Legislative News

CalHR Pay Letter Affects Pay Scales for Some Excluded Employees

Posted: 12/29/2016 Tags: policy salary Tags Views: 2063

CalHR released Pay Letter 16-24 on December 22, 2016, which addressed changes in the Fair Labor Standards Act salary threshold. Some excluded employees received an increased pay rate. 

>> Click here to read the details of Pay Letter 16-24 to see if your classification was affected by this change. 


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CalPERS Lowers Investment Funds Discount Rate

Posted: 12/21/2016 Tags: benefits policy retirement salary Tags Views: 446

On December 21, 2016, the CalPERS Board of Directors Investment Committee approved a reduction in the discount rate from 7.5% to 7.0% over a three-year phase. CalPERS financial consultants have been concerned about the current state of negative cash flow over the next 10 years. Lower returns in early years will diminish the compounding interest of later years. According to Reuters, “State and local governments could see their pension contributions rise by as much as $2 billion in five years. But for employees, the hit could be another percentage point or more in payroll deductions.” CalPERS views this reduction in the discount rate as a necessary way to improve its current situation.

This means that state employees will be paying more towards their retirement benefits in the long run as a direct result of the discounted rate. The state needs to protect the pensions. To cover that, state employees will end up having to pay more from their current paychecks towards their retirement benefits. At this point, we do not know exactly how much will come out of employee paychecks.

"This was a very difficult decision to make, but it is an important step to ensure the long-term sustainability of the Fund," said Rob Feckner, president of the CalPERS Board of Administration.

The new discount rate for the state will go into effect on July 1, 2017 at 7.375% and then be phased down incrementally to 7.25% for Fiscal Year (FY) 2018-19 and the again phased down to 7.0% for FY 2019-20.

ACSS will continue to follow this issue closely and provide you with updates that affect excluded state employees.

>>Click here to read the full article from CalPERS.


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Paid Leave Buy-Back Program Enhanced – Options for Savings Plan or Cash Payout

Posted: 12/9/2016 Tags: benefits policy Tags Views: 1136

The California Department of Human Resources (CalHR) has authorized an enhancement to the Paid Leave Buy-Back Program for fiscal year 2016-17 in PML 2016-032. Employees designated as Exempt, Managerial, Supervisory, Confidential, or otherwise excluded from collective bargaining are able to participate. If an employee has vacation or annual leave balances in excess of 640 hours as of December 1, 2016, the employee has the option to transfer accruals into a Savings Plus 457(b) account, transfer accruals into a 401(k) account, or request a cash payment. This enhancement to the Excluded Employee Leave Buy-Back Program allows employees another option when using the 80 hours of leave buy-back proposed and obtained by ACSS in April 2016.

Eligible employees can elect to participate by completing the Transfer Future Leave Accruals to Savings Plus form and returning it to Human Resources by December 31, 2016. No action is required if you do NOT elect to participate.

For more information, download the FAQ provided by CalHR.


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Rank and File reach a Tentative Agreement and Pay Raise – How this Affects Excluded Employees

Posted: 12/5/2016 Tags: bargaining policy retirement salary Tags Views: 3279

Over the past month, ACSS has followed the bargaining between California’s largest union of state employees (SEIU Local 1000) and the State of California over a new contract. We have also been following the reports on the possibility of a strike and how the State of California sought to halt the potentially disruptive strike by seeking an injunction against SEIU Local 1000 employees. The Brown administration has been arguing that the potential strike would be illegal because of the no-strike clause. On Friday December 2nd, 2016, SEIU Local 1000 announced that the strike, set for December 5th, had been called off.

Over the weekend, a tentative agreement had been reportedly reached between L1000 and the state. As reported by SEIU Local 1000, the new tentative agreement includes:

  • A $2,500 one-time signing bonus
  • 11.5% GSI total spread over 3 years: 4% effective 7/1/2017, 4% GSI effective 7/1/2018 and 3.5% GSI effective 7/1/2019.
  • Only 2.3% total in prefunding contributions for retirement health benefits over those 3 years
  • Special salary adjustments in over 30 classifications

ACSS will review and analyze the tentative agreement. We plan to reach out to CalHR to discuss the impact of this potential agreement on excluded employees related to SEIU Bargaining Units. ACSS is following this issue closely and will continue to bring updates to managers and supervisors who may be affected by it.


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Legislative Analyst’s Office Predicts Uncertainty Yet Preparedness in Future Budget Outlook

Posted: 11/18/2016 Tags: budget legislation Tags Views: 469

On November 16, 2016, the Legislative Analyst’s Office (LAO) released a comprehensive report on the assessment of the condition of the California economy and budget over the 2016-17 through 2020-2021 period. While the report predicts unpredictable economic conditions ahead, the report also provides a positive budget outlook and describes how the state is prepared to withstand a mild recession in the future.

Assuming that the state makes no additional budget commitments, the report estimates the state would end up with a decent amount of reserves. Of the $11.5 billion in estimated reserves, $2.8 billion would be set aside for discretionary reserves, which the Legislature can appropriate for any purpose.

In the event of a mild economic downturn scenario, the LAO estimates the state would have enough reserves to cover almost all of its operating deficits through 2020-21 without cutting spending or raising taxes.

These estimates are under the assumptions that the state does not make any changes in current policies or programs during the outlook period, and assumes no new changes in federal policy. The future is uncertain and any unforeseen future changes could have significant impact on the budget outlook.

>>Click here to read the full report from the Legislative Analyst’s Office on the Budget Outlook.


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