BILL NUMBER: AB 584 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Cooley
FEBRUARY 24, 2015
An act to amend Sections 10600, 10601, 10602, 10605, and 10606 of,
and to amend the heading of Chapter 5 (commencing with 10600) of
Part 2 of Division 2 of Title 2 of, the Government Code, relating to
public employee retirement systems.
LEGISLATIVE COUNSEL'S DIGEST
AB 584, as introduced, Cooley. Public employee retirement systems.
Existing law creates the Joint Legislative Retirement Committee,
prescribes the composition of the committee, and requires the
committee to study and review the benefits, programs, actuarial
condition, practices, investments and procedures of, and all
legislation relating to, retirement systems for public officers and
employees in this state as well as trends in the field of retirement.
Existing law requires a copy of each bill that affects any public
employee retirement system to be transmitted to the committee.
Existing law requires the committee to establish a board of experts,
the composition of which is prescribed, and to retain an independent
actuary as a consultant to the board of experts. Existing law makes a
statement of legislative findings in this regard.
This bill would rename the committee the Joint Pension
Administration and Sustainability Committee and, in addition to the
duties described above, would require the committee to make reports
and recommendations to the Legislature and its respective houses on
these retirement issues. The bill would revise the composition of the
committee to reflect current legislative practice. The bill would
require the committee to transmit an analysis for each bill submitted
to it, including an actuarial opinion if appropriate, to the policy
committee that is responsible for the bill. The bill would require
the committee to retain a legal advisor recognized for expertise in
pension and investment law and an academician from a California
university with recognized expertise in investing, pension
administration, and the operation of financial markets to act as
consultants to its board of experts. The bill would revise the
statement of legislative findings associated with these provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The heading of Chapter 5 (commencing with Section
10600) of Part 2 of Division 2 of Title 2 of the Government Code is
amended to read:
CHAPTER 5. JOINT LEGISLATIVE RETIREMENT
PENSION ADMINISTRATION AND SUSTAINABILITY COMMITTEE
SEC. 2. Section 10600 of the Government Code is amended to read:
10600. (a) The Legislature finds that the
retirement of officers and employees of the state, school districts,
and many cities, counties, and public jurisdictions in the state, is
provided under several independently administered and highly complex
and technical statutes, and that development
systems that all share the distinctive feature of being organized to
achieve results over the 30- to 40-year time frame that
corresponds to the typical length of workers' careers.
(b) These pension systems are organized and administered under
highly technical statutes and protected by constitutional provisions.
Certain provisions in the California Constitution, which are
patterned upon the Employee Retirement Income Security Act, commonly
known as ERISA, require that pension funds be invested for the sole
interests of the beneficiaries and for the exclusive purpose of
providing benefits and establish a standard of conduct that makes
persons managing the pension systems fiduciaries with respect to how
they manage the money.
(c) D evelopment and
change in such these systems are
interrelated and have important long-range implications both with
respect to cost and to the rights of public employees
retirement expectations of public employees
and also the state and national economy, as the ability of persons
to enter into retirement with a source of income to spend on goods
and services in retirement provides an important source of demand for
goods and services during economic downturns to assist eventual
recovery as well as assisting the ability of public entities to
transition their workforces to younger entry level employees as
older workers are able to retire even during an economic downturn,
thereby creating openings . The
(d) The Legislature recognizes
the need of coordination of such to
coordinate this change and development and for continuing study
and analysis of such these systems and
legislation affecting them. The Legislature also recognizes
the need to recommend legislation to change employers' and employees'
contributions through increased portfolio yield.
(e) Therefore, it is the desire of the
Legislature to provide for such continuing study and analysis by a
joint legislative committee.
SEC. 3. Section 10601 of the Government Code is amended to read:
10601. (a) The Joint Legislative
Retirement Pension Administration and Sustainability
Committee is hereby created. The committee shall study and
review the benefits, programs, actuarial condition, practices,
investments , and procedures of, and all legislation
relating to , the retirement systems for public officers
and employees in this state and the trends and developments in the
field of retirement retirement, and make
reports and recommendations thereon to the Legislature and its
respective houses . The committee has a continuing existence
and may meet, act, and conduct its business at any place within this
state during the sessions of the Legislature
, or any recess thereof, and in the interim period between
sessions. A copy of each bill which that
affects any public employee retirement system shall be
transmitted to the committee , and the committee shall transmit
an analysis, including an actuarial opinion if
appropriate, to the policy committee responsible for the bill .
(b) A report submitted pursuant to the Legislature subdivision (a)
shall be submitted in compliance with Section 9795.
SEC. 4. Section 10602 of the Government Code is amended to read:
10602. The committee shall consist of a member from each of the
following Senate committees: Banking and Commerce,
Financial Institutions, Governance and Finance,
Health, Insurance, Labor and Industrial Relations,
Local Government, and Public Employment and
Retirement, and Revenue and Taxation and a member
from each of the following Assembly committees:
committees: Accountability and Administrative Review,
Banking and Finance, Insurance and Commerce
, Labor and Employment, Local Government, Public Employees
and Retirement Employees, Retirement and Social
Security , and Revenue and Taxation. The members shall be
selected in the manner provided for in the Joint Rules of the Senate
and Assembly. The committee shall elect its own chairman. Vacancies
occurring in the membership of the committee between general sessions
of the Legislature shall be filled in the manner provided for in the
Joint Rules of the Senate and Assembly. A vacancy shall be deemed to
exist as to any member of the committee whose term is expiring
whenever such member is not reelected at the General Election.
SEC. 5. Section 10605 of the Government Code is amended to read:
10605. (a) The committee shall establish a
board of experts. The board of experts shall include: the Controller,
the chairpersons of the investment committees of the Board of
Administration of the Public Employees' Retirement System and of
the Teachers' Retirement Board of the Teachers'
Retirement System , the presidents
president and chairperson of those boards,
respectively, the executive officers of those systems, the
chiefs of investment of those systems, the chief actuaries of those
systems, the pension managers and treasurers of two corporations, a
manager of a city pension fund, and a manager of a county pension
fund.
(b) The committee shall retain as a
consultant consultants to the board of experts
an independent actuary a legal advisor recognized for expertise
in pension and investment law and an academician from a California
university with recognized expertise in investing, pension
administration, and the operation of financial markets .
(c) The board of experts shall be reimbursed
for its actual and necessary expenses.
SEC. 6. Section 10606 of the Government Code is amended to read:
10606. (a) There shall be held during the
last week of March of each year a joint meeting of the
committee Joint Pension Administration and
Sustainability Committee , the board of experts, the Board of
Administration of the Public Employees' Retirement System, the
Teachers' Retirement Board, the executive officers of those systems,
and the State Treasurer, to review the performance of the systems.
The annual reports of those systems and the financial reports and
reports of operations shall be presented at the meeting.
(b) (1) At the meeting,
the State Treasurer shall present a review of the investment
practices of the Public Employees' Retirement System and the State
Teachers' Retirement System and shall transmit a copy of the report
to the committee.
(2) A report submitted pursuant to paragraph (2) shall be
submitted in compliance with Section 9795.