BILL ANALYSIS SB 1217 Page 1 Date of Hearing: June 23, 2010 ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL SECURITY Alberto Torrico, Chair SB 1217 (P.E.& R. Com.) - As Introduced: February 18, 2010 SENATE VOTE : 33-0 SUBJECT : State government: warrants: employee designees. SUMMARY : Allows an employee of the state to designate a primary person and up to three contingent persons for receipt of final pay warrants upon the employee's death. In addition, it clarifies that the employee could also designate a corporation, trust, or the employee's estate as a recipient of those warrants. EXISTING LAW authorizes an employee of the state to file with his or her employer a designation naming the person who will receive the employee's final pay warrants in the event of the employee's death. The employee may change the designation from time to time and may name anyone as his or her designee. In addition, the designee has the right to claim the final warrants, upon proof of identity, and to negotiate the warrants as if he or she is the original payee. FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS : Upon entering employment, an employee designates a recipient for his or her final warrant. In some cases, many years go by between that initial designation and the employee's death. After a number of years have passed, an employee may not think to change a designation or even remember having made a designation in the first place. According to the State Controller's Office (SCO), this becomes a problem because the final pay warrants of the decedent must then be released under provisions of the Probate Code if the sole designee is not eligible or cannot be located within 60 days of the employee's death. According to the SCO, 42.6 death transactions occurred in the SB 1217 Page 2 last six months. Although incidences of a beneficiary predeceasing the employee are rare, they do occur from time to time. This bill will enable the SCO to release a deceased employee's final pay warrants to a contingent designee if the primary designee is deceased, thereby minimizing financial hardship to the deceased employee's family. REGISTERED SUPPORT / OPPOSITION : Support Office of the State Controller (Sponsor) California State Employees Association Opposition None on file Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916) 319-3957