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HomeMy WebLinkAbout06.a.3) Update on Senate and Assembly Bills covering enhanced benefits6,0 eze Central Contra Costa Sanitary District April 7, 2011 inswrolneffso, Wk _=400 VIA: JAMES M. KELLY, GENERAL MANAGER FROM: RANDALL M. MUSGRAVES, DIRECTOR. OF ADMINISTRATION f h4A MICHAEL SCAHILL, COMMUNICATION SERVICES MANAGER SUBJECT: SENATE AND ASSEMBLY BILLS COVERING ENHANCED BENEFITS These are the latest updates since March 17 on Senate and Assembly bills that could impact public employees and. pension - related benefits. Senate Bill 27: Public retirement: final compensation: computation: retirees Introduced 12/00/10 by Senator Joe Simitian (Derr — Palo Alto) Read on Senate Floor, referred to Rules Committee 12/00/10 Referred to Committee on Public Employees and Retirement (PE&R) on 1120111 Author's amendments added 313111; re -read on Senate floor; re- referred to Comm. on PE& R. 3/21/11 Passed by the PE &R committee (5 Ayes, 0 Noes) Referred to the Appropriations Committee The key elements of the amended bill include: • Amends the State Teachers' Retirement Law • Any change in salary or compensation principally for the purpose of enhancing benefits would not be included in the calculation of a member's final compensation. • State -- and NOT "Local" retirement boards are authorized to administer retirement systems • Unused vacation, personal leave, sick time, etc. shall not be used in the calculation of final compensation • Calculation of a member's final compensation would be limited to an amount not to exceed the average of his or her final five years of employment. • A person who retires on or after January 1, 2013 (including public school and state universities and colleges) may not work for any employer covered by state or local retirement system for at least 180 days. • Provisions become operative on July 1, 2012. Assembly Bill 340: County Employees Retirement; post - retirement service Introduced on Assembly Floor on 2110111 by Assembly member Warren Furutani (D- Long Beach), co- authored by Assembly Member Fiona Ma (D -San Francisco) Referred to Committee on Public Employees, Retirement and Social Security (PER & SS) Amended and re -read on 2124111; Rereferred to Committee on PER & SS No action since being sent back to the PER &SS Committee The key elements of the amended bill include: • Amends the county Employees' Retirement Law of 1937. • Bill would prohibit any form of spiking during last year of employment. • County or District would be required to identify pay period in which compensation was earned to its retirement board. • Effective January 1, 2012, retired person would be prohibited from reemployment in any capacity until at least 180 days have passed. • Provisions of this bill shall not be applied to reduce the pension of anyone who has retired prior to July 1, 2011. Two other bills have been noted in recent articles: Assembly Bill 961 Introduced by Assembly Member Allan Mansoor (R -Costa Mesa) on 2120111 The bill presently reads: "It is the intent of the Legislature to enact legislation that would reform public retirement systems." Senate Bill 520 Introduced by Senator Mimi Walters (R-- L.A County) on 2117111; referred to Rules Committee, amended and re- referred to Rules on 3121111 The key points of this amended bill include: • Creation of a hybrid retirement plan for public employees who become members on or after January 1, 2012, January 1, 2012. ■ The plan shall have both a defined contribution plan and a defined benefit plan for retirement for service. The defined benefit plan shall have formulas that yield a lower benefit than formulas in effect on January 1, 2011. ■ The plan shall not create a vested property right for the member with respect to any employer contributions before the date of retirement for service or disability. • Public employees who become members on or after January 1, 2012, shall not be eligible to enroll in the defined benefit plan that existed before January 1, 2012. Copies of the bills are available upon request. Proposed Proposition for November 2011 Ballot Former Republican Assembly member Roger Niello has submitted a proposed state- wide ballot initiative for the November 2011 ballot. Titled the "Public Employee Pension Reform Act," the measure would: • Set retirement age for all California public employees, including current workers in every classification, at age 62. • Limit retirement benefits for a public agency employee to no more than 60% of the highest annual average base salary over a period of 3 consecutive years of employment. • Split employer/employee contributions to pensions equally. • Exclude unused leave time from pension calculations. • Ends retroactive pension increases. Other than retirement age, the other parts would apply only to new hires. If approved by voters, the measure would take effect immediately.