BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 215|
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THIRD READING
Bill No: SB 215
Author: Beall (D)
Amended: 4/1/13
Vote: 21
SENATE PUBLIC EMPL. & RETIREMENT COMMITTEE : 5-0, 4/8/13
AYES: Beall, Walters, Block, Gaines, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Public employees retirement
SOURCE : California Public Employees Retirement System Board
of
Administration
DIGEST : This bill makes technical and non-controversial
changes to various sections of the Government Code including
code sections governing the California Public Employees'
Retirement System (CalPERS), the Public Employees Medical and
Hospital Care Act (PEMHCA), as well as some conforming changes
to the Education Code with respect to CalPERS members.
ANALYSIS :
I. Actuarial Valuation Reports
Existing law requires all state and local retirement systems
to engage an enrolled actuary to produce an actuarial
valuation at least triennially. The State Controller reviews
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and compiles the actuarial information submitted by state and
local public retirement agencies and publishes the data in
the Public Retirement Systems Annual Report.
This bill changes the period for public retirement systems to
produce actuarial valuations from triennial to biennial to
conform to standards of best practice promulgated by the
Government Accounting Standards Board Statement 25.
II. CalPERS/CalSTRS Right of Election
Existing law:
1. Permits a CalPERS or California State Teachers'
Retirement System (CalSTRS) member respectively who takes
a job covered by the other retirement system to elect to
remain in the first system and have their eligible service
credited as service in the first system.
2. Requires CalPERS members with less than five years of
service to avoid any break in service in order to exercise
their right of election.
3. Allows CalPERS members with more than five years of
service and CalSTRS members to exercise their right of
election within a specified time period even though they
may have a break in service between their old position and
new position.
This bill clarifies that CalPERS members with less than five
years of service may have a break in service of up to 120
days and still retain the right to elect to remain in CalPERS
upon taking a job covered under CalSTRS.
III. Agency Reimbursement for CalPERS Board Member Service
Existing law authorizes CalPERS to reimburse an employing
agency of an elected CalPERS Board member for time the Board
member was on leave from the agency for official CalPERS
business, as specified, if the agency employs another person
to replace the employee serving on the CalPERS Board.
This bill clarifies that an agency is not required to hire a
replacement employee in order to receive reimbursement for
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time the agency's employee spent on duties as a CalPERS'
Board Member and provides a reimbursement equivalent to the
pro rata salary and benefits paid to the elected CalPERS
Board member by the agency.
IV. Obsolete Options Trading Statute
Existing law authorizes CalPERS to invest in accordance with
modern portfolio theory pursuant to Proposition 21 and
provides CalPERS plenary authority under Proposition 162 over
investment decisions (Prior to Proposition 21 and Proposition
162's passage, CalPERS required specific statutory authority
to invest in certain investment vehicles).
This bill repeals obsolete statutory language that authorized
CalPERS to invest in exchange traded options, as specified,
bringing code into conformity with Propositions 21 and 162
and deleting potential misinformation regarding the manner in
which CalPERS can invest in options trading.
V. Electronic Benefit Statements
Existing law:
1. Allows retirees to select to receive their retirement
check either by mail or by Electronic Funds Transfer
(EFT). In either case, CalPERS also sends a retirement
payment benefit statement.
2. Prohibits CalPERS from mailing a statement to a retiree
if the retiree has notified the system in writing that
such a statement not be sent.
3. Requires CalPERS to notify retirees of their right to
request not to receive a mailed copy of their statement if
they are receiving their retirement check by EFT.
This bill gives CalPERS flexibility to decide whether to send
statements by mail or electronically. If CalPERS elects to
send statements by mail, this bill prohibits CalPERS from
sending a statement to a retiree who has provided CalPERS a
written request not to receive statements.
If CalPERS elects to not send statements by mail, this bill:
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1. Requires CalPERS to notify retirees of their right to
receive statements by mail; and
2. Requires CalPERS to send a statement by mail to a
retiree who has provided CalPERS a written request to
receive statements by mail.
VI. Contract Requirement Authority for PEMHCA Coverage
Existing law authorizes local public agencies to provide
employee health care coverage through PEMHCA by submitting a
resolution from their governing board to CalPERS. The
resolution serves to subject the local agency to the
provisions of PEMHCA.
This bill:
1. Permits CalPERS, at its discretion, to require local
agencies to enter a contract for PEMHCA coverage in
addition to, or in lieu of, simply filing a resolution.
2. Clarifies that CalPERS can refuse to contract with a
local agency or decide not to permit amendments to
existing contracts for benefits that are not specifically
authorized in PEMHCA.
3. Requires an affirmative vote of a majority of the
governing board to approve the contract for PEHMCA.
Background
This bill makes technical and non-controversial changes to
various sections of the Government Code including code sections
governing the CalPERS, PEMHCA, as well as some conforming
changes to the Education Code with respect to CalPERS members.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Public Employment & Retirement Committee
analyses, CalPERS reports that it incurs an annual cost of $2.8
million to reimburse the State Controller for printing and
mailing benefit statements each month to approximately 92% of
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retirees who receive their retirement allowance through EFT. By
authorizing CalPERS to provide benefit statements
electronically, this bill reduces that cost proportionately.
SUPPORT : (Verified 4/19/13)
CalPERS Board of Administration (source)
ARGUMENTS IN SUPPORT : According to CalPERS, this bill "would
make several minor policy and technical amendments to various
sections of the Government Code administered by CalPERS" and
"?ensures the statutes administered by CalPERS are as clear and
unambiguous as possible."
JL:d 4/24/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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