BILL ANALYSIS Ó
SENATE COMMITTEE ON
PUBLIC EMPLOYMENT AND RETIREMENT
Dr. Richard Pan, Chair
2015 - 2016 Regular
Bill No: AB 868 Hearing Date: 6/08/15
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|Author: |Obernolte |
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|Version: |2/26/15 As introduced |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Glenn Miles |
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Subject: Public Employees' Retirement System: contracting
agencies: transfer of membership
SOURCE: Big Bear Fire Authority
ASSEMBLY VOTES:
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|Assembly Floor: |77 - 0 |
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|Assembly Appropriations |17 - 0 |
|Committee: | |
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|Assembly Public Employees, |7 - 0 |
|Retirement/Soc Sec Committee: | |
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DIGEST: This bill authorizes the California Public Employees'
Retirement System (CalPERS) and the San Bernardino County
Employees Retirement System (SBCERS) to agree to transfer the
service credit and employee and employer assets from CalPERS to
SBCERS on behalf of local public agency and state employees who
are transferred to SBCERS covered employment.
ANALYSIS:
Existing law:
AB 868 (Obernolte) Page 2 of ?
1)Authorizes CalPERS and a county retirement system established
under the County Employees Retirement Law of 1937 ('37 Act)
for the counties of Los Angeles, Kern, or Orange to make an
agreement to transfer assets and service credit to the '37 Act
system from CalPERS for CalPERS members whose public agency or
state employer transfers their firefighting or law enforcement
functions and positions to the county and terminates its
contract with CalPERS governing the transferred members.
2)Provides that the agreement between CalPERS and the '37 Act
system shall contain provisions necessary to protect CalPERS,
including provisions for determination of the amount, time,
and manner of transfer of cash or securities, or both, to be
transferred to the county system representing the actuarial
value of the interests in the retirement fund of the public
agency or the state and the transferred employees by reason of
accumulated contributions credited to that public agency or
the state and the transferred employees.
3)Requires that all liability of CalPERS with respect to the
transferred members under the agreement shall cease and shall
become the liability of the respective '37 Act system as of
the date of transfer specified in the agreement. Liability of
the '37 Act system shall be for payment of benefits to
transferred employees in accordance with '37 Act requirements.
4)Provides that the transferred members shall become members of
the '37 Act system upon entering county service and shall be
entitled to service credit in the county retirement system for
the service for which the person was entitled to credit in
CalPERS at the time of cessation of employment by the public
agency or the state, without necessity of payment of any
additional contributions in respect to that service, as
specified.
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.
2)Permits such an agreement for safety employees of a public
AB 868 (Obernolte) Page 3 of ?
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 SBCERA.
3)Specifies that the agreement must provide for the termination
of participation in CalPERS for the public agency's
transferring employees.
4)Specifies that public agencies must have contracted with
CalPERS for at least five years to be eligible.
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
rights and limitations as if they had been members of the
county retirement system during their membership in CalPERS.
Background
According to the bill's sponsor,
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.
AB 868 (Obernolte) Page 4 of ?
Currently, all employees remain employed by their
respective agencies. Under those employment arrangements,
employees of the City are enrolled in a CalPERS retirement
plan and employees of the Lake are enrolled in a SBCERA
retirement plan. Under current law, however, if the Fire
Authority chooses to contract with SBCERA, the City safety
employees (currently in CalPERS) cannot transfer their
service credit to SBCERA without legislative approval.
Current law allows for a CalPERS safety employee's service
credit to be transferred to a county retirement system in cases
where firefighting or law enforcement functions are transferred
from an agency participating in CalPERS to an agency
participating in a county retirement system. Currently,
however, this is only applicable to the counties of Los Angeles,
Kern, and Orange. AB 868 would add San Bernardino County to
this group.
Prior/Related Legislation
AB 1683 (Assembly PER&SS Committee, Chapter 11, Statutes of
2001) added Kern County to the list of counties eligible to
transfer safety/firefighter members from CalPERS to their '37
Act county system.
AB 355 (Morrissey, Chapter 832, Statutes of 1997) provided for
the transfer of assets and liabilities from CalPERS to the '37
Act system in Orange County related to the 1980 shift of
firefighting services previously provided by the State (CDF) to
Orange County.
AB 2819 (Epple, Chapter 419, Statutes of 1990) authorized the
transfer, from CalPERS to the '37 Act system in Los Angeles, of
assets and liabilities associated with employees of numerous
cities that had previously contracted with CalPERS but then
transferred their fire services to LA County.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
AB 868 (Obernolte) Page 5 of ?
Big Bear Fire Authority (source)
Big Bear City Community Services District
Big Bear Lake Fire Protection District
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: According to the sponsor, the joint
powers agency created by City and Lake would consolidate City
employees who are covered in CalPERS with Lake employees who are
covered in SBCERA. "The Fire Authority is now set to manage its
own financial responsibilities and is now functioning in almost
every aspect as one department." However, "under current law,
City safety employees cannot transfer their CalPERS service
credit to the new system without legislative approval." AB 868
would authorize such a transfer and enable the Big Bear City and
Lake fire agencies to complete their consolidation into the Fire
Authority.