BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 215
Author: Beall (D)
Amended: 8/22/13
Vote: 21
SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM. : 5-0, 4/8/13
AYES: Beall, Walters, Block, Gaines, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 33-2, 4/25/13
AYES: Beall, Berryhill, Block, Calderon, Cannella, Corbett,
Correa, De Le�n, DeSaulnier, Emmerson, Evans, Gaines,
Galgiani, Hancock, Hernandez, Hill, Huff, Jackson, Knight,
Lara, Leno, Lieu, Liu, Monning, Nielsen, Pavley, Price, Roth,
Steinberg, Walters, Wright, Wyland, Yee
NOES: Anderson, Fuller
NO VOTE RECORDED: Hueso, Padilla, Wolk, Vacancy, Vacancy
ASSEMBLY FLOOR : 77-1, 8/26/13 - See last page for vote
SUBJECT : Public employee benefits
SOURCE : California Public Employees Retirement System Board
of
Administration
DIGEST : This bill makes various technical and conforming
changes to the Public Employees' Retirement Law (PERL) necessary
for continued effective administration of the California Public
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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.
Assembly Amendments (1) allow employers that contract for health
care with CalPERS to add part-time employees, as required by the
Affordable Care Act; (2) allow the current Highway Patrol
Commissioner to continue to serve in his/her position beyond the
age of 60, but no longer than to the end of 2018; (3) allow the
1937 Act retirement systems to use recorded telephone
conversations for the processing of authorized transactions
affecting member accounts; (4) fixed an oversight in the law to
allow an individual who divorces and remarries a former spouse
to again name that spouse as a beneficiary, consistent with what
a member can currently do who divorces and marries a new spouse;
and (5) remove several sections that were opposed by the
Department of Finance.
ANALYSIS :
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/her spouse as the
beneficiary of an optional settlement 2, 3 or 4, and is later
awarded the total interest in his/her benefit through an
annulment, legal separation, or dissolution judgment, to have
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his /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/she
remarries a former spouse.
5. Defines "employee" for purposes of determining eligibility to
participate in the Public Employees' Medical and Hospital
Care Act (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.
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.
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
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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 sunsets in 2018.
4. Allows a CalPERS member who has remarried a former spouse to
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 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.
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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 retention of the recorded communication.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee, CalPERS
estimates it will save about $2 million because of the
provisions of this bill.
SUPPORT : (Verified 8/27/13)
CalPERS Board of Administration (source)
California Federation of Teachers
California State Association of Counties
ARGUMENTS IN SUPPORT : According to the sponsor, 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."
The California State Association of Counties (CSAC) states in
support that this bill expands the definition of "employee,"
thus providing counties with the option of offering health
coverage to employees previously not eligible for PEMHCA
benefits. CSAC asserts this broadening of benefits eligibility
will grant counties with an affordable option when complying
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with the ACA.
ASSEMBLY FLOOR : 77-1, 8/26/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Frazier, Beth
Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin,
Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,
V. Manuel P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. P�rez
NOES: Fox
NO VOTE RECORDED: Vacancy, Vacancy
JL:d 8/29/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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