
vii. To BART employees first hired on or after July
1, 2013, or on the date specified in the bargaining
agreement;
viii. To represented employees only if the agreement
is incorporated into a memorandum of understanding;
ix. To no one who retires prior to the effective
date of the applicable memorandum of understanding.
COMMENTS :
1)Arguments in Support
According to the sponsor, this bill "would save the San
Francisco Bay Area Rapid Transit District (BART) millions
of dollars in retiree health care costs by extending the
time employees would be required to work in order to
qualify for retiree health benefits from CalPERS." The new
vesting schedule would require new employees to "serve 10
years to qualify for a reduced retiree medical benefit, and
15 years to qualify for full retiree medical benefits.
This would enable BART and its unions to incorporate the
new eligibility schedule into their collective bargaining
agreements."
According to the California Labor Federation, this bill
will reduce BART's retiree health care costs by enabling
BART and its unions to incorporate a new eligibility
schedule into their collective bargaining agreements.
In addition, the sponsor has provided the committee with a
copy of the agreement, reached in 2009, to increase the
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retiree health vesting schedule to the 15-year vesting
addressed in the bill and to seek legislation necessary to
implement the change. The agreement, incorporated into the
current memorandum of understanding, which expires on June
30, 2013, states the intent to implement the new vesting
schedule in fiscal year 2012 or 2013.
2)Information from BART
BART has not taken a position on AB 2053. In a letter to
the author, BART notes that
its current collective bargaining agreement (CBA) with its
represented employees does not expire until June 30, 2013,
and that it considers this bill to be a placeholder in
nature subject to a new CBA currently under negotiation.
3)SUPPORT :
California Conference of the Amalgamated Transit Union,
Sponsor
California Labor Federation (CLF)
4)OPPOSITION :
None to date
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