BILL ANALYSIS �
AB 2140
Page 1
ASSEMBLY THIRD READING
AB 2140 (Lara)
As Introduced February 23, 2012
Majority vote
PUBLIC EMPLOYEES 5-0 APPROPRIATIONS 17-0
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|Ayes:|Mansoor, Allen, Gorell, |Ayes:|Fuentes, Harkey, |
| |Ma, Wieckowski | |Blumenfield, Bradford, |
| | | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Gatto, |
| | | |Ammiano, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
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SUMMARY : Reduces retirement contribution rates for
miscellaneous and industrial members of State Bargaining Unit
(BU) 5, Highway Patrol, by 3%.
EXISTING LAW requires the following retirement contribution
amounts for state miscellaneous or state industrial members of
BU 5:
1)For those members who do not participate in Social Security,
11% of compensation in excess of $317 per month towards
retirement.
2)For those members who do participate in Social Security, 10%
of compensation in excess of $513 per month.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the estimated impact to the California Public
Employees' Retirement System (CalPERS) is $200,000 annually.
The amount of overpayment for each cadet class is approximately
$100,000. The total cost annually depends on the number of
cadet classes, in 2011 there was not a class and there is one
currently being trained at the academy. The CHP usually had two
to four classes. 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.
AB 2140
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COMMENTS : According to the author, this bill 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
California Highway Patrol (CHP) cadet pension contributions.
BU 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 the California
Public Employees' Retirement System (CalPERS).
The current BU 5 memorandum of understanding (MOU) reached
between the state and the CAHP, required Patrol members to
increase their pension contribution by 2%, from 8% of monthly
pay to 10% of monthly pay. During negotiations that culminated
in the current BU 5 MOU, the state and CAHP intended that
cadets, while serving their six month academy training, would
also increase their pension contribution by 2%, from 5% to 7% of
their monthly pay. Once the cadets graduate and are sworn in,
their contribution rate would increase to 10%.
According to the Department of Personnel Administration (DPA)
who 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.
The author concludes, "In the ongoing process of administering
state employee bargaining agreements, the State Controller's
Office notified DPA of the oversight and that current law
required the cadets to contribute 10% toward their pension.
Consequently, a statutory change to Government Code section
20677.7 is required to accurately reflect the State's and CAHP's
intent that BU 5 cadets pay 7% of monthly pay toward the pension
fund."
AB 2140
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Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0003842