BILL ANALYSIS Ó
AB 2376
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CONCURRENCE IN SENATE AMENDMENTS
AB
2376 (Committee on Public Employees, et al.)
As Amended June 20, 2016
Majority vote
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|ASSEMBLY: | 78-0 |(May 12, 2016) |SENATE: | 37-0 |(June 30, 2016) |
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Original Committee Reference: P.E.,R., & S.S.
SUMMARY: Makes various technical and minor policy changes to
the County Employees' Retirement Law of 1937 ('37 Act).
Specifically, this bill:
1)Revises the definition of the Los Angeles County Employees
Retirement Association's (LACERA's) Retirement Plan D to mean
the contributory retirement plan otherwise available to
members of the system between June 1, 1979, and December 31,
2012.
2)Clarifies the applicability of reciprocal retirement benefits
in LACERA's noncontributory defined benefit plan know as Plan
E and states that this clarification is declaratory of
existing law.
3)Authorizes the alternate retirement member of the board of
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retirement of a '37 Act county to vote as a member of the
board if the 8th member of the board is present and both the
2nd and 3rd, or both the 2nd and 7th, or both the 3rd and the
7th members are absent.
4)Authorizes '37 Act counties to collect specified member
information from the member's employer electronically rather
than from the member in a sworn statement.
The Senate amendments delete a provision which specified that
the retirement allowance calculation for safety members
purchasing qualified service credit for prior service in active
law enforcement, active fire suppression or military service
during war or national emergency, be based on the safety benefit
formula that was in effect on the date of the member's initial
safety membership.
EXISTING LAW:
1)Establishes the '37 Act, which provides for retirement systems
for county and district employees in those counties adopting
its provisions. Currently 20 counties operate retirement
systems under the '37 Act.
2)Sets forth the composition of the nine-member board of
retirement for any '37 Act county retirement system as
follows:
a) The county treasurer;
b) Two general (non-safety) members elected by the general
members of the system (2nd and 3rd members);
c) Four members who are qualified electors not in any way
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connected with county government, except one may be a
county supervisor, appointed by the board of supervisors
(4th, 5th, 6th, and 9th members);
d) One safety member elected by the safety members of the
system (7th member); and,
e) One retired member elected by the retired members of the
system (8th member).
3)Provides for alternates for all retirement board members
except those appointed by the board of supervisors (4th, 5th,
6th, and 9th members).
FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS:
1)LACERA currently has six plan tiers for its general members:
Plans A, B, C, D, E, and G. Plan G was established to be
effective on January 1, 2013 to comply with the requirements
of the Public Employees' Pension Reform Act (PEPRA) and is the
current plan in which new members are enrolled. Before the
enactment of PEPRA, new members had a choice between enrolling
in Plan D or Plan E, both of which are no longer available to
new members. However, existing members of those plans are
eligible to prospectively transfer from Plan D to Plan E or
vice versa.
For purposes of the prospective plan transfer, Plan D is
currently defined as "the contributory retirement plan
otherwise available to new members of the retirement system on
the transfer date." This definition now conflicts with Plan
G's status as the contributory retirement plan that is
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available to new members. This bill changes the definition of
Plan D, so that it is no longer designated as the contributory
plan otherwise available to new members of the retirement
system, thereby removing the conflict between Plan D and Plan
G.
In order to be eligible for reciprocal retirement benefits, a
member must have a period between memberships in each system
that does not exceed six months. There is, however, an
exception to the rule relating to concurrent retirement. If a
member is eligible to retire at age 50 under a contributory
'37 Act plan but is unable to retire concurrently under a
reciprocal retirement system, she is entitled to have her
final compensation and service credit determined as if she had
retired concurrently under the reciprocal retirement system.
2)When LACERA's noncontributory Plan E was established in 1982,
its provisions provided for reciprocal benefits to be
applicable to the plan. Only those provisions dealing with
disability retirement, death benefits, and deposit of member
contributions were excluded. Therefore, a noncontributory
Plan E member who moves from one retirement system to another
would be in the same position as a contributory member with
respect to the exception to concurrent retirement. However,
the statutory provision for the exception does not specify
those members eligible to retire under noncontributory Plan E,
thereby creating an ambiguity in the statute.
The bill would remove the ambiguity between the provisions of
noncontributory Plan E, which provide for the member to
benefit under the exception to concurrent retirement, and the
provision for the exception, which does not expressly state
that noncontributory members are included. It would clarify
that noncontributory Plan E members are also eligible for the
exception.
3)Existing law requires '37 Act counties to collect a member's
date of birth, nature and duration of employment with the
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county, compensation received and other required information
the member in a sworn statement. Some counties are currently
receiving this information automatically via electronic
payroll feed from the county. In this situation, continuing
to require sworn statements from employees just creates
compliance issues and inefficiencies.
By allowing counties to collect this information from the
employer electronically, this bill will make administration of
the benefit more efficient and bring the current statute in
alignment with modern-day technology.
Analysis Prepared by:
Karon Green / P.E.,R., & S.S. / (916) 319-3957
FN:
0003554