BILL ANALYSIS Ó SB 354 Page 1 Date of Hearing: July 8, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 354 (Huff) - As Amended April 6, 2015 ----------------------------------------------------------------- |Policy |Public Employees, |Vote:|6 - 0 | |Committee: |Retirement/Soc Sec | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill: 1)Clarifies the period during which employees of the cities of Brea and Fullerton who are "classic" members of the California Public Employees' Retirement System (CalPERS) can transfer to a Joint Powers Authority (JPA) formed by those cities and retain their benefit formulas received prior to transfer and not the formula required under the California Public Employees' Pension Reform Act of 2013. SB 354 Page 2 2)Deletes the reference date of December 31, 2012, and instead specifies that transferred employees will receive the defined benefit plans or formulas they were receiving prior joining the JPA, and clarifies that if any of the three contiguous cities to Brea and Fullerton join the JPA, transferred employees with no more than a 6-month break will also retain their existing benefit plans or formulas. FISCAL EFFECT: Insignificant costs to CalPERS and/or changes to benefits for employees. COMMENTS: Purpose. SB 1251 (Huff), Chapter 757, Statutes of 2014, allowed Brea and Fullerton to transfer employees to a new JPA while retaining the retirement formulas those employees enjoyed prior to the formation and implementation of the JPA. The bill used December 31, 2012, as the reference date for determining retirement benefits of those transferred employees. As a result, employees who joined Brea and Fullerton as "classic" employees after that date and were later transferred to the JPA were not grandfathered under the statute. This bill corrects that error by clarifying that any classic employee who transfers to the JPA will retain the classic benefit formula. Supporters maintain SB 1251 allowed Brea and Fullerton to form a JPA for purposes of sharing fire services with the intent of allowing classic employees to transfer to the JPA and retain their classic pension formulas. Since December 31, 2012, Brea and Fullerton have hired classic public safety employees to replace retiring employees, and this bill allows those employees to retain their benefits after transfer to the JPA as well. SB 354 Page 3 Analysis Prepared by:Joel Tashjian / APPR. / (916) 319-2081