BILL ANALYSIS Ó
SB 987
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Date of Hearing: June 20, 2012
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Warren T. Furutani, Chair
SB 987 (Negrete McLeod) - As Amended: June 11, 2012
SENATE VOTE : 31-0
SUBJECT : Public employees' retirement.
SUMMARY : Makes various technical and non-controversial changes
to various sections of the Government Code administered by the
California Public Employees' Retirement System (CalPERS) that
are necessary for the continued efficient administration of the
system. Specifically, this bill :
1)Clarifies that references to "spouse," "surviving spouse," and
"marriage" in the laws governing CalPERS, the Judges'
Retirement Systems I and II (JRS I and JRS II) and the
Legislators' Retirement System (LRS) apply equally to a
registered domestic partner, or partnership, to the extent
provided by the domestic partnership provisions in the Family
Code.
2)Revises investment reporting requirements to align them with
financial industry standards and the requirements of other
public retirement systems.
3)Clarifies the definition of an industrial "leave of absence"
to include leave for an industrial illness or injury.
4)Clarifies that members are able to purchase service credit at
their own expense for time away from work caused by a non-work
related injury in the same manner as purchasing service credit
for leave a non-work related illness.
5)Clarifies that contracting agency employees must be members of
CalPERS or another public retirement system in order to be
eligible for CalPERS health benefits, and that contracting
agencies have the option to provide CalPERS health benefits to
their elected and appointed officials regardless of whether
they also provide retirement benefits to these officials or
the official has chosen to become a CalPERS member.
SB 987
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EXISTING LAW :
1)Allows individuals to file a Declaration of Domestic
Partnership with the Secretary of State and requires that
registered domestic partners shall have the same rights,
protections, and benefits as are granted to and imposed upon
spouses.
2)Requires CalPERS to provide the Legislature a review of the
system's assets on a quarterly basis that includes, among
other things, both time-weighted and dollar-weighted
investment rates of return on a five-year, three-year,
two-year, and one-year basis.
3)Allows a public employee to be absent from service on
employer-approved leave for an industrial illness or injury
and to receive temporary disability payments during the
absence.
4)Allows a CalPERS member who has been on uncompensated,
employer-approved leave for a personal illness or injury to
purchase service credit in the CalPERS system equivalent to
the time spent on leave. In such cases the employee pays the
entire cost (i.e., employer and employee contributions) of the
service credit.
5)Requires employees of CalPERS contracting agencies, in order
to be eligible for CalPERS health benefits, to be CalPERS
members or participate in another public retirement system.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : CalPERS is the state's largest public retirement
system, providing benefits for California's state employees and
local public employees. Annually, CalPERS sponsors a
housekeeping bill to make technical and non-controversial
changes to the area of law it administers.
SB 987 removes the 2-year reporting requirement to align CalPERS
financial reporting to financial industry standards and existing
requirements for other public retirement systems.
According to CalPERS, "Employers do not distinguish between
illness or injury when approving employee leaves, which are
SB 987
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granted for medical or disability reasons regardless of cause.
The proposed change would clarify that members are able to
purchase service credit at their own expense for time away from
work caused by a non-work related injury in the same manner as
non-work related illness."
CalPERS points out that poor drafting in the Public Employees
Medical and Hospital Care Act (PEMHCA) would appear to make
available CalPERS health benefits to non-member employees and
only elected and appointed officials that participate in a
retirement system provided by the contracting agency. This bill
clarifies in statute that contracting agency employees must be
members of CalPERS or another public retirement system in order
to be eligible for CalPERS health benefits, and that contracting
agencies have the option to provide CalPERS health benefits to
their elected and appointed officials regardless of whether they
also provide retirement benefits to these officials or the
official has chosen to become a CalPERS member. This will align
the PEMHCA with existing practices that enable CalPERS to
monitor eligibility of contracting agency employees, and ensure
equity among officials of local governments that provide health
benefits.
REGISTERED SUPPORT / OPPOSITION :
Support
California Public Employees' Retirement System (Sponsor)
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957