BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 220|
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CONSENT
Bill No: SB 220
Author: Beall (D)
Amended: 4/11/13
Vote: 21
SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM. : 5-0, 4/22/13
AYES: Beall, Walters, Block, Gaines, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : California Public Employees Pension Reform Act of
2013
SOURCE : California Public Employees Retirement System Board
of
Administration
DIGEST : This bill makes various technical and
non-controversial changes in the Public Employees Retirement Law
and the Public Employee Medical and Hospital Care Act to conform
with the requirements of the California Public Employees Pension
Reform Act of 2013 (PEPRA). This bill brings the statutes
administered by the California Public Employees' Retirement
System (CalPERS) into conformity with the requirements of PEPRA.
ANALYSIS :
Existing law:
1. Establishes CalPERS, the Legislators' Retirement System, and
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the Judges Retirement Systems I and II, all of which are
administered by the CalPERS Board of Administration under the
provisions of the Public Employees' Retirement Law and other
provisions of the Government Code.
2. Establishes PEPRA, which requires, as of January 1, 2013,
comprehensive and statewide reform for the state's public
pension systems and plans and public employers and employees,
including the retirement systems administered by the CalPERS
Board of Administration.
3. Specifies who is considered to be a new member of a public
retirement system and defines which provisions of PEPRA are
applicable to new members and which provisions apply to new
and/or legacy members.
This bill, sponsored by the CalPERS Board of Administration,
clarifies CalPERS' authority to administer the changes required
by PEPRA in the various systems it administers, and makes
technical and clarifying changes to the statutes administered by
CalPERS in order to conform those statutes with PEPRA, including
the following:
1. Clarifies that members subject to PEPRA cannot receive
Employer Paid Member Contributions from their employers.
2. Clarifies that new members subject to PEPRA are excluded from
the pre-PEPRA statutes defining "compensation earnable."
Those statutes will continue to apply to "legacy" members
(i.e., members prior to implementation of PEPRA).
3. Conforms the definition of "annuitant" to accommodate the
reinstatement provisions of PEPRA, as specified.
4. Adds code references for the new Second Tier retirement
formula to various sections impacting Second Tier benefits
and participants.
5. Clarifies that Second Tier member contribution rates shall
increase by 1.5% annually until they are in compliance with
the requirement to pay at least one-half of the actuarial
normal cost of their benefit plan, and makes other technical
changes.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Public Employment & Retirement
Committee, these changes are part of CalPERS' efforts to conform
to the requirements of PEPRA and are not anticipated to create
additional costs.
SUPPORT : (Verified 5/7/13)
California Public Employees Retirement System (source)
ARGUMENTS IN SUPPORT : According to CalPERS, the sponsor, this
bill makes conforming changes in order to facilitate the
implementation of newly enacted pension reform legislation.
CalPERS states that the proposed changes are technical in nature
and will better align CalPERS' processes and statutes to the new
pension reform laws, and to the pension reform clean-up
legislation presently being considered by the Legislature. The
sponsor states the proposed changes are not intended to alter
the intent or the provisions of PEPRA and related pension reform
statutes. CalPERS claims that without these changes, CalPERS'
pension-reform implementation efforts may become delayed or
subject to unnecessary challenge.
JL:d 5/7/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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