AB 1987 and its affects on our pensions. (Updated 9/9/10)
Updated On: Sep 09, 2010
We have been getting a lot calls on AB 1987 and its possible affect on our pensions. While we are trying to answer each call individually, its been a bit of a moving target due to amendments, changes in authors and committee votes..
We will tell you what we know....
Ventura benefits are very different. The entire reason we get those benefits as pensionable is that they are earned and received as compensation any time during the employee's career. This was the essence of the State Supreme Court decision that decided in our favor, granting employees this benefit. Payment for unused benefit time and other bonus payments are penisonable, and we must continue to make contributions on those payments.
AB 1987 reads:
"Cash conversions of accrued employee benefits in amounts that exceed the amount that is both earned and payable to the member during the member’s applicable final compensation measurement period shall not be credited to, or included in compensation earnable by any state or local public retirement system."
This section clearly continues to allow conversion of benefits that are earned and payable in a single year - such as your Ventura benefits.
Local 1014 will remain actively involved in AB 1987 and closely watch any amendments, but this bill (in its current form) does NOT affect our benefits in any way.
This bill is meant to stem serious pension spiking issues that have plagued other county and State pension systems. We encourage the authors and others to pursue any legislation that will curb those corrupt practices, and we will continue to watch this legislation to ensure it will not affect our earned benefits.
If you have any questions please call Will Pryor at 310-925-2590
UPDATE:AB 1987 as had a long road. It has been picked up and dropped by several authors, but the basics are the same...
Nothing has changed since the orignial article above, but some language was added to protect benefits won as a result of the "Ventura Decision" the bill specifically mentions that items in the Ventura litigation are not "special compensation". This amendment doesn't look like it was really needed considering the bill language enclosed above, but this bill has caused some confusion and authors wanted to clarify that it does NOT affect ventura benefits.
Local 1014 will have another section in its upcoming newsletter on AB 1987 and should get to members houses in a week or so.
As always if there are any qeustions on this bill please call me at 310-925-2590 or email to willp@local1014.org.
There is more strategy, inside scoop and other infomation on this bill, but this is a public site. You can always call or email and I can give more information. I will be happy to come by stations and discuss if time permits.
UPDATE 2: 9/2/10 Please see the bill that passed the assembly enclosed.
Nothing has changed. This bill in no way affects 1. Ventura Benefits 2. Pensionability of earned bonus time 3. FLSA Premium pay. This position is not in doubt and is supported by Local 1014 (and our legal staff) by LACERA (and its legal staff) and by CPF (and its legal staff).
AB 1987 is not supported by Local 1014 because it does not affect our benefits, but we watch it closely to make sure it stays that way. It is a state law amendment aimed at curbing pension fund abuse in final years compensation periods. This is a law that will assist County pension funds in fighting spiking abuse and is supported by LACERA.
Our members need to remember that our Ventura benefits are negotiated, funded (half by our own contributions) and are protected through the "contract" you have with LACERA. They are vested benfits. The salary you receive is not just in our final year, but can be (and is) received throughout your career.
This bill is meant to fight unfunded, last minute bonus', benefit time that is NOT usually penisonable (final compensation payouts, management time off, etc) that is used only to spike pensions.
WE DO NOT SPIKE OUR PENSIONS! We get a salary.
Update 3 - 9/9/10
AB 1987 and its companion Senate bill are on the Governors desk. It is unknown whether the bill will be signed.
The original bill and its amendments have remained as written above. Ventura benefits will not change if the bill is signed.
Other than technical changes that the LACERA board has to deal with, the only provision that will affect our current benefits would be the provision that requires a break in service of 180 days before an employee can be employed by the same agency or a reciprocal system as a contractor or employee. We do have some members come back to the department to teach classes on a contract - they will have to wait 180 days to do that.
I have had some question about reciprocity and AB 1987. Your final average salary is determined by LACERA and is reported by LACERA to your reciprocal agency upon retirement. Nothing will change. Nothing in this bill affects the salary that is reported to other agencies. Your sold-back benefit time will continue to be reported as salary for the purposes of retirement.
