BILL ANALYSIS �
SB 1494
Page 1
Date of Hearing: June 20, 2012
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Warren T. Furutani, Chair
SB 1494 (DeSaulnier) - As Amended: June 14, 2012
SENATE VOTE : 37-0
SUBJECT : County employees' retirement: Contra Costa County.
SUMMARY : Provides for implementation of the negotiated
agreement between Contra Costa County and county employees to
create lower benefit tiers for new employees. Specifically,
this bill :
1)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.
2)Allows a district that participates in Contra Costa County
Employees Retirement Association (CCCERA) to also approve the
lower tiers, subject to collective bargaining, for new hires
on and after January 1, 2013.
3)Creates two formulas for the new tiers: a 2% at age 60
formula for non-safety workers, called Tier Four, and a 3% at
age 55 formula for safety workers, called Tier D.
4)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.
5)Requires that employees in the new tiers be subject to a
three-year final compensation calculation based on either the
three years preceding retirement or any consecutive three
years elected by the member.
6)Requires that if the employee has less than three 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.
7)Identifies the collective bargaining units and their official
representatives that may be subject to the new tiers.
SB 1494
Page 2
8)Limits retirement the allowance for an employee subject to
Tier Four and Tier D to no more than 90% of the employee's
final compensation amount.
9)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.
EXISTING LAW :
1)Establishes the County Employees' Retirement Law of 1937 ('37
Act), under which 20 counties have established independent
retirement systems, including the CCCERA.
2)Establishes various retirement formulas that public employers
may choose from, and subject to collective bargaining, provide
for employees.
3)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.
FISCAL EFFECT : Unknown. This bill has been keyed non-fiscal
by the Legislative Counsel.
COMMENTS : 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 Law 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."
Supporters state, "By negotiating these retirement plans at the
bargaining table, Contra Costa County achieves local pension
reform that saves money for county taxpayers and helps the
pension system, the CCCERA, stay sustainable for retirees.
SB 1494
Page 3
Legislation is required to amend the County Employees'
Retirement Law of 1937 to enact these changes."
REGISTERED SUPPORT / OPPOSITION :
Support
Contra Costa County (Sponsor)
American Federation of State, County and Municipal Employees
Contra Costa County Board of Supervisors
Contra Costa County Deputy Sheriffs Association
Probation Peace Officers Association Contra Costa County
Professional and Technical Employees of Contra Costa County
Public Employees Union, Local One
Western Council of Engineers
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957