BILL ANALYSIS Ó
AB 868
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Date of Hearing: April 22, 2015
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT, AND SOCIAL
SECURITY
Rob Bonta, Chair
AB 868
(Obernolte) - As Introduced February 26, 2015
SUBJECT: Public Employees' Retirement System: contracting
agencies: transfer of membership
SUMMARY: Adds San Bernardino County to the list of counties
authorized to transfer its firefighting or law enforcement
functions from the California Public Employees' Retirement
System (CalPERS) to a county, fire authority, or district that
participates in a retirement system established under the County
Employees' Retirement Law of 1937 ('37 Act), as specified.
Specifically, this bill:
1)Authorizes CalPERS to enter into an agreement with the Board
of Retirement for the San Bernardino County Employees'
Retirement Association (SBCERA) for the transfer of service
credit and associated assets and liabilities for specified
safety employees. The decision to enter into the agreement
must be agreed to by both CalPERS and SBCERA.
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2)Permits such an agreement for safety employees of a public
agency or the state who have ceased to be employed by that
public agency or the state as a result of the transfer of
firefighting or law enforcement functions to a local agency
that participates in the SBCERA.
3)Specifies that the agreement must provide for the termination
of participation in the CalPERS System for the public agency
transferring employees.
4)Specifies the eligible public agencies must have been
contracted with CalPERS for at least five years.
5)Empowers CalPERS to require provisions it finds necessary in
the agreement related to the transfer of assets and
accumulated contributions and benefits subject to an
outstanding domestic relations order or benefits subject to a
lien.
6)Specifies that the agreement applies only to employees of the
public agency on the effective date of the agreement.
7)Specifies that once transferred from CalPERS to the county
system, SBCERA would assume all the liability for the payment
of benefits for the transferred members.
8)Specifies that the transferred members would have the same
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rights and limitations as if they had been members of the
county retirement system during their membership in CalPERS.
EXISTING LAW: Allows the Counties of Los Angeles, Kern, and
Orange, in specified instances, for the service credit and
associated assets and liabilities of active members in a CalPERS
safety plan to be transferred to a county retirement system in
cases where firefighting or law enforcement functions are
transferred from the state or an agency participating in CalPERS
to an agency participating in a county retirement system. The
significant advantage of this provision is that the transfer of
eligible active members of a CalPERS safety plan pursuant to
this section is not subject to withdrawal liability because the
liability of accrued benefits is transferred entirely to the
county retirement system.
FISCAL EFFECT: Unknown.
COMMENTS: According to information provided to the Committee,
in June of 2012, the boards of the Big Bear City Community
Services District (City) and the Big Bear Lake Fire Protection
District (Lake) acted to establish a Joint Powers Authority
creating the Big Bear Fire Authority (Fire Authority). Since
that time, the fire department administration has been
consolidated, jurisdictional boundaries have been removed, and
standard operational policies and procedures have been
implemented. The Fire Authority is now set to manage its own
financial responsibilities and is now functioning in almost
every aspect as one department.
Currently, all employees remain employed by their respective
agencies. Under those employment arrangements, employees of the
City are enrolled in a California Public Employees Retirement
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System (CalPERS) retirement plan and employees of the Lake are
enrolled in a San Bernardino County Employees Retirement
Association (SBCERA) retirement plan.
According to the author, "The only issue standing in the way of
full consolidation is the matter of pension alignment.
Currently, if the Fire Authority decides to transfer one set of
employees to a different pension system, it would incur costly
withdrawal liabilities."
The author concludes that AB 868 would add San Bernardino County
to provisions of existing law that will permit, but not mandate,
the transfer of City employees from CalPERS to SBCERA without
triggering withdrawal liability.
AB 2819 (Epple), Chapter 419, Statutes of 1990, enabled CalPERS
and the Los Angeles County Employees' Retirement Association
(LACERA) to agree to transfer the service credit and member
contributions from CalPERS to the LACERA for local safety
members who are transferred from a CalPERS covered city to Los
Angeles County when a city transfers its fire or police function
to the county.
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AB 355 (Morrissey), Chapter 832, Statutes of 1997, allowed
CalPERS and the Orange County Employees Retirement System to
agree to transfer the service credit and employee and employer
assets to the Orange County Employees Retirement System on
behalf of local public agency and state employees who are
transferred to Orange County Employees Retirement System covered
employment.
AB 1683 (PER&SS Committee), Chapter 793, Statutes of 2001, among
its several provisions, allowed CalPERS and the Kern County
Employees' Retirement Assocaition to agree to transfer the
service credit and employee and employer assets to the Kern
County Retirement System on behalf of local public agency and
state employees who are transferred to Kern County Retirement
System covered employment.
REGISTERED SUPPORT / OPPOSITION:
AB 868
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Support
Big Bear Fire Authority (Sponsor)
Big Bear City Community Services District
Big Bear Lake Fire Protection District
Opposition
None on file.
Analysis Prepared by:Karon Green / P.E.,R., & S.S. / (916)
319-3957