Amended in Assembly May 30, 2013

Amended in Senate April 1, 2013

Senate BillNo. 215


Introduced by Senator Beall

February 11, 2013


An act to amendbegin delete Section 22508 of the Education Code, and to amendend delete Sectionsbegin delete 7504,end delete 20092,begin delete 20309,end delete 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 amended, Beall. Public employees’ retirement.

begin delete

(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.

end delete
begin delete

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.

end delete
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(2) Existing law requires all state and local public retirement systems to secure the services of an enrolled actuary on a triennial basis to perform a valuation of the system utilizing actuarial assumptions and techniques established by the agency that are, in the aggregate, reasonably related to the experience and the actuary’s best estimate of anticipated experience under the system, as specified.

end delete
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This bill would instead require an enrolled actuary to be retained on a biennial basis to perform these functions.

end delete
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(3)

end delete

begin insert(1)end insert Existing law provides thatbegin delete PERSend deletebegin insert the Public Employeesend insertbegin insert’ Retirement System (PERS)end insert 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.

begin delete

(4)

end delete

begin insert(2)end insert  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.

begin delete

(5)

end delete

begin insert(3)end insert Existing law permits a person entitled to a benefit from PERS to request that payment be made by 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.

begin delete

(6)

end delete

begin insert(4)end insert 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. The bill would require that the approval of the contract be by affirmative vote of a majority of the members of the relevant governing body.

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

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

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P3    1

SECTION 1.  

Section 22508 of the Education Code is amended
2to read:

3

22508.  

(a) A member who becomes employed by the same or
4a different school district or community college district, or a county
5superintendent, or who becomes employed by the state in a position
6described in subdivision (b), to perform service that requires
7membership in a different public retirement system, and who is
8not excluded from membership in that public retirement system,
9may elect to have that service subject to coverage by the Defined
10Benefit Program of this plan and excluded from coverage by the
11other public retirement system. The election shall be made in
12writing on a form prescribed by this system within 60 days from
13the date of hire in the position requiring membership in the other
14public retirement system. If that election is made, the service
P4    1performed for the employer after the date of hire shall be
2considered creditable service for purposes of this part.

3(b) Subdivision (a) shall apply to a member who becomes
4employed by the state only if the member is also one of the
5following:

6(1) Represented by a state bargaining unit that represents
7educational consultants, professional educators, or librarians
8employed by the state.

9(2) Excluded from the definition of “state employee” in
10subdivision (c) of Section 3513 of the Government Code, but
11performing, supervising, or managing work similar to work
12performed by employees described in paragraph (1).

13(3) In a position not covered by civil service and in the executive
14branch of government, but performing, supervising, or managing
15work similar to work performed by employees described in
16paragraph (1).

17(c) (1) A member of the Public Employees’ Retirement System
18described in paragraph (2) who is subsequently employed to
19perform creditable service requiring coverage by the Defined
20Benefit Program of this plan may elect to have that subsequent
21service subject to coverage by the Public Employees’ Retirement
22System and excluded from coverage by the Defined Benefit
23Program pursuant to Section 20309 of the Government Code. If
24the election is made, creditable service performed for the employer
25after the date of hire shall be subject to coverage by the Public
26Employees’ Retirement System.

27(2) This subdivision shall apply to a member of the Public
28Employees’ Retirement System who either (A) was employed by
29a school district, community college district, a county
30superintendent, or the State Department of Education within 120
31days prior to the member’s date of hire to perform service that
32requires membership in the Defined Benefit Program of the State
33Teachers’ Retirement Plan or (B) has at least five years of credited
34service under the system.

35(d) An election made by a member pursuant to this section shall
36be irrevocable.

37

SEC. 2.  

Section 7504 of the Government Code is amended to
38read:

39

7504.  

