Senate Bill No. 215

Introduced by Senator Beall

February 11, 2013

An act to amend Section 22508 of the Education Code, and to amend Sections 20092, 20309, 21269, 22850, 22920, and 22922 of, and to repeal Section 20204 of, the Government Code, relating to public employees’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

SB 215, as introduced, Beall. Public employees’ retirement.

(1) Existing law permits a member of the Public Employees’ Retirement System (PERS) who is employed by a school district, community college district, a county superintendent of schools, or the State Department of Education to elect to have specified service excluded from coverage by the Defined Benefit Program of the State Teachers’ Retirement Plan and instead be subject to coverage by PERS, as specified.

This bill would provide that the option to elect the exclusion applies when the member of PERS was employed by a school district, community college district, a county superintendent of schools, or the State Department of Education within 120 days prior to the member’s date of hire to perform service that requires membership in the Defined Benefit Program of the State Teachers’ Retirement Plan.

(2) Existing law provides that PERS is governed by its Board of Administration (board) and prescribes the composition of the board. Existing law requires the retirement fund of PERS to reimburse an employing agency that employs an elected member of the board and that employs a person to replace the member during attendance at meetings of the board, among other times, for the direct and reasonable costs incurred by employing a replacement.

This bill would recast these provisions to provide that the employing agency be reimbursed, as specified, without regard to whether it replaces the elected member.

(3)  Existing law authorizes the board to sell exchange-traded call options only through an exchange, and only with respect to stock owned by the system, as specified.

This bill would repeal these provisions.

(4) Existing law permits a person entitled to a benefit from PERS to request that payment be made an electronic fund transfer, as specified. Existing law prohibits the board from sending a copy of benefit payment information to any person who has had payment made by electronic fund transfer or by mail, as specified, if the board has received a written request from that person that it not be sent.

This bill would authorize the board to make available, in a manner it determines appropriate, copies of the monthly benefit payment information electronically and by mail. The bill would require the board, if it does not elect to mail copies of this payment information, as specified, to all or some of the people receiving monthly benefit payments, to notify people of their right to request that a copy of the benefit payment information be mailed. The bill would require the board to mail the information upon receiving a written request to do so.

(5) Existing law, the Public Employees’ Medical and Hospital Care Act (PEMHCA), authorizes the board to enter into contracts with carriers offering health benefit plans or with entities offering services relating to the administration of health benefit plans. Existing law specifically authorizes the board to contract for, or approve, health benefit plans exclusively for the employees and annuitants of contracting agencies. Existing law authorizes a contracting agency and its employees and annuitants to elect to be subject to PEMHCA upon filing with the board a resolution of its governing body, as specified. Existing law authorizes the board, by regulation, to establish requirements for a contracting agency that elects to become subject to PEMHCA.

This bill would provide that a contracting agency and its employees and annuitants may obtain a health benefit plan, as defined, subject to board approval of a resolution submitted by the governing body. The bill would authorize the board to refuse to contract with, or to agree to an amendment proposed by, any contracting agency for benefit provisions that are not specifically authorized by PEMHCA and that the board determines would adversely affect the administration of this system. Among other things, the bill would permit the board to require the contracting agency to enter into a contract with the board in this regard and that the contract would constitute an election by the contracting agency to include the agency and its employees PEMHCA-authorized health benefit plans. The bill would require that the approval of the contract be by ordinance adopted by the affirmative vote of a majority of the members of the relevant governing body, at least 20 days after the adoption of the resolution of intention, or by ordinance adopted by a majority vote of the electorate of the contracting agency.

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

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

SECTION 1.  

Section 22508 of the Education Code is amended
to read:

22508.  

(a) A member who becomes employed by the same or
a different school district or community college district, or a county
superintendent, or who becomes employed by the state in a position
described in subdivision (b), to perform service that requires
membership in a different public retirement system, and who is
not excluded from membership in that public retirement system,
may elect to have that service subject to coverage by the Defined
Benefit Program of this plan and excluded from coverage by the
other public retirement system. The election shall be made in
writing on a form prescribed by this system within 60 days from
the date of hire in the position requiring membership in the other
public retirement system. If that election is made, the service
performed for the employer after the date of hire shall be
considered creditable service for purposes of this part.

