BILL ANALYSIS Ó
SB 215
Page 1
SENATE THIRD READING
SB 215 (Beall)
As Amended August 15, 2013
Majority
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 |
|-----+--------------------------+-----+--------------------------|
| | | | |
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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) and allows a county operating a
retirement system pursuant to the County Employee's Retirement Law
of 1937 ('37 Act) to establish procedures for the secure
processing of member requests by telephone, as specified.
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 the current Commissioner of the California Highway Patrol
to exceed the mandatory age 60 retirement requirement until
2018. This provision will sunset in 2018.
4)Allows a CalPERS member who has remarried a former spouse to
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again name that person as an optional settlement beneficiary.
5)Allows the state and local employers who contract with CalPERS
for health care under the Public Employees' Medical and Hospital
Care Act (PEMHCA) to comply with requirements of the Affordable
Care Act by expanding the definition of "employee" in PEMHCA to
include fulltime employees as defined by Section 4980(H) of
Title 26 of the United States Code, as specified.
6)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:
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.
7)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.
8)Permits CalPERS, at its discretion, to require local agencies to
enter a contract for coverage in PEMHCA in addition to, or in
lieu of, simply filing a resolution.
9)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.
10)Requires an affirmative vote of a majority of the governing
board to approve the contract for PEHMCA.
11)Allows a '37 Act retirement system to voluntarily adopt
regulations allowing for the use and acceptance of a member's
recorded telephone request to have an authorized transaction
processed as long as the procedures adopted provide for adequate
validation and authentication of member identity and permanent
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retention of the recorded communication.
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).
3)Requires a state patrol member to separate from employment under
that classification upon attaining age 60.
4)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.
5)Defines "employee" for purposes of determining eligibility to
participate in PEMHCA.
6)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.
7)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.
8)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.
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9)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.
10)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.
11)Allows the retirement boards of '37 Act retirement systems to
adopt regulations allowing for the use and acceptance of a
member's electronic signature with the same force and effect as
a signed, valid original document.
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
$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.
Beginning in January 2015, the Affordable Care Act (ACA) requires
large employers defined as employing 50 or more fulltime or
fulltime equivalent employees, to offer affordable health coverage
that provides minimum value to at least 95% of their fulltime
employees, defined as working an average of 30 or more hours per
week, or be subject to penalties.
Some state and contracting agency employees that are eligible for
health coverage under the ACA because they average 30 or more
hours of work per week, but are currently not eligible for
coverage under PEMHCA because they do not participate in a
publicly funded retirement system or do not otherwise satisfy
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PEMHCA eligibility requirements.
To ensure conformity with the ACA, this bill would permit
employers to offer health coverage to employees previously not
eligible for PEMHCA by including in the definition of "employee"
fulltime employees as defined by Section 4980(H) of Title 26 of
the United States Code.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0001639