BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 215
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          SENATE THIRD READING
          SB 215 (Beall)
          As Amended August 5, 2013
          Majority vote 

           SENATE VOTE  :33-2  
           
           PUBLIC EMPLOYEES    6-0         APPROPRIATIONS      17-0        
           
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          |Ayes:|Bonta, Allen,             |Ayes:|Gatto, Harkey, Bigelow,   |
          |     |Jones-Sawyer, Mullin,     |     |Bocanegra, Bradford, Ian  |
          |     |Rendon, Wieckowski        |     |Calderon, Campos,         |
          |     |                          |     |Donnelly, Eggman, Gomez,  |
          |     |                          |     |Hall, Holden, Linder,     |
          |     |                          |     |Pan, Quirk, Wagner, Weber |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Makes various technical and conforming changes to the  
          Public Employees' Retirement Law (PERL) necessary for continued  
          effective administration of the California Public Employees'  
          Retirement System (CalPERS).  Specifically,  this bill  :   

          1)Clarifies that an agency is not required to hire a replacement  
            employee in order to receive reimbursement for 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.

          2)Repeals obsolete statutory language that authorized CalPERS to  
            invest in exchange traded options, as specified, bringing code  
            into conformity with Proposition 21 of 1984 and Proposition  
            162 of 1992 and deleting potential misinformation regarding  
            the manner in which CalPERS can invest in options trading.

          3)Allows a CalPERS member who has remarried a former spouse to  
            again name that person as an optional settlement beneficiary.

          4)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  








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            request not to receive statements.  If CalPERS elects to not  
            send statements by mail, this bill:

             a)   Requires CalPERS to notify retirees of their right to  
               receive statements by mail; and

             b)   Requires CalPERS to send a statement by mail to a  
               retiree who has provided CalPERS a written request to  
               receive statements by mail.

          5)Allows a retiree, on or after January 1, 2014, to name as a  
            new option beneficiary the same person as previously covered  
            under the member's option election if due to divorce the  
            judgment dividing the community property awarded the total  
            interest in the retirement system to the retired member.

          6)Permits CalPERS, at its discretion, to require local agencies  
            to enter a contract for coverage in the Public Employee  
            Medical and Hospital Care Act (PEMHCA) in addition to, or in  
            lieu of, simply filing a resolution.

          7)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.

          8)Requires an affirmative vote of a majority of the governing  
            board to approve the contract for PEHMCA.

           EXISTING LAW  : 

          1)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.

          2)Authorizes CalPERS to invest in accordance with modern  
            portfolio theory pursuant to Proposition 21 of 1984 and  
            provides CalPERS plenary authority under Proposition 162 of  
            1992 over investment decisions.  (Prior to Proposition 21 and  
            Proposition 162's passage, CalPERS required specific statutory  
            authority to invest in certain investment vehicles).









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          3)Allows a CalPERS member that names his or her spouse as the  
            beneficiary of an optional settlement 2, 3 or 4, and is later  
            awarded the total interest in his or her benefit through an  
            annulment, legal separation, or dissolution judgment, to have  
            his or her allowance recalculated under a new option and name  
            a different person as the beneficiary.  However, current law  
            does not allow the member to name the same person as a  
            beneficiary of an optional settlement 2, 3 or 4 when he or she  
            remarries a former spouse. 

          4)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.

          5)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.

          6)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.

          7)Allows a retiree to name a different option beneficiary  
            following a divorce if the judgment dividing the community  
            property awards the total interest in the retirement system to  
            the retired member.

          8)Authorizes local public agencies to provide employee health  
            care coverage through the PEMHCA by submitting a resolution  
            from their governing board to CalPERS.  The resolution serves  
            to subject the local agency to the provisions of PEMHCA.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, CalPERS estimates it will save about $2 million  
          because of the provisions of this bill. 

           COMMENTS :  According to the sponsor, CalPERS, SB 215 "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."

          Additionally, CalPERS reports that it incurs an annual cost of  








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          $2.8 million to reimburse the State Controller for printing and  
          mailing benefit statements each month to approximately 92% of  
          retirees who receive their retirement allowance through  
          Electronic Funds Transfer.  By authorizing CalPERS to provide  
          benefit statements electronically, this bill would reduce that  
          cost proportionately.


           Analysis Prepared by  :    Karon Green / P.E., R. & S.S. / (916)  
          319-3957 


                                                                FN: 0001551