BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 1494
Gloria Negrete McLeod, Chair Hearing date: May 7, 2012
SB 1494 (DeSaulnier) as amended 3/29/12 FISCAL: NO
CONTRA COSTA COUNTY: MEMORANDUM OF UNDERSTANDING
HISTORY :
Sponsor: Contra Costa County
Other legislation: SB 373 (DeSaulnier)
Chapter 68, Statutes of 2011
SUMMARY :
SB 1494 provides for implementation of the negotiated
agreement between Contra Costa County and county employees to
create lower benefit tiers for new employees.
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) requires a public employer and official employee
representative to collectively bargain over wages,
working conditions, and other terms and conditions of
employment.
c) establishes various retirement formulas that public
employers may choose from, and subject to collective
bargaining, provide for employees.
d) generally requires that when pension benefits are
reduced, the reduced benefits apply only to employees
hired on or after the date the reduced benefits become
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applicable.
e) requires an employer to provide disability benefits for
employees who become disabled while working.
f) requires an employer to pay cost-of-living adjustments
to retirees.
g) establishes a defined benefit retirement plan in Contra
Costa County that provides a retirement benefit based on
a percentage of the individual's final compensation,
which is determined by multiplying the number of years of
service by the individual's retirement age factor and
final compensation.
2) This bill :
a) allows Contra Costa County, subject to collective
bargaining, to approve a resolution to establish lower
retirement tiers for employees first hired on or after
January, 1, 2013.
b) allows a district that participates in CCCERA to also
approve the lower tiers, subject to collective
bargaining, for new hires on and after January 1, 2013.
c) creates two formulas for the new tiers: a 2 percent at
age 60 formula for non-safety workers, called Tier Four,
and a 3 percent at age 55 formula for safety workers,
called Tier D.
d) requires annual 2% cost-of-living adjustments for
retirees subject to the new formulas, and disability
benefits that are that same as for existing employees
(i.e., employees hired prior to January 1, 2013).
e) requires that employees in the new tiers be subject to
a 3-year final compensation calculation based on either
the three years preceding retirement or any consecutive
three years elected by the member.
f) requires that if the employee has less than three
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years of service in the plan, his or her retirement
benefit shall be determined by dividing the total
compensation by the number of months of service and then
multiplying by 12.
g) identifies the collective bargaining units and their
official representatives that may be subject to the new
tiers.
h) limits retirement the allowance for an employee subject
to Tier Four and Tier D to no more than 90 percent of the
employee's final compensation amount.
i) requires that the new Tier Four and Tier D benefit
plans also apply to non-represented employees in related
classification who are first hired on and after January
1, 2013.
COMMENTS :
1) Arguments in Support :
According to the author:
"Contra Costa County officials are presently in
negotiations with several of its employee bargaining units
regarding the creation of new pension tiers. However,
because of conditions set forth within the County Employees
Retirement Act of 1937, the County cannot amend the pension
tiers without legislative approval.
By permitting the County to meet with its various employee
bargaining units at the negotiating table to adjust the
pension tiers, SB 1494 will afford the County the
opportunity to create a local pension system that saves
money for County taxpayers and helps its pension system
stay sustainable for its employees."
The sponsor states the following:
"By negotiating these retirement plans at the bargaining
table, Contra Costa County achieves local pension reform
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that saves money for county taxpayers and helps the pension
system, the Contra Costa County Employees Retirement
Association (CCCERA), stay sustainable for retirees.
Legislation is required to amend the County Employees
Retirement Law of 1937 to enact these changes."
2) SUPPORT :
Contra Costa County Board of Supervisors, Sponsor
Deputy Sheriff's Association of Contra Costa County
Public Employees Union, Local One
Service Employees International Union (SEIU), Local 1021
Western Council of Engineers (WCE)
3) OPPOSITION:
None to date
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