BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 373|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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CONSENT
Bill No: SB 373
Author: DeSaulnier (D)
Amended: As introduced
Vote: 21
SEN. PUBLIC EMPLOYMENT & RETIREMENT COMM. : 5-0, 4/11/11
AYES: Negrete McLeod, Walters, Gaines, Padilla, Vargas
SUBJECT : Retirement: Contra Costa County
SOURCE : Contra Costa County Board of Supervisors
DIGEST : This bill eliminates the sunset date on
provisions allowing Contra Costa County, as agreed to in a
Memorandum of Understanding with the Contra Costa County
Deputy Sheriffs Association, 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.
ANALYSIS :
Existing Law
1.Establishes the 1937 Act County Retirement Law ('37 Act),
which covers 20 independent county retirement systems,
including the Contra Costa County Employees Retirement
Association (CCCERA).
2.Authorizes participating counties to provide retirement
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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").
3.Authorizes the Board of Supervisors of Contra Costa
County, pursuant to a memorandum of understanding (MOU)
with employees, to provide different retirement benefits
for different bargaining units of safety employees
represented by the Contra Costa County Deputy Sheriffs
Association (DSA), the unrepresented groups of safety
employees in similar job classifications, and the
supervisors and managers of those employees.
4.Authorizes the Board of Supervisors of 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.
5.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.
6.Prohibits an employee who elects the lower benefit tier
from rescinding that election, except as specified.
7.Provides that these provisions sunset as of January 1,
2012.
]
This bill eliminates the January 1, 2012 sunset date.
Comments
According to the sponsor, the Contra Costa County Deputy
Sheriffs Association, "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
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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:
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| 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 Cost of |3% annually |2% annually |
|Living Adjustments | | |
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|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. |
| |
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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 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
According to the sponsor, DSA, 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.
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Currently, the County reports that of the 619 current sworn
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.
SUPPORT : (Per Senate Public Employment and Retirement
Committee analysis)
Contra Costa County Board of Supervisors (source)
Contra Costa County Deputy Sheriffs Association
Peace Officers Research Association of California
CPM:cm 4/13/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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