(b) Subdivision (a) shall apply to a member who becomes
employed by the state only if the member is also one of the
following:

(1) Represented by a state bargaining unit that represents
educational consultants, professional educators, or librarians
employed by the state.

(2) Excluded from the definition of “state employee” in
subdivision (c) of Section 3513 of the Government Code, but
performing, supervising, or managing work similar to work
performed by employees described in paragraph (1).

(3) In a position not covered by civil service and in the executive
branch of government, but performing, supervising, or managing
work similar to work performed by employees described in
paragraph (1).

(c) (1) A member of the Public Employees’ Retirement System
described in paragraph (2) who is subsequently employed to
perform creditable service requiring coverage by the Defined
Benefit Program of this plan may elect to have that subsequent
service subject to coverage by the Public Employees’ Retirement
System and excluded from coverage by the Defined Benefit
Program pursuant to Section 20309 of the Government Code. If
the election is made, creditable service performed for the employer
after the date of hire shall be subject to coverage by the Public
Employees’ Retirement System.

(2) This subdivision shall apply to a member of the Public
Employees’ Retirement System who either (A) begin delete is end delete begin insert was end insert employed
by a school district, community college district, a county
superintendent, or the State Department of Education begin insert within 120
days prior to the member’s date of hire to perform service that
requires membership in the Defined Benefit Program of the State
Teachers’ Retirement Plan end insert or (B) has at least five years of credited
service under the system.

(d) An election made by a member pursuant to this section shall
be irrevocable.

SEC. 2.  

Section 20092 of the Government Code is amended
to read:

20092.  

Each employing agency that employs an elected
member of the board begin delete and that employs a person to replace the
member during attendance at end delete begin insert shall be reimbursed by the retirement
fund in an amount equal to the salary and benefits paid to the
elected board member by the employing agency for the percentage
of the elected board member’s regular work schedule during which
the elected board member is on leave from the employing agency
to attend end insert meetings begin insert or activities end insert of the board, or meetings of
committees or subcommittees of the board, begin delete or when serving as a
panel member of this system end delete begin insert or when serving as president or vice
president of the board or chair or vice chair of a committee or
subcommittee of the board end insert , or when carrying out other powers or
duties as may be approved by the board, begin delete shall be reimbursed from
the retirement fund for the direct and reasonable costs incurred by
employing a replacement. Reimbursement for the costs incurred
in employing a replacement pursuant to this section shall be
operative on February 1, 2003 end delete begin insert or to otherwise fulfill his or her
responsibilities to the system end insert .

SEC. 3.  

Section 20204 of the Government Code is repealed.

begin delete

20204.  

The board may sell exchange-traded call options only
through an exchange, and only with respect to stock owned by this
system. Common stock that is obligated under an unexpired written
call option shall not be sold unless the board first enters into a
closing purchase transaction.

The board may purchase exchange traded options only through
an exchange and only for the purpose of a closing purchase
transaction.

end delete

SEC. 4.  

Section 20309 of the Government Code is amended
to read:

20309.  

(a) A member of the system described in subdivision
(b) who subsequently is employed to perform service subject to
coverage by the Defined Benefit Program of the State Teachers’
Retirement Plan, may elect to retain coverage by this system for
that subsequent service. An election to retain coverage under this
system shall be submitted in writing by the member to the system
on a form prescribed by the system, and a copy of the election
shall be submitted to the State Teachers’ Retirement System, within
60 days after the member’s date of hire to perform service that
requires membership in the Defined Benefit Program of the State
Teachers’ Retirement Plan. A member who elects to retain
coverage under this system pursuant to this section shall be deemed
to be a school member while employed by a school employer.

(b) This section shall apply to a member of the system who
either (1) begin delete is end delete begin insert was end insert employed by a school employer, the Board of
Governors of the California Community Colleges, or the State
Department of Education begin insert within 120 days prior to the member’s
date of hire to perform service that requires membership in the
Defined Benefit Program of the State Teachers’ Retirement Plan end insert
or (2) has at least five years of credited service under this system.

