BILL ANALYSIS
AB 1136
Page 1
Date of Hearing: May 28, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1136 (Fong) - As Amended: May 18, 2009
Policy Committee: P.E.R. &
S.S.Vote: N/A
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill permits, upon adoption by a county board of
retirement, a retired member of a county retirement system being
operated under the County Employees' Retirement Law of 1937 ('37
Act) to change previously elected optional settlements under
specified circumstances.
FISCAL EFFECT
No direct effect on the state. By requiring that information on
the revocation application be provided under penalty of perjury,
the bill contains a crime mandate, not state reimbursable.
SUMMARY (CONTINUED)
Specifically, the bill:
1)Allows a '37 Act retired member to revoke an optional
settlement if:
a) The retired member retired on or before the date the
post-retirement spouse provision was adopted in the county
from which he or she retired; and,
b) The member was unmarried or had been married less than
one year at the time of retirement.
c) The application for a revocation includes the signature
of the designated beneficiary of the optional settlement
acknowledging the revocation, or includes a written
declaration, made under penalty of perjury, that the
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beneficiary has no identifiable community property, the
beneficiary has refused to sign the document, or the
beneficiary is incapable of executing the acknowledgment
because of an incapacitating mental or physical condition.
d) In the case where the designated beneficiary of the
optional settlement is a spouse or domestic partner, the
application must also include evidence of agreement from
the beneficiary.
2)Specifies that after revocation, the member's retirement
allowance will be adjusted prospectively to the amount he or
she would have been entitled to had they not elected an option
and to reflect any cost-of-living increases that would have
been added to the retirement allowance.
3)Specifies that the spouse, after revocation, is entitled to
any provisions for which he or she may qualify, as if no
optional settlement had been elected by the member.
4)Prohibits a retired member that has revoked an optional
settlement pursuant to these provisions from electing other
optional settlements.
COMMENTS
1)Background . Existing law permits the spouse of a member of a
'37 Act retirement system to receive a spousal continuation
allowance equal to 60% of the member's retirement benefit.
Prior to the early 1990s, this benefit was only available to
spouses of members who were married at least one year prior to
retirement. Legislation passed in the early 1990s permitted
counties to adopt a post-retirement spouse provision, whereby
spouses of members that married either less than one year
prior to, or after retirement are eligible to receive the 60%
continuation allowance, if the death occurred after two years
of marriage and the spouse is over 55 years of age.
Current law also allows members to choose alternative
retirement settlement options, where they can reduce their
regular allowance in return for a specified continuation
benefit for a spouse or any other beneficiary. Once made, the
option cannot be revoked.
2)Purpose. This bill is meant to address the situation where a
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retiree who was unmarried (or married for less than one year)
at the time of retirement had chosen an alternative settlement
option prior to when the post-retirement spouse provision was
adopted by his or her county. (This may have occurred, for
example, had the retiree designated his or her future spouse
as a beneficiary using an alternative settlement option).
Under existing law, this member cannot revoke that option in
order to avail himself or herself to the more generous
post-retirement spouse provision. This bill would allow the
member to do so, under specified circumstances.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081