Amended in Assembly August 15, 2013

Amended in Assembly August 5, 2013

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 amend Sections 20092, 21269, 21462,begin insert 22772,end insert 22850, 22920,begin delete and 22922end deletebegin insert 22922, and 31527 of, to amend, repeal, and add Section 21130end insert of, and to repeal Section 20204 of, the Government Code, relating to publicbegin delete employees’ retirement.end deletebegin insert employee benefits, and making an appropriation therefor.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 215, as amended, Beall. Publicbegin delete employees’ retirement.end deletebegin insert employee benefits.end insert

(1) Existing law provides that the Public Employees’ Retirement System (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.

begin insert

(2) Existing law requires that a patrol member of PERS who is subject to specified benefit formulas be retired in the calendar month succeeding that in which he or she attains 60 years of age.

end insert
begin insert

This bill, until January 1, 2018, would except from this requirement a Commissioner of the California Highway Patrol who was appointed on or after January 1, 2008.

end insert
begin delete

(2)

end delete

begin insert(3)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

(3)

end delete

begin insert(4)end insert Existing law authorizes abegin delete member or retiredend delete member, in lieu of the retirement allowance for his or her life alone, to elect, or to revoke or change a previous election, to have the actuarial equivalent of his or her retirement allowance, as specified, applied to a lesser retirement allowance, in accordance with one of several optional settlements. Existing law authorizes a member who previously elected to receive one of certain optional settlements involving a life contingency of the beneficiary, and who has a qualifying event, as specified, to make a new election within 12 months after the occurrence of the qualifying event. Existing law requires the member to name a new beneficiary for this purpose.

This bill would authorize a member who exercises the election described above on and after January 1, 2014, to name the same beneficiary as previouslybegin delete designated,end deletebegin insert designatedend insert and requires that the resulting benefit under these circumstances otherwise satisfy applicable existing law requirements.

begin delete

(4)

end delete

begin insert(5)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

(5)

end delete

begin insert(6)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 lawbegin delete specificallyend delete authorizes the board to contract for, or approve, health benefit plans exclusively for the employees and annuitants ofbegin insert the state andend insert contracting agencies.begin insert Existing law defines an employee for these purposes and provides that a person who is an intermittent or irregular employee is not an employee.end insert 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.

begin insert

Existing law creates the Public Employees’ Health Care Fund to fund health benefit plans administered by the board. Existing law provides that the fund is continuously appropriated and consists of, among other things, health plan premiums paid by contracting agencies, the state, and enrolled employees. Existing law creates the Public Employees’ Contingency Reserve Fund, and various accounts within that fund, which are continuously appropriated, for the receipt of funds for certain purposes relating to PEMHCA, including for payments made by contracting agencies for health care premiums.

end insert

This billbegin insert would revise the definition of employee to include an individual who would not otherwise qualify but who meets the definition of a full-time employee provided in specified federal law and is designated as an employee by the state or a contracting agency. By providing for increased contributions to a continuously appropriated fund, this bill would make an appropriation. The billend insert 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.

begin insert

(7) The County Employees Retirement Law of 1937 prescribes a comprehensive set of rights and benefits for county and district employees who are members of a retirement system subject to that law and establishes retirement boards for the administration of those systems. Existing law authorizes a retirement board to promulgate regulations regarding the administration of benefits and specifically authorizes regulations for the use and acceptance of a document requiring a signature that is submitted by a member using an electronic signature, as specified.

end insert
begin insert

This bill would permit a retirement board to promulgate regulations regarding the use of recorded telephone communications for the processing of authorized transactions affecting a member’s account if the board approves procedures adequate to protect the member and the system, as specified.

end insert

Vote: majority. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: yes. State-mandated local program: no.

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

P4    1

SECTION 1.  

Section 20092 of the Government Code is
2amended to read:

3

20092.  

Each employing agency that employs an elected
4member of the board shall be reimbursed by the retirement fund
5in an amount equal to the salary and benefits paid to the elected
6board member by the employing agency for the percentage of the
7elected board member’s regular work schedule during which the
8elected board member is on leave from the employing agency to
9attend meetings or activities of the board, or meetings of
10committees or subcommittees of the board, or when serving as
11president or vice president of the board or chair or vice chair of a
12committee or subcommittee of the board, or when carrying out
13other powers or duties as may be approved by the board, or to
14otherwise fulfill his or her responsibilities to the system.

15

SEC. 2.  

Section 20204 of the Government Code is repealed.

16begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 21130 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
17read:end insert

P5    1

21130.  

begin deleteEvery end deletebegin insert(a)end insertbegin insertend insertbegin insertExcept as provided in subdivision (b), every end insert
2patrol member subject to Section 21362, 21362.2, or 21363.1, as
3applicable, shall be retired on the first day of the calendar month
4succeeding that in which he or she attains the age of 60 years.

begin insert

5(b) Subdivision (a) does not apply to a Commissioner of the
6California Highway Patrol appointed on or after January 1, 2008.

end insert
begin insert

7(c) This section shall remain in effect only until January 1, 2018,
8and as of that date is repealed, unless a later enacted statute, that
9is enacted before January 1, 2018, deletes or extends that date.

end insert
10begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 21130 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
11read:end insert

begin insert
12

begin insert21130.end insert  

(a) Every patrol member subject to Section 21362,
1321362.2, or 21363.1, as applicable, shall be retired on the first
14day of the calendar month succeeding that in which he or she
15attains the age of 60 years.

16(b) This section shall be operative January 1, 2018.

end insert
17

begin deleteSEC. 3.end delete
18begin insertSEC. 5.end insert  

Section 21269 of the Government Code is amended
19to read:

20

21269.  

(a) Any person entitled to a benefit from this system
21may request that payment be made by deposit by electronic fund
22transfer in the person’s bank, savings and loan association, or credit
23union account.

24(b) If deposit pursuant to subdivision (a) is not available, deposit
25may be made by mail in the person’s bank, savings and loan
26association, or credit union account.

27(c) Mailing of the warrant or electronic fund transfer is a full
28discharge of the board and this system.

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

32(1) If the board elects to mail copies of this payment information
33to all or a portion of persons receiving monthly benefit payments,
34it shall not send a copy of the benefit payment information to any
35person who has had payment made by electronic fund transfer or
36by mail pursuant to subdivision (a) or (b), if the board has received
37a written request from that person that it not be sent.

38(2) The board shall notify persons subject to this section, in the
39monthly benefit payment notice, of their right to request that no
P6    1copy of the benefit payment information be mailed, pursuant to
2paragraph (1).

3(3) If the board does not elect to mail copies of this payment
4information to all or a portion of persons receiving monthly benefit
5payments, it shall notify a person subject to this section of his or
6 her right to request that a copy of the benefit payment information
7be mailed. The board shall mail a copy of the benefit payment
8information if the system has received a written request to do so
9from that person.

10

begin deleteSEC. 4.end delete
11begin insertSEC. 6.end insert  

Section 21462 of the Government Code is amended
12to read:

13

21462.  

(a) (1) Notwithstanding any other provision of this
14part, a member who elected to receive optional settlement 2, 3, or
154, involving a life contingency of the beneficiary, may, if the
16beneficiary predeceases the member or if the member marries and
17the former spouse was not named as beneficiary, or, if a former
18spouse was named, in the event of a dissolution or annulment of
19the marriage or a legal separation in which the judgment dividing
20the community property awards the total interest in the retirement
21system to the retired member, elect to have the actuarial equivalent
22reflecting any selection against the fund resulting from the election
23as of the date of election of the allowance payable for the remainder
24of the member’s lifetime under the optional settlement previously
25chosen applied to a lesser allowance during the member’s
26remaining lifetime under one of the optional settlements specified
27in this article and name a different beneficiary.

28(2) Notwithstanding paragraph (1), for an election pursuant to
29this section that occurs on or after January 1, 2014, a member may
30name the same beneficiary as previously designated, provided that
31the resulting benefit to the member and the named beneficiary
32otherwise meets the requirements of this section.

33(b) The election shall be made within 12 months following the
34death of the beneficiary who predeceased the member or within
3512 months of the date of entry of the judgment dividing the
36community property of the parties, or within 12 months following
37marriage if the spouse is named as beneficiary. The election shall
38become effective on the date specified on the election, provided
39that this date is not earlier than the day following receipt of the
40election in this system pursuant to this section.

P7    1(c) A member who has a qualifying event prior to January 1,
21988, and who fails to elect by January 1, 1989, or a member who
3has a qualifying event on or after January 1, 1988, and who fails
4to elect within 12 months, shall retain the right to make an election
5under this section. However, this election shall become effective
6no earlier than 12 months after the date it is filed with the board,
7provided that neither the member nor the designated beneficiary
8die prior to the effective date of the election.

9(d) This section shall not be construed to mean that designation
10of a new beneficiary causes the selection of an optional settlement.
11An optional settlement shall be selected by a member in a writing
12filed by the member with the board.

13begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 22772 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
14read:end insert

15

22772.  

(a) “Employee” means:

16(1) An officer or employee of the state or of any agency,
17department, authority, or instrumentality of the state, including
18the University of California.

19(2) An employee who is employed by a contracting agency and
20participates in a publicly funded retirement system provided by
21the contracting agency, or an officer or official of a contracting
22agency.

23(3) An annuitant receiving a retirement allowance pursuant to
24Section 21228 who is employed by a contracting agency.

