BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 373
Gloria Negrete McLeod, Chair
Hearing date: April 11, 2011
SB 373 (DeSaulnier) as introduced 2/15/11 FISCAL: NO
CONTRA COSTA COUNTY RETIREMENT SYSTEM: DEPUTY SHERIFFS'
RETIREMENT BENEFITS
HISTORY :
Sponsor: Contra Costa County
Prior legislation: SB 524 (Torlakson)
Chapter 633, Statutes of 2006
SUMMARY :
SB 373 eliminates the sunset date on provisions allowing
Contra Costa County, as agreed to in a MOU with the Contra
Costa County Deputy Sheriffs' Association (DSA), to provide a
lower tier of benefits to employees who either elected to
participate in the lower tier prior to 2007, or who were
first hired and placed in the lower tier since 2007.
BACKGROUND AND ANALYSIS :
1) Existing law :
a) establishes the 1937 Act County Retirement Law, which
covers 20 independent county retirement systems, including
the Contra Costa County Employees Retirement Association
(CCCERA).
b) authorizes participating counties to provide retirement
benefits to general members and safety members of a county
retirement system, and generally requires that the benefits
be the same for all members of a retirement category (such
as "safety" or "general").
c) authorizes the Board of Supervisors of Contra Costa
County, pursuant to a memorandum of understanding with
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employees, to provide different retirement benefits for
different bargaining units of safety employees represented
by the DSA, the unrepresented groups of safety employees in
similar job classifications, and the supervisors and
managers of those employees.
d) authorizes the Board of Supervisors in Contra Costa
County, by resolution or ordinance and subject to the
provisions of the applicable MOU, to terminate increased
benefits above the basic level, as specified, for employees
who elect by written notice to terminate the higher
benefits and thereby receive a lower tier of benefits.
e) requires the Board of Supervisors, prior to adopting
such an ordinance, to provide a written explanation of the
effect and impact of the lower tier for each member
requesting a termination of increased benefits, and to
specify how the retirement allowance for employees electing
the lower tier of benefits will be calculated.
f) prohibits an employee who elects the lower benefit tier
from rescinding that election, except as specified.
g) provides that these provisions sunset as of January 1,
2012.
2) This bill
a) eliminates the January 1, 2012 sunset date.
FISCAL :
According to the sponsor,
There is currently a 5.65% difference in the cost to the
County for employees in Tier A versus employees in Tier C.
For each $80,000 deputy - Tier C saves the County
approximately $4,534 per year. For example, 100 Tier C
deputies would cost the County $453,366 less a year than Tier
A, and 500 of them would be $2.3 million less.
Currently, the County reports that of the 619 current sworn
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staff, 507 are in Tier A and 112 are in Tier C. As each Tier
A employee retires or separates, the County realizes
permanent savings for every new employee hired into Tier C.
COMMENTS :
1) Argument in support
According to the sponsor,
The DSA contract ratified in October, 2005, included
provisions for "Tier B," which was intended to create an
optional lower tier for current employees. Due to Internal
Revenue Code issues, the county was never able to implement
Tier B.
"Tier C" was created for new hires beginning January 1,
2007. Since then, Tier A has been closed to new employees.
The website for CCCERA defines the current benefit
structure for employees in the two tiers:
--------------------------------------------------------------
|Benefit |Tier A |Tier C |
|--------------------+--------------------+--------------------|
|Retirement Formula |3% at age 50 |3% at age 50 |
|--------------------+--------------------+--------------------|
|Final Compensation |Highest 1 Year |Highest 3 Years |
|Period | | |
|--------------------+--------------------+--------------------|
|Post-Retirement |3% Annually |2% Annually |
|Cost of Living | | |
|Adjustments | | |
--------------------------------------------------------------
---------------------------------------------------------------
|Basic member contribution rates for employees in Tier C are |
|approximately 3% to 4% lower than for employees in Tier A in |
|fiscal year 2010/2011. |
---------------------------------------------------------------
The statutory provision allowing the county and the deputy
sheriff's to negotiate the lower tier is expiring on January
1, 2012. The sponsor states that Contra Costa County and the
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DSA would like to retain the ability to negotiate lower
retirement tiers, which saves money for the County and
reduces the contribution rate for employees in the lower
tiers, thus allowing them more take-home pay.
2) SUPPORT :
Contra Costa County Board of Supervisors, sponsor
Contra Costa County Deputy Sheriffs Association (DSA)
Peace Officers Research Association of California
(PORAC)
3) OPPOSITION :
None to date
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