Assembly Public Employment And Retirement Committee

McKenna? Here. McKenna present. Lackey? I'm here. Lackey present. Alanis? Berner? Garcia? Nguyen? Nguyen present. Rodriguez? Rodriguez present.

Thank you, Madam Chair. This bill is sponsored by, and by the way, I served on this committee when I was in the Assembly and we met in this room. So I see nothing has changed. That's been 20 years, I think. But Senate Bill 939 is sponsored by the California Public Employees Retirement System, or CalPERS. The bill simplifies the options to purchase service credit at the time of retirement or post-retirement. In 2020, CalPERS introduced a system that was called the Actuarial Equivalent Reduction, or AER, for members that are purchasing service credit. That option allows the retiree to receive the entire benefit, including for any unpaid service credit, in exchange for a permanent reduction in their service credit. Unfortunately, this hasn't really worked. there have been unintended consequences. For members and their families, they may end up paying more than was owed for the credit purchase, given that it's a permanent reduction. For CalPERS and employers, it creates cost pressures because they're paying for increased benefits that aren't fully funded at the time of retirement, which limits their ability to invest and compound the contributions. And additionally, this has increased the administrative workload needed to calculate and distribute benefits. So this bill discontinues enrollment in AER on or after January 1st, 2028. Instead, any unpaid balance at the time of retirement will need to be paid in full within 90 days, which is longer than the prior practice before this program went into effect. And it will encourage members to purchase service credit earlier in life and ensure service credit purchases are paid in full and funded at the time of retirement. The bill has no opposition. It's received unanimous bipartisan support. And here with me for technical questions is Danny Brown from CalPERS. And at the appropriate time, I would respectfully ask for an iPhone.

Move the bill. Second.

I respectfully ask for an aye vote.

I'll just cut that short and let you get the vote.

McKenner. Aye. McKenner, aye. Lackey. Aye. Lackey, aye. Alaniz, Berner, Garcia, Nguyen, Nguyen, Nguyen, aye.

Thank you, Madam Chair and committee members. Senate Bill 1038 is sponsored by the California School Employees Association, CSCA, and expands the CalPERS audit notification process to ensure that unions receive proper notice when their members' employers are being audited. This is significant because audit findings can result in members' monthly benefits being reduced or even being required to repay CalPERS a lump sum in cases where there was an overpayment, even if it was inadvertent. Um, currently there's no mechanism requiring unions to receive notification when CalPERS intends to conduct an audit of an employer. A key example, um, of what this bill was trying to address was with an audit that was done by CalPERS on Kern High School District in 2020, which revealed that special compensation for employee longevity was incorrectly included in employee base rates. It took the school district and Calverse three years after the final audit report to fix the air. And during these three years, one pay rate left an employee with an $8,400 bill through no fault of their own. So this bill requires employees to forward the initial audit notification, a list of the affected members in the final audit report to the relevant bargaining unit. And these notifications allow unions to properly inform and advocate for their members, which would be key to try to avoid the situation such as happened in Kern. The bill has no registered opposition, no no votes. Here with me is Cassie Mancini on behalf of CSCA, who can address technical questions.

Madam Chair and members, Matt Broad here on behalf of the Teamsters in support.

Jessica Hay with AFSCME California in support.

Move.

Senator, this is a great bill. Last time I had a technical fix, I had some little unintended things inside of the bill. So I hope that this is just like straightforward. When it goes to the other side, when it gets signed, hopefully, there's no unintended consequences in this bill. And so with that, I ask for also to pass the bill. And the irony is that this bill is trying to reverse unintended consequences. So I'm hoping that there are no unintended consequences in reversing the unintended consequences. Thank you, because I had one last year. And I appreciate the support and I respectfully ask for an iPhone Thank you Madam Secretary would you please call the roll Item number two SB 1038 The motion is due pass And we refer to the Committee on Appropriations

Aye.

Aye.

Aye.

Nguyen, aye.

Rodriguez, aye.

Thank you very much.

Madam Chair and committee members. Thank you. Let's see. This might be. So we're waiting. We have one left.

Thank you.

We'll take vote add-ons at the moment. Item number one. Item number one, SB 939. The current vote is 5-0. Berner? Aye. Berner, aye. That bill is out. 6-0. Item number two, SB 1038. The current vote is 5-0. Berner? Aye. Berner, aye. That bill is out. 6-0.

Good morning, Madam Chair and members. Thank you to the committee for the analysis, and I accept the committee amendments. For too long, the Department of Industrial Relations has faced persistent staffing shortages, vacancy rates exceeding 25%, undermining labor law enforcement, delaying inspections, and leaving workers waiting years for wage and retaliation claims to be resolved. Recent state auditor reports in 24 and 25 concern these impacts. At Cal OSHA, inspections are delayed, documentation is inconsistent, and staffing shortages contribute to operational failures. At the Labor Commissioner's office, tens of thousands of wage claims remain backlogged, often taking two years or more to resolve with hundreds of additional staff needed. SB 1227 is a practical solution. It requires DIR, Department of Industrial Relations, to partner with state worker unions to develop apprenticeship pathways into key enforcement roles. Apprenticeship is a proven workforce model that combines hands training with classroom instruction allowing workers to build skills progressively and demonstrate competency to the journey level in a merit system State agencies like CAL FIRE, the Department of Water Resources, and the Department of Corrections already use apprenticeship programs successfully for critical roles. This bill builds on this model by requiring DIR to work through collective bargaining and joint apprenticeship committees to create these pathways while upholding both labor law requirements and the civil service merit principle. With me here today to testify in support of the bill are Norman Rogers, second vice president at United Steelworkers Local 675, and Sarah McGinn, research program coordinator of SCIU Local 1000.

Very good. Thank you for the opportunity to testify. My name is Norman Rogers. As mentioned, I'm second vice president with United Steel Workers Local in 675 in Southern California. We are an amalgamated union, meaning we have workers in a number of different industries. We have folks at car washes, we have folks that make 55-gallon drums, cardboard boxes, and folks that work at refineries. This bill is important. As mentioned, with the shortages that we're seeing at OSHA, it's showing up across the country, actually, because we have shortages at federal OSHA. But this provides a pathway. It's an invaluable opportunity. I'll put it that way, because we can take workers that know the industry and have an apprenticeship program so they can quickly be upskilled to take positions at OSHA. And, of course, folks coming in straight out of college with the more technical engineering degrees, that makes a nice mix at OSHA. To have workers that can come into the system that have knowledge of the industry is invaluable, and this would help with that. And so we strongly urge an aye vote. Thank you.

and other committee members. My name is Sarah McGinn and I'm a research program coordinator for SEIU Local 1000, California's largest union of state employees. For the last 10 years I've worked with state partners to develop non-traditional apprenticeships for Local 1000 workers I here to speak in support of SB 1227 This bill serves to address understaffing at the Department of Industrial Relations by uniting state and union efforts to trade apprenticeships for classifications essential to labor law enforcement The 2024 State Auditor's Report of Cal OSHA, a division of the department, found that persistent understaffing limited Cal OSHA's ability to ensure worker protection and enforce critical safety standards. The report also noted that in its enforcement branch and at several district offices, Cal OSHA had a 40% vacancy rate. Apprenticeship is the model mechanism to address these vacancies and increase enforcement. As the Department's Division of Apprenticeship Standards explains, apprenticeship produces the need for expensive recruitment programs by creating a flow of candidates who are already screened and trained. SCI Local 1000 is an early adopter of non-traditional apprenticeship. In partnership with the state, we've launched dozens of apprentice cohorts in the last decade targeting occupations in registered nursing, cybersecurity, networking, mainframe administration, client services, and auditing and accounting. These programs connect workers to stable living wage jobs while meeting the needs of state employers. SB 1227 will enable career development for state workers and also has the potential to create pipelines into the state workforce for external applicants. Local 1000 strongly supports this legislation and is grateful to Senator Durazzo for her leadership on this topic.

There's none registered.

On behalf of Case in support, thank you.

Madam Chair and members, Yvonne Fernandez on behalf of the California Labor Fed in support.

Thank you. Are there any witnesses in opposition? Please come forward and give your name, organization, and position.

Okay, the vote has been moved by Assemblymember Berner and seconded by Assemblymember Nguyen. Nguyen. Thank you, Asen. Okay. Any questions? No questions?

I have an I recommendation and the motion is due pass as amended to Labor Committee. And we do have a motion and second.

Would you like to close?

Thank you very much.

Thank you. Thank you. This meeting is adjourned. Thank you. Thank you.