BILL ANALYSIS Ó
AB 2375
Page 1
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT, AND SOCIAL
SECURITY
Rob Bonta, Chair
AB 2375
(Committee on Public Employees, Retirement, and Social Security)
- As Introduced February 18, 2016
SUBJECT: Public Employees' Retirement System: omnibus bill
SUMMARY: Makes various technical and non-controversial changes
to various sections of the Government Code governing the
California Public Employees' Retirement System (CalPERS) to
maintain and ensure effective administration of the system.
Specifically, this bill:
1)Clarifies that the final compensation of a CalPERS member
applying for concurrent retirement using their final
compensation earnable under the University of California
Retirement System or a 1937 Act County Retirement System is
based on their highest annual average compensation during any
consecutive 12 or 36 month period.
2)Removes language that allows a member to designate his or her
highest final compensation period for purposes of calculating
retirement benefits because the my|CalPERS system now
automatically searches payroll records for a member's highest
AB 2375
Page 2
final compensation period when calculating retirement
benefits.
3)Clarifies the interest payment owed to CalPERS when
contracting agencies do not pay their contributions in a
timely manner, by replacing the interest charged for amounts
due and unpaid at the actuarial interest rate, with the higher
of a 10% interest rate or investment return rate for the prior
fiscal year. In addition, it clarifies that the penalty
assessment for a contracting agency more than three months
delinquent is in addition to the interest charged to
contracting agencies until their payment is received.
4)Specifies that CalPERS may take action to reduce member
benefits only after their employers' plan has been placed in
the Terminated Agency Pool and the employer fails to remit the
contributions necessary to fully fund the liabilities of the
plan.
5)Specifies a conversion ratio in statute to clarify that one
day of unused sick leave or educational leave is equivalent to
an eight hour day for purposes of making the necessary
conversion to retirement service credit.
6)Changes the interest rate to be paid on delayed payments of
death benefits from 6% or the net earnings rate in effect at
the time of payment minus expenses, whichever is greater, to a
fixed rate of 7% per annum simple (non-compounding) interest,
to ensure consistency in payment of death benefits and reduce
CalPERS administrative costs.
AB 2375
Page 3
7)Provides survivor continuance to same-sex married couples who
never entered into a registered domestic partnership and who
retired before it was legally possible to marry their same-sex
spouse so long as they sign an affidavit that they would have
met the conditions had same-sex marriage been legal at the
time of their retirement.
FISCAL EFFECT: Unknown.
COMMENTS: CalPERS annually sponsors "housekeeping" legislation
to provide technical and non-controversial amendments to
portions of the Government Code that CalPERS administers.
REGISTERED SUPPORT / OPPOSITION:
Support
California Public Employees' Retirement System (Sponsor)
Opposition
None on file
AB 2375
Page 4
Analysis Prepared by:Karon Green / P.E.,R., & S.S. / (916)
319-3957