BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1824|
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THIRD READING
Bill No: AB 1824
Author: Rendon (D)
Amended: 4/22/14 in Assembly
Vote: 21
SENATE PUBLIC EMPLOY. & RETIRE. COMM. : 3-2, 6/23/14
AYES: Torres, De León, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 51-22, 5/23/14 - See last page for vote
SUBJECT : County employees' retirement: optional settlements
revision
SOURCE : California Retired County Employees Association
DIGEST : This bill permits, upon adoption by a county board of
retirement (board), a retired member of a county retirement
system being operated under the County Employees' Retirement Law
of 1937 ('37 Act) to change a previously elected optional
settlement, as specified.
ANALYSIS :
Existing law:
1.Establishes the '37 Act, governed by the '37 Act and comprised
of 20 independent county retirement systems.
2.Permits a member of a '37 Act retirement system, prior to the
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first payment of any retirement allowance, to elect certain
optional settlements, which reduce the allowance payable to
the retiree through his/her life in exchange for providing
ongoing payments to the beneficiary (which could be a spouse
or other individual) for his/her lifetime in the event of the
retiree's death.
3.Provides that, upon the death of a '37 Act member who died
after a service retirement or non-service related disability
and did not elect an optional settlement, an allowance
equaling 60% of his/her retirement allowance will be continued
throughout life to a surviving spouse to whom he or she was
married for at least one year prior to the effective date of
retirement.
4.Allows, upon adoption by a county board of supervisors,
retired '37 Act members, who marry after retirement, to
purchase, at no cost to the retirement system, an optional
survivor benefit in order to increase the survivor benefit
that would be paid to the new spouse if the member dies first.
This bill:
1.Allows a '37 Act retiree, in order to provide for his/her
spouse, to revise an optional settlement, as specified, if all
of the following apply:
A. The retiree retired on or before the date the
post-retirement spouse provision was made applicable in the
county from which he/she retired;
B. The retiree was unmarried or had been married less than
one year at the time of retirement;
C. The retiree's spouse is at least age 55 and is older
than the originally designated beneficiary; and
D. The application requirements, including requiring
notification of, and acknowledgement by, beneficiaries who
may be affected by the revision, have been satisfied.
1.Specifies that a person who knowingly provides false
information in the required written declaration is subject to
a civil penalty of not less than $1,000 and not more than
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$25,000, in addition to any civil remedies available to the
board. An action to impose a civil penalty pursuant to this
provision may be brought by any public prosecutor in the name
of the people of the state.
2.Specifies that after revision, the retiree's allowance will
remain the same as provided by the original optional
settlement, adjusted to reflect any cost-of-living increases
that have been added to the retirement allowance.
3.Specifies that the retirement system is under no obligation to
locate or otherwise contact retired members who may qualify
for these provisions.
4.Specifies that any action taken pursuant to these provisions
does not excuse the obligation of a member to provide a
continuing benefit to a former spouse pursuant to a court
order.
5.Specifies that these provisions will not become effective in a
county until adopted by the board.
Prior Legislation
This bill is similar to AB 1136 (Fong, 2009), which was vetoed
by Governor Schwarzenegger due to concerns that the bill would
have created unfunded increases to county retirement costs.
This bill differs from AB 1136 by stating that after making this
election, the retiree's allowance will remain the same as
provided by the original optional settlement.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 6/25/14)
California Retired County Employees Association (source)
ARGUMENTS IN SUPPORT : This bill's sponsor, California Retired
County Employees Association, states, "Frequently, optional
settlements are selected because, when making application for
retirement, the employee is either unmarried or is barred from
naming his spouse as the beneficiary of an unmodified allowance
because he or she had been married less than one year prior to
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retirement. By requiring the spouse to be older than the
designated beneficiary, and not changing the amount of the
pension, the change should result in no additional cost to the
retirement system."
ASSEMBLY FLOOR : 51-22, 5/23/14
AYES: Alejo, Ammiano, Bloom, Bocanegra, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chesbro, Cooley,
Dababneh, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Garcia,
Gatto, Gomez, Gonzalez, Gray, Hall, Holden, Jones-Sawyer,
Levine, Lowenthal, Medina, Mullin, Muratsuchi, Nazarian, Pan,
Perea, John A. Pérez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber,
Wieckowski, Williams, Yamada, Atkins
NOES: Achadjian, Allen, Bigelow, Chávez, Dahle, Donnelly, Beth
Gaines, Gorell, Grove, Hagman, Jones, Linder, Logue,
Maienschein, Mansoor, Melendez, Nestande, Olsen, Patterson,
Wagner, Waldron, Wilk
NO VOTE RECORDED: Bonilla, Conway, Gordon, Harkey, Roger
Hernández, V. Manuel Pérez, Vacancy
JL:ke 6/25/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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