AB 2004: Big Bear Fire Agencies Pension Consolidation Act of 2018.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2018-07-09
The County Employees Retirement Law of 1937 authorizes a county to establish a retirement system, as specified, in order to provide pension benefits to county, city, and district employees. Under that law, all officers and employees of a district become members of the countys retirement association on the first day of the calendar month after adoption, by specified vote thresholds, of a resolution by the governing body of the district providing for inclusion of the district in the retirement association and, if the county board of supervisors is not the governing body of the district, the board of retirement consents by majority vote.
This bill would enact the Big Bear Fire Agencies Pension Consolidation Act of 2018, which, on and after the effective date of a resolution of the Board of Retirement of the San Bernardino County Employees Retirement Association consenting to membership by employees of the Big Bear Fire Authority as described above, would provide that all safety employees currently employed by the Big Bear Lake Fire Protection District as of that date would be deemed to be employees of the authority and that all duties and obligations of the fire protection district in the employment relationship would be assumed by the authority. The bill would specify that the authority is a district for purposes of the County Employees Retirement Law of 1937. The bill would provide that the authority would assume the rights, obligations, and status previously occupied by the City of Big Bear Lake with regard to the portion of the city safety plan, which is that portion of the citys retirement plan that covers safety employees of the fire protection district, and to the replacement benefits program. The bill would also provide that termination of the city safety plan would not trigger withdrawal liability. The bill would state that its provisions are severable.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Bernardino.
This bill would declare that it is to take effect immediately as an urgency statute.
The County Employees Retirement Law of 1937 authorizes a county to establish a retirement system, as specified, in order to provide pension benefits to county, city, and district employees. Under that law, all officers and employees of a district become members of the countys retirement association on the first day of the calendar month after adoption, by specified vote thresholds, of a resolution by the governing body of the district providing for inclusion of the district in the retirement association and, if the county board of supervisors is not the governing body of the district, the board of retirement consents by majority vote.
This bill would enact the Big Bear Fire Agencies Pension Consolidation Act of 2018, which, on and after the effective date of a resolution of the Board of Retirement of the San Bernardino County Employees Retirement Association consenting to membership by employees of the Big Bear Fire Authority as described above, would provide that all safety employees currently employed by the Big Bear Lake Fire Protection District as of that date would be deemed to be employees of the authority and that all duties and obligations of the fire protection district in the employment relationship would be assumed by the authority. The bill would specify that the authority is a district for purposes of the County Employees Retirement Law of 1937. The bill would provide that the authority would assume the rights, obligations, and status previously occupied by the City of Big Bear Lake with regard to the portion of the city safety plan, which is that portion of the citys retirement plan that covers safety employees of the fire protection district, and to the replacement benefits program. The bill would also provide that termination of the city safety plan would not trigger withdrawal liability. The bill would state that its provisions are severable.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Bernardino.
This bill would declare that it is to take effect immediately as an urgency statute.
The County Employees Retirement Law of 1937 authorizes a county to establish a retirement system, as specified, in order to provide pension benefits to county, city, and district employees. Under that law, all officers and employees of a district become members of the countys retirement association on the first day of the calendar month after adoption, by specified vote thresholds, of a resolution by the governing body of the district providing for inclusion of the district in the retirement association and, if the county board of supervisors is not the governing body of the district, the board of retirement consents by majority vote.
This bill would enact the Big Bear Fire Agencies Pension Consolidation Act of 2018, which, on and after the effective date of a resolution of the Board of Retirement of the San Bernardino County Employees Retirement Association consenting to membership by employees of the Big Bear Fire Authority as described above, would provide that all safety employees currently employed by the Big Bear Lake Fire Protection District as of that date would be deemed to be employees of the authority and that all duties and obligations of the fire protection district in the employment relationship would be assumed by the authority. The bill would specify that the authority is a district for purposes of the County Employees Retirement Law of 1937. The bill would provide that the authority would assume the rights, obligations, and status previously occupied by the City of Big Bear Lake with regard to the portion of the city safety plan, which is that portion of the citys retirement plan that covers safety employees of the fire protection district, and to the replacement benefits program. The bill would also provide that termination of the city safety plan would not trigger withdrawal liability. The bill would state that its provisions are severable.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Bernardino.
This bill would declare that it is to take effect immediately as an urgency statute.
It is the intent of the Legislature that this article authorize the Big Bear Fire Authority to assume all of the revenues, debts, obligations, and liabilities of the City of Big Bear Lakes safety plan, which covers the employees of the Big Bear Lake Fire Protection District.
31571.This article shall be known, and may be cited, as the Big Bear Fire Agencies Pension Consolidation Act of 2018.
31572.For purposes of this article, the following definitions apply:
(a)Authority means the Big Bear Fire Authority, which is a joint powers authority established by the Big Bear City Community Services District and the Big Bear Lake Fire Protection District pursuant to the Joint Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of Title 1) in 2012.
(b)City means the City of Big Bear Lake.
(c)City safety plan means that portion of the citys retirement plan through the San Bernardino County Employees Retirement Association that covers the safety employees of the fire protection district.
