BILL NUMBER: AB 1247	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Fletcher

                        FEBRUARY 18, 2011

    An act relating to the Public Employees' Retirement
System.   An act to amend Section 7503 of the Government
Code, relating to public employees' retirement. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1247, as amended, Fletcher.  Public Employees'
Retirement System.   Public retirement systems:
reporting.  
   The California Constitution grants the retirement board of a
public pension or retirement system, consistent with the exclusive
fiduciary responsibilities vested in it, the sole and exclusive power
to provide for actuarial services in order to assure the competency
of the assets of the public pension or retirement system. Existing
law requires all state and local public retirement systems to prepare
an annual report in accordance with generally accepted accounting
principles. Existing law requires the Boards of Administration of the
Public Employees' Retirement System and the State Teachers'
Retirement System to file with the Governor and the Legislature a
report of its financial statements and investments for the fiscal
year. That report is required to include time-weighted market value
rate of return on a 5-year, 3-year, and one-year basis and portfolio
return comparisons by asset class that compare investment returns
with an alternative theoretical portfolio of comparable funds,
universes, and indexes regarding the rate of return of the system by
asset type.  
   This bill would require the annual report of all state and local
public retirement systems to include projections of the fair market
value of system assets for each of the next 20 years based on assumed
rates of returns of 6%, 73/4 %, and 91/2 %.  
   The California Constitution commits the sole and exclusive
fiduciary duty over the assets of a public pension system to the
board that manages it. Existing law requires that the Board of
Administration of the Public Employees' Retirement System, its
officers, and employees discharge their duties solely in the interest
of the participants and beneficiaries of the system. 

   This bill would state the intent of the Legislature to enact
legislation that implements the proposed recommendations of the
CalPERS Special Review, issued December 2010, that investigated and
addressed issues raised by the use of placement agents. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


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

   SECTION 1.    Section 7503 of the  
Government Code   is amended to read: 
   7503.   (a)    All state and local public
retirement systems shall prepare an annual report in accordance with
generally accepted accounting principles. 
   (b) The report described in subdivision (a) shall include
projections of the fair market value of system assets for each of the
next 20 years based on the following assumed rates of returns: 6
percent, 73/4 percent, and 91/2 percent.  
  SECTION 1.    It is the intent of the Legislature
to enact legislation that implements the proposed recommendations of
the CalPERS Special Review, issued December 2010, that investigated
and addressed problems raised by the use of placement agents. In this
regard, it is the intent of the Legislature to enact legislation
that addresses, among other things, the following:
   (a) Institutional risk management and oversight.
   (b) Gifts to employees and staff of the Public Employees'
Retirement System.
   (c) Employment of members of the Board of Administration of the
Public Employees' Retirement System following their separation from
employment with the system.
   (d) Responsiveness to public records request.
   (e) Internal audits.
   (f) Relationships between external managers or contractors and
placement agents.
   (g) Conflicts in investment functions.
   (h) Payment of placement agent fees from investment funds.
   (i) Expenses for meetings.