BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 1163
          Author:   Levine (D)
          Amended:  1/14/14 in Assembly
          Vote:     21

           
           SENATE PUBLIC EMPLOY. & RETIR. COMMITTEE  :  5-0, 6/9/14
          AYES: Torres, Walters, Block, Evans, Gaines

           SENATE APPROPRIATIONS COMMITTEE :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  70-1, 1/29/14 - See last page for vote


           SUBJECT  :    Public Employees Retirement System:  Board of  
          Administration:
                      education

           SOURCE  :     Author


           DIGEST  :    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' Internet Web site.

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           ANALYSIS  :    

          Existing law:

          1. Establishes CalPERS and designates the Board with  
             responsibility for the management and control of CalPERS,  
             including the exclusive control of the administration and  
             investment of the retirement fund.

          2. Establishes the composition of the Board which consists of 13  
             members who are elected, appointed, or hold office ex officio  
             as follows:

             A.    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.

             B.    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.

             C.    Four ex officio members:

                (1)      the State Treasurer;
                (2)      the State Controller;
                (3)      the Director of the Department of Human  
                   Resources; and
                (4)      a designee of the State Personnel Board.

          This bill:


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          1. 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:

             A.    Fiduciary responsibilities;

             B.    Ethics;

             C.    Pension fund investments and investment program  
                management;

             D.    Actuarial matters;

             E.    Pension funding;

             F.    Benefits administration;

             G.    Disability evaluation;

             H.    Fair hearings;

             I.    Pension fund governance;

             J.    New board member orientation.

          2. Provides that the adopted board member education policy do  
             the following:

             A.    Establish a means for determining the programs,  
                training, and educational sessions that qualify as Board  
                member education.

             B.    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.

             C.    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' Internet Website.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    

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          Local:  No

          According to the Assembly Appropriations Committee, this bill  
          will result in annual administrative costs of approximately  
          $50,000 for CalPERS.

           SUPPORT  :   (Verified  6/20/14)

          California Professional Firefighters
          California School Employees Association
          CalPERS

           ARGUMENTS IN SUPPORT  :    According to the author's office, this  
          bill achieves the Governor's goal of "reforming board  
          composition to bring financial sophistication to the board"  
          while maintaining the existing board structure.

          The California Professional Firefighters support this 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."

           ASSEMBLY FLOOR  :  70-1, 1/29/14
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian  
            Calderon, Campos, Chau, Chesbro, Cooley, Dababneh, Dahle,  
            Daly, Dickinson, Eggman, Fong, Fox, Frazier, Beth Gaines,  
            Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Grove,  
            Hagman, Harkey, Roger Hernández, Holden, Jones, Jones-Sawyer,  
            Levine, Linder, Maienschein, Mansoor, Medina, Melendez,  
            Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, V. Manuel  
            Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez,  
            Salas, Skinner, Stone, Ting, Waldron, Weber, Wieckowski, Wilk,  
            Williams, Yamada, John A. Pérez
          NOES:  Morrell
          NO VOTE RECORDED:  Chávez, Conway, Donnelly, Hall, Logue,  
            Lowenthal, Patterson, Perea, Wagner


          JL:d  6/23/14   Senate Floor Analyses 

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                           SUPPORT/OPPOSITION:  SEE ABOVE

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