BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2582
                                                                  Page  1

          Date of Hearing:   April 30, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 2582 (Bonta) - As Amended:  April 21, 2014 

          Policy Committee:                              PERSSVote:6-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill authorizes the San Francisco Bay Area Rapid Transit  
          District (BART) to establish a vesting requirement for  
          post-retirement health benefits coverage that is different than  
          what is allowed under current law for contracting agencies.  The  
          new vesting requirement applies to BART employees hired on or  
          after January 1, 2014, and requires employer contributions be  
          based on percentages associated with years of service with BART.

          Under the bill's formulation, the employer contribution would be  
          50% for 10 years of credited service, increasing incrementally  
          by 10% each credited year of service, and reaching 100% if the  
          employee attained 15 years of credited service, with a specified  
          exception for those employees who retire for disability.
           
          FISCAL EFFECT  

          1)Minor and absorbable administrative costs to the California  
            Public Employee Retirement System.

          2)Any future benefit costs or savings to BART will vary based on  
            the employer contribution negotiated from time to time in  
            collective bargaining agreements.  According to the author,  
            this modification to the vesting schedule for retiree  
            healthcare benefits is estimated to save BART $13.8 million  
            over the next 30 years.

           COMMENTS  

           Purpose.   According to the author, this bill authorizes  
          implementation of new labor contract provisions related to  
          vesting of healthcare benefits for BART retirees that were  








                                                                  AB 2582
                                                                  Page  2

          negotiated in the collective bargaining agreement between BART  
          labor and management representatives in the fall of 2013 and  
          have since been ratified by all parties.





           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081