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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