Amended in Senate May 27, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1291

Introduced by Assembly Member Williams

February 27, 2015

An act to amend Sections begin delete 31468 and 31522.5 of end delete begin insert 31468, 31557.3, and 31580.2 of, and to add Section 31522.10 to, end insert the Government Code, relating to retirement.

LEGISLATIVE COUNSEL’S DIGEST

AB 1291, as amended, Williams. The County Employees Retirement Law of 1937.

Existing law, the County Employees Retirement Law of 1937, authorizes counties to establish retirement systems, as specified, in order to provide pension benefits to county, city, and district employees. Existing law defines a district for these purposes and includes specified county retirement systems within the definition.

This bill would include the retirement system established under these provisions in the County of Ventura within the definition of district.

The County Employees Retirement Law of 1937 also authorizes the board of retirement, in a county in which the board has appointed administrative, technical, and clerical staff personnel, to also appoint other administrators, managers, and legal counsel, as specified. These appointees are not classified as county employees and are therefor not subject to the civil service system, but are employees of the retirement system subject to the terms of employment determined by the board of retirement. begin delete Existing law authorizes the board of retirement in San Bernadino County to adopt, by resolution, those provisions classifying specified personnel as employees of the retirement system. end delete

This bill would begin delete additionally end delete authorize the board of retirement of Ventura County to begin delete adopt those provisions by resolution. end delete begin insert appoint a retirement administrator, chief financial officer end insert begin insert , end insert begin insert chief operations officer, end insert begin insert chief investment officer, and general counsel end insert begin insert . The bill would require these appointees to be employees of the retirement system, and not of the county, and subject to terms and conditions of employment established by the board of retirement. The bill would provide that the compensation of these appointees is an expense of the administration of the retirement system. The bill would grant the board of retirement and the board of supervisors authority to enter into agreements necessary to implement its provisions and would except the retirement system from specified requirements relating to retirement administrators. The bill would provide that these provisions apply to the Ventura County retirement system only upon adoption of a specified resolution by the board of retirement. The bill would make conforming changes. end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 31468 of the Government Code is
amended to read:

31468.  

(a) “District” means a district, formed under the laws
of the state, located wholly or partially within the county other
than a school district.

(b) “District” also includes any institution operated by two or
more counties, in one of which there has been adopted an ordinance
placing this chapter in operation.

(c) “District” also includes any organization or association
authorized by Chapter 26 of the Statutes of 1935, as amended by
Chapter 30 of the Statutes of 1941, or by Section 50024, which
organization or association is maintained and supported entirely
from funds derived from counties, and the board of any retirement
system is authorized to receive the officers and employees of that
organization or association into the retirement system managed
by the board.

(d) “District” also includes, but is not limited to, any sanitary
district formed under Part 1 (commencing with Section 6400) of
Division 6 of the Health and Safety Code.

(e) “District” also includes any city, public authority, public
agency, and any other political subdivision or public corporation
formed or created under the constitution or laws of this state and
located or having jurisdiction wholly or partially within the county.

(f) “District” also includes any nonprofit corporation or
association conducting an agricultural fair for the county pursuant
to a contract between the corporation or association and the board
of supervisors under the authority of Section 25905.

(g) “District” also includes the Regents of the University of
California, but with respect only to employees who were employees
of a county in a county hospital, who became university employees
pursuant to an agreement for transfer to the regents of a county
hospital or of the obligation to provide professional medical
services at a county hospital, and who under that agreement had
the right and did elect to continue membership in the county’s
retirement system established under this chapter.

(h) “District” also includes the South Coast Air Quality
Management District, a new public agency created on February
1, 1977, pursuant to Chapter 5.5 (commencing with Section 40400)
of Part 3 of Division 26 of the Health and Safety Code.

(1) Employees of the South Coast Air Quality Management
District shall be deemed to be employees of a new public agency
occupying new positions on February 1, 1977. On that date, those
new positions are deemed not to have been covered by any
retirement system.

