BILL ANALYSIS
SB 973
Page 1
Date of Hearing: July 6, 2005
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Alberto Torrico, Chair
SB 973 (Kuehl) - As Amended: June 30, 2005
SENATE VOTE : 24-15
SUBJECT : Public Employees' Retirement: domestic partners.
SUMMARY : Amends the various laws governing the Public
Employees' Retirement System, the State Teachers' Retirement
System, and the twenty County Employees Retirement Systems to
entitle retired members to elect to change optional retirement
allowances to provide for their domestic partners.
Specifically, this bill :
1)Revises and recasts the provisions of the State Teachers
Retirement Law regarding pre-retirement elections to require
the form include the signature of the member's spouse or
domestic partner, as specified, and be received at the
system's headquarters.
2)Provides that a spouse or registered domestic partner who
fails to meet specified criteria are prohibited from receiving
a distribution of contributions until the member separates
from employment.
3)Provides, for purpose of the provision of certain
postretirement death benefits under CalPERS, that a surviving
domestic partner shall be treated in the same manner as a
surviving spouse if the domestic partner is in a registered
domestic partnership that meets specified criteria or if the
retired member and his or her domestic partner, who are
currently in a registered domestic partnership, sign an
affidavit that makes specified statements. Because moneys in
the Public Employees' Retirement Fund would be used for a new
purpose, this bill would make an appropriation.
4)Revises and recasts the provisions in the Public Employees'
Medical and Hospital Care Act regarding the extension of the
rights and duties of marriage to domestic partnerships on and
after 2005. Because moneys in the Public Employees' Health
Care Fund would be used for a new purpose, this bill would
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make an appropriation.
5)Entitles a retired member and his or her domestic partner to
the same entitlements as described above, if specified
criteria are satisfied, including providing an affidavit
signed by the member and domestic partner under penalty of
perjury relative to the member's service retirement effective
date or disability retirement date.
6)Expands provisions regarding conservatorship to provide that a
conservatee retains the capacity to enter into a domestic
partnership, as specified.
7)Provides that no reimbursement is required by this act.
EXISTING LAW :
1)Provides that any member retiring from service may elect to
receive his or her retirement
allowance pursuant to specified options. A member may make
a pre-retirement election by
filing a form with the system's office in Sacramento
within 30 days of the date of signature.
2)Requires a court to address certain community property issues
and rights under the CalPERS system upon the legal separation
or dissolution of marriage of a member.
3)Defines the term surviving spouse for the purpose of providing
postretirement death benefits.
These benefits are funded by the Public Employees'
Retirement Fund, a continuously
appropriated fund.
4)Extends the rights and duties of marriage to persons
registered as domestic partners on and
after January 1, 2005.
5)Authorizes under the Public Employees' Medical and Hospital
Care Act the Board of Administration of the Public Employees'
Retirement System to contract with carriers for health benefit
plans and major medical plans for employees and annuitants, as
defined, and approve other plans. The act defines domestic
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partnership for these purposes and provides that a domestic
partner is a family member for specified purposes. The act
permits certain persons are eligible to enroll their domestic
partners as family members in health plans, subject to
collective bargaining, as specified. The act allows an
employer to require an employee or annuitant to be responsible
for certain increased costs or associated with covering the
domestic partner, as specified. The act permits a contracting
agency to offer health benefits to domestic partners of
employees and annuitants at its option. The benefits provided
under the act are funded by the Public Employees' Health Care
Fund, a continuously appropriated fund.
6)Provides that under the County Employees Retirement Law of
1937, any member retiring from service may elect to receive
his or her retirement allowance pursuant to specified options.
7)Specifies the capacity of a conservatee and the powers of a
conservator and, among other things, provides that a
conservatee retains the capacity to marry.
8)The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated
by the state. Statutory provisions establish procedures for
making that reimbursement.
FISCAL EFFECT : All of the retirement systems affected by this
bill report minor or no costs created by the provisions of the
bill.
COMMENTS :
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.
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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 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.
Argument in Support
According to the author, with the passage of AB 205 (Goldberg),
which was signed into law in 2003 and went into full effect in
January of this year, domestic partners in the state of
California now have many of the same benefits and
responsibilities afforded under state law to married couples.
SB 973 is a simple clean up bill to bring certain provisions of
our retirement law and our probate code into compliance with AB
205.
REGISTERED SUPPORT / OPPOSITION :
Support
American Civil Liberties Union
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American Federation of State, County, and Municipal Employees
California Federation of Teachers
California Public Employees' Retirement System Board of
Administration
California School Employees Association
Los Angeles County Employees Retirement Association
National Association of Social Workers
Service Employees International Union
Opposition
None on file
Analysis Prepared by : Clem Meredith / P.E., R. & S.S. / (916)
319-3957