BILL ANALYSIS �
AB 2140
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Date of Hearing: May 9, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2140 (Lara) - As Introduced: February 23, 2012
Policy Committee: PERSSVote:5-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill reduces retirement contribution rates for
miscellaneous and industrial members, of State Bargaining Unit
5, Highway Patrol, specifically the cadets of the Highway
Patrol, by 3 percentage points.
FISCAL EFFECT
The estimated impact to the California Public Employees'
Retirement System (CalPERS) is $200,000. The amount of
overpayment for each cadet class is approximately $100,000. The
annual total cost depends on the number of cadet classes. In
2011 there was no class and one class is currently training at
the academy. The CHP usually has two to four classes annually.
Reducing the amount the cadets pay into CalPERS has no immediate
impact to the state, however, to the extent CalPERS is not fully
funded, any reduction in contributions is potential pressure on
the General Fund.
COMMENTS
1)Purpose. According to the author, AB 2140 corrects a
retirement contribution oversight and ensures current law
accurately reflects the agreement reached between the State
and the California Association of Highway Patrolmen (CAHP)
regarding Highway Patrol cadet pension contributions. The
author notes during the ongoing process of administering state
employee bargaining agreements, the State Controller's Office
notified Department of Personnel Administration (DPA) of the
oversight and that current law required the cadets to
contribute 10% toward their pension. The author concludes
that AB 2140 accurately reflects the State's and CAHP's intent
AB 2140
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that cadets pay 7% of monthly pay to CalPERS.
2)Background. Bargaining Unit 5 cadets are the group of
employees who undergo the six-month CHP training academy.
During this training period, cadets are classified as
miscellaneous employees for retirement purposes. Upon
graduation from the CHP Academy, cadets are promoted to the
position of officer, and become Patrol members of CalPERS.
According to DPA, which represents the state in these
negotiations, the parties' intent on the cadets' retirement
contribution issue did not translate onto the current MOU nor
into the legislation that ratified the BU 5 MOU, SB 846
(Correa), Chapter 162, Statutes of 2010. As a result, CHP
cadets are now contributing more than what was agreed upon
between the State and CAHP into CalPERS. Further evidence of
the intent to have CHP cadets contribute 7% rather than the
current 10% can be seen in DPA's fiscal analysis of SB 846
which accurately reflects the intended 7% monthly pension
contribution for cadets.
3)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081