(c) Any election made pursuant to this section shall become
effective as of the first day of employment in the position that
qualified the member to make an election.

SEC. 5.  

Section 21269 of the Government Code is amended
to read:

21269.  

(a) Any person entitled to a benefit from this system
may request that payment be made by deposit by electronic fund
transfer in the person’s bank, savings and loan association, or credit
union account.

(b) If deposit pursuant to subdivision (a) is not available, deposit
may be made by mail in the person’s bank, savings and loan
association or credit union account.

(c) Mailing of the warrant or electronic fund transfer is a full
discharge of the board and this system.

(d)  begin insert The board shall make available, in a manner it determines
appropriate, copies of the monthly benefit payment information
electronically or by mail. end insert

(1)  begin delete The board end delete begin insert If the board elects to mail copies of this payment
information to all or a portion of persons receiving monthly benefit
payments, it end insert shall not send a copy of the benefit payment
information to any person who has had payment made by electronic
fund transfer or by mail pursuant to subdivision (a) or (b), if the
board has received a written request from that person that it not
be sent.

(2) The board shall notify persons subject to this section, in the
monthly benefit payment notice, of their right to request that no
copy of the benefit payment information be mailed, pursuant to
paragraph (1).

begin insert

(3) If the board does not elect to mail copies of this payment
information to all or a portion of persons receiving monthly benefit
payments, it shall notify a person subject to this section of his or
her right to request that a copy of the benefit payment information
be mailed. The board shall mail a copy of the benefit payment
information if the system has received a written request to do so
from that person.

end insert

SEC. 6.  

Section 22850 of the Government Code is amended
to read:

22850.  

(a) The board may, without compliance with any
provision of law relating to competitive bidding, enter into
contracts with carriers offering health benefit plans or with entities
offering services relating to the administration of health benefit
plans.

(b) The board may contract with carriers for health benefit plans
or approve health benefit plans offered by employee organizations,
provided that the carriers have operated successfully in the hospital
and medical care fields prior to the contracting for or approval
thereof. The plans may include hospital benefits, surgical benefits,
inpatient medical benefits, outpatient benefits, obstetrical benefits,
and benefits offered by a bona fide church, sect, denomination, or
organization whose principles include healing entirely by prayer
or spiritual means.

(c) Notwithstanding any other provision of this part, the board
may contract with health benefit plans offering unique or
specialized health services.

(d) The board may administer self-funded or minimum premium
health benefit plans.

(e) The board may contract for or implement employee cost
containment and cost reduction incentive programs that involve
the employee, the annuitant, and family members as active
participants, along with the carrier and the provider, in a joint effort
toward containing and reducing the cost of providing medical and
hospital health care services to public employees. In developing
these plans, the board, in cooperation with the Department of
Human Resources, may request proposals from carriers and
certified public employee representatives.

(f) Notwithstanding any other provision of this part, the board
may do any of the following:

(1) Contract for, or approve, health benefit plans that charge a
contracting agency and its employees and annuitants rates based
on regional variations in the costs of health care services.

(2) Contract for, or approve, health benefit plans exclusively
for the employees and annuitants of contracting agencies. State
employees and annuitants may not enroll in these plans. The board
may begin delete offer end delete begin insert provide end insert health benefit plans exclusively for employees
and annuitants of contracting agencies in addition to or in lieu of
other health benefit plans offered under this part begin delete . The governing
body of a contracting agency may elect, upon filing a resolution
with the board, to provide those health benefit plans to its
employees and annuitants. The resolution shall be subject to mutual
agreement between the contracting agency and the recognized
employee organization, if any end delete begin insert pursuant to Section 22922 end insert .

(3) Implement and administer risk adjustment procedures
consistent with Section 22864 that require health benefit plans to
adjust premiums and authorize the system to redistribute premiums
based on rules and regulations established by the board for this
purpose.

