BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 782|
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CONSENT
Bill No: AB 782
Author: Brownley (D)
Amended: 6/7/11 in Senate
Vote: 21
SENATE PUBLIC EMPLOYMENT & RET. COMMITTEE : 5-0, 6/13/11
AYES: Negrete McLeod, Walters, Gaines, Padilla, Vargas
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 73-0, 5/2/11 - See last page for vote
SUBJECT : Public employee benefits: audits
SOURCE : California Public Employees Retirement System
DIGEST : This bill requires California Public Employees
Retirement System (CalPERS) to inform employers of the
estimated time required to perform an audit based on
specified factors, and allows CalPERS to charge employers
reasonable fees when audits require more time than
originally estimated.
ANALYSIS :
Existing law :
1. Creates CalPERS, the State's largest public employee
retirement system, which administers retirement and
other benefits for over 1.6 million members and retirees
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and their beneficiaries and survivors.
2. Requires CalPERS to administer retirement plans for the
State and over 1,500 public agencies and almost 1,500
school districts.
3. Allows CalPERS to perform audits of employer records to
determine the correctness of retirement benefits,
reportable compensation, and employee enrollment and
reinstatement into the system.
This bill:
1. Requires CalPERS to inform the subject of an audit of
the estimated time required to perform the audit, based
on the following factors:
A. The number of employees
B. Employment classifications
C. Benefits
D. Contract provisions
E. Geographical location
F. Time required for audits of comparable entities
G. Additional time factors raised by the subject of
the audit
2. Allows CalPERS to assess reasonable charges to the
employer being audited, when the audit requires more
time than originally estimated, in order to recoup
additional costs incurred for the excess time.
3. Specifies that an employer may not be assessed for
delays during the course of the audit that are outside
of the agency's control.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/28/11)
California Public Employees' Retirement System (source)
ARGUMENTS IN SUPPORT : According to the sponsor of the
bill, CalPERS states, "The Office of Audit Services (OFAS)
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began to audit contracting employers in 1990 in response to
reports of alleged pension spiking. Although audits
originally focused on contracting agencies, CalPERS later
extended the audit program to the State, California State
University, and school districts. CalPERS also audits
employers who contract with CalPERS for health benefits for
program compliance. The audits take from three days to two
weeks, depending on the size of the agency.
"OFAS has performed approximately 900 employer audits since
1990 and is expected to complete 54 audits in FY 2010-11
and 89 audits in FY 2011-12."
CalPERS further states that they occasionally experience
difficulty with employers who are uncooperative or have
poor internal controls and recordkeeping, resulting in
excessive time and cost to CalPERS staff. Some of these
audits have required OFAS staff time in excess of the hours
that OFAS would have estimated for completion of an audit
of a comparable employer and resulted in large
unanticipated administrative costs to CalPERS.
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Campos, Carter, Cedillo,
Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Furutani, Garrick, Gatto, Gordon,
Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel Pérez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Charles Calderon, Fuentes, Galgiani,
Gorell, Roger Hernández, Mendoza, Vacancy
CM:do 6/28/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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