(a) All state and local public retirement systems shall,
40not less than biennially, secure the services of an enrolled actuary.
P5    1An enrolled actuary, for the purposes of this section, means an
2actuary enrolled under subtitle C of Title III of the federal
3Employee Retirement Income Security Act of 1974 (Public Law
493-406) and who has demonstrated experience in public retirement
5systems. The actuary shall perform a valuation of the system
6utilizing actuarial assumptions and techniques established by the
7agency that are, in the aggregate, reasonably related to the
8experience and the actuary’s best estimate of anticipated experience
9under the system. Any differences between the actuarial
10assumptions and techniques used by the actuary that differ
11significantly from those established by the agency shall be
12disclosed in the actuary’s report and the effect of the differences
13on the actuary’s statement of costs and obligations shall be shown.

14(b) All state and local public retirement systems shall secure
15the services of a qualified person to perform an attest audit of the
16system’s financial statements. A qualified person means any of
17the following:

18(1) A person who is licensed to practice as a certified public
19accountant in this state by the California Board of Accountancy.

20(2) A person who is registered and entitled to practice as a public
21accountant in this state by the California Board of Accountancy.

22(3) A county auditor in any county subject to the County
23Employees Retirement Law of 1937 (Chapter 3 (commencing with
24Section 31450) of Part 3 of Division 4 of Title 3).

25(4) A county auditor in any county having a pension trust and
26retirement plan established pursuant to Section 53216.

27(c) All state and local public retirement systems shall submit
28audited financial statements to the State Controller at the earliest
29practicable opportunity within six months of the close of each
30fiscal year. However, the State Controller may delay the filing date
31for reports due in the first year until the time as report forms have
32been developed that, in his or her judgment, will satisfy the
33requirements of this section. The financial statements shall be
34prepared in accordance with generally accepted accounting
35principles in the form and manner prescribed by the State
36Controller. The penalty prescribed in Section 53895 shall be
37invoked for failure to comply with this section. Upon a satisfactory
38showing of good cause, the State Controller may waive the penalty
39for late filing provided by this subdivision.

P6    1(d) The State Controller shall compile and publish a report
2annually on the financial condition of all state and local public
3retirement systems containing, but not limited to, the data required
4in Section 7502. The report shall be published within 12 months
5of the receipt of the information, and in no case later than 18
6months after the end of the fiscal year upon which the information
7in the report is based.

end delete
8

begin deleteSEC. 3.end delete
9begin insertSECTION 1.end insert  

Section 20092 of the Government Code is
10amended to read:

11

20092.  

Each employing agency that employs an elected
12member of the board shall be reimbursed by the retirement fund
13in an amount equal to the salary and benefits paid to the elected
14board member by the employing agency for the percentage of the
15elected board member’s regular work schedule during which the
16elected board member is on leave from the employing agency to
17attend meetings or activities of the board, or meetings of
18committees or subcommittees of the board, or when serving as
19president or vice president of the board or chair or vice chair of a
20committee or subcommittee of the board, or when carrying out
21other powers or duties as may be approved by the board, or to
22otherwise fulfill his or her responsibilities to the system.

23

begin deleteSEC. 4.end delete
24begin insertSEC. 2.end insert  

Section 20204 of the Government Code is repealed.

begin delete
25

SEC. 5.  

Section 20309 of the Government Code is amended
26to read:

27

20309.  

(a) A member of the system described in subdivision
28(b) who subsequently is employed to perform service subject to
29coverage by the Defined Benefit Program of the State Teachers’
30Retirement Plan, may elect to retain coverage by this system for
31that subsequent service. An election to retain coverage under this
32system shall be submitted in writing by the member to the system
33on a form prescribed by the system, and a copy of the election
34shall be submitted to the State Teachers’ Retirement System, within
3560 days after the member’s date of hire to perform service that
36requires membership in the Defined Benefit Program of the State
37Teachers’ Retirement Plan. A member who elects to retain
38coverage under this system pursuant to this section shall be deemed
39to be a school member while employed by a school employer.

