BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 1479
Lou Correa, Chair Hearing date: April 12, 2010
SB 1479 (Senate PE&R Comm) as introduced 3/2/10
FISCAL: NO
1937 ACT COUNTY RETIREMENT SYSTEM: ANNUAL HOUSEKEEPING BILL
HISTORY :
Sponsor: author
Prior legislation: This is the 1937 Act Retirement
System Housekeeping Bill
SUMMARY :
This bill makes technical and non-controversial changes
to the 1937 Act Retirement Law.
BACKGROUND AND ANALYSIS :
1) Existing law :
a) establishes the County Employees Retirement Law of
1937, which governs 20 independent county retirement
systems,
b) allows an employee who moves from one public employer
to another public employer to accrue service credit in
separate public retirement systems and to have reciprocity
among the different retirement systems with regard to
certain benefits; however, that employee cannot receive
reciprocity if service is earned in more than one
retirement system during the same time period, and
c) allows the retirement board of a county retirement
system to set the date upon which a new employee becomes a
credited member of the system, but that date must be no
later than 6 weeks after entering employment with the
participating county.
Pamela Schneider
Date: 4/2/10 Page 1
This bill would allow the retirement board of a county to set
the date upon which a new employee becomes, or ceases being,
a member, but that date could be no later than 12 weeks after
entering employment with the county and no sooner than 12
weeks prior to ending employment under the previous public
employer.
Source: State Association of County Employee Retirement
Systems (SACRS).
2) Existing law requires that counties in the 1937 Act
system transfer payments to the county retirement
associations to fund the cost of retiree benefits. Existing
law also allows a county board of supervisors to authorize
the county auditor to make payments to the retirement system
in advance of when those payments would otherwise be due.
This bill would allow a district in San Bernardino County
that participates in the San Bernardino County Employee
Retirement Association (SBCERA) to also make advance payments
to that retirement system.
Source: South Coast Air Quality Management District, a
SBCERA participating agency.
3) Existing law establishes the Supplemental Retiree
Benefits Reserve (SRBR), to be used exclusively for the
benefit of retirees under county retirement systems that have
elected to be subject to those provisions (specifically,
Alameda, Kern, and Tulare counties).
This bill clarifies that the administrative costs of
operating the SRBR in Alameda County may be paid through the
main retirement program in order to comply with IRS rulings
regarding the exclusive benefit rule.
Source: Alameda County Employees Retirement Association
(ACERA).
COMMENTS :
Pamela Schneider
Date: 4/2/10 Page 2
1) Arguments in support:
According to SACRS, sometimes employees who move between
public employers run the risk of violating reciprocity
rules if they have overlapping periods of credited
service. For example, an employee may still be running
out vacation time (i.e. technically still employed) under
one employer while entering employment with the new
employer. This bill provides flexibility for the
retirement systems to start or end credited service under
each system in a coordinated manner so that the employee
does not lose reciprocity rights.
According to South Coast Air Quality Management District,
the ability to pay retirement system payments in advance
can result in savings on interest charges.
2) SUPPORT :
Alameda County Employees' Retirement Association (ACERA)
State Association of County Retirement Systems (SACRS)
South Coast Air Quality Management District (SCAQMD)
3) OPPOSITION :
None to date
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Pamela Schneider
Date: 4/2/10 Page 3