(d)Fire protection district means the Big Bear Lake Fire Protection District.
31573.(a)On and after the effective date of a resolution of the Board of Retirement of the San Bernardino County Employees Retirement Association consenting to membership of the authoritys employees pursuant to subdivision (b) of Section 31557, all safety employees currently employed by the fire protection district as of that date shall be deemed to be employees of the authority, and all duties and obligations of the fire protection district in the employment relationship shall be assumed by the authority. The status of each employee deemed to be an employee of the authority pursuant to this section, with respect to membership in the retirement system, shall, in all respects, be as if the employee had remained a member of the retirement system without any break in service or change of employer. The authority shall be deemed to be a district, as defined in this chapter, and shall, in all respects, assume all of the rights, obligations, and status previously occupied by the city, with regard to the city safety plan, as a participating district in the retirement system, including, but not limited to, all of the following: the payment of employer contributions, the payment of unfunded actuarial liability, the withholding of employee contributions, the reporting of compensation earnable and pensionable compensation, record retention and audit compliance, the enrollment of eligible employees as members of the retirement system, compliance with restrictions on the employment of retired persons, and the pickup of employee contributions pursuant to Section 414(h)(2) of the Internal Revenue Code and any agreement or resolution implementing that section.
(b)The termination of the city safety plan shall not trigger withdrawal liability pursuant to Section 31564.2. The authority shall assume the prior obligations of the city safety plan for the payment of unfunded actuarial liability, which shall continue to be included in contribution rates calculated and approved pursuant to this chapter, including, but not limited to, Sections 31453, 31453.5, 31454, 31581, and 31585, as if no change in the participating employer had occurred.
(c)The authority shall succeed to the rights, duties, and obligations of the city safety plan with respect to its replacement benefits program pursuant to Chapter 3.9 (commencing with Section 31899). The rights of each member of the retirement system to participate in the replacement benefits program, as those rights exist at the time of the transfer of rights, duties, and obligations to the authority pursuant to this section, whether the member is actively employed, deferred, or retired, shall continue as if there had been no change in the status of the employer. The transfer of rights, duties, and responsibilities shall not be deemed to be the creation of a new replacement benefit program and the continuation of employees rights pursuant to this section shall not be deemed the offering of a new plan to any employee for purposes of Section 7522.43 or subdivision (c) of Section 31899.
SEC. 2.The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 3.The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances regarding pension and employment obligations relating to fire protection services for the City of Big Bear Lake in the County of San Bernardino.
SEC. 4.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to facilitate the transfer of employment from the Big Bear Lake Fire Protection District to the Big Bear Fire Authority in a timely and expeditious manner, it is necessary that this act take effect immediately.
It is the intent of the Legislature that this article authorize the Big Bear Fire Authority to assume all of the revenues, debts, obligations, and liabilities of the City of Big Bear Lakes safety plan, which covers the employees of the Big Bear Lake Fire Protection District.
31571.This article shall be known, and may be cited, as the Big Bear Fire Agencies Pension Consolidation Act of 2018.
31572.For purposes of this article, the following definitions apply:
(a)Authority means the Big Bear Fire Authority, which is a joint powers authority established by the Big Bear City Community Services District and the Big Bear Lake Fire Protection District pursuant to the Joint Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of Title 1) in 2012.
(b)City means the City of Big Bear Lake.
(c)City safety plan means that portion of the citys retirement plan through the San Bernardino County Employees Retirement Association that covers the safety employees of the fire protection district.
(d)Fire protection district means the Big Bear Lake Fire Protection District.
31573.(a)On and after the effective date of a resolution of the Board of Retirement of the San Bernardino County Employees Retirement Association consenting to membership of the authoritys employees pursuant to subdivision (b) of Section 31557, all safety employees currently employed by the fire protection district as of that date shall be deemed to be employees of the authority, and all duties and obligations of the fire protection district in the employment relationship shall be assumed by the authority. The status of each employee deemed to be an employee of the authority pursuant to this section, with respect to membership in the retirement system, shall, in all respects, be as if the employee had remained a member of the retirement system without any break in service or change of employer. The authority shall be deemed to be a district, as defined in this chapter, and shall, in all respects, assume all of the rights, obligations, and status previously occupied by the city, with regard to the city safety plan, as a participating district in the retirement system, including, but not limited to, all of the following: the payment of employer contributions, the payment of unfunded actuarial liability, the withholding of employee contributions, the reporting of compensation earnable and pensionable compensation, record retention and audit compliance, the enrollment of eligible employees as members of the retirement system, compliance with restrictions on the employment of retired persons, and the pickup of employee contributions pursuant to Section 414(h)(2) of the Internal Revenue Code and any agreement or resolution implementing that section.
(b)The termination of the city safety plan shall not trigger withdrawal liability pursuant to Section 31564.2. The authority shall assume the prior obligations of the city safety plan for the payment of unfunded actuarial liability, which shall continue to be included in contribution rates calculated and approved pursuant to this chapter, including, but not limited to, Sections 31453, 31453.5, 31454, 31581, and 31585, as if no change in the participating employer had occurred.
