BILL ANALYSIS Ó
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 1163
Norma Torres, Chair HEARING DATE: June 9, 2014
AB 1163 (Levine) as amended 1/14/14 FISCAL: YES
CALIFORNIA PUBLIC EMPLOYMEES' RETIREMENT SYSTEM: BOARD OF
ADMINISTRATION MEMBERS' EDUCATION
HISTORY :
Sponsor: Author
Other legislation: AB 1519 (Wieckowski),
Chapter 15, Statutes of 2012
ASSEMBLY VOTES :
PER & SS 6-0 1/08/14
Appropriations 16-0 1/23/14
Assembly Floor 70-1 1/29/14
SUMMARY :
This bill requires the California Public Employees'
Retirement System (CalPERS) Board of Administration (Board)
to adopt a policy for providing education to Board members.
The required policy shall, at a minimum, identify appropriate
Board education topics, establish a means to determine what
qualifies as Board education, set a requirement that Board
members receive 24 hours of education within two years of
their appointment and ongoing for every two-year period
thereafter, maintain a record of Board member compliance with
the Board education requirements, and provide an annual
report thereof to be posted on CalPERS' website.
BACKGROUND AND ANALYSIS :
1)Existing law :
a) establishes CalPERS and designates the Board of
Administration with responsibility for the management
and control of CalPERS, including the exclusive control
of the administration and investment of the retirement
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Date: May 19, 2014 Page
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fund.
b) establishes the composition of the Board which
consists of 13 members who are elected, appointed, or
hold office ex officio as follows:
i) six elected members:
1. two elected by and from all members;
2. one elected by and from all active state
members;
3. one elected by and from all active school
members;
4. one elected by and from all active public
agency members (employed by contracting public
agencies); and,
5. one elected by and from the retired
members.
ii) three appointed members:
1. two appointed by the Governor - an elected
official of a local government and an official of a
life insurer; and,
2. one public representative appointed jointly
by the Speaker of the Assembly and the Senate Rules
Committee.
iii) four ex officio members:
1. the State Treasurer;
2. the State Controller;
3. the Director of the California Department
of Human Resources; and,
4. a designee of the State Personnel Board.
1)This bill :
a) requires the Board to adopt a policy for providing
education to its members that at a minimum, identifies
appropriate topics which may include, but are not
limited to, the following:
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i) fiduciary responsibilities;
ii) ethics;
iii) pension fund investments and investment program
management;
iv) actuarial matters;
v) pension funding;
vi) benefits administration;
vii) disability evaluation;
viii) fair hearings;
ix) pension fund governance;
x) new board member orientation.
b) provides that the adopted board member education
policy do the following:
i) establish a means for determining the programs,
training, and educational sessions that qualify as
Board member education.
ii) require that all Board members receive 24 hours of
education within two years of assuming office and for
every subsequent two-year period of Board service
thereafter.
iii) require the Board to maintain a record of Board
member compliance with the Board education
requirements and provide an annual report thereof to
be posted on CalPERS' website.
FISCAL :
According to the Assembly Appropriations Committee, the bill
would result in annual administrative costs of approximately
$50,000 for CalPERS.
COMMENTS :
1)Arguments in Support :
According to the author, this bill would achieve the
Governor's goal of "reforming board composition to bring
financial sophistication to the board" while maintaining the
existing board structure.
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The California Professional Firefighters support the bill,
stating that "the value of informed decision making by board
members over a pension system's management and investments is
invaluable to both our members and the public they serve."
The California School Employees Association states that "we
believe that training is an important education component to
strengthen the skill and knowledge of any board."
2)SUPPORT :
California Professional Firefighters (CPF)
California Public Employees' Retirement System (CalPERS)
California School Employees Association (CSEA)
3)OPPOSITION :
None.
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Date: May 19, 2014 Page
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