BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1042|
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THIRD READING
Bill No: AB 1042
Author: Allen (D)
Amended: 3/31/11 in Assembly
Vote: 21
SENATE PUBLIC EMPLOY. & RETIRE. COMMITTEE : 5-0, 6/13/11
AYES: Negrete McLeod, Walters, Gaines, Padilla, Vargas
SENATE APPROPRIATIONS COMMITTEE : 9-0, 8/25/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
ASSEMBLY FLOOR : 72-0, 5/12/11 - See last page for vote
SUBJECT : Public employees retirement
SOURCE : California Public Employees Retirement System
DIGEST : This bill requires the California Public
Employees Retirement System Board of Administration to
appoint and set the compensation of a chief financial
officer.
ANALYSIS :
Existing law:
1. Requires the California Public Employees' Retirement
System (CalPERS) Board of Administration (Board) to
appoint and establish compensation for the system's
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chief executive officer, a general counsel, a chief
actuary, a chief investment officer, and other
investment officers and portfolio managers whose
positions are designated managerial.
2. States that the compensation level for these positions
are to be comparable to other public retirement systems
and financial services companies and, when these
positions are filled through a general civil service
appointment, that the candidates be selected from an
eligible list based on an open examination.
3. States that except for the executive officers of both
CalPERS and the California State Teachers' Retirement
System, these positions are subject to a modified civil
service selection process, and the boards are able to
take action against these personnel for causes related
to their fiduciary duty, including the failure to meet
specified performance objectives.
4. Prohibits individuals employed in these positions for
less than five years from being paid to influence the
actions of the retirement system, or decisions of its
governing board for two years following the end of their
employment with the retirement system.
This bill:
1. Maintains existing provisions and requirements regarding
the Board's authority to appoint and set the
compensation of specified employees, and
2. Requires the CalPERS Board to appoint and set the
compensation of a chief financial officer (CFO).
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
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Salary/benefits ----unknown, likely over
$150----Special*
*Public Employees Retirement Fund
SUPPORT : (Verified 8/26/11)
California Public Employees' Retirement System (source)
ARGUMENTS IN SUPPORT : According to the author:
"CalPERS recently undertook a comprehensive evaluation of
its organizational structure and identified a need for a
new CFO position that reports to the Chief Executive
Officer. Giving CalPERS the authority to set the salary
of the new CFO will enable hiring of an individual with
the necessary investment finance experience needed to
coordinate with the Chief Actuary and the Chief
Investment Officer."
According to the sponsor, CalPERS:
"As recently proposed under the new CalPERS organization
structure, the CFO will oversee corporate finance and
coordinate other finance functions throughout the
organization to create a single point of financial
accountability. Establishing such a position and hiring
a high caliber, experienced individual is a critical step
in achieving a higher level of transparency and tighter
internal controls in our financial operations. It is
anticipated that the cost of establishing such a position
with a competitive salary will be offset by the
anticipated savings generated by a higher standard of
organizational financial accountability."
ASSEMBLY FLOOR : 72-0, 5/12/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines,
Galgiani, Gatto, Gordon, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso,
Huffman, Jeffries, Jones, Lara, Bonnie Lowenthal, Ma,
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Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel
Pérez, Silva, Skinner, Smyth, Solorio, Swanson, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Cedillo, Conway, Garrick, Gorell,
Knight, Logue, Portantino, Torres
CPM:kc 8/26/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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