BILL ANALYSIS �
SB 879
Page 1
SENATE THIRD READING
SB 879 ( Budget and Fiscal Review Committee)
As Amended August 22, 2014
Majority vote
SENATE VOTE : Vote not relevant
BUDGET 14-10
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|Ayes:|Skinner, Bloom, Campos, | | |
| |Chesbro, Daly, Dickinson, | | |
| |Jones-Sawyer, Mullin, | | |
| |Muratsuchi, Nazarian, | | |
| |Rodriguez, Stone, Ting, | | |
| |Weber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Gorell, Ch�vez, Grove, | | |
| |Harkey, Mansoor, | | |
| |Melendez, Allen, | | |
| |Nestande, Patterson, | | |
| |Wagner | | |
| | | | |
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SUMMARY : Provides legislative ratification for the memoranda of
understanding (MOU) agreed to by the state and the following
state bargaining units (BUs). Specifically, this bill :
1)BU 2 (Attorneys and Hearing Officers), represented exclusively
by the California Attorneys, Administrative Law Judges and
Hearing Officers in State Employment (CASE).
2)BU 10 (Professional Scientists), represented exclusively by
the California Association of Professional Scientists (CAPS).
EXISTING LAW :
1)Establishes the Ralph C. Dills Act, which requires the state
to collectively bargain with official representatives of
employee groups (i.e., bargaining units) regardless of wages
and working conditions, and to define negotiated agreements in
MOUs.
2)Establishes the California Department of Human Resources
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(CalHR) as the official representative of the Governor in all
matters related to collective bargaining.
3) Requires the any MOU between the state and an official
representative must be ratified by the Legislature.
4)Requires that an addendum to a ratified MOU must be submitted
to the Joint Legislative Budget Committee (JLBC) for analysis,
and, if so required by the JLBC, must also be approved by the
Legislature.
5)Establishes the California Public Employees' Retirement System
(CalPERS), which provides health and retirement benefits for
the state employees.
6)Requires the Legislative Analyst's Office (LAO) to analyze all
state MOUs and to provide analyses of the MOUs and their
fiscal impact to the Legislature within 10 days of receipt of
the MOUs from CalHR.
7)Establishes comprehensive public employee pension reform
through enactment of the Public Employees' Pension Reform Act
of 2013 (PEPRA) that apply to all public employee and public
pension plans on and after January 1, 2013, excluding the
University of California and charter cities and counties that
do not participate in a retirement system governed by the
state statute.
FISCAL EFFECT : Appropriates $12,629,000 for BU 2 and $3,124,000
for BU 10 for FY 2014-15.
COMMENTS : The 2014-15 Budget Act included preliminary funding
for BUs 2 and 10, in anticipation of the MOUs. This bill will
increase the overall 2014-15 budget by $9.027 million in
accordance with the two MOUs.
The following information summarizing the general provisions of
the MOUs was provided by CalHR:
Number of Employees:
The BU 2 agreement affects approximately 3,869 full-time
equivalents.
The BU 10 agreement affects approximately 2,870 full-time
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equivalents.
Retirement Benefit Formula Calculation:
BUs 2 and 10 employees who become CalPERS members on or after
January 1, 2013, are subject to the Public Employees' Pension
Reform Act (PEPRA) Retirement Formula of 2% at age 62.
BUs 2 and 10 employees who become CalPERS State Safety members
on or after January 1, 2013, are subject to the State Safety
PEPRA Retirement Formula of 2% at age 57.
BUs 2 and 10 employees who become CalPERS members on or after
January 1, 2013, are subject to the Second Tier PEPRA Retirement
Formula of one and 1.25% at age 67.
Pensionable compensation caps will apply to new CalPERS members
subject to PEPRA as defined under PEPRA.
Employee Pension Contribution - Attorneys and Hearing Officers:
BU 2 Miscellaneous and Industrial members in the First Tier
retirement subject to social security, contribute 9% of monthly
pensionable compensation.
BU 2 Miscellaneous and Industrial members in the First Tier
retirement not subject to social security, contribute 10% of
monthly pensionable compensation.
Effective July 1, 2013, all BU 2 State Safety members began
contributing 11% of monthly pensionable compensation.
Effective July 1, 2013, all BU 2 Second Tier members began
contributing 1.5% of monthly pensionable compensation and the
contribution will increase by 1.5% annually. The final annual
increase in the contribution rate shall be adjusted as
appropriate to reach 50% of normal cost.
Employee Pension Contribution - Scientists:
All BU 10 Miscellaneous First Tier members contribute 8% of
monthly pensionable compensation.
Effective July 1, 2013, all BU 10 State Safety members began
contributing 10% of monthly pensionable compensation. Effective
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July 1, 2014, all Bargaining Unit 10 State Safety members shall
contribute 11% of monthly pensionable compensation.
Effective July 1, 2013, all BU 10 Industrial members began
contributing 9% of monthly pensionable compensation.
On July 1, 2013, all BU 10 Second Tier members began
contributing 1.5% of monthly pensionable compensation and the
contribution will increase by 1.5% annually. The final annual
increase in the contribution rate shall be adjusted as
appropriate to reach 50% of normal cost.
Compensation BU 2:
Effective July 1, 2014, all BU 2 represented classifications
receive a 2% General Salary Increase (GSI).
Effective July 1, 2015, all BU 2 represented classifications
receive a 2.5% GSI.
Compensation BU 10:
The month following ratification of the MOU, all BU 10
represented classifications shall receive a one-time bonus of
$1,000.
Effective July 1, 2015, all BU 10 represented classifications
shall receive a 3% GSI.
Heath Benefits - Employer Contribution:
BU 2 - The pay period following ratification, the employer
health benefits contribution to the health insurance portion of
the BU 2 Consolidated Benefits (CoBen) allowance will be set at
a dollar amount that equals the 80/80 formula. The amounts shall
be increased on January 1, 2015, and January 1, 2016.
Heath Benefits - Dependent Coverage:
BU 10 - Thirty days following ratification, BU 10 employees who
first become eligible for health enrollment will become eligible
for the full employer contribution for dependent health coverage
after one year of state employment. The State will contribute
75% of the normal amount for dependents during the vesting
period.
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Miscellaneous:
The agreements contain various miscellaneous provisions.
Duration:
BU 2 - Three years - July 2, 2013, through July 1, 2016
BU 10 - Two years - July 2, 2013, through July 1, 2015
Analysis Prepared by : Genevieve Morelos / Budget / (916)
319-2099
FN: 0005309