BILL ANALYSIS Ó
AB 584
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Date of Hearing: April 8, 2015
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT, AND SOCIAL
SECURITY
Rob Bonta, Chair
AB 584
(Cooley) - As Amended April 6, 2015
SUBJECT: Public employee retirement systems
SUMMARY: Revises and renames the joint legislative committee
established in statute to review legislation and programs
related to public employee retirement systems in California.
Specifically, this bill:
1)Renames the Joint Legislative Retirement Committee (JLRC) as
the Joint Pension Administration and Sustainability Committee
(JPASC) and revises the Legislative findings associated with
the establishment of the JPASC.
2)Requires the JPASC, in addition to the duties of the JLRC
described below, to make reports and recommendations to the
Legislature on retirement system related issues, as specified.
3)Requires the JPASC to transmit to the policy committee
responsible for the bill, an analysis, including an actuarial
opinion if appropriate, on each bill that affects any public
retirement system.
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4)Specifies the membership of the JPASC to reflect current
legislative practice.
5)Requires the JPASC to retain as additional consultants to the
board of experts (see below), a legal advisor with expertise
in pension and investment law, and an academician from a
California university with expertise in investing, pension
administration, and the operation of financial markets.
EXISTING LAW:
1)Establishes, through legislation enacted in 1963, the Joint
Legislative Retirement Committee (JLRC) to 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 and
the trends and developments in the field of retirement.
2)Requires a copy of each bill which affects any public employee
retirement system to be transmitted to the JLRC.
3)Specifies the membership of the JLRC and prescribes how
vacancies between general sessions of the Legislature will be
filled.
4)Authorizes the JLRC to make rules governing its own
proceedings, to create subcommittees, to assign studies,
inquiries, or investigations, to these subcommittees, as
specified.
5)Authorizes the JLRC to appoint and fix salaries of
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professional and other employees and specifies that funds for
the support of the JLRC will be provided from the Contingent
Funds of the Assembly and Senate in the same manner as other
joint committees.
6)Requires the JLRC to establish a board of experts, as
specified, and to retain an independent actuary as a
consultant to the board.
7) Requires, in March of each year, a joint meeting to be held
of the JLRC, the board of experts, the boards and executive
officers of the California Public Employees' Retirement System
(CalPERS) and the California State Teachers' Retirement System
(CalSTRS), and the State Treasurer, to review the performance
of CalPERS and CalSTRS. The annual reports, and other
specified reports are required to be presented at the meeting.
8)Requires the State Treasurer to present a review of the
investment practices of CalPERS and CalSTRS at the joint
meeting.
FISCAL EFFECT: Unknown.
COMMENTS: While the JLRC was established in 1963, the Committee
is not aware of it operating, or complying with any of its
statutory requirements, during the last several decades. Both
the Senate and the Assembly have standing policy committees
whose jurisdiction includes all of the public retirement systems
in the state.
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According to the author, "California's pension system is
critical to ensuring our economy is strong, but the system
itself is under attack. Pensions are generally confusing and
unfamiliar to the public at large. Existing law provides for a
joint legislative committee structure which has its purpose in
taking a methodical approach in deepening the understanding of
how pension systems operate. This type of committee which
focuses on complex subjects provides an extremely useful tool in
the legislative toolkit to operate alongside the regular
standing committee process."
"The key purpose of AB 584, given this committee is already in
current law, is to update the statute and to promote the
importance of pensions in our economy. The committee-now
renamed the Joint Pension Administration and Sustainability
Committee-would be required to compose an analysis of bills
submitted to it and retain a legal advisor who is an expert in
pension and investment law, and an academician from a California
university with an expertise in investing and pension
administration. The bill also updates the committee membership
to reflect current Assembly and Senate standing committees."
The author concludes. "California's pension system is critical
to our multitude of public employees and also our state's
economy as a whole, since the ability of seniors to enter into
retirement with a robust and safe pension ensures economic
activity. It also encourages public employees to retire, even
during hard economic times. This permits public entities to
hire younger employees, who can then form households and engage
in spending that supports economic growth."
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REGISTERED SUPPORT / OPPOSITION:
Support
None on file
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Opposition
None on file
Analysis Prepared by:Karon Green / P.E.,R., & S.S. / (916)
319-3957