(c)The authority shall succeed to the rights, duties, and obligations of the city safety plan with respect to its replacement benefits program pursuant to Chapter 3.9 (commencing with Section 31899). The rights of each member of the retirement system to participate in the replacement benefits program, as those rights exist at the time of the transfer of rights, duties, and obligations to the authority pursuant to this section, whether the member is actively employed, deferred, or retired, shall continue as if there had been no change in the status of the employer. The transfer of rights, duties, and responsibilities shall not be deemed to be the creation of a new replacement benefit program and the continuation of employees rights pursuant to this section shall not be deemed the offering of a new plan to any employee for purposes of Section 7522.43 or subdivision (c) of Section 31899.
SEC. 2.The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 3.The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances regarding pension and employment obligations relating to fire protection services for the City of Big Bear Lake in the County of San Bernardino.
SEC. 4.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to facilitate the transfer of employment from the Big Bear Lake Fire Protection District to the Big Bear Fire Authority in a timely and expeditious manner, it is necessary that this act take effect immediately.
It is the intent of the Legislature that this article authorize the Big Bear Fire Authority to assume all of the revenues, debts, obligations, and liabilities of the City of Big Bear Lakes safety plan, which covers the employees of the Big Bear Lake Fire Protection District.
31571.This article shall be known, and may be cited, as the Big Bear Fire Agencies Pension Consolidation Act of 2018.
31572.For purposes of this article, the following definitions apply:
(a)Authority means the Big Bear Fire Authority, which is a joint powers authority established by the Big Bear City Community Services District and the Big Bear Lake Fire Protection District pursuant to the Joint Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of Title 1) in 2012.
(b)City means the City of Big Bear Lake.
(c)City safety plan means that portion of the citys retirement plan through the San Bernardino County Employees Retirement Association that covers the safety employees of the fire protection district.
(d)Fire protection district means the Big Bear Lake Fire Protection District.
31573.(a)On and after the effective date of a resolution of the Board of Retirement of the San Bernardino County Employees Retirement Association consenting to membership of the authoritys employees pursuant to subdivision (b) of Section 31557, all safety employees currently employed by the fire protection district as of that date shall be deemed to be employees of the authority, and all duties and obligations of the fire protection district in the employment relationship shall be assumed by the authority. The status of each employee deemed to be an employee of the authority pursuant to this section, with respect to membership in the retirement system, shall, in all respects, be as if the employee had remained a member of the retirement system without any break in service or change of employer. The authority shall be deemed to be a district, as defined in this chapter, and shall, in all respects, assume all of the rights, obligations, and status previously occupied by the city, with regard to the city safety plan, as a participating district in the retirement system, including, but not limited to, all of the following: the payment of employer contributions, the payment of unfunded actuarial liability, the withholding of employee contributions, the reporting of compensation earnable and pensionable compensation, record retention and audit compliance, the enrollment of eligible employees as members of the retirement system, compliance with restrictions on the employment of retired persons, and the pickup of employee contributions pursuant to Section 414(h)(2) of the Internal Revenue Code and any agreement or resolution implementing that section.
(b)The termination of the city safety plan shall not trigger withdrawal liability pursuant to Section 31564.2. The authority shall assume the prior obligations of the city safety plan for the payment of unfunded actuarial liability, which shall continue to be included in contribution rates calculated and approved pursuant to this chapter, including, but not limited to, Sections 31453, 31453.5, 31454, 31581, and 31585, as if no change in the participating employer had occurred.
(c)The authority shall succeed to the rights, duties, and obligations of the city safety plan with respect to its replacement benefits program pursuant to Chapter 3.9 (commencing with Section 31899). The rights of each member of the retirement system to participate in the replacement benefits program, as those rights exist at the time of the transfer of rights, duties, and obligations to the authority pursuant to this section, whether the member is actively employed, deferred, or retired, shall continue as if there had been no change in the status of the employer. The transfer of rights, duties, and responsibilities shall not be deemed to be the creation of a new replacement benefit program and the continuation of employees rights pursuant to this section shall not be deemed the offering of a new plan to any employee for purposes of Section 7522.43 or subdivision (c) of Section 31899.
SEC. 2.The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 3.The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances regarding pension and employment obligations relating to fire protection services for the City of Big Bear Lake in the County of San Bernardino.
