BILL NUMBER: SB 526	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 21, 2011

INTRODUCED BY   Senator Walters
    (   Coauthors:   Senators   Dutton
  and Runner   ) 
   (   Coauthors:   Assembly Members  
Garrick,   Grove,   Harkey,   Jeffries,
  Mansoor,   and Silva   ) 

                        FEBRUARY 17, 2011

   An act  to add Section 7514.6 to the Government Code, 
relating to public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 526, as amended, Walters.  Retirement.  
Public employees' retirement: final compensation.  
   The Public Employees' Retirement Law (PERL) creates the Public
Employees' Retirement System, which provides a defined benefit to its
members based on age at retirement, service credit, and final
compensation. PERL defines "final compensation" for purposes of
calculating a member's retirement allowance. The State Teachers'
Retirement Law (STRL), the Judges' Retirement System II Law, and the
County Employees Retirement Law of 1937 also provide for a defined
benefit based on age at retirement, service credit, and final
compensation.  
   This bill, for persons first hired on and after January 1, 2012,
for the purpose of determining any pension or benefit with respect to
a public entity defined benefit retirement system, would require
that final compensation means the highest annual average compensation
earnable by the person during a consecutive 36-month period of
membership, as specified. The bill would prohibit the inclusion of
credit for accrued leave of any form or credit for overtime work in
the calculation of final compensation, as specified.  
   The Public Employees' Retirement Law creates the Public Employees'
Retirement System, which provides a defined benefit to its members
based on age at retirement, service credit, and final compensation.
 
   This bill would state the intent of the Legislature to enact
legislation that would establish a defined contribution plan for new
state employees. 
   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 7514.6 is added to the 
 Government Code   , to read:  
   7514.6.  (a) Notwithstanding any other provision of law, for the
purpose of determining any pension or benefit with respect to service
with a public entity that has a retirement system that provides a
defined benefit for which final compensation is an element, both of
the following shall apply:
   (1) "Final compensation" shall mean the highest average annual
compensation earnable by the person during a consecutive 36-month
period of membership in the system preceding the effective date of
his or her retirement as designated by the person.
   (2) "Final compensation" shall not include any compensation for
accrued leave of any form or compensation for overtime work. On and
after January 1, 2012, the creation of a contractual right to a
calculation of final compensation that includes credit for accrued
leave or credit for overtime work is prohibited.
   (b) This section shall apply to a person employed by the public
entity for the first time on and after January 1, 2012. If a
memorandum of understanding, entered into prior to January 1, 2012,
would preclude application of this section with regard to particular
employment classifications, this section shall not apply to a person
to be employed in those classifications governed by the memorandum of
understanding, provided that upon expiration of the memorandum of
understanding this section shall apply. A renewal or continuation of
an existing memorandum of understanding shall be considered a new
agreement for purposes of this section and shall not supersede the
requirements of subdivision (a).  
  SECTION 1.    It is the intent of the Legislature
to enact legislation that would establish a defined contribution plan
for new state employees.