HomeMy WebLinkAboutMINUTES - 05241998 - 1.36 1-036
To . -"A'ARD OF�SUPERVISORS
.FROM: . Phil Batchelor, County Administrator Contra
Costa
DATE: May 17, 1988 Ca.*
SUBJECT:, Legislation - SB 275 (Russell)
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION
Agree to remain neutral on SB 275 by Senator Russell which would
increase the percentage set as a goal for -PERS' retirees'
retirement allowance from 75% to 80% of the purchasing power of
the initial month' s retirement allowance.
BACKGROUND
On February .23 , 1988, Mr. Claude Harman addressed the Board of
Supervisors and .asked the Board to support or remain neutral on
SB 275.
SB 275 relates to the retirement- allowance of members of the
Public Employees Retirement Association (PERS) ..
The PERS retirement fund has within it an Investment Dividend
Disbursement . Account (IDDA) . The IDDA consists of all of the
fund' s earnings after paying the cost of administering PERS,
transfers . to the reserve for deficiencies and interest paid on
employer and employee contributions. Within the IDDA are a
number of Purchasing Power Accounts (PPA) . These accounts are
used . to increase all monthly retirement allowances to 750 of the
purchasing power of the retiree' s initial monthly allowance, as
funds .are available for this purpose.
Additional provisions of the PERS law provide special 10%
quarterly increases for persons who. were eligible to receive a
retirement allowance on December 31, 1979. The law, which was
enacted' in 1982, originally provided for these loo quarterly
increases only between October 1, 1982 and September 30, 1984 .
Subsequent law has continued these payments through December 31,
1993 . However, these special 10% quarterly payments are made
only from any surplus in the PPA' s. If there are not sufficient
funds in the PPA' s to make the full 10% quarterly payment, then
the 'payments are reduced proportionately or may not be paid at
all. Whether there is a surplus in the PPA depends, in part, on
the level of purchasing power the PPA is trying to maintain.
Since it was established .in 1982, the law has set 75% of the
initial month' s allowance' s purchasing power• as thee objective.
CONTINUED ON ATTACHMENT:_ YES SIGNATURE: I.
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE S
ACTION OF BOARD ON Ma,7 .24, 1988' APPRIVED AS RECOMMENDED OTHER X
Supervisor McPeak voted NO ,. indicating support for SB 275.
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
`UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN
AYES: 15 I I ,III ,V NOES: IV AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON 198
N THE DATE SHOWN.
ATTESTED; MAY 2 4 8
PHIL' BATCHELOR, CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
BY ,DEPUTY
M382/7-8.3 —
-2-
SB 275 increases the objective to 800. This will obviously make
it more difficult for there to be any surplus in the PPA which
can be used to pay the loo quarterly payments. Increasing the
objective to 80% obviously benefits all PERS retirees , at the
expense of the pre-1979 retirees. Leaving the objective at 75%
makes it more likely that there will be a surplus to provide
additional payments to the pre-1979 retirees. This issue appears
to pit the older or pre-1979 retirees against the younger
post-1979 retirees.
The issue becomes which of these groups should be given favored
attention. SB 275 will benefit all PERS retirees at the expense
of the pre-1979 retirees, whereas current law benefits the
pre-1979 retirees at the expense of more recent retirees.
SB 275 passed the Senate Public Employees and Retirement
Committee March 18, 1987 by a vote of 5 : 0 . The bill passed the
Senate Appropriations Committee January 12, 1988 by a vote of 7 : 0
and the full Senate January 14, 1988 by a vote of 34 : 0. The bill
is currently on referral to the Assembly Committee on Public
Employees, Retirement and Social Security.
cc: County Administrator
Retirement Administrator
Senator Russell
Mr. Claude Harman
1265 Del Arroyo Court
Lafayette, CA 94549