BILL NUMBER: AB 197	CHAPTERED
	BILL TEXT

	CHAPTER  297
	FILED WITH SECRETARY OF STATE  SEPTEMBER 12, 2012
	APPROVED BY GOVERNOR  SEPTEMBER 12, 2012
	PASSED THE SENATE  AUGUST 31, 2012
	PASSED THE ASSEMBLY  AUGUST 31, 2012
	AMENDED IN SENATE  AUGUST 31, 2012
	AMENDED IN SENATE  JULY 5, 2012
	AMENDED IN SENATE  JUNE 2, 2011

INTRODUCED BY   Assembly Member Buchanan

                        JANUARY 27, 2011

   An act to amend Sections 20516 and 31461 of the Government Code,
relating to public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 197, Buchanan. Public employees' retirement.
   The Public Employees' Retirement Law establishes the Public
Employees' Retirement System (PERS) for the purpose of providing
pension benefits to specified public employees. PERS is funded by
investment returns and employer and employee contributions. Existing
law authorizes a contracting agency and its employees to agree in
writing to share the costs of any optional benefit that is
inapplicable to a contracting agency until the agency elects to be
subject to the benefit.
   This bill would instead authorize a contracting agency and its
employees to agree in writing to share the costs of the employer
contribution with or without a change in benefits, as specified. The
bill would prohibit an employer from using impasse procedures to
impose member cost sharing on any contribution amount above that
which is authorized by law.
   The County Employees Retirement Law of 1937 (CERL) authorizes
counties and districts, as defined, to provide a system of retirement
benefits to their employees. CERL defines compensation earnable for
the purpose of calculating benefits as the average compensation for
the period under consideration with respect to the average number of
days ordinarily worked by persons in the same grade or class of
positions during the period, and at the same rate of pay, as
determined by the retirement board.
   This bill would exclude from the definition of compensation
earnable any compensation determined by the board to have been paid
to enhance a member's retirement benefit. The bill would also exclude
various payments from the definition of compensation earnable,
including payments for unused vacation, annual leave, personal leave,
sick leave, and compensatory time off, as well as payments made at
the termination of employment, except what may be earned and payable
in each 12-month period during the final average salary period.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 20516 of the Government Code is amended to
read:
   20516.  (a) Notwithstanding any other provision of this part, with
or without a change in benefits a contracting agency and its
employees may agree, in writing, to share the costs of the employer
contribution. The cost sharing pursuant to this section shall also
apply for related nonrepresented employees as approved in a
resolution passed by the contracting agency.
   (b) The collective bargaining agreement shall specify the exact
percentage of member compensation that shall be paid toward the
current service cost of the benefits by members. The member
contributions shall be contributions over and above normal
contributions otherwise required by this part and shall be treated as
normal contributions for all purposes of this part. The
contributions shall be uniform, except as described in subdivision
(c), with respect to all members within each of the following
classifications: local miscellaneous members, local police officers,
local firefighters, county peace officers, and all local safety
members other than local police officers, local firefighters, and
county peace officers. The balance of any costs shall be paid by the
contracting agency and shall be credited to the employer's account.
An employer shall not use impasse procedures to impose member cost
sharing on any contribution amount above that which is authorized by
law.
   (c) Member cost sharing may differ by classification for groups of
employees subject to different levels of benefits pursuant to
Sections 7522.20, 7522.25, and 20475, or by a recognized collective
bargaining unit if agreed to in a memorandum of understanding reached
pursuant to the applicable collective bargaining laws.
   (d) This section shall not apply to any contracting agency nor to
the employees of a contracting agency until the agency elects to be
subject to this section by contract or by amendment to its contract
made in the manner prescribed for approval of contracts.
Contributions provided by this section shall be withheld from member
compensation or otherwise collected when the contract amendment
becomes effective.
   (e) For the purposes of this section, all contributions,
liabilities, actuarial interest rates, and other valuation factors
shall be determined on the basis of actuarial assumptions and methods
that, in the aggregate, are reasonable and which, in combination,
offer the actuary's best estimate of anticipated experience under
this system.
   (f) Nothing in this section shall preclude a contracting agency
and its employees from independently agreeing in a memorandum of
understanding to share the costs of any benefit, in a manner
inconsistent with this section. However, any agreement in a
memorandum of understanding that is inconsistent with this section
shall not be part of the contract between this system and the
contracting agency.
   (g) If, and to the extent that, the board determines that a
cost-sharing agreement under this section would conflict with Title
26 of the United States Code, the board may refuse to approve the
agreement.
   (h) Nothing in this section shall require a contracting agency to
enter into a memorandum of understanding or collective bargaining
agreement with a bargaining representative in order to increase the
amount of member contributions when such a member contribution
increase is authorized by other provisions under this part.
  SEC. 2.  Section 31461 of the Government Code is amended to read:
   31461.  (a) "Compensation earnable" by a member means the average
compensation as determined by the board, for the period under
consideration upon the basis of the average number of days ordinarily
worked by persons in the same grade or class of positions during the
period, and at the same rate of pay. The computation for any absence
shall be based on the compensation of the position held by the
member at the beginning of the absence. Compensation, as defined in
Section 31460, that has been deferred shall be deemed "compensation
earnable" when earned, rather than when paid.
   (b) "Compensation earnable" does not include, in any case, the
following:
   (1) Any compensation determined by the board to have been paid to
enhance a member's retirement benefit under that system. That
compensation may include:
   (A) Compensation that had previously been provided in kind to the
member by the employer or paid directly by the employer to a third
party other than the retirement system for the benefit of the member,
and which was converted to and received by the member in the form of
a cash payment in the final average salary period.
   (B) Any one-time or ad hoc payment made to a member, but not to
all similarly situated members in the member's grade or class.
   (C) Any payment that is made solely due to the termination of the
member's employment, but is received by the member while employed,
except those payments that do not exceed what is earned and payable
in each 12-month period during the final average salary period
regardless of when reported or paid.
   (2) Payments for unused vacation, annual leave, personal leave,
sick leave, or compensatory time off, however denominated, whether
paid in a lump sum or otherwise, in an amount that exceeds that which
may be earned and payable in each 12-month period during the final
average salary period, regardless of when reported or paid.
   (3) Payments for additional services rendered outside of normal
working hours, whether paid in a lump sum or otherwise.
   (4) Payments made at the termination of employment, except those
payments that do not exceed what is earned and payable in each
12-month period during the final average salary period, regardless of
when reported or paid.
   (c) The terms of subdivision (b) are intended to be consistent
with and not in conflict with the holdings in Salus v. San Diego
County Employees Retirement Association (2004) 117 Cal.App.4th 734
and In re Retirement Cases (2003)110 Cal.App.4th 426.