BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1028|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AB 1028
Author: Assembly Public Employees, Retirement and Social
Security Committee
Amended: 8/15/11 in Senate
Vote: 21
SENATE PUBLIC EMPLOYMENT & RETIRE. COMM. : 5-0, 6/27/11
AYES: Negrete McLeod, Walters, Gaines, Padilla, Vargas
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 73-0, 5/2/11 (Consent) - See last page for
vote
SUBJECT : Annual housekeeping bill
SOURCE : California Public Employees Retirement System
DIGEST : This bill makes technical and non-controversial
changes to various sections of the Government Code
administered by the California Public Employees' Retirement
System (CalPERS). This is CalPERS' annual housekeeping
bill.
ANALYSIS : Existing law establishes CalPERS, the state's
largest public retirement system, which provides
retirement, death, and health benefits to over 1.6 million
employees and retirees of the state, the California State
University (CSU), school districts, and local public
agencies including cities, counties, and special districts.
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This bill makes clarifying and non-controversial changes to
Government Code sections found in the Public Employees'
Retirement Law as follows:
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| | | |
| Bill | GC | |
|Section| Section | Change |
| | | |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 1 | 20096.5 |Recently enacted laws require Board candidates to |
| | |be subject to the same reporting requirements as |
| | |other types of elected officials. |
| | | |
| | | |
| | |This section conforms obsolete filing requirements |
| | |for Board candidates to these new requirements. |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 2 | 20636.1 |Current law defines which parts of an employee's |
| | |compensation may be used as final compensation to |
| | |calculate benefits. |
| | | |
| | | |
| | |This bill clarifies sections defining compensation |
| | |earnable for classified school employees to make |
| | |them consistent with laws and rules regarding |
| | |compensation earnable for other types of CalPERS |
| | |members, clarifying that compensation earnable, |
| | |which includes payrate and special compensation, |
| | |includes monies deducted from pay for |
| | |participation in a 401(k), 403(b), (401(a), |
| | |deferred compensation plan, or flexible benefits |
| | |program. |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 3 | 20812 |Current law allows the board to adopt 30-year |
| | |funding periods to amortize unfunded accrued |
| | |actuarial obligations for the purpose of setting |
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| | |employer rates. The board may approve a one-time |
| | |request from a contracting agency for a new |
| | |amortization period based on the agency's |
| | |financial necessity, but may also deny the request |
| | |if granting the request would subject the fund to |
| | |unsound financial risk. |
| | | |
| | | |
| | |This bill removes the restriction prohibiting a |
| | |contracting agency from asking for a new |
| | |amortization period more than once. |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 4 | 20814 |In 2010 and 2011, the state bargained with |
| | |employees to increase employee contribution rates |
| | |to CalPERS and to reduce benefits for new |
| | |employees, thus reducing the annual rate the State |
| | |needs to pay to fund benefits. The Board acted to |
| | |reduce the state's rate immediately to reflect the |
| | |savings achieved through collective bargaining, |
| | |instead of requiring the state to wait for a lower |
| | |rate to be set in the annual rate setting cycle, |
| | |thus saving the state millions in the current |
| | |budget year. |
| | | |
| | | |
| | |This section aligns statute with the Board's |
| | |current rate setting policy of adjusting the |
| | |state's rate to reflect changes in state employee |
| | |contribution rates and benefit plans immediately |
| | |instead of waiting for the annual rate setting, |
| | |and requires that any such actions be consistent |
| | |with the Board's constitutional fiduciary duty. |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 5, | 20820 |Recent statutory changes require higher |
| | |contribution rates from state patrol members and |
| | |specify that new patrol members (as of October |
| 7 | 21130 |2010) shall be subject to lower retirement |
| | |formulas and higher retirement ages. |
| | | |
| | | |
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| | |This bill deletes obsolete code references and |
| | |adds new code references, as needed, to sections |
| | |of law applicable to patrol members. |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 6 | 20969.1 |Current law specifies that a mandatory furlough |
| | |for trial court employees shall not have a |
| | |negative impact on the employees' retirement |
| | |benefits. |
| | | |
| | | |
| | |This section clarifies that both service credit |
| | |and compensation earnable shall be calculated as |
| | |if the employee were not subject to furlough for |
| | |the purpose of determining a retirement allowance. |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 8, | 21221 |A number of statutes define the terms under which |
| | |a retiree may work for the state or a public |
| | |employer without being required to reinstate from |
| 9, | 21224 |retirement. Requirements include that the |
| | |employee may not work for more than 960 hours in a |
| | |fiscal year, that the appointment be temporary and |
| 11 | 21229 |require special skills, and that the pay not |
| | |exceed what is normally paid for that position. |
| | |However, these requirements are not consistently |
| | |spelled out in the statutes, creating potential |
| | |for misinterpreting or abusing the requirements of |
| | |the program. |
| | | |
| | | |
| | |This bill aligns various provisions governing |
| | |retired workers to ensure that the program |
| | |requirements are consistently applied. |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 10 | 21228 |A member who retires for regular or industrial |
| | |disability may work on an ongoing basis for a |
| | |public employer in a class other than the one he |
| | |or she was disabled from. In such cases, the |
| | |disabled employee's retirement benefit and salary |
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| | |are coordinated so that he or she can earn no more |
| | |than the salary the individual was earning prior |
| | |to the disability retirement. |
| | | |
| | | |
| | |This bill clarifies that a disabled retiree |
| | |working under this program cannot concurrently be |
| | |working as a retiree under other provisions |
| | |governing retired workers. |
| | | |
|-------+-----------+---------------------------------------------------|
| | | |
| 12, | 21493 |Unfortunately, many individuals do not keep their |
| | |beneficiary designations up to date. If the |
| | |retiree does not have a designated beneficiary, or |
| 13, | 21494 |the beneficiary has also died, CalPERS relies on a |
| | |beneficiary order outlined in statute, including |
| | |the retiree's spouse or registered domestic |
| 14 | 21506 |partner, children, parents, brothers and sisters, |
| | |or the individual's estate, in descending order, |
| | |as specified. Often, the amount to be paid is |
| | 21507 |quite small, and may be part of an estate valued |
| | |at $30,000 or less and subject to disposal by a |
| | |Public Administrator without probate. |
| | | |
| | | |
| | |This bill authorizes those benefits to be paid to |
| | |a public administrator upon receipt by CalPERS of |
| | |written certification of authority for summary |
| | |administration when the estate's total value does |
| | |not exceed $30,000. If the estate does not |
| | |require probate, the benefit would be paid to the |
| | |decedent's trust or other familial survivors, as |
| | |specified. |
| | | |
|-------+-----------+---------------------------------------------------|
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| 16 | 21533.5 |Federal laws enacted in 2008 (the HEART Act) |
| | |require that the families of employees who die |
| | |while on active military duty receive the same |
| | |employer benefits they would have received had the |
| | |individual died as an active employee. Although |
| | |retirement systems have been in compliance with |
| | |the Heart Act since it was implemented, the Act |
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| | |requires that laws governing pension plans be |
| | |amended so that state laws are consistent with the |
| | |requirements of the Act. |
| | | |
| | | |
| | |This bill amends CalPERS' laws to comply with the |
| | |requirements of the HEART Act. |
| | | |
| | | |
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/16/11)
California Public Employees' Retirement System (source)
ASSEMBLY FLOOR : 73-0, 5/2/11 (Consent)
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
CPM:mw 8/17/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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