BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 973|
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UNFINISHED BUSINESS
Bill No: SB 973
Author: Kuehl (D), et al
Amended: 8/25/05
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
SENATE FLOOR :
AYES: Alarcon, Alquist, Bowen, Cedillo, Chesbro, Ducheny,
Dunn, Escutia, Figueroa, Kehoe, Kuehl, Lowenthal,
Machado, Migden, Murray, Ortiz, Perata, Romero, Scott,
Simitian, Soto, Speier, Torlakson, Vincent
NOES: Aanestad, Ackerman, Ashburn, Battin, Campbell, Cox,
Denham, Dutton, Florez, Hollingsworth, Maldonado,
Margett, McClintock, Poochigian, Runner
NO VOTE RECORDED: Morrow
ASSEMBLY FLOOR : Not available
SUBJECT : Public employees retirement: domestic partners
SOURCE : Equality California
DIGEST : This bill amends the Public Employees Retirement
System (PERS), the State Teachers Retirement System (STRS),
and the County Employees Retirement Act of 1937 to entitle
CONTINUED
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retired members to elect to change optional retirement
allowances to provide for their domestic partners.
Assembly Amendments recast the provisions of the bill with
the same intent as it left the Senate, and make the
necessary conforming changes to PERS, STRS and the County
Employees Retirement Law of 1937 law.
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
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'
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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
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
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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:
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 is 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 PERS, 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 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
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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.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
It is PERS position that this bill is not expected to have
an impact on PERS' actuaries' current assumption that 85
percent on non-safety members and 90 percent of safety
members are married or in a domestic partnership. PERS'
staff states that the "slight increase in domestic
partners' entitlement to benefits would be captured at the
end of each year's unrealized actuarial loss and will not
trigger an increase in employer rates or a revision of the
actuarial assumption."
SUPPORT : (Verified 8/30/05)
Equality California (source)
American Civil Liberties Union
American Federation of State, County and Municipal
Employees
California Federation of Teachers
California Public Employees Retirement System
California School Employees Association
California State Employees Association
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Los Angeles County Employees Retirement Association
National Association of Social Workers
Service Employees International Union, Local 1000
OPPOSITION : (Verified 8/30/05)
Department of Finance
JJA:cm 8/30/05 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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