Loading...
HomeMy WebLinkAbout07.a.3) Update on pension reform legislation-7-a-3 Central Contra Costa Sanitary District July 1, 2011 TO: HONORABLE BOARD OF DIRECTORS VIA: JAMES M. KELLY, GENERAL MANAGER FROM: RANDALL M. MUSGRAVES, DIRECTOR OF ADMINISTRATION AM MICHAEL SCAHILL, COMMUNICATION SERVICES MANAGER SUBJECT: SENATE AND ASSEMBLY BILLS COVERING ENHANCED BENEFITS These are the latest updates on bills that could impact public employees and pension - related benefits. Senate Bill 27: Public retirement: final compensation: computation: retirees Passed by Senate 39 — 0 on June 1, 2011 Sent to Assembly - Hearing scheduled for July 6, 2011 The key elements of the amended bill include: • Covers members of CaISTRS and CalPERS • 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. • Calculation of a member's final compensation would be limited to an amount not to exceed the average of his or her highest paid 12 or 36 months 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 Passed by Assembly 73 — 0 (7 not voting or absent) on May 12, 2011 Sent to Senate Passed 5 — 0 in Senate Committee on Public Employees & Retirement on June 27 Final Senate vote as yet not scheduled 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 January 1, 2012. Public Employee Pension Reform Act/Proposition 11 -0007: Although granted approval on 5/24/11 to begin collecting signatures to place the initiative before voters, the measure's author Roger Niello has said he will not pursue signature gathering because of the diminished likelihood of a special election in November of this year. He also stated that he is open to introducing a new measure for one of the 2012 ballots. He said he would likely amend his proposal to have a lower retirement age for public safety workers and tie a benefit cap to a specific dollar amount rather than a percentage of wages. Key points in original initiative: • Raise the minimum retirement age for all public workers to 62, including current workers • Require public employees to work at least five years, full -time before being eligible for a pension • Cap pension checks at no more than 60 percent of the highest three -year average base wage • End any form of spiking • Require employees to contribute at least as much as their employers to retirement accounts • End 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.