BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 987|
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UNFINISHED BUSINESS
Bill No: SB 987
Author: Negrete McLeod (D)
Amended: 8/13/12
Vote: 21
SENATE PUBLIC EMPLOY. & RETIREMENT COMM. : 3-0, 4/9/12
AYES: Negrete McLeod, Gaines, Vargas
NO VOTE RECORDED: Walters, Padilla
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 31-0, 5/3/12
AYES: Alquist, Berryhill, Blakeslee, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Emmerson, Evans,
Fuller, Gaines, Hancock, Harman, Hernandez, Kehoe, Leno,
Lieu, Liu, Lowenthal, Negrete McLeod, Price, Rubio,
Steinberg, Strickland, Vargas, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Anderson, Dutton, Huff, La Malfa,
Padilla, Pavley, Runner, Simitian, Walters
ASSEMBLY FLOOR : 67-1, 8/22/12 - See last page for vote
SUBJECT : Public employees retirement: annual
housekeeping
legislation
SOURCE : California Public Employees Retirement System,
Board of
Administration
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DIGEST : This bill makes various technical and
non-controversial changes to various sections of the
Government Code administered by the California Public
Employees Retirement Board, including code sections
governing the California Public Employees' Retirement
System (CalPERS), the Judges' Retirement Systems I and II
(JRS I and JRS II) and the Legislators' Retirement System
(LRS).
Assembly Amendments clarify 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.
ANALYSIS :
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
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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.
This bill includes the following provisions:
1. Standardizes service credit purchase eligibility for
temporary disability leaves. Existing law allows
members on an employer-approved leave for medical
reasons, to purchase retirement service credit for their
time away from active service, but contains confusing
references. This bill 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.
2. Clarifies that references to "spouse," "surviving
spouse," and "marriage" in the laws governing CalPERS,
JRS I and II, and LRS apply equally to a registered
domestic partner, or partnership, to the extent provided
by the domestic partnership provisions in the Family
Code.
3. Aligns CalPERS Investment Reporting to Financial
Industry Standards. Existing law 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.
According to the bill's sponsor, CalPERS, reporting
investment returns on a two-year basis (1) deviates from
financial industry standards, which specifies
calculations on a five-year, three-year, and one-year
basis;
(2) requires additional time and expense for CalPERS to
furnish such information, which is not used for any
other purpose; and (3) is not required by statute for
other public retirement systems in California. This
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bill removes the two-year reporting requirement.
CalPERS argues this aligns CalPERS financial reporting
to financial industry standards and existing
requirements for other public retirement systems.
This bill also clarifies in statute that CalPERS can pay
the cafeteria, parking and other building vendor
contracts through the CalPERS building fund and correct
drafting errors in budget trailer bills.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/15/12)
California Public Employees' Retirement System, Board of
Administration (source)
ARGUMENTS IN SUPPORT : According to CalPERS, "Employers
do not distinguish between illness or injury when approving
employee leaves, which are 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."
ASSEMBLY FLOOR : 67-1, 8/22/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Block, Blumenfield, Bonilla, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Galgiani,
Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall,
Hayashi, Hill, Huber, Hueso, Huffman, Lara, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Mitchell, Monning,
Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V.
Manuel Pérez, Portantino, Skinner, Smyth, Solorio,
Swanson, Torres, Wieckowski, Williams, Yamada, John A.
Pérez
NOES: Jones
NO VOTE RECORDED: Bill Berryhill, Donnelly, Beth Gaines,
Garrick, Harkey, Roger Hernández, Jeffries, Knight,
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Mansoor, Silva, Valadao, Wagner
DLW:m 8/22/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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