BILL ANALYSIS Ó
AB 340
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CONCURRENCE IN SENATE AMENDMENTS
AB 340 (Furutani)
As Amended September 7, 2011
Majority vote
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|ASSEMBLY: |73-0 |(May 12, 2011) |SENATE: |25-15|(September 8, |
| | | | | |2011) |
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Original Committee Reference: P.E.,R . & S.S.
SUMMARY : States legislative intent to convene a conference
committee to craft responsible and comprehensive pension reform
legislation that reflects both the needs of public employees and
the fiscal situations of state and local governments.
The Senate amendments delete the Assembly version of this bill,
and instead state that it is the intent of the Legislature to
convene a conference committee to craft responsible and
comprehensive pension reform legislation that reflects both the
needs of public employees and the fiscal situations of state and
local governments.
EXISTING LAW :
1)Creates California's public retirement systems, which, in
general, provide defined benefit retirement allowances based
on members' ages at retirement, years of service, and highest
average compensation, as specified by the retirement system.
2)Specifies that a defined benefit is paid as a retirement
allowance for the member-retiree's lifetime and, as an option
to the member, the lifetime of his or her survivor at a
reduced actuarial amount.
AS PASSED BY THE ASSEMBLY , this bill prohibited certain cash
payments from being counted as compensation earnable for
retirement purposes in counties operating retirement systems
pursuant to the County Employees' Retirement Law of 1937 ('37
Act) and prohibits a retiree in those counties from immediately
returning to employment with the public employer on a part-time
or contract basis.
FISCAL EFFECT : Unknown
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COMMENTS : In California, most public employees are covered by a
defined benefit retirement plan which provides participants with
a guaranteed annual pension based upon age at retirement, years
of service, and highest average compensation. The California
Public Employees' Retirement System (CalPERS) administers the
retirement plans for state employees and classified school
employees, while the California State Teachers' Retirement
System administers the plans for teachers. Many local
government entities also contract with CalPERS to administer
their retirement plans. Additionally, twenty counties have
chosen to establish their own retirement systems under the '37
Act. Finally, some cities and counties have established
independent retirement systems to provide benefits to their
employees.
Funding for defined benefit retirement systems generally comes
from three sources - employee contributions, employer
contributions, and interest earnings. Employee contributions
are generally a fixed percentage amount, while employer
contributions generally vary from year to year.
This bill states legislative intent to convene a conference
committee to craft responsible, comprehensive legislation to
reform state and local pension systems; a conference committee
would be in a position to examine issues related to state and
local pension system reform, so as to support the development of
legislation to implement such reform.
This bill is similar to SB 827 (Simitian) of this year which
would also state that it is the intent of the Legislature to
convene a conference committee to craft responsible and
comprehensive pension reform legislation that reflects both the
needs of public employees and the fiscal situations of state and
local governments.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0002845
AB 340
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