BILL NUMBER: AB 160 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 11, 2013
INTRODUCED BY Assembly Member Alejo
JANUARY 22, 2013
An act to amend Section Sections
7522.04 and 7522.18 of the Government Code, relating to
public employees' retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 160, as amended, Alejo. California Public Employees' Pension
Reform Act of 2013: exceptions.
The
(1) The California Public
Employees' Pension Reform Act of 2013 (PEPRA), on and after January
1, 2013, requires a public retirement system, as defined, to modify
its plan or plans to comply with the act, as specified. Among other
things, PEPRA prohibits a public employer from offering a defined
benefit pension plan exceeding specified retirement formulas,
requires new members of public retirement systems to contribute at
least a specified amount of the normal cost, as defined, for their
defined benefit plans, and prohibits an enhancement of a public
employee's retirement formula or benefit adopted after January 1,
2013, from applying to service performed prior to the operative date
of the enhancement.
This bill would except from PEPRA, by excepting from the
definition of public retirement system, certain multiemployer plans
authorized under federal law and retirement plans for public
employees whose collective bargaining rights are protected by a
specified provision of federal law if a federal agency determines
a conflict with federal law .
(2) PEPRA prohibits a public employer from offering a supplemental
defined benefit plan if the public employer did not do so before
January 1, 2013, or, if it did, from offering this plan to an
additional employee group after that date.
This bill would exclude from the definition of a supplemental
defined benefit plan for purposes of this prohibition a multiemployer
plan, as defined in federal law, pursuant to a collective bargaining
or similar agreement.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7522.04 of the Government Code is amended to
read:
7522.04. For the purposes of this article:
(a) "Defined benefit formula" means a formula used by the
retirement system to determine a retirement benefit based on age,
years of service, and pensionable compensation earned by an employee
up to the limit defined in Section 7522.10.
(b) "Employee contributions" means the contributions to a public
retirement system required to be paid by a member of the system, as
fixed by law, regulation, administrative action, contract, contract
amendment, or other written agreement recognized by the retirement
system as establishing an employee contribution.
(c) "Federal system" means the old age, survivors, disability, and
health insurance provisions of the federal Social Security Act (42
U.S.C. Sec. 301 et seq.).
(d) "Member" means a public employee who is a member of any type
of a public retirement system or plan.
(e) "New employee" means either of the following:
(1) An employee, including one who is elected or appointed, of a
public employer who is employed for the first time by any public
employer on or after January 1, 2013, and who was not employed by any
other public employer prior to that date.
(2) An employee, including one who is elected or appointed, of a
public employer who is employed for the first time by any public
employer on or after January 1, 2013, and who was employed by another
public employer prior to that date, but who was not subject to
reciprocity under subdivision (c) of Section 7522.02.
(f) "New member" means any of the following:
(1) An individual who becomes a member of any public retirement
system for the first time on or after January 1, 2013, and who was
not a member of any other public retirement system prior to that
date.
(2) An individual who becomes a member of a public retirement
system for the first time on or after January 1, 2013, and who was a
member of another public retirement system prior to that date, but
who was not subject to reciprocity under subdivision (c) of Section
7522.02.
(3) An individual who was an active member in a retirement system
and who, after a break in service of more than six months, returned
to active membership in that system with a new employer. For purposes
of this subdivision, a change in employment between state entities
or from one school employer to another shall not be considered as
service with a new employer.
(g) "Normal cost" means the portion of the present value of
projected benefits under the defined benefit that is attributable to
the current year of service, as determined by the public retirement
system's actuary according to the most recently completed valuation.
(h) "Public employee" means an officer, including one who is
elected or appointed, or an employee of a public employer.
(i) "Public employer" means:
(1) The state and every state entity, including, but not limited
to, the Legislature, the judicial branch, including judicial
officers, and the California State University.
(2) Any political subdivision of the state, or agency or
instrumentality of the state or subdivision of the state, including,
but not limited to, a city, county, city and county, a charter city,
a charter county, school district, community college district, joint
powers authority, joint powers agency, and any public agency,
authority, board, commission, or district.
(3) Any charter school that elects or is required to participate
in a public retirement system.
(j) (1) "Public retirement system" means any pension or retirement
system of a public employer, including, but not limited to, an
independent retirement plan offered by a public employer that the
public employer participates in or offers to its employees for the
purpose of providing retirement benefits, or a system of benefits for
public employees that is governed by Section 401(a) of Title 26 of
the United States Code.
(2) "Public retirement system" does not include:
(A) A multiemployer plan authorized by Section 302(c)(5) of the
Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) if the public employer
began participation in that plan prior to January 1, 2013, and that
plan is regulated by the Employee Retirement Income Security Act of
1974 (29 U.S.C. Sec. 1001 et seq.).
(B) A retirement plan for public employees whose collective
bargaining rights are protected by Section 5333(b) of Title 49 of the
United States Code and the agreements entered into
pursuant to that provision if the United States Department of
Labor has issued a written determination that this division is in
conflict with federal law .
SEC. 2. Section 7522.18 of the
Government Code is amended to read:
7522.18. (a) A public employer that does not offer a supplemental
defined benefit plan before January 1, 2013, shall not offer a
supplemental defined benefit plan for any employee on or after
January 1, 2013.
(b) A public employer that provides a supplemental defined benefit
plan, including a defined benefit plan offered by a private
provider, before January 1, 2013, shall not offer a supplemental
defined benefit plan to any additional employee group to which the
plan was not provided before January 1, 2013.
(c) Except as provided in Chapter 38 (commencing with Section
25000) of Article 1 of Part 13 of Title 1 of the Education Code, a
public employer shall not offer or provide a supplemental defined
benefit plan, including a defined benefit plan offered by a private
provider, to any employee hired on or after January 1, 2013.
(d) For purposes of this section, a "supplemental defined benefit
plan" does not include a multiemployer plan, as defined in the
federal Employee Retirement Income Security Act (29 U.S.C. Sec. 1002
(37)), in which a public employer participates pursuant to a
collective bargaining agreement or similar agreement covering its
employees.