CSAC Opposes County Retirement Systems Bill
April 29. 2016
CSAC is opposing a bill that would allow retirement systems operating under the County Employees’ Retirement Law of 1937 (known as ’37 Act counties) to essentially operate independently from its respective county without any input from the county Board of Supervisors. The Urban Counties Caucus (UCC) and the Rural County Representatives of California (RCRC) are also opposed to the bill.
AB 1853 (Cooper) would permit a ’37 Act county to elect to be an independent district by a simple vote of the Board of Retirement (BOR) and would allow the retirement system to shift their current operating authority model to one of the three authority types already in practice in the Counties of Orange, San Bernardino, and Contra Costa, respectively. Those counties adopted their new operating structures by going through the state legislative process. AB 1853 will bypass this public process by instead permitting a new operating structure to be put into place by a simple vote of the BOR itself.
CSAC − along with RCRC and UCC − opposes this bill for several reasons. First, retirement systems already have authority to change their operating model by pursing legislation – they may pursue legislation, go through a public analysis, and engage with the Board of Supervisors in order to make these types of changes under current law. Second, these potential changes in operating structure will result in increased administration costs, with lack of oversight by the Board of Supervisors regarding hiring, pay, and benefits of employees. Finally, AB 1853 includes language that would allow retirement system employees who had been employees of the county the opportunity to participate in county health care plans; this could pose major administrative problems for counties and employees as many health plans may not cover those who are not members, or a dependent of a member of the county.
AB 1853 is set for hearing on Wednesday, May 4 in the Assembly Public Employees, Retirement, and Social Security Committee. CSAC will keep counties apprised of developments. In the meantime, if you have any comments or feedback on AB 1853 please contact Faith Conley (firstname.lastname@example.org) or Betsy Hammer (email@example.com).