BILL ANALYSIS Ó
AB 1163
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Date of Hearing: January 23, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1163 (Levine) - As Amended: January 14, 2014
Policy Committee: PERSSVote:6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Board of Administration (Board) of the
California Public Employees' Retirement System (CalPERS) to
adopt a policy for providing board member education
Specifically, this bill:
1)Requires the policy to establish appropriate education topics
and processes for determining if specific programs comply.
2)Specifies the policy provide that all board members receive a
minimum requirement of 24 hours of education every two years.
3)Requires the policy to require the board to maintain a record
of board member compliance with the policy and to post the
policy, along with information on board member compliance, on
the retirement system's Internet Web site.
FISCAL EFFECT
Annual administrative costs of approximately $50,000 for
CalPERS.
COMMENTS
1)Purpose . According to the author, in 2011, Governor Brown
proposed a 12-point pension reform plan, including changing
the composition of the CalPERS Board. Ultimately much of the
reform plan was adopted in the form of AB 340 (Furutani 2012,
known as the Public Employees' Pension Reform Act PEPRA), but
board composition was not changed. The author states the
purpose of reforming board composition was to bring financial
sophistication to the board. The author argues AB 1163 would
AB 1163
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achieve that goal while maintaining the existing board
structure.
The author contends AB 1163 would build upon both PEPRA and
board policy in a way that will codify the commitment to
increase the financial expertise on the board, while bringing
greater information about board member financial training to
the public.
2)Background . According to CalPERS, the Board recognizes the
ability of continuous learning to enhance its oversight and
control of the numerous health and retirement benefit programs
it administers. CalPERS explain this is why it is currently
developing a Board Education Policy to provide current and
future Board members additional opportunities to improve their
knowledge and abilities through a formal education program.
CalPERS also asserts the Board is committed to continuous
learning and adaptation to changing conditions, and its
members currently engage in training associated with their
fiduciary, investment, actuarial and other responsibilities
through participation in internal workshops and industry
conferences. The Board also conducts a regular assessment of
its performance and capabilities, identifies the skills and
capabilities required to fulfill its fiduciary roles and
responsibilities, and maintains an inventory of existing
trustee skills and capabilities, as well as strengths,
weaknesses, gaps and priority development needs.
3)Previous legislation . This bill is similar to AB 1519
(Wieckowski), Chapter 15, Statutes of 2012, which requires the
boards of retirement or investments for the 20 retirement
systems established pursuant to the County Employees'
Retirement Law of 1937 to adopt a policy for providing board
member education, as specified.
4)There is no registered opposition to this bill .
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081
AB 1163
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