BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                               AB 1380
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       CONCURRENCE IN SENATE AMENDMENTS
       AB 1380 (Public Employees, Retirement, and Social Security Committee)
       As Amended June 18, 2013
       Majority vote
        
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       |ASSEMBLY:  |70-0 |(May 16, 2013)  |SENATE: |33-0 |(July 1, 2013) |
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        Original Committee Reference:    P.E.,R.& S.S.  

        SUMMARY  :  Makes various technical corrections and conforming changes  
       that align the County Employees' Retirement Law of 1937 ('37 Act) with  
       the provisions of the Public Employees' Pension Reform Act of 2013  
       (PEPRA), as enacted in AB 340 (Furutani), Chapter 296, Statutes of  
       2012.  Specifically,  this bill  :  

       1)Clarifies that certain rights, responsibilities, and entitlements  
         imposed by the '37 Act are also subject to the provisions of PEPRA.

       2)Specifies that the definitions and general provisions of the '37 Act  
         govern its laws unless the context otherwise requires, or unless any  
         provision of PEPRA supersedes the definitions and general  
         provisions.

       3)Clarifies in the '37 Act that a member subject to PEPRA may not be  
         eligible for a 12-month final compensation period, but if the member  
         is eligible to retire after less than three years of service, the  
         final compensation will be calculated on the average compensation  
         earned during the entire length of the member's service.

       4)Clarifies various provisions of the '37 Act to ensure that new  
         members subject to PEPRA will be subject to a 36 consecutive month  
         final compensation period.

       5)Clarifies that provisions of the '37 Act that allow an elective or  
         appointive county office to receive retirement service credit for  
         that service even though it was not compensated do not apply to such  
         service if it is subject to PEPRA.

       6)Clarifies that members subject to PEPRA may not be eligible for  
         supplemental defined benefit plans if prohibited by PEPRA.

       7)Specifies that the provisions of the '37 Act governing the purchase  
         of additional retirement credit only apply to an application  








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         received by the retirement system prior to January 1, 2013, that is  
         subsequently approved.

       8)Clarifies in the '37 Act that an employer may not pay member  
         contributions for members subject to PEPRA, nor may a member with 30  
         years of continuous service discontinue employee contributions.

       9)Specifies that the provisions of the '37 Act that allow a member to  
         retire at a specified age, or a specified age with a certain amount  
         of service credit, or once they have attained a certain amount of  
         service credit regardless of age, do not apply to members who are  
         subject to PEPRA.

       10)Clarifies that the compensation limit established in PEPRA applies  
         to members who are subject to those limits.

       11)Clarifies that any provisions of the '37 Act regarding benefit  
         changes that is in conflict with PEPRA will be superseded by PEPRA.

       12)Specifies that any provisions in the '37 Act regarding community  
         property and benefit payable to former spouses, apply to benefit  
         determined under the '37 Act or PEPRA, whichever is applicable.

       13)Clarifies that compensation used to calculate a benefit may be  
         pensionable compensation or compensation earnable, whichever is  
         applicable.

       14)Clarifies that a county may use a single rate or an age-at-entry  
         rate when calculating the cost of member contributions required for  
         increasing post-retirement cost-of-living adjustments.

       15)Clarifies that members subject to PEPRA are not eligible to  
         participate in an Internal Revenue Section 415 benefit replacement  
         plan.

        The Senate amendments  make additional technical corrections and  
       conforming changes to the bill.

        EXISTING LAW  :

       1)Establishes comprehensive public employee pension reform through  
         enactment of PEPRA (and related statutory changes) that apply to all  
         public employers and public pension plans on and after January 1,  
         2013, excluding the University of California and charter cities and  
         counties that do not participate in a retirement system governed by  








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         state statute.

       2)Prohibits, under PEPRA, the purchase of nonqualified service credit  
         unless the application to purchase the credit is received by the  
         retirement system prior to January 1, 2013, and subsequently  
         approved.

       3)Authorizes, under the '37 Act, an active member of the retirement  
         system to purchase up to five years of additional retirement credit  
         for "nonqualified service," as specified.

       4)Authorizes, under the '37 Act, a safety member who has completed 10  
         years of continuous service and has reached age 50, or who has  
         completed 20 years of service regardless of age, to retire, as  
         specified.

       5)Authorizes, under the '37 Act, a general member who has reached age  
         70, or has completed 10 years of service and has reached age 55, or  
         who has completed 30 years of service regardless of age, to retire,  
         as specified. 

        FISCAL EFFECT  :  None.  This bill is keyed non-fiscal by the  
       Legislative Counsel. 

        COMMENTS  :  According to the sponsor of the bill, the State Association  
       of County Retirement Systems, this bill will ensure continued  
       implementation of PEPRA as intended by placing the act's requirements  
       in the '37 Act.  


        Analysis Prepared by  :    Karon Green / P.E., R. & S.S. / (916)  
       319-3957                                                    FN:  
       0001344