BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 220
Author: Beall (D)
Amended: 8/26/13
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
SENATE FLOOR : 34-0, 5/9/13 (Consent)
AYES: Anderson, Beall, Block, Calderon, Cannella, Corbett,
Correa, De Le�n, DeSaulnier, Emmerson, Evans, Fuller, Gaines,
Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson,
Knight, Leno, Lieu, Liu, Monning, Nielsen, Padilla, Roth,
Steinberg, Walters, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Berryhill, Lara, Pavley, Price, Vacancy,
Vacancy
ASSEMBLY FLOOR : 76-0, 9/3/13 - See last page for vote
SUBJECT : California Public Employees Pension Reform Act of
2013
SOURCE : California Public Employees Retirement System Board
of
Administration
DIGEST : This bill makes various technical corrections and
conforming changes that align the Public Employees' Retirement
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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.
Assembly Amendments repeal, recast, and conform the
post-retirement employment restrictions in the PERL, in order to
conform to the restrictions imposed by PEPRA; clarify 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; add language to prevent chaptering out issues with AB
410 (Jones-Sawyer) of the current legislative session; and make
other clarifying and technical changes.
ANALYSIS :
Existing law:
1. Establishes CalPERS, the Legislators' Retirement System, and
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:
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
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(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
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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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 : (per Assembly Public Employees, Retirement and Social
Security Cmte. 6/17/13 - unable to reverify at time of writing)
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.
ASSEMBLY FLOOR : 76-0, 09/03/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Ch�vez, Chesbro, Conway, Cooley, Dahle,
Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth
Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Grove, Hagman, 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
NO VOTE RECORDED: Chau, Hall, Vacancy, Vacancy
JL:RM:d:n 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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