California Legislature—2013–14 Regular Session

Assembly BillNo. 2472


Introduced by Committee on Public Employees, Retirement and Social Security (Bonta (Chair), Rendon, Ridley-Thomas, and Wieckowski)

February 21, 2014


An act to amend Sections 20533, 21453, 21499, 22775, and 75552 of, to add Section 75580.5 to, and to repeal Sections 20237 and 22849 of, the Government Code, relating to public employee benefits.

LEGISLATIVE COUNSEL’S DIGEST

AB 2472, as introduced, Committee on Public Employees, Retirement and Social Security. Public employees: retirement and health benefits.

(1) The Public Employees’ Retirement Law (PERL) creates the Public Employees’ Retirement System (PERS), which provides a defined benefit to its members based on age at retirement, service credit, and final compensation. Existing law vests the management and control of the PERS in the Board of Administration of the PERS. Existing law requires the board, in addition to any other reports it is required to make, to annually file a separate report with the Governor and the Legislature on all matters under its jurisdiction.

This bill would repeal that requirement and make other conforming changes.

(2) Existing law provides that if a correction of the amount of compensation received by a member that is reported to the system requires additional employer contributions to be paid to the system, the contributions shall be computed using the employer rate in effect at the time of the adjustment.

This bill would instead provide that the employer contribution shall be computed using the employer contribution rate in effect at the time that the compensation requiring adjustment was earned.

(3) Existing law requires that an election, revocation, or change of retirement benefits be made prior to the making of the first payment on account of any retirement allowance, or any retirement allowance following a change in retirement status.

This bill would allow an election, revocation, or change of election to be made within 30 calendar days after the making of the first payment.

(4) Existing law requires the Board of Administration of the Public Employees’ Retirement System to administer the Public Employees’ Medical and Hospital Care Act and authorizes the board to contract for health benefit plans for employees and annuitants. Existing law defines a family member, for purposes of the act as an employee’s or annuitant’s spouse or domestic partner and any child, including an adopted child, a stepchild, or recognized natural child.

This bill would include a foster child in the definition of family member.

(5) Existing law requires the board to conduct a study to examine the feasibility and cost-effectiveness of creating a single statewide health care pool that would cover all public school employees.

This bill would repeal that requirement.

(6) Existing law establishes the Judges’ Retirement System II which provides retirement benefits to elected judges. Existing law provides that if a retired judge becomes entitled to any salary for assignment to a court by the Chairperson of the Judicial Council after retirement for disability, the retirement allowance otherwise payable pursuant to the Judges’ Retirement System II Law shall, during the time he or she is entitled to receive that salary or other compensation, be reduced by the amount of that salary or compensation.

This bill would specify, except as provided, that if person who is retired for service or disability under the system is appointed or elected to serve as a judge, he or she shall reinstate from retirement and again become a member of the system.

(7) The bill would make other conforming, and technical, nonsubstantive changes.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

Section 20237 of the Government Code is
2repealed.

begin delete
3

20237.  

In addition to any other reports that it may be required
4to make by law, the board shall annually file a separate report with
5the Governor and each house of the Legislature on all matters
6under the jurisdiction of the board.

end delete
7

SEC. 2.  

Section 20533 of the Government Code is amended
8to read:

9

20533.  

The employer contribution rate adopted under this partbegin insert,end insert
10 or because of amendments to the contract or to this part, apply to
11all compensation upon the basis of which member’s contributions
12are deducted after thosebegin delete percentagesend deletebegin insert employer contribution ratesend insert
13 became or become effectivebegin delete, without regard to the time when the
14service was rendered for which the compensation is paidend delete
.

15If correction of the amount of compensation reportedbegin delete requires
16additional employer contributions, theend delete
begin insert is required, the employerend insert
17 contributions shall be computed using the employerbegin insert contributionend insert
18 rate in effect at the time begin delete of the adjustment.end delete begin insert that the compensation
19requiring adjustment was earned.end insert

20

SEC. 3.  

Section 21453 of the Government Code is amended
21to read:

22

21453.  

An election, revocation, or change of election shall be
23madebegin delete prior toend deletebegin insert within 30 calendar days afterend insert the making of the first
24payment on account of any retirement allowance or, inbegin insert theend insert event
25of a change of retirement status after retirement,begin delete prior toend deletebegin insert within 30
26calendar days afterend insert
the making of the first payment on account of
27any retirement allowance following the change in retirement status.
28“Change in retirement status” includes, but is not limited to, change
29from service to disability retirement, from disability retirement to
30service retirement, from nonindustrial disability retirement to
31industrial disability retirement, or from industrial to nonindustrial
32disability retirement.

33For purposes of this section, payment shall be deemed to have
34been made on the date a warrant is mailed, or the date funds are
35electronically transferred to a bank, savings and loan association,
36or credit union account for deposit in the member’s account.