P7    1(b) This section shall apply to a member of the system who
2either (1) was employed by a school employer, the Board of
3Governors of the California Community Colleges, or the State
4Department of Education within 120 days prior to the member’s
5date of hire to perform service that requires membership in the
6Defined Benefit Program of the State Teachers’ Retirement Plan
7or (2) has at least five years of credited service under this system.

8(c) Any election made pursuant to this section shall become
9effective as of the first day of employment in the position that
10qualified the member to make an election.

end delete
11

begin deleteSEC. 6.end delete
12begin insertSEC. 3.end insert  

Section 21269 of the Government Code is amended
13to read:

14

21269.  

(a) Any person entitled to a benefit from this system
15may request that payment be made by deposit by electronic fund
16transfer in the person’s bank, savings and loan association, or credit
17union account.

18(b) If deposit pursuant to subdivision (a) is not available, deposit
19may be made by mail in the person’s bank, savings and loan
20association, or credit union account.

21(c) Mailing of the warrant or electronic fund transfer is a full
22discharge of the board and this system.

23(d) The board shall make available, in a manner it determines
24appropriate, copies of the monthly benefit payment information
25 electronically or by mail.

26(1) If the board elects to mail copies of this payment information
27to all or a portion of persons receiving monthly benefit payments,
28it shall not send a copy of the benefit payment information to any
29person who has had payment made by electronic fund transfer or
30by mail pursuant to subdivision (a) or (b), if the board has received
31a written request from that person that it not be sent.

32(2) The board shall notify persons subject to this section, in the
33monthly benefit payment notice, of their right to request that no
34copy of the benefit payment information be mailed, pursuant to
35paragraph (1).

36(3) If the board does not elect to mail copies of this payment
37information to all or a portion of persons receiving monthly benefit
38payments, it shall notify a person subject to this section of his or
39 her right to request that a copy of the benefit payment information
40be mailed. The board shall mail a copy of the benefit payment
P8    1information if the system has received a written request to do so
2from that person.

3

begin deleteSEC. 7.end delete
4begin insertSEC. 4.end insert  

Section 22850 of the Government Code is amended
5to read:

6

22850.  

(a) The board may, without compliance with any
7provision of law relating to competitive bidding, enter into
8contracts with carriers offering health benefit plans or with entities
9offering services relating to the administration of health benefit
10plans.

11(b) The board may contract with carriers for health benefit plans
12or approve health benefit plans offered by employee organizations,
13provided that the carriers have operated successfully in the hospital
14and medical care fields prior to the contracting for or approval
15thereof. The plans may include hospital benefits, surgical benefits,
16inpatient medical benefits, outpatient benefits, obstetrical benefits,
17 and benefits offered by a bona fide church, sect, denomination, or
18organization whose principles include healing entirely by prayer
19or spiritual means.

20(c) Notwithstanding any other provision of this part, the board
21may contract with health benefit plans offering unique or
22specialized health services.

23(d) The board may administer self-funded or minimum premium
24health benefit plans.

25(e) The board may contract for or implement employee cost
26containment and cost reduction incentive programs that involve
27the employee, the annuitant, and family members as active
28participants, along with the carrier and the provider, in a joint effort
29toward containing and reducing the cost of providing medical and
30hospital health care services to public employees. In developing
31these plans, the board, in cooperation with the Department of
32Human Resources, may request proposals from carriers and
33certified public employee representatives.

34(f) Notwithstanding any other provision of this part, the board
35may do any of the following:

36(1) Contract for, or approve, health benefit plans that charge a
37contracting agency and its employees and annuitants rates based
38on regional variations in the costs of health care services.

39(2) Contract for, or approve, health benefit plans exclusively
40for the employees and annuitants of contracting agencies. State
P9    1employees and annuitants may not enroll in these plans. The board
2may provide health benefit plans exclusively for employees and
3annuitants of contracting agencies in addition to or in lieu of other
4health benefit plans offered under this part pursuant to Section
522922.

