BILL ANALYSIS �
SB 1494
Page 1
SENATE THIRD READING
SB 1494 (DeSaulnier)
As Amended June 21, 2012
Majority vote
SENATE VOTE :37-0
PUBLIC EMPLOYEES 5-0
-----------------------------------------------------------------
|Ayes:|Furutani, Mansoor, Allen, | | |
| |Ma, Wieckowski | | |
| | | | |
-----------------------------------------------------------------
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 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 employees
hired 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
the 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
SB 1494
Page 2
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.
8)Limits retirement 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 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 to provide for employees, which is subject to
collective bargaining.
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 is 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
SB 1494
Page 3
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.
Legislation is required to amend the County Employees'
Retirement Law of 1937 to enact these changes."
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0004150