37This section shall not be construed to authorize a member to
38change his or her retirement status afterbegin delete the mailing of the first
P4    1retirement warrant followingend delete
the election, revocation, or change
2of election provided in this section.

3

SEC. 4.  

Section 21499 of the Government Code is amended
4to read:

5

21499.  

(a) Notwithstanding Section 21498, when either an
6initial payment of a preretirement or postretirement death allowance
7or a preretirement or postretirement lump-sum benefit is payable
8in an amount of ten dollars ($10) or more, it shall be authorized
9to the Controller within 45 days of receipt by this system of all the
10necessary information, including the return of warrants issued or
11any overpayment outstanding after the date of the death of the
12annuitant.

13(b) If any payment is not made within that time limitation, the
14payment shall also include interest at the greater of the interest
15crediting rate specified in Section 20178 or the net earnings rate
16(including capital gains and losses) in effect at the time the payment
17is made, for time following the expiration of that time limitation.

begin delete

18(c) The system shall submit, annually, as part of the report
19required by Section 20237, to the Legislature and the Governor a
20summary of the experience of the system in making payments
21pursuant to subdivision (b).

end delete
22

SEC. 5.  

Section 22775 of the Government Code is amended
23to read:

24

22775.  

“Family member” means an employee’s or annuitant’s
25spouse or domestic partner and any child, including an adopted
26child, a stepchild,begin insert an eligible foster child as defined in Section
27152(f)(1)(c) of Title 26 of the United States Code,end insert
or recognized
28natural child. The board shall, by regulation, prescribe age limits
29and other conditions and limitations pertaining to children.

30

SEC. 6.  

Section 22849 of the Government Code is repealed.

begin delete
31

22849.  

(a) The board shall conduct a study to examine the
32feasibility and cost-effectiveness of creating a single statewide
33health care pool that would cover all public school employees
34working in school districts, county offices of education, community
35colleges, and in entities created or established by those school
36employers, including, but not limited to, joint powers agencies,
37regional occupational centers, and regional occupational programs.

38(b) The health care school pool study shall, at a minimum,
39include the following:

P5    1(1) A review and analysis of the costs, cost savings, benefits,
2and drawbacks of creating a health care pool for all public school
3employees in California, including retirees.

4(2) An analysis of rates, including both a regional rating
5structure and a single statewide rating structure.

6(3) An analysis and reporting of any and all cost savings in the
7administration of a single health care pool for all school employees
8compared to the current process that includes hundreds of different
9plans.

10(4) An examination of plan design options in the health care
11school pool.

12(5) An analysis of the feasibility and cost savings of including
13all school employees under this part, as the health care pool for
14all school employees.

15(6) An analysis of the feasibility and cost savings of creating a
16pool operated exclusively for school employees.

17(7) An analysis and comparison of a mandatory pool versus a
18voluntary pool.

19(c) The completion of the health care school pool study shall
20be contingent upon the ability to secure or budget for funding to
21cover the costs of the study. The completed study shall be reported
22to the Legislature within one year after funding is secured or
23budgeted.

24(d) The board shall consult with the Teachers’ Retirement Board
25of the State Teachers’ Retirement System in preparing the study.

end delete
26

SEC. 7.  

Section 75552 of the Government Code is amended
27to read:

28

75552.  

(a) After payment of a portion of the member’s
29contributions to a nonmember pursuant to subdivision (b) of
30Section 75551, the member may redeposit the full amount in the
31fund at any time before he or she retires or otherwise leaves judicial
32office. The redeposit shall include interest at the rate of interest
33then being required to be paid by members of the Public
34Employees’ Retirement System under Sectionbegin delete 20654end deletebegin insert 20750end insert from
35the date of payment to the date of redeposit. A partial redeposit
36shall not be accepted.

37(b) After payment of a portion of the member’s monetary credits
38to a nonmember pursuant to subdivision (c) of Section 75551, the
39member may redeposit the full amount in the fund at any time
40before he or she retires or otherwise leaves judicial office. The
P6    1redeposit shall include interest at the greater of: (1) the rate of
2interest then being required to be paid by members of the Public
3Employees’ Retirement System under Sectionbegin delete 20654end deletebegin insert 20750end insert from
4the date of payment to the date of redeposit; or (2) the compounded
5amounts that would have been credited to the member’s monetary
6account pursuant to subdivision (b) of Section 75520 had the
7payment not been made to the nonmember. A partial redeposit
8shall not be accepted.

9

SEC. 8.  

Section 75580.5 is added to the Government Code, to
10read:

11

75580.5.  

(a) Except as provided in subdivision (b), if a person
12who is retired for service or disability under this system is
13appointed or elected to serve as a judge, he or she shall reinstate
14from retirement and again become a member of the system pursuant
15to this chapter.

16(b) This section shall not apply to a retired judge who is assigned
17to serve in a court pursuant to Section 68543.5, and he or she shall
18not earn service credit or be entitled to retirement benefits under
19this part for that service.



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