BILL ANALYSIS �
SB 220
Page 1
SENATE THIRD READING
SB 220 (Beall)
As Amended August 26, 2013
Majority vote
SENATE VOTE : 34-0
PUBLIC EMPLOYEES 6-0 APPROPRIATIONS 17-0
-----------------------------------------------------------------
|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 corrections and conforming
changes that align the Public Employees' Retirement Law (PERL)
and other laws administered by the California Public Employees'
Retirement System (CalPERS) with the provisions of the Public
Employees' Pension Reform Act of 2013 (PEPRA), as enacted in AB
340 (Furutani), Chapter 296, Statutes of 2012. Specifically,
this bill :
1)Clarifies that CalPERS has the authority to administer the
changes required by PEPRA.
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)Clarifies that members subject to PEPRA cannot receive
employer-paid member contributions from their employers.
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 will
increase by 1.5% annually until they are in compliance with
the requirement to pay at least one-half of the actuarial
SB 220
Page 2
normal cost of their benefit plan, and makes other technical
changes to ensure that Second Tier member contributions are
credited to member accounts and treated consistently with
other members' contributions.
6)Clarifies that the contract option for increasing final
compensation through a modified employer-paid member
contributions mechanism does not apply to members subject to
PEPRA.
7)Clarifies that additional retirement service credit purchases
are not permitted for applications received after January 1,
2013.
8)Clarifies how CalPERS will determine the retirement benefit
for a member retiring prior to age 52 with service credit
under an existing CalPERS benefit schedule and a PEPRA
non-safety benefit schedule.
9)Clarifies that the PEPRA requirement for employees to pay 50%
of the normal cost applies to new members in the local agency
1.5% at age 65 formula.
10)Repeals, recasts, and conforms the post-retirement employment
restrictions in the PERL, in order to conform to the
restrictions imposed by PEPRA.
11)Adds language to prevent chaptering out issues with AB 410
(Jones-Sawyer) of the current legislative session.
EXISTING LAW establishes comprehensive public employee pension
reform through enactment of PEPRA (and related statutory
changes) that apply to all public employers and public pension
plans on and after January 1, 2013, excluding the University of
California and charter cities and counties that do not
participate in a retirement system governed by state statute.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, "The administrative costs of this bill to CalPERS are
minor and absorbable. The bill should help state and local
governments realize savings from enactment of PEPRA."
COMMENTS : According to the author, "This bill makes conforming
changes to the PERL, Legislators Retirement Law, and the Judges'
Retirement Law (JRL I & JRL II) in order to facilitate the
SB 220
Page 3
implementation of newly enacted pension reform legislation. 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 proposed changes are not
intended to alter the intent or the provisions of the Public
Employees' Pension Reform Act of 2013 and related pension reform
statutes. Without these changes, CalPERS' pension reform
implementation efforts may become delayed or subject to
unnecessary challenge."
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0001884