25(4) A teaching associate, lecturer, coach, or interpreter employed
26by the California State University who is appointed to work in an
27academic year classification for at least six weighted teaching units
28for one semester, or for at least six weighted teaching units for two
29or more consecutive quarter terms. This paragraph does not apply
30to a state member employed by the California State University,
31unless provided for in a memorandum of understanding reached
32pursuant to Chapter 12 (commencing with Section 3560) of
33Division 4 of Title 1 or authorized by the Trustees of the California
34State University for employees excluded from collective
35bargaining.

36(5) All employees in job classes specified in subdivision (a) of
37Section 14876.

begin insert

38(6) An individual not described in paragraphs (1) to (5),
39inclusive, who is both of the following:

end insert
begin insert

P8    1(A) A “full-time employee” of the state or a contracting agency
2within the meaning of Section 4980H of Title 26 of the United
3States Code and applicable United States Treasury Department
4regulations and interpretive guidance.

end insert
begin insert

5(B) Designated in writing as an employee for purposes of this
6section by the state or the contracting agency, as applicable.

end insert

7(b) Except as otherwise provided by this part, “employee” does
8not include any of the following:

9(1) A person employed on an intermittent, irregular, or less than
10half-time basis, or an employee similarly situated.

11(2) A National Guard member described in Section 20380.5.

12

begin deleteSEC. 5.end delete
13begin insertSEC. 8.end insert  

Section 22850 of the Government Code is amended
14to read:

15

22850.  

(a) The board may, without compliance with any
16provision of law relating to competitive bidding, enter into
17contracts with carriers offering health benefit plans or with entities
18offering services relating to the administration of health benefit
19plans.

20(b) The board may contract with carriers for health benefit plans
21or approve health benefit plans offered by employee organizations,
22provided that the carriers have operated successfully in the hospital
23and medical care fields prior to the contracting for or approval
24thereof. The plans may include hospital benefits, surgical benefits,
25inpatient medical benefits, outpatient benefits, obstetrical benefits,
26and benefits offered by a bona fide church, sect, denomination, or
27organization whose principles include healing entirely by prayer
28or spiritual means.

29(c) Notwithstanding any other provision of this part, the board
30may contract with health benefit plans offering unique or
31specialized health services.

32(d) The board may administer self-funded or minimum premium
33health benefit plans.

34(e) The board may contract for or implement employee cost
35containment and cost reduction incentive programs that involve
36the employee, the annuitant, and family members as active
37participants, along with the carrier and the provider, in a joint effort
38toward containing and reducing the cost of providing medical and
39hospital health care services to public employees. In developing
40these plans, the board, in cooperation with the Department of
P9    1Human Resources, may request proposals from carriers and
2certified public employee representatives.

3(f) Notwithstanding any other provision of this part, the board
4may do any of the following:

5(1) Contract for, or approve, health benefit plans that charge a
6contracting agency and its employees and annuitants rates based
7on regional variations in the costs of health care services.

8(2) Contract for, or approve, health benefit plans exclusively
9for the employees and annuitants of contracting agencies. State
10employees and annuitants may not enroll in these plans. The board
11may provide health benefit plans exclusively for employees and
12annuitants of contracting agencies in addition to or in lieu of other
13health benefit plans offered under this part pursuant to Section
1422922.

15(3) Implement and administer risk adjustment procedures
16consistent with Section 22864 that require health benefit plans to
17adjust premiums and authorize the system to redistribute premiums
18based on rules and regulations established by the board for this
19purpose.

20(g) The board shall approve any employee association health
21benefit plan that was approved by the board in the 1987-88 contract
22year or prior, provided the plan continues to meet the minimum
23standards prescribed by the board. The trustees of an employee
24association health benefit plan are responsible for providing health
25benefit plan administration and services to its enrollees.
26Notwithstanding any other provision of this part, the California
27Correctional Peace Officer Association Health Benefits Trust may
28offer different health benefit plan designs with varying premiums
29in different areas of the state.

30(h) Irrespective of any other provision of law, the sponsors of
31a health benefit plan approved under this section may reinsure the
32operation of the plan with an admitted insurer authorized to write
33disability insurance, if the premium includes the entire prepayment
34fee.

35

begin deleteSEC. 6.end delete
36begin insertSEC. 9.end insert  

Section 22920 of the Government Code is amended
37to read:

38

22920.  

The following entities are eligible to obtain a health
39benefit plan, as defined in Section 22777, subject to board approval:

P10   1(a) A contracting agency, as defined in Section 20022, a county
2or special district subject to the County Employees Retirement
3Law of 1937 (Chapter 3 (commencing with Section 31450) of Part
43 of Division 4 of Title 3), and a school employer.

5(b) A public body or agency of or within the state that is not
6subject to Part 3 (commencing with Section 20000) of the
7Government Code or the County Employees Retirement Law of
81937 (Chapter 3 (commencing with Section 31450) of Part 3 of
9Division 4 of Title 3), and that provides a retirement system for
10its employees funded wholly or in part by public funds.

