BILL ANALYSIS �
AB 1380
Page 1
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
AB 1380
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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