BILL ANALYSIS                                                                                                                                                                                                    


          |SENATE RULES COMMITTEE            |                  AB 1902|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
                                 THIRD READING

          Bill No:  AB 1902
          Author:   Portantino (D)
          Amended:  3/9/10 in Assembly
          Vote:     21

           SENATE PUBLIC EMP. & RET. COMMITTEE :   5-0, 6/23/10
          AYES:  Correa, Corbett, Ducheny, Hollingsworth, Liu
          NO VOTE RECORDED:  Ashburn

           ASSEMBLY FLOOR  :  72-0, 05/10/10 - See last page for vote

           SUBJECT  :    County employees retirement:  Los Angeles  

           SOURCE  :     Los Angeles County Employees Retirement  

           DIGEST  :    This bill make technical and non-controversial  
          changes to laws governing the Los Angeles County Employees  
          Retirement Association (LACERA) regarding employee transfer  
          of membership between retirement plans D and E, pay  
          periods, and reciprocity with other public retirement  
          systems for former Plan E members.

           ANALYSIS  :    

           Existing Law

           1.Establishes the 1937 Act County Retirement Law for 20  
            independent county retirement systems, of which Los  


                                                               AB 1902

            Angeles County is a participant.

          2.Provides two retirement plans for Los Angeles County  
            Employees Retirement Association (LACERA) general  
            members:  Plan D (members make contributions in exchange  
            for higher benefits at younger retirement ages) and Plan  
            E (members do not make contributions but receive lower  
            benefits at older ages).

          3.Allows members to choose which plan to participate in,  
            and provides that a member in one plan may elect, no more  
            than once every three years, to transfer from one plan to  
            the other.

          4.Provides disability retirement benefits for Plan D  
            members but not for Plan E members, and requires that  
            someone who transfers from Plan E to Plan D must perform  
            two continuous years of service, or five total years of  
            service, in Plan D before being eligible for disability  
            retirement in Plan D.

          5.Provides reciprocity benefits for an employee who moves  
            between public employers within specified timeframes,  
            which include transferability of certain rights and  
            benefits, and requires that to be eligible for  
            reciprocity an employee may not receive service credit in  
            more than one system for the same period of service.

          This bill:

          1.Clarifies that Plan E members may only be credited for  
            service earned during payroll periods for which they  
            received compensation.

          2.Allows a member who transfers to Plan D and becomes  
            permanently disabled, and who does not have enough  
            service credited in Plan D to retire for disability, to  
            transfer back to Plan E even though it has been less than  
            three years, and receive the Long Term Disability offered  
            to Plan E members until he or she is old enough to retire  
            for service from Plan E.

          3.Allows a former Plan E member who changes public  
            employers to retain certain reciprocity rights and  


                                                               AB 1902

            purchase service with the new employer that was earned  
            and forfeited under Plan E, as specified.


           According to the author's office, "Disabled workers who  
          change retirement plan tiers may receive inequitable  
          treatment that limits rehabilitation periods.  Plan D  
          offers disability benefits while Plan E does not.

          "A worker participating in Plan E who prospectively  
          transfers to Plan D must meet one of two waiting period  
          requirements before applying for Plan D disability  
          retirement benefits:  (1) complete two continuous years of  
          active service, or (2) earn five years of retirement  
          service credit under Plan D.  The intent of the waiting  
          period requirement is to limit the possibility of a worker  
          transferring from Plan E to Plan D and filing for  
          disability benefits.

          "However, disabled workers in Plan D are required to leave  
          employment and file for retirement benefits at the earliest  
          possible age following the 24 month period (generally age  
          50 with 10 years of retirement credit).  As such, a worker  
          who prospectively transfers from Plan E to Plan D and  
          becomes disabled prior to satisfying the waiting period  
          receives inequitable treatment compared to other disabled  
          workers who remained in Plan E by being forced to leave  
          employment and losing the opportunity to participate in the  
          employer's Return to Work rehabilitation programs.

          "This bill allows a disabled worker who prospectively  
          transfers to Plan D and does not meet the requirements to  
          apply for a Plan D disability retirement benefit the option  
          of transferring back to Plan E even though fewer than three  
          years may have elapsed since the member's most recent  
          transfer date."

           Regarding benefit portability  .  This bill re-links  
          [reciprocal] retirement plan benefits between California  
          public retirement systems when a Plan E member forfeits  
          their LACERA retirement benefit, and keeps intact the  
          prohibition of workers receiving a retirement benefit from  
          multiple California government employers for the same time  


                                                               AB 1902

          period worked.  
           FISCAL EFFECT :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

           SUPPORT  :    (Verified  6/30/10)

          Los Angeles County Employees Retirement Association  

           ARGUMENTS IN SUPPORT  :    LACERA, the sponsor states,  
          "Enactment of Assembly Bill 1902 will greatly improve and  
          update Plan E statutes by allowing for precise crediting of  
          Plan E service, a needed safety net for former Plan E  
          members who recently transferred to contributory Plan D and  
          became disabled, and greater benefit portability under the  
          reciprocity provisions of Plan E."

           ASSEMBLY FLOOR  : 
          AYES:  Adams, Ammiano, Anderson, Arambula, Bass, Beall,  
            Bill Berryhill, Tom Berryhill, Blakeslee, Block,  
            Blumenfield, Bradford, Brownley, Buchanan, Caballero,  
            Charles Calderon, Carter, Chesbro, Conway, Cook, Coto,  
            Davis, De Leon, Emmerson, Eng, Evans, Feuer, Fletcher,  
            Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,  
            Garrick, Gilmore, Hagman, Hall, Hayashi, Hernandez, Hill,  
            Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,  
            Bonnie Lowenthal, Ma, Miller, Monning, Nava, Nestande,  
            Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,  
            Salas, Silva, Skinner, Smyth, Audra Strickland, Swanson,  
            Torlakson, Torres, Torrico, Tran, Villines, Yamada, John  
            A. Perez
          NO VOTE RECORDED:  De La Torre, DeVore, Harkey, Mendoza,  
            Norby, Saldana, Solorio, Vacancy

          CPM:cm  6/30/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****