11(c) The protection and advocacy agency described in subdivision
12(h) of Section 4900 of the Welfare and Institutions Code, if the
13agency obtains a written advisory opinion from the United States
14Department of Labor stating that the organization is an agency or
15instrumentality of the state or a political subdivision thereof within
16the meaning of Chapter 18 (commencing with Section 1001) of
17Title 29 of the United States Code.

18

begin deleteSEC. 7.end delete
19begin insertSEC. 10.end insert  

Section 22922 of the Government Code is amended
20to read:

21

22922.  

(a) A contracting agency and its employees and
22annuitants may obtain a health benefit plan, as defined in Section
2322777, subject to board approval of a resolution submitted by the
24governing body electing to be so subject. The resolution shall be
25adopted by a majority vote and shall be effective at the time
26provided in board regulations.

27(b) In addition to, or in lieu of, submitting a resolution as
28prescribed in subdivision (a), the board may require the contracting
29agency to enter into a contract with the board to obtain a health
30benefit plan, as defined in Section 22777, for all or part of its
31employees, pursuant to rules and regulations developed by the
32board for this purpose.

33(c) The board may refuse to contract with, or to agree to an
34amendment proposed by, a contracting agency for any benefit
35provisions that are not specifically authorized by this part and that
36the board determines would adversely affect the administration of
37this system.

38(d) A contracting agency may become subject to this part with
39respect to a recognized employee organization with which it has
40reached mutual agreement. The resolution and any contracts, or
P11   1the resolution and contract required by subdivisions (a) and (b),
2shall specify the recognized employee organizations participating
3in this system.

4(e) Pursuant to Section 22796 and subdivision (g) of Section
522934, the board may by regulation require any contracting agency
6that becomes subject to this part to meet certain board-determined
7criteria, including, but not limited to, additional requirements for
8any contracting agency that elects to become subject to this part
9that previously terminated coverage pursuant to Section 22938.

10(f) Approval of the contract to obtain a health benefit plan
11pursuant to subdivision (b) shall be by the affirmative vote of a
12majority of the members of the governing body of the contracting
13agency.

14begin insert

begin insertSEC. 11.end insert  

end insert

begin insertSection 31527 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
15to read:end insert

16

31527.  

In its regulations, the board may include the following
17provisions:

18(a) From what warrants deductions of members’ contributions
19shall be made.

20(b) For a period of time longer than one year during which a
21member may redeposit in the retirement fund an amount equal to
22all of the accumulated normal contributions that he or she has
23withdrawn, plus regular interest thereon from the date of return to
24service.

25(c) For a period of time longer than one year during which a
26member brought within the field of membership may pay into the
27retirement fund the amount equal to the contributions he or she
28would have made plus interest, if he or she had been a member
29from the date of its organization, or from the date of his or her
30entrance into service, whichever is later.

31(d) For a withdrawal charge against a member who withdraws
32his or her accumulated contributions. The withdrawal charge shall
33not exceed the interest credited to the member subsequent to the
34effective date of the regulation.

35(e) For the exemption or exclusion from membership as a peace
36officer member or as a safety member or from membership
37altogether, in the discretion of the board, of persons whose tenure
38is temporary, seasonal, intermittent, or for part time only, or
39persons whose compensation is fixed at a rate by the day or hour.

P12   1(f) For the periodic physical examination, at county expense,
2of safety members.

3(g) The amount of additional deductions from the salaries or
4wages of members pursuant to Article 15.5 (commencing with
5Section 31841) or Article 16 (commencing with Section 31861).
6Such a provision may be adopted in anticipation of, and prior to
7Article 15.5 (commencing with Section 31841) or Article 16
8(commencing with Section 31861) becoming operative in the
9particular county.

10(h) The day upon which each person becomes a member of the
11association if it is to be other than the first day of the calendar
12month after his or her entrance into service. However, that day
13shall be no later than 12 weeks after his or her entrance into service,
14or the day upon which the member terminates service credited by
15the association, and that the day shall be no earlier than 12 weeks
16prior to the member’s termination from employment.

17(i) Notwithstanding any other law, for the use and acceptance
18of a document requiring a signature that is submitted by a member
19using an electronic signature, if the document and electronic
20signature are submitted using technology the board deems sufficient
21to ensure its integrity, security, and authenticity. A document
22submitted pursuant to the regulation shall be given the same force
23as a signed, valid original document.

begin insert

24(j) For the use of recorded telephone communications for the
25processing of authorized transactions affecting a member’s
26account, if the board approves procedures adequate to protect the
27member and the system. These procedures shall include adequate
28validation and authentication of member identity and permanent
29retention of recorded communication.

end insert


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