County Retirement Systems Bill Still Problematic
August 4, 2016
AB 1853 (Cooper) would allow any retirement system under the County Employees Retirement Law of 1937 (CERL) to elect to be an independent district without any county input on the logistical or cost aspects of the separation. Currently, retirement systems operating under CERL have the ability to modify their operating structure by pursuing legislation to establish the different option. This bill creates an option for retirement systems to make such a choice without input from any other stakeholders.
CSAC, along with the Rural County Representatives of California and the Urban Counties of California, opposes this bill. This bill would limit the public view and discussion of a major structural change, and would require no notice or recognition of the change by the Board of Supervisors. It would likely result in increased administrative costs, and creates potentially problematic interactions with health care benefits.
Specifically, AB 1853 contains language that would allow retirement system employees that had been employees of the county to continue participating in county health plans, even after the retirement system becomes independent of the county. Many health plans either do not offer or must approve coverage for those who are not actual employees of the contracting entity.