(g) The board shall approve any employee association health
benefit plan that was approved by the board in the 1987-88 contract
year or prior, provided the plan continues to meet the minimum
standards prescribed by the board. The trustees of an employee
association health benefit plan are responsible for providing health
benefit plan administration and services to its enrollees.
Notwithstanding any other provision of this part, the California
Correctional Peace Officer Association Health Benefits Trust may
offer different health benefit plan designs with varying premiums
in different areas of the state.

(h) Irrespective of any other provision of law, the sponsors of
a health benefit plan approved under this section may reinsure the
operation of the plan with an admitted insurer authorized to write
disability insurance, if the premium includes the entire prepayment
fee.

SEC. 7.  

Section 22920 of the Government Code is amended
to read:

22920.  

The following entities are eligible to begin delete become subject
to this part end delete begin insert obtain a health benefit plan, as defined in Section
22777, subject to board approval end insert :

(a) A contracting agency, as defined in Section 20022, a county
or special district subject to the County Employees Retirement
Law of 1937 (Chapter 3 (commencing with Section 31450) of Part
3 of Division 4 of Title 3), and a school employer.

(b) A public body or agency of or within the state that is not
subject to Part 3 (commencing with Section 20000) of the
Government Code or the County Employees Retirement Law of
1937 (Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3), and that provides a retirement system for
its employees funded wholly or in part by public funds.

(c) The protection and advocacy agency described in subdivision
(h) of Section 4900 of the Welfare and Institutions Code, if the
agency obtains a written advisory opinion from the United States
Department of Labor stating that the organization is an agency or
instrumentality of the state or a political subdivision thereof within
the meaning of Chapter 18 (commencing with Section 1001) of
Title 29 of the United States Code.

SEC. 8.  

Section 22922 of the Government Code is amended
to read:

22922.  

(a) A contracting agency and its employees and
annuitants begin delete shall be end delete begin insert may obtain a health benefit plan, as defined in
Section 22777, end insert subject to begin delete this part upon filing with the end delete board
begin insert approval of end insert a resolution begin delete of its end delete begin insert submitted by the end insert governing body
electing to be so subject. The resolution shall be adopted by a
majority vote and shall be effective at the time provided in board
regulations.

begin insert

(b) In addition to, or in lieu of, submitting a resolution as
prescribed in subdivision (a), the board may require the
contracting agency to enter into a contract with the board to obtain
a health benefit plan, as defined in Section 22777, for all or part
of its employees, pursuant to rules and regulations developed by
the board for this purpose. The contract entered into between a
contracting agency and the board pursuant to this part constitutes
an election by the contracting agency to include the agency and
its employees in this system’s health benefit plans.

end insert begin insert

(c) The board may refuse to contract with, or to agree to an
amendment proposed by, a contracting agency for any benefit
provisions that are not specifically authorized by this part and
that the board determines would adversely affect the administration
of this system.

end insert begin delete

(b)

end delete

begin insert (d) end insert  A contracting agency may become subject to this part with
respect to a recognized employee organization begin insert with which it has
reached mutual agreement end insert . The resolution begin delete filed with respect to a
contracting agency pursuant to subdivision (a) end delete begin insert and any contracts,
or the resolution and contract required by subdivisions (a) and
(b), end insert shall specify the recognized employee organizations begin delete to which
the resolution applies end delete begin insert participating in this system end insert .

begin delete

(c)

end delete

begin insert (e) end insert  Pursuant to Section 22796 and subdivision (g) of Section
22934, the board may by regulation require any contracting agency
that begin delete elects to become end delete begin insert becomes end insert subject to this part to meet certain
board-determined criteria, including, but not limited to, additional
requirements for any contracting agency that elects to become
subject to this part that previously terminated coverage pursuant
to Section 22938.

begin insert

(f) Approval of the contract to obtain a health benefit plan
pursuant to subdivision (b) shall be by ordinance adopted by the
affirmative vote of a majority of the members of the governing
body of the contracting agency, not less than 20 days after the
adoption of the resolution of intention, or by ordinance adopted
by a majority vote of the electorate of the contracting agency voting
upon it.

end insert