6(3) Implement and administer risk adjustment procedures
7consistent with Section 22864 that require health benefit plans to
8adjust premiums and authorize the system to redistribute premiums
9based on rules and regulations established by the board for this
10purpose.

11(g) The board shall approve any employee association health
12benefit plan that was approved by the board in the 1987-88 contract
13year or prior, provided the plan continues to meet the minimum
14standards prescribed by the board. The trustees of an employee
15association health benefit plan are responsible for providing health
16benefit plan administration and services to its enrollees.
17Notwithstanding any other provision of this part, the California
18Correctional Peace Officer Association Health Benefits Trust may
19offer different health benefit plan designs with varying premiums
20in different areas of the state.

21(h) Irrespective of any other provision of law, the sponsors of
22a health benefit plan approved under this section may reinsure the
23operation of the plan with an admitted insurer authorized to write
24disability insurance, if the premium includes the entire prepayment
25fee.

26

begin deleteSEC. 8.end delete
27begin insertSEC. 5.end insert  

Section 22920 of the Government Code is amended
28to read:

29

22920.  

The following entities are eligible to obtain a health
30benefit plan, as defined in Section 22777, subject to board approval:

31(a) A contracting agency, as defined in Section 20022, a county
32or special district subject to the County Employees Retirement
33Law of 1937 (Chapter 3 (commencing with Section 31450) of Part
343 of Division 4 of Title 3), and a school employer.

35(b) A public body or agency of or within the state that is not
36subject to Part 3 (commencing with Section 20000) of the
37Government Code or the County Employees Retirement Law of
381937 (Chapter 3 (commencing with Section 31450) of Part 3 of
39Division 4 of Title 3), and that provides a retirement system for
40its employees funded wholly or in part by public funds.

P10   1(c) The protection and advocacy agency described in subdivision
2(h) of Section 4900 of the Welfare and Institutions Code, if the
3agency obtains a written advisory opinion from the United States
4Department of Labor stating that the organization is an agency or
5instrumentality of the state or a political subdivision thereof within
6the meaning of Chapter 18 (commencing with Section 1001) of
7Title 29 of the United States Code.

8

begin deleteSEC. 9.end delete
9begin insertSEC. 6.end insert  

Section 22922 of the Government Code is amended
10to read:

11

22922.  

(a) A contracting agency and its employees and
12annuitants may obtain a health benefit plan, as defined in Section
1322777, subject to board approval of a resolution submitted by the
14governing body electing to be so subject. The resolution shall be
15adopted by a majority vote and shall be effective at the time
16provided in board regulations.

17(b) In addition to, or in lieu of, submitting a resolution as
18prescribed in subdivision (a), the board may require the contracting
19agency to enter into a contract with the board to obtain a health
20benefit plan, as defined in Section 22777, for all or part of its
21employees, pursuant to rules and regulations developed by the
22board for this purpose.

23(c) The board may refuse to contract with, or to agree to an
24amendment proposed by, a contracting agency for any benefit
25provisions that are not specifically authorized by this part and that
26the board determines would adversely affect the administration of
27this system.

28(d) A contracting agency may become subject to this part with
29respect to a recognized employee organization with which it has
30reached mutual agreement. The resolution and any contracts, or
31the resolution and contract required by subdivisions (a) and (b),
32shall specify the recognized employee organizations participating
33in this system.

34(e) Pursuant to Section 22796 and subdivision (g) of Section
3522934, the board may by regulation require any contracting agency
36that becomes subject to this part to meet certain board-determined
37criteria, including, but not limited to, additional requirements for
38any contracting agency that elects to become subject to this part
39that previously terminated coverage pursuant to Section 22938.

P11   1(f) Approval of the contract to obtain a health benefit plan
2pursuant to subdivision (b) shall be by the affirmative vote of a
3majority of the members of the governing body of the contracting
4agency.



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