BILL ANALYSIS Ó
AB 2375
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
2375 (Committee on Public Employees, Retirement, and Social
Security)
As Amended August 8, 2016
Majority vote
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|ASSEMBLY: |76-0 |(May 19, 2016) |SENATE: |39-0 |(August 23, |
| | | | | |2016) |
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Original Committee Reference: P.E.,R., & S.S.
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)Corrects an erroneous statutory reference in the Education
Code to the correct section of the Government Code authorizing
the CalPERS reduced workload program for California State
University (CSU), school district, and community college
members and clarifies and makes consistent the eligibility
requirements for participation in the program.
2)Eliminates the requirement that actuaries be enrolled by the
Joint Board of the United States Department of the Treasury
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and the Department of Labor and instead requires that
actuaries performing duties required, as specified, must have
attained the designation of Associate or Fellow of the Society
of Actuaries and have demonstrated experience with public
sector clients.
3)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.
4)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
final compensation period when calculating retirement
benefits.
5)Eliminates the requirement that the California Actuarial
Advisory Panel (CAAP) Chair make a presentation of the annual
CAAP report to a publicly noticed joint hearing of the Senate
Committee on Public Employment and Retirement and the Assembly
Committee on Public Employees, Retirement, and Social Security
within 30 days of receiving the report from the CalPERS board
and instead requires the presentation be made at the beginning
of each legislative session.
6)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.
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7)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.
8)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.
9)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.
10)Requires the employer of a deceased firefighter or peace
officer member when notifying CalPERS of the member's death to
also provide any updated contact information of the surviving
spouse or family member if that spouse or family member may be
eligible for enrollment in a CalPERS health benefit plan.
The Senate amendments delete provisions related to unused sick
leave and purchasing power protection for state and school
members.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: CalPERS annually sponsors "housekeeping" legislation
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to provide technical and non-controversial amendments to
portions of the Government Code that CalPERS administers.
Analysis Prepared by:
Karon Green / P.E.,R., & S.S. / (916) 319-3957
FN:
0004761