BILL ANALYSIS Ó SENATE COMMITTEE ON PUBLIC EMPLOYMENT AND RETIREMENT Dr. Richard Pan, Chair 2015 - 2016 Regular Bill No: SB 294 Hearing Date: 1/14/16 ----------------------------------------------------------------- |Author: |Pan | |-----------+-----------------------------------------------------| |Version: |1/04/16 As amended | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Pamela Schneider | | | | ----------------------------------------------------------------- Subject: Public employment: military service: return to state service SOURCE: California Association of Highway Patrol CAL FIRE, Local 2881 Peace Officers Research Association of California DIGEST: This bill requires that CalPERS employers inform returning veterans of their rights to receive CalPERS credit for their periods of active military service, and requires employers to provide veterans with the forms necessary to claim the service credit. CalPERS must create a service credit form that clearly states this is an employer-paid benefit. Employers must also inform new employees who are veterans of their rights to purchase CalPERS service credit for their military service performed prior to CalPERS membership. ANALYSIS: Existing law: 1)Requires that a public employee in the CalPERS retirement system who takes a leave of absence to perform active military duty is entitled to certain rights upon return to public employment, including the right to receive salary adjustments, retirement contributions, and applicable service credit in the retirement system as if the individual had been working in his SB 294 (Pan) Page 2 of ? or her job during the period of active military duty, as specified. 2)Requires the returning veteran, in order to receive the retirement service credit, to file an application form with CalPERS. 3)Requires a CalPERS employer to pay the entire cost of the applicable service credit for a returning veteran employee, as specified, once the employee has filed the appropriate form. 4)Allows a veteran who performed active military duty prior to membership in CalPERS to purchase that military service in the retirement system as additional service credit, as specified. This type of service credit purchase is paid for entirely by the employee with no cost to the employer. This bill: 1)Requires CalPERS to create a separate and unique form for returning public employee veterans that clearly states that the veteran has no obligation to pay any portion of the employer cost of applicable service credit during the eligible period of military duty. 2)Requires CalPERS employers to inform returning veterans of their rights to receive service credit in CalPERS for their periods of military service and requires employers to provide veterans with the appropriate CalPERS form to receive the service credit. 3)Requires the state employer, on or before March 31, 2017, to inform all state employees in a letter or electronic transmission of the rights of returning veteran employees to receive service credit in CalPERS for their military service at no cost to the returning veterans. 4)Requires all CalPERS employers, upon hiring a veteran, to inform the veteran of his or her right to purchase service credit in CalPERS for his or her military duty prior to employment and membership in CalPERS. Background According to the author: SB 294 (Pan) Page 3 of ? Existing law provides that a CalPERS member who goes on active military service is entitled to return to his or her job following discharge from that active service. In addition, the returning veteran is entitled to receive an employer contribution to CalPERS for credit in CalPERS during the time of the active military service as if the member had remained in his or her CalPERS-covered employment during that time. This benefit is paid for entirely by the employer and costs nothing to the returning veteran. However, in order to receive this benefit, the veteran must complete a service credit purchase form for CalPERS, and this requirement has resulted in several problems. First, some veterans do not realize that they are entitled to the benefit, or they think the benefit is automatic. If the employer or another individual does not inform the returning veteran of the benefit and how to receive it, he or she may not be aware that an action is required on the veteran's part to receive the benefit. Second, the form CalPERS uses for this benefit is confusing. It is currently combined with another option to allow public employees to purchase military service credit for military service preformed prior to being a public employee. This type of service credit is costly and some veterans become confused and forgo applying for the service credit they are entitled to at no charge because they mistakenly believe it to be too expensive. Some veterans go years without applying for this no-cost benefit, or may never apply. Without an application, CalPERS cannot credit service and does not have a record of the applicable military service. Veterans and their survivors, in some cases, may be losing valuable benefits. Prior/Related Legislation SB 221 (Jackson, Chapter 794, Statutes of 2015) allows a state employee who is a disabled military veteran, in his or her first year of employment, to receive up to 96 hours of additional sick leave for the purpose of undergoing medical treatment for his or her military service-connected disability. SB 294 (Pan) Page 4 of ? AB 372 (Eggman, Chapter 75, Statutes of 2013) requires that whenever any veteran, widow or widower of a veteran, or spouse of a