SEC. 4.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to facilitate the transfer of employment from the Big Bear Lake Fire Protection District to the Big Bear Fire Authority in a timely and expeditious manner, it is necessary that this act take effect immediately.
|
Date
|
Status
|
|---|---|
| Jul 9, 2018 | Chaptered by Secretary of State - Chapter 72, Statutes of 2018. |
| Jul 9, 2018 | Approved by the Governor. |
| Jun 26, 2018 | Enrolled and presented to the Governor at 3 p.m. |
| Jun 18, 2018 | In Assembly. Ordered to Engrossing and Enrolling. |
| Jun 18, 2018 | Read third time. Urgency clause adopted. Passed. Ordered to the Assembly. |
| Jun 13, 2018 | Read second time. Ordered to Consent Calendar. |
| Jun 12, 2018 | From committee: Do pass. To Consent Calendar. (Ayes 5. Noes 0.) (June 11). |
| Apr 19, 2018 | Referred to Com. on P.E. & R. |
| Mar 22, 2018 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Mar 22, 2018 | Read third time. Urgency clause adopted. Passed. Ordered to the Senate. |
| Mar 15, 2018 | Read second time. Ordered to third reading. |
| Mar 14, 2018 | From committee: Do pass. (Ayes 7. Noes 0.) (March 14). |
| Feb 12, 2018 | Referred to Com. on P.E., R., & S.S. |
| Feb 2, 2018 | From printer. May be heard in committee March 4. |
| Feb 1, 2018 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Jun 18, 2018 | Consent Calendar AB2004 Obernolte Urgency Clause | Senate Floor |
Passed |
|
| Jun 11, 2018 | Do pass and be ordered to the Consent Calendar | Senate Standing Committee on Public Employment and Retirement |
Passed |
|
| Mar 22, 2018 | AB 2004 OBERNOLTE Third Reading Urgency | Assembly Floor |
Passed |
|
| Mar 14, 2018 | Do pass. | Assembly Standing Committee on Public Employees, Retirement, and Social Security |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Big Bear Fire Authority | ** Support | Jun 13, 2018 |
| Big Bear Professional Firefighters' Association | ** Support | Jun 13, 2018 |
| City of Big Bear Lake | ** Support | Jun 13, 2018 |
| San Bernardino County Employees' Retirement Association | ** Support | Jun 13, 2018 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
CONSENT
Bill No: AB 2004
:
SENATE PUBLIC EMP. & RET. COMMITTEE: 5-0, 6/11/18
AYES: Pan, Morrell, Leyva, Moorlach, Portantino
ASSEMBLY FLOOR: 70-0, 3/22/18 - See last page for vote
SOURCE: Big Bear Fire Authority
DIGEST:
This bill enacts the Big Bear Fire Agencies Pension Consolidation Act of 2018, which provides that all safety employees currently employed by the Big Bear Lake Fire Protection District shall become employees of the Big Bear Fire Authority, as specified, which shall assume all associated retirement liabilities.
ANALYSIS:
Existing law:
- Establishes the County Employees’ Retirement System Act of 1937 (’37 Act) which governs 20 independent retirement associations.
- Permits the counties of Orange, Kern, and Los Angeles, as specified, to transfer the service credit and associated assets and liabilities of active members in a CalPERS safety plan to a county retirement system in cases where firefighting or law enforcement functions are shifted from the state or an agency participating in CalPERS to an agency participating in a county retirement system.
- Authorizes San Bernardino County to transfer its firefighting or law enforcement functions from CalPERS to a county, fire authority, or district that participates in a ’37 Act County Retirement System, as specified.
This bill:
- Enacts the Big Bear Fire Agencies Pension Consolidation Act of 2018, which provides that all safety employees currently employed by the Big Bear Lake Fire Protection District (“fire protection district”) shall, upon adoption of a resolution by the Board of Retirement of the San Bernardino County Employees’ Retirement Association (SBCERA), become employees of the Big Bear Fire Authority (“authority”).
- Provides that on and after the effective date of a resolution by SBCERA consenting to the transferred membership of the safety employees, as specified, all duties and obligations of the fire protection district in the employment relationship shall be assumed by the authority.
- States that the status of each employee deemed to be an employee of the authority pursuant to this bill, shall remain with respect to membership in the retirement system as if the employee had remained a member without any break in service or change of employer.
- Provides that the authority shall be deemed a district and shall assume all the rights, obligations, and status previously occupied by the City of Big Bear Lake, with regard to the city safety plan, as a participating district in the retirement system. These include, but are not limited to:
- Payment of employer contributions and unfunded actuarial liability,
- Withholding of employee contributions,
- Reporting of compensation earnable and pensionable compensation,
- Record retention and audit compliance,
- Enrollment of eligible employees as retirement system members,
- Compliance with restrictions on the employment of retired persons, and
- The pickup of employee contributions, as specified.
- Stipulates that the termination of the city safety plan shall not trigger withdrawal liability, as specified, and the authority shall assume prior obligations of the city safety plan for the payment of unfunded actuarial liability, which shall continue to be included in contribution rates calculated and approved, as specified, as if no change in the participating employer had occurred.
- States that the authority shall succeed to the rights, duties, and obligations of the city safety plan with respect to its replacement benefits program, as specified. The rights of each member of the SBCERA retirement system to participate in the replacement benefits program shall continue as if there had been no change in the status of the employer, as those rights exist at the time of the transfer, and regardless of whether the member is actively employed, deferred, or retired.
- States that the transfer of rights, duties, and responsibilities shall not be deemed to be the creation of a new replacement benefit program and the continuation of employees’ rights shall not be deemed the offering of a new plan to any employee, as specified.
- Contains legislative intent stating that the authority shall assume all of the revenues, debts, obligations, and liabilities of the City of Big Bear Lake’s safety plan, which covers the employees of the Big Bear Lake Fire Protection District.
- States that the provisions of this act are severable, and if any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
- Declares that a special statute is necessary under Section 16 of Article IV of the California Constitution because of the unique circumstances regarding pension and employment obligations relating to fire protection services for the City of Big Bear Lake in San Bernardino County.
- Declares this bill is an urgency statute within the meaning of Article IV of the California Constitution, and that the timely and expeditious transfer of employment shall help preserve the public peace, health, and safety.
Background
According to the author, “the Big Bear Fire Authority is a member of the San Bernardino County Employees’ Retirement Association (SBCERA). Employees of the Big Bear Lake Fire Protection District were already members of SBCERA, but it has been determined that moving the employees from the Big Bear Lake Fire Protection District to the new Big Bear Fire Authority will trigger withdrawal liabilities without State legislation authorizing the transfer.”
Related/Prior Legislation
AB 868 (Obernolte, Chapter 86, Statutes of 2015), added San Bernardino County to the list of counties authorized to transfer its firefighting or law enforcement functions from CalPERS to a county, fire authority, or district that participates in a ’37 Act County Retirement System, as specified.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Big Bear Fire Authority (source)
Big Bear Professional Firefighters’ Association
City of Big Bear Lake
San Bernardino County Employees’ Retirement Association
OPPOSITION: (Verified 6/12/18)
None received
ARGUMENTS IN SUPPORT: The author’s office states, “AB 2004 provides specific statutory authority for the transfer of employees between the two employers [and] will solve the final administrative issue for fully consolidated fire services in the Big Bear area.”
According to the Big Bear Fire Authority, “the Authority is now set to manage its own financial responsibilities and is now functioning in almost every aspect as one department. The only issue that has not been fully resolved is the alignment of pension benefits…[this bill will] clear the final hurdle to full consolidation of fire services in the Big Bear area into the Authority.”
ASSEMBLY FLOOR: 70-0, 3/22/18
AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rubio, Salas, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Chau, Cristina Garcia, Levine, Mullin, Nazarian, Rodriguez, Santiago
6/13/18 14:43:08
**** END ****
SENATE COMMITTEE ON
PUBLIC EMPLOYMENT AND RETIREMENT
Dr. Richard Pan, Chair
2017 - 2018 Regular
Bill No: AB 2004 Hearing Date: 6/11/18
Author: | Obernolte | ||
Version: | 2/1/18 As introduced | ||
Urgency: | Yes | Fiscal: | No |
Consultant: | Korinne Sugasawara | ||
Subject: Big Bear Fire Agencies Pension Consolidation Act of 2018
SOURCE: Big Bear Fire Authority
ASSEMBLY VOTES:
Assembly Floor: | 70 - 0 |
Assembly Public Employees, Retirement, and Social Security Committee: | 7 - 0 |
DIGEST:
This bill enacts the Big Bear Fire Agencies Pension Consolidation Act of 2018, which provides that all safety employees currently employed by the Big Bear Lake Fire Protection District shall become employees of the Big Bear Fire Authority, as specified, which shall assume all associated retirement liabilities.
ANALYSIS:
Existing law:
- Establishes the County Employees’ Retirement System Act of 1937 (’37 Act) which governs 20 independent retirement associations.
- Permits the counties of Orange, Kern, and Los Angeles, as specified, to transfer the service credit and associated assets and liabilities of active members in a CalPERS safety plan to a county retirement system in cases where firefighting or law enforcement functions are shifted from the state or an agency participating in CalPERS to an agency participating in a county retirement system.
- Authorizes San Bernardino County to transfer its firefighting or law enforcement functions from CalPERS to a county, fire authority, or district that participates in a ’37 Act County Retirement System, as specified.
This bill:
- Enacts the Big Bear Fire Agencies Pension Consolidation Act of 2018, which provides that all safety employees currently employed by the Big Bear Lake Fire Protection District (“fire protection district”) shall, upon adoption of a resolution by the Board of Retirement of the San Bernardino County Employees’ Retirement Association (SBCERA), become employees of the Big Bear Fire Authority (“authority”).
- Provides that on and after the effective date of a resolution by SBCERA consenting to the transferred membership of the safety employees, as specified, all duties and obligations of the fire protection district in the employment relationship shall be assumed by the authority.
- States that the status of each employee deemed to be an employee of the authority pursuant to this bill, shall remain with respect to membership in the retirement system as if the employee had remained a member without any break in service or change of employer.
- Provides that the Big Bear Fire Authority shall be deemed a district and shall assume all the rights, obligations, and status previously occupied by the City of Big Bear Lake, with regard to the city safety plan, as a participating district in the retirement system. These include, but are not limited to:
- Payment of employer contributions and unfunded actuarial liability,
- Withholding of employee contributions,
- Reporting of compensation earnable and pensionable compensation,
- Record retention and audit compliance,
- Enrollment of eligible employees as retirement system members,
- Compliance with restrictions on the employment of retired persons, and
- The pickup of employee contributions, as specified.
- Stipulates that the termination of the city safety plan shall not trigger withdrawal liability, as specified, and the authority shall assume prior obligations of the city safety plan for the payment of unfunded actuarial liability, which shall continue to be included in contribution rates calculated and approved, as specified, as if no change in the participating employer had occurred.
- States that the authority shall succeed to the rights, duties, and obligations of the city safety plan with respect to its replacement benefits program, as specified. The rights of each member of the SBCERA retirement system to participate in the replacement benefits program shall continue as if there had been no change in the status of the employer, as those rights exist at the time of the transfer, and regardless of whether the member is actively employed, deferred, or retired.
- States that the transfer of rights, duties, and responsibilities shall not be deemed to be the creation of a new replacement benefit program and the continuation of employees’ rights shall not be deemed the offering of a new plan to any employee, as specified.
- Contains legislative intent stating that the Big Bear Fire Authority shall assume all of the revenues, debts, obligations, and liabilities of the City of Big Bear Lake’s safety plan, which covers the employees of the Big Bear Lake Fire Protection District.
- States that the provisions of this act are severable, and if any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
- Declares that a special statute is necessary under Section 16 of Article IV of the California Constitution because of the unique circumstances regarding pension and employment obligations relating to fire protection services for the City of Big Bear Lake in San Bernardino County.
- Declares this bill is an urgency statute within the meaning of Article IV of the California Constitution, and that the timely and expeditious transfer of employment shall help preserve the public peace, health, and safety.
Background
According to the author, “the Big Bear Fire Authority is a member of the San Bernardino County Employees’ Retirement Association (SBCERA). Employees of the Big Bear Lake Fire Protection District were already members of SBCERA, but it has been determined that moving the employees from the Big Bear Lake Fire Protection District to the new Big Bear Fire Authority will trigger withdrawal liabilities without State legislation authorizing the transfer.”
Related/Prior Legislation
AB 868 (Obernolte, Chapter 86, Statutes of 2015), added San Bernardino County to the list of counties authorized to transfer its firefighting or law enforcement functions from CalPERS to a county, fire authority, or district that participates in a ’37 Act County Retirement System, as specified.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT:
Big Bear Fire Authority (source)
Big Bear Professional Firefighters’ Association
City of Big Bear Lake
San Bernardino County Employees’ Retirement Association
OPPOSITION:
None received.
ARGUMENTS IN SUPPORT:
The author’s office states, “AB 2004 provides specific statutory authority for the transfer of employees between the two employers [and] will solve the final administrative issue for fully consolidated fire services in the Big Bear area.”
According to the Big Bear Fire Authority, “the Authority is now set to manage its own financial responsibilities and is now functioning in almost every aspect as one department. The only issue that has not been fully resolved is the alignment of pension benefits…[this bill will] clear the final hurdle to full consolidation of fire services in the Big Bear area into the Authority.”
ASSEMBLY THIRD READING
ATR Bill Id:AB 2004
Author:(Obernolte)
As Introduced Ver:February 1, 2018
2/3 vote. Urgency
Committee | Votes | Ayes | Noes |
Public Employees | 7-0 | Rodriguez, Travis Allen, Obernolte, Cervantes, Cooley, Cooper, O'Donnell |
SUMMARY: Enacts the Big Bear Fire Agencies Pension Consolidation Act of 2018 which provides that all safety employees currently employed by the Big Bear Lake Fire Protection District (District) would be deemed employees of the Big Bear Fire Authority (Authority) upon a resolution adopted by the San Bernardino County Employees' Retirement Association (SBCERA), among other provisions. Specifically, this bill:
- Establishes that this measure is an urgency statute, and includes a legislative finding and declaration that because of the unique circumstances regarding pension and employment obligations relating to fire protection services for the City of Big Bear Lake in the County of San Bernardino, a special statute is necessary.
- Includes legislative intent that authorizes the Authority to assume all revenues, debts, obligations, and liabilities of the City of Big Bear Lake's safety plan, which covers employees of the District.
- Provides that on and after the effective date of a resolution of SBCERA consenting to membership of the Authority's employees, all safety employees currently employed by the fire protection district as of that date are deemed to be employees of the Authority.
- Further provides that all duties and obligations of the fire protection district in the employment relationship must be assumed by the Authority, and that the status of each employee of the Authority with respect to membership in the retirement system must, in all respects, assume all of the rights, obligations, and status previously occupied by the city with regard to the city safety plan, as a participating district in the retirement system.
- Provides that the status of each employee deemed to be an employee of the Authority, with respect to membership in the retirement system, must be as if the employee had remained a member of the retirement system without any break in service or change in employer, in all respects.
- Provides that the termination of the city safety plan must not trigger withdrawal liability pursuant to existing law, and that the Authority must assume prior obligations of the city safety plan or the payment of unfunded actuarial liability, which must continue to be included in contribution rates calculated and approved as if no change in the participating employer had occurred.
- Provides that the Authority succeeds to the rights, duties and obligations of the city safety plan with respect to its replacement benefit plan, and that the rights of each member of the retirement system to participate in the replacement benefit plan will continue as if there had been no change in the status of the employer.
- Also provides that the transfer of rights, duties and responsibilities are not to be deemed the creation of a new replacement benefit program and the continuation of the employees' rights are not to be deemed as the offering of a new plan to employees.
- Includes a severability clause.
EXISTING LAW:
- Establishes the County Employees' Retirement Law of 1937 ('37 Act), which governs 20 independent county retirement associations, and provides for retirement systems for county and district employees in those counties adopting its provisions. Currently, 20 counties operate retirement systems under the '37 Act.
- Added San Bernardino County to the list of counties authorized to transfer its firefighting or law enforcement functions from CalPERS to a county, fire authority or district that participates in a retirement system established under the '37 Act.
FISCAL EFFECT: This bill has been keyed nonfiscal by the Legislative Counsel.
COMMENTS: According to the author, "[i]n June 2012, the Boards of the [Big Bear] City [Community Services District] and Lake Fire Protection District acted to establish a Joint Powers Authority creating the Big Bear Fire Authority. Since that time, the fire department administration has been consolidated, jurisdiction boundaries removed and standard operational policies and procedures have been implemented.
"The only issue standing in the way of full consolidation is the matter of pension alignment. It has since been determined that the Authority needs a specific allowance to assume all of the liability of the City Safety Plan. Assembly Bill 2004 would avoid the withdrawal liability and clear the way for the final consolidation of fire services into the Authority."
For additional information, please see the policy committee analysis.
Analysis Prepared by: Michael Bolden / P.E.,R., & S.S. / (916) 319-3957 FN: 0002614
Date of Hearing: March 14, 2018
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT, AND SOCIAL SECURITY
Freddie Rodriguez, Chair
ABPCA Bill Id:AB 2004 (
Author:Obernolte) – As Introduced Ver:February 1, 2018
SUBJECT: Big Bear Fire Agencies Pension Consolidation Act of 2018
SUMMARY: Enacts the Big Bear Fire Agencies Pension Consolidation Act of 2018 which provides that all safety employees currently employed by the Big Bear Lake Fire Protection District (District) would be deemed employees of the Big Bear Fire Authority (Authority) upon a resolution adopted by the San Bernardino County Employees’ Retirement Association (SBCERA), among other provisions. Specifically, this bill:
1) Establishes that this measure is an urgency statute necessary for the immediate preservation of the public peace, health or safety, as specified, because of the unique circumstances regarding pension and employment obligations related to fire protection services for the City of Big Bear Lake in the County of San Bernardino.
2) Includes legislative intent that authorizes the Authority to assume all revenues, debts, obligations, and liabilities of the City of Big Bear Lake’s safety plan, which covers employees of the District.
3) Establishes the Big Bear Fire Agencies Pension Consolidation Act of 2018 and defines the following terms to as follows:
a) “Authority” to mean the Big Bear Fire Authority, which is a joint power authority (JPA) established by the Big Bear City Community Services District and the Big Bear Lake Fire Protection District, pursuant to the JPA Act, as specified.
b) “City” to mean the City of Big Bear Lake.
c) “City safety plan” to mean that portion of the city’s retirement plan through SBCERA that covers the safety employees of the fire protection district.
d) “Fire protection district” to mean the Big Bear Lake Fire Protection District.
4) Provides that on and after the effective date of a resolution of SBCERA consenting to membership of the authority’s employees, as specified, all safety employees currently employed by the fire protection district as of that date are deemed to be employees of the authority.
Further provides that all duties and obligations of the fire protection district in the employment relationship must be assumed by the authority, and that the status of each employee of the authority, as specified, with respect to membership in the retirement system, must, in all respects, assume all of the rights, obligations, and status previously occupied by the city with regard to the city safety plan, as a participating district in the retirement system, including, but not limited to the following:
a) The payment of employer contributions;
b) The payment of unfunded actuarial liability;
c) The withholding of employee contributions;
d) The reporting of compensation earnable and pensionable compensation;
e) Record retention and audit compliance;
f) The enrollment of eligible employees as members of the retirement system;
g) Compliance with restrictions on the employment of retired persons; and,
h) The pickup of employee contributions, as specified.
5) Provides that the status of each employee deemed to be an employee of the authority, with respect to membership in the retirement system, must be as if the employee had remained a member of the retirement system without any break in service or change in employer, in all respects.
6) Provides that the termination of the city safety plan must not trigger withdrawal liability pursuant to existing law, and that the authority must assume prior obligations of the city safety plan or the payment of unfunded actuarial liability, which must continue to be included in contribution rates calculated and approved, as specified, as if no change in the participating employer had occurred.
7) Provides that the authority succeeds to the rights, duties and obligations of the city safety plan with respect to its replacement benefit plan, as specified, and that the rights of each member of the retirement system to participate in the replacement benefit plan will continue as if there had been no change in the status of the employer.
Also provides that the transfer of rights, duties and responsibilities are not to be deemed the creation of a new replacement benefit program and the continuation of the employees’ rights are not to be deemed as the offering of a new plan to employees, as specified.
8) Includes a severability clause providing that if any act of this measure or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
9) Includes a legislative finding and declaration that because of the unique circumstances regarding pension and employment obligations relating to fire protection services for the City of Big Bear Lake in the County of San Bernardino, a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution.
EXISTING LAW:
- Establishes the County Employees’ Retirement Law of 1937 (’37 Act), which governs 20 independent county retirement associations, and provides for retirement systems for county and district employees in those counties adopting its provisions. Currently 20 counties operate retirement systems under the ’37 Act.
2) Allows the Counties of Los Angeles, Kern, and Orange, in specified instances, for the service credit and associated assets and liabilities of active members in a CalPERS safety plan to be transferred to a county retirement system in cases where firefighting or law enforcement functions are transferred from the state or an agency participating in CalPERS to an agency participating in a county retirement system.
3) Added San Bernardino County to the list of counties authorized to transfer its firefighting or law enforcement functions from CalPERS to a county, fire authority, or district that participates in a retirement system established under the '37 Act, as specified.
FISCAL EFFECT: This bill has been keyed nonfiscal by Legislative Counsel.
COMMENTS: According to the author, “[i]n June 2012, the boards of the [Big Bear] City [Community Services District] and Lake Fire Protection District acted to establish a Joint Powers Authority creating the Big Bear Fire Authority. Since that time, the fire department administration has been consolidated, jurisdiction boundaries removed and standard operational policies and procedures have been implemented.
“The Fire Authority is now set to manage its own financial responsibilities and is now functioning in almost every aspect as one department. Currently all employees remain employed by their respective agencies. Under those employment arrangements, employees of the City are enrolled in CalPERS’ retirement plan and employees of the Lake are enrolled in the SBCERA retirement plan. The only issue standing in the way of full consolidation is the matter of pension alignment.
“Currently, if the Fire Authority decides to transfer one set of employees to a different pension system, it would incur costly withdrawal penalties. Government Code Section 20588 allows for a CalPERS safety plan to be transferred to a county retirement system in cases where firefighting or law enforcement functions are transferred from an agency participating in CalPERS to an agency participating in a county retirement system. The significant advantage of Section 20588 is that the termination of a CalPERS plan pursuant to this section is not subject to withdrawal liability because the liability of accrued benefits is transferred entirely to the county retirement system.
“Under current law this section currently only applies to the Los Angeles, Kern and Orange counties. Assembly Bill (AB) 868 (Obernolte, 2015) added San Bernardino County to the list of counties [also] allowed [by] this provision. However, it has since been determined that the Authority needs a specific allowance to assume all of the liability of the City Safety Plan.
AB 2004 would avoid the withdrawal liability and clear the way for the final consolidation of fire services into the Authority.”
1) Committee Staff Comments
When compared to special districts, cities and counties, a JPA has limited sources of revenue and unless otherwise statutorily authorized, limited authority to raise revenue (e.g., taxes or through the issuance of bonds).
For this measure, while the JPA must assume the prior obligations of the city safety plan or the payment of unfunded actuarial liability, and since the JPA will succeeds to the rights, duties and obligations of the city safety plan with respect to its replacement benefit plan as if there had been no change in the status of the employer, the committee may wish to inquire the author as to the financial stability of the JPA given the committee’s ongoing attention to JPA’s contracting with public employee retirement systems.
2) Prior/Related Legislation
Chapter 86, Statutes of 2015 (AB 868, Obernolte) added San Bernardino County to the list of counties authorized to transfer its firefighting or law enforcement functions from CalPERS to a county, fire authority, or district that participates in a ’37 Act County Retirement System, as specified.
Chapter 793, Statutes of 2001, (AB 1683, Assembly Public Employees, Retirement, and Social Security Committee) allowed, among other provisions, CalPERS and the Kern County Employees' Retirement Association to agree to transfer the service credit and employee and employer assets to the Kern County Retirement System on behalf of local public agency and state employees who are transferred to Kern County Retirement System-covered employment.
Chapter 832, Statutes of 1997 (AB 355, Morrissey) allowed CalPERS and the Orange County Employees Retirement System to agree to transfer the service credit and employee and employer assets to the Orange County Employees Retirement System on behalf of local public agency and state employees who are transferred to Orange County Employees Retirement System-covered employment.
Chapter 419, Statutes of 1990 (AB 2819, Epple) enabled CalPERS and the Los Angeles County Employees’ Retirement Association (LACERA) to agree to transfer the service credit and member contributions from CalPERS to LACERA for local safety members who are transferred from a CalPERS covered city to Los Angeles County when a city transfers its fire or police function to the county.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file.
Opposition
None on file.
Analysis Prepared by: Michael Bolden / P.E.,R., & S.S. / (916) 319-3957
Discussed in Hearing
1MIN
Assembly Floor
16MIN
Assembly Standing Committee on Public Employees, Retirement, and Social Security
Bill Author
Bill Co-Author(s):