(2) No retirement system coverage may be effected for an
employee of the South Coast Air Quality Management District
who commenced employment with the district during the period
commencing on February 1, 1977, and ending on December 31,
1978, unless and until the employee shall have elected whether to
become a member of the retirement association established in
accordance with this chapter for employees of Los Angeles County
or the retirement association established in accordance with this
chapter for employees of San Bernardino County. The election
shall occur before January 1, 1980. Any employee who fails to
make the election provided for herein shall be deemed to have
elected to become a member of the retirement association
established in accordance with this chapter for the County of Los
Angeles.

(3) The South Coast Air Quality Management District shall
make application to the retirement associations established in
accordance with this chapter for employees of Los Angeles County
and San Bernardino County for coverage of employees of the South
Coast Air Quality Management District.

(4) An employee of the South Coast Air Quality Management
District who commenced employment with the district during the
period commencing on February 1, 1977, and ending on December
31, 1978, and who has not terminated employment before January
1, 1980, shall be covered by the retirement association elected by
the employee pursuant to paragraph (2). That coverage shall be
effected no later than the first day of the first month following the
date of the election provided for in paragraph (2).

(5) Each electing employee shall receive credit for all service
with the South Coast Air Quality Management District. However,
the elected retirement association may require, as a prerequisite
to granting that credit, the payment of an appropriate sum of money
or the transfer of funds from another retirement association in an
amount determined by an enrolled actuary and approved by the
elected retirement association’s board. The amount to be paid shall
include all administrative and actuarial costs of making that
determination. The amount to be paid shall be shared by the South
Coast Air Quality Management District and the employee. The
share to be paid by the employee shall be determined by good faith
bargaining between the district and the recognized employee
organization, but in no event shall the employee be required to
contribute more than 25 percent of the total amount required to be
paid. The elected retirement association’s board may not grant that
credit for that prior service unless the request for that credit is
made to, and the required payment deposited with, the elected
retirement association’s board no earlier than January 1, 1980, and
no later than June 30, 1980. The foregoing shall have no effect on
any employee’s rights to reciprocal benefits under Article 15
(commencing with Section 31830).

(6) An employee of the South Coast Air Quality Management
District who commenced employment with the district after
December 31, 1978, shall be covered by the retirement association
established in accordance with this chapter for employees of San
Bernardino County. That coverage shall be effected as of the first
day of the first month following the employee’s commencement
date.

(7) Notwithstanding paragraphs (2) and (4) above, employees
of the South Coast Air Quality Management District who were
employed between February 1, 1977, and December 31, 1978, and
who terminate their employment between February 1, 1977, and
January 1, 1980, shall be deemed to be members of the retirement
association established in accordance with this chapter for the
employees of Los Angeles County commencing on the date of
their employment with the South Coast Air Quality Management
District.

(i) “District” also includes any nonprofit corporation that
operates one or more museums within a county of the 15th class,
as described by Sections 28020 and 28036 of the Government
Code, as amended by Chapter 1204 of the Statutes of 1971,
pursuant to a contract between the corporation and the board of
supervisors of the county, and that has entered into an agreement
with the board and the county setting forth the terms and conditions
of the corporation’s inclusion in the county’s retirement system.

(j) “District” also includes any economic development
association funded in whole or in part by a county of the 15th class,
as described by Sections 28020 and 28036 of the Government
Code, as amended by Chapter 1204 of the Statutes of 1971, and
that has entered into an agreement with the board of supervisors
and the county setting forth the terms and conditions of the
association’s inclusion in the county’s retirement system.

(k) “District” also includes any special commission established
in the Counties of Tulare and San Joaquin as described by Section
14087.31 of the Welfare and Institutions Code, pursuant to a
contract between the special commission and the county setting
forth the terms and conditions of the special commission’s
inclusion in the county’s retirement system with the approval of
the board of supervisors and the board of retirement.

(l) (1) “District” also includes the retirement system established
under this chapter in Orange County.

(2) “District” also includes the retirement system established
under this chapter in San Bernardino County at such time as the
board of retirement, by resolution, makes this section applicable
in that county.

(3) “District” also includes the retirement system established
under this chapter in Contra Costa County.

(4) “District” also includes the retirement system established
under this chapter in Ventura County.

(m) “District” also includes the Kern County Hospital Authority,
a public agency that is a local unit of government established
pursuant to Chapter 5.5 (commencing with Section 101852) of
Part 4 of Division 101 of the Health and Safety Code.

begin delete

SEC. 2.  

Section 31522.5 of the Government Code is amended
to read:

31522.5.  

(a) In a county in which the board of retirement has
appointed personnel pursuant to Section 31522.1, the board of
retirement may appoint an administrator, an assistant administrator,
a chief investment officer, senior management employees next in
line of authority to the chief investment officer, subordinate
administrators, senior management employees next in line of
authority to subordinate administrators, and legal counsel.

(b) Notwithstanding any other provision of law, the personnel
appointed pursuant to this section may not be county employees
but shall be employees of the retirement system, subject to terms
and conditions of employment established by the board of
retirement. Except as specifically provided in this subdivision, all
other personnel shall be county employees for purposes of the
county’s employee relations resolution, or equivalent local rules,
and the terms and conditions of employment established by the
board of supervisors for county employees, including those set
forth in a memorandum of understanding.

(c) Except as otherwise provided by Sections 31529.9 and
31596.1, the compensation of personnel appointed pursuant to this
section shall be an expense of administration of the retirement
system, pursuant to Section 31580.2.

(d) The board of retirement and board of supervisors may enter
into any agreements as may be necessary and appropriate to carry
out the provisions of this section.

(e) Section 31522.2 is not applicable to any retirement system
that elects to appoint personnel pursuant to this section.

(f) This section shall apply only in Orange County.

(g) This section shall apply to the retirement system established
under this chapter in San Bernardino County if the board of
retirement, by resolution, makes this section applicable in that
county.

(h) This section shall apply to the retirement system established
under this chapter in Ventura County if the board of retirement,
by resolution, makes this section applicable in that county.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 31522.10 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 31522.10. end insert   

(a) In a county in which the board of retirement
has appointed personnel pursuant to Section 31522.1, the board
of retirement may appoint a retirement administrator, chief
financial officer, chief operations officer, chief investment officer,
and general counsel.

(b) Notwithstanding any other law, the personnel appointed
pursuant to this section shall not be county employees but shall
be employees of the retirement system, subject to terms and
conditions of employment established by the board of retirement.
Except as specifically provided in this subdivision, all other
personnel shall be county employees for purposes of the county’s
employee relations resolution, or equivalent local rules, and the
terms and conditions of employment established by the board of
supervisors for county employees, including those set forth in a
memorandum of understanding.

(c) Except as otherwise provided by Sections 31529.9 and
31596.1, the compensation of personnel appointed pursuant to
this section shall be an expense of administration of the retirement
system, pursuant to Section 31580.2.

(d) The board of retirement and board of supervisors may enter
into any agreements as may be necessary and appropriate to carry
out the provisions of this section.

(e) Section 31522.2 is not applicable to a retirement system that
elects to appoint personnel pursuant to this section.

(f) This section shall apply only to the retirement system
established under this chapter in Ventura County at such time as
the board of retirement, by resolution, makes this section
applicable in that county.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 31557.3 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

31557.3.  

On the date a district, as defined in subdivision (l) of
Section 31468, is included in the retirement system, any personnel
appointed pursuant to Sections 31522.5, 31522.9, begin insert 31522.10, end insert and
31529.9 who had previously been in county service shall continue
to be members of the system without interruption in service or loss
of credit. Thereafter, each person entering employment with the
district shall become a member of the system on the first day of
the calendar month following his or her entrance into service.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 31580.2 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

31580.2.  

(a) In counties in which the board of retirement, or
the board of retirement and the board of investment, have appointed
personnel pursuant to Section 31522.1, 31522.5, 31522.7, begin delete or
31522.9, end delete begin insert 31522.9, or 31522.10, end insert the respective board or boards
shall annually adopt a budget covering the entire expense of
administration of the retirement system which expense shall be
charged against the earnings of the retirement fund. The expense
incurred in any year may not exceed the greater of either of the
following:

(1) Twenty-one hundredths of 1 percent of the accrued actuarial
liability of the retirement system.

(2) Two million dollars ($2,000,000), as adjusted annually by
the amount of the annual cost-of-living adjustment computed in
accordance with Article 16.5 (commencing with Section 31870).

(b) Expenditures for computer software, computer hardware,
and computer technology consulting services in support of these
computer products shall not be considered a cost of administration
of the retirement system for purposes of this section.