BILL ANALYSIS SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 775 Patricia Wiggins, Chair Hearing date: June 25, 2007 AB 775 (Niello) as introduced 2/22/07 FISCAL: NO '37 ACT COUNTIES: PROHIBIT RETIRED COUNTY EMPLOYEES WHO RETURN TO PART-TIME COUNTY EMPLOYMENT AFTER RETIREMENT AND THEN CLAIM UNEMPLOYMENT INSURANCE BENEFITS FROM CONTINUING THEIR PART-TIME COUNTY EMPLOYMENT AFTER RETIREMENT HISTORY : Sponsor: County of Sacramento Prior legislation: SB 1439 (Speier) Chapter 398 of 2004 ASSEMBLY VOTES : PER & SS 6-0 5/02/07 Assembly Floor 72-0 5/10/07 SUMMARY : Would prohibit a retiree of a county operating a retirement system under the County Employees' Retirement Law of 1937 ('37 Act) from being hired by the same '37 Act county from which they retired, if, during the 12-month period prior to the appointment, the retiree received unemployment insurance payments arising out of prior county employment as a retired annuitant. BACKGROUND : 1) Existing '37 Act law allows retired county employees to work for their former employer up to 960 hours per year after retirement . Existing '37 Act law authorizes a '37 Act county to employ a retired annuitant in a position requiring special skills or knowledge for up to 120 working days or 960 hours, whichever is greater, in a fiscal year or any other designated 12-month period, without reinstatement from retirement or loss or interruption of retirement benefits, and David Felderstein Date: 5/22/07 Page 1 2) Existing law provides Unemployment Insurance program Existing law also provides for the Unemployment Insurance (UI) program, administered by the State Employment Development Department, granting weekly UI payments for workers who lose their job through no fault of their of own. Eligibility for benefits requires that the claimant be able to work, be seeking work, and be willing to accept a suitable job. David Felderstein Date: 5/22/07 Page 2 3) Chapter 398 of 2004 prohibits PERS retired annuitants who claim Unemployment Insurance from working for their former employer Existing PERS law permits a retiree to work for in PERS-covered employment, for up to 960 hours in a calendar year, without reinstatement from retirement or loss or interruption of PERS retirement benefits. Chapter 398 of 2004 prohibits a PERS retiree from being hired by a state agency, if during the 12-month period prior to the proposed appointment, the PERS retiree received any UI payments arising out of prior post-retirement employment with a PERS employer. ANALYSIS : This bill would prohibit a retiree of a county operating a retirement system under the County Employees' Retirement Law of 1937 ('37 Act) from being hired by the same '37 Act county from which they retired, if, during the 12-month period prior to the appointment, the retiree received unemployment insurance payments arising out of prior county employment as a retired annuitant. FISCAL EFFECT : Unknown COMMENTS : 1) Arguments in support According to the sponsor, the County of Sacramento: "Employees who retire from county service and return to work as retired annuitants on temporary assignments are eligible to draw unemployment insurance in the event they have worked the maximum 960 hours or are released from their position due to lack of work. This practice has been referred to in the press as "triple dipping" (i.e., David Felderstein Date: 5/22/07 Page 3 collecting retirement, retired annuitant salary and unemployment insurance). While this allowable practice has not been prevalent in Sacramento County, the Board of Supervisors believes that it is inappropriate. Retired state employees are allowed to collect unemployment insurance after working 960 hours or being released due to lack of work, but are prevented from being hired as a retired annuitant by the employer from whom they earned their retirement if the retirees have received unemployment insurance benefits in a 12-month period." David Felderstein Date: 5/22/07 Page 4 Supporters state: "AB 775 (Niello) states that 1937 Act counties cannot hire a retired annuitant if they received any employment insurance payments from their home county during the prior year. This change parallels current law for state employees and conforms to federal law. AB 775 (Niello) will have no impact on the employee's retirement or retired annuitant amounts." 2) SUPPORT : California State Association of Counties (CSAC) 3) OPPOSITION : None to date ##### David Felderstein Date: 5/22/07 Page 5