BILL ANALYSIS
SB 973
Page 1
SENATE THIRD READING
SB 973 (Kuehl)
As Amended August 25, 2005
Majority vote
SENATE VOTE : 24-15
PUBLIC EMPLOYEES 4-2 APPROPRIATIONS 12-5
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|Ayes:|Torrico, Jones, Mullin, |Ayes:|Chu, Bass, Berg, |
| |Negrete McLeod | |Calderon, Laird, Klehs, |
| | | |Leno, Nation, Levine, |
| | | |Saldana, Yee, Mullin |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Huff, Niello |Nays:|Sharon Runner, Emmerson, |
| | | |Haynes, Nakanishi, |
| | | |Walters |
| | | | |
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SUMMARY : Amends the various laws governing the California
Public Employees' Retirement System (CalPERS), the California
State Teachers' Retirement System (CalSTRS), and the 20 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
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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 (PEMHCA) 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 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 bill.
8)States legislative intent regarding the implementation of AB
205 (Goldberg) Chapter 421 Statutes of 2003.
9)Makes various minor technical changes to existing law
regarding domestic partners.
10) Makes various technical changes to the provisions of the
State Teacher's Retirement Law which implemented AB 205
(Goldberg) Chapter 421, Statutes of 2003.
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
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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 PEMHCA, the Board of Administration of
CalPERS to contract with carriers for health benefit plans and
major medical plans for employees and annuitants, as defined,
and approve other plans. PEMHCA defines domestic partnership
for these purposes and provides that a domestic partner is a
family member for specified purposes. PEMHCA permits certain
persons are eligible to enroll their domestic partners as
family members in health plans, subject to collective
bargaining, as specified. PEMHCA 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. PEMHCA 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 under the County Employees Retirement Law of 1937
('37 Act), 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.
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COMMENTS :
1)Spousal survivor benefits: CalPERS and the '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% of the member's benefit. If,
before retirement, the member chooses to provide more than 25%
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% to 100% of the member's
actuarially reduced benefit.
2)Non-spousal survivor benefits: CalPERS 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.
3)CalSTRS is the exception and does not provide "automatic"
survivor benefits. Existing CalSTRS law does not contain any
automatic survivor benefit. If a married CalSTRS member
retires with an "unmodified" benefit, even the spouse would
get no survivor benefit. However, because the CalSTRS benefit
is community property, the spouse has to sign the member's
CalSTRS retirement application, confirming approval that the
CalSTRS member is not to providing a survivor benefit). In
order for the spouse of a CalSTRS member to receive a survivor
benefit, the CalSTRS 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 CalSTRS member for any person, but if the CalSTRS member
is married and wants to provide a survivor benefit to someone
other than the spouse, the spouse must sign the election form.
4)Argument in support: According to the author, with the
passage of AB 205 in 2003 and which went into full effect in
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January of 2004, 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.
Analysis Prepared by : Clem Meredith / P.E., R. & S.S. / (916)
319-3957
FN: 0012202