BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 973|
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THIRD READING
Bill No: SB 973
Author: Kuehl (D), et al
Amended: As introduced
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 3-2, 5/09/05
AYES: Soto, Alarcon, Dunn
NOES: Ashburn, Hollingsworth
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Public employees retirement: domestic partners
SOURCE : Equality California
DIGEST : This bill amends the Public Employees'
Retirement System, the State Teachers' Retirement System ,
and the County Employees Retirement Act of 1937 to entitle
retired members to elect to change optional retirement
allowances to provide for their domestic partners.
ANALYSIS :
Existing Law
1.Provides that registered domestic partners of public
employees have the same retirement survivor rights as the
spouses of married public employees.
2.Provides that domestic partners of public employee
CONTINUED
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members have a right to an "automatic" survivor benefit
even if the member retires with an unmodified benefit
(meaning the member retired without choosing an option to
make their domestic partner a beneficiary).
3.Provides that when a member is not married when they
retire, but who marries after retirement, is allowed to
choose an optional survivor benefit (and experience an
actuarial reduction in their monthly benefit
prospectively, as long as the member does not die within
12 months of the marriage. Under these circumstances,
the new spouse is also eligible for the "automatic"
survivor benefit if the member does not choose an
optional survivor benefit.
4.Provides the same rights to public employees, but there
are uneven interpretations of the new law as it relates
to:
A. Public employees with registered domestic partners
who retire before January 1, 2005.
B. Single public employees who retired before January
1, 2005, who subsequently enter into domestic
partnerships.
Spousal Survivor Benefits . The Public Employees'
Retirement System (PERS) and the County Employees
Retirement Act of 1937 ('37 Act) have an "automatic"
spousal survivor benefit with an unmodified benefit. For
example, if a state employee who participates in Social
Security dies after retirement, their spouse receives a
lifetime monthly benefit of 25 percent of the member's
benefit. If, before retirement, the member chooses to
provide more than 25 percent to the spouse upon the
member's death, the member can elect to take a permanent
actuarial reduction in their monthly benefit (based on the
age and sex of the beneficiary) to provide an optional
survivor benefit of 50 percent to 100 percent of the
member's actuarially reduced benefit.
Non-spousal Survivor Benefits . PERS and '37 Act system
members who are not married may also provide survivor
benefits to non-spousal beneficiaries. However, any
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election of an option of a beneficiary requires an
actuarial reduction of the members benefit based on the age
and sex of the beneficiary.
In addition, the actuarial reduction charged to a
non-married member for providing a survivor continuance to
a beneficiary is significantly greater than the
corresponding reduction experienced by a married member,
because the "automatic" spousal survivor continuance is
factored into the actuarial reduction calculations made for
married members when they choose an optional survivor
continuance for their spouses.
The State Teachers Retirement System (STRS) is the
Exception and Does Not Provide "Automatic" Survivor
Benefits . Existing STRS law does not contain any
"automatic" survivor benefit.
If a married STRS member retires with an "unmodified"
benefit, even the spouse would get no survivor benefit.
However, because the STRS benefit is community property,
the spouse has to sign the member's STRS retirement
application, confirming approval that the STRS member is
not to providing a survivor benefit).
In order for the spouse of a STRS member to receive a
survivor benefit, the STRS member must choose one of the
optional benefits and have the actuarial reduction apply to
their monthly benefit. Optional survivor benefits can be
chosen by the STRS member for any person, but if the STRS
member is married and wants to provide a survivor benefit
to someone other than the spouse, the spouse must sign the
election form.
This bill amends the PERS, STRS and the '37 Act county
retirement laws to entitle retired members to elect to
change optional retirement allowances to provide for their
domestic partners.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/25/05)
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Equality California (soruce)
California School Employees Association
American Civil Liberties Union
American Federation of State, County and Municipal
Employees
California State Employees Association
California Federation of Teachers
California School Employees Association
Service Employees International Union, Local 1000
JJA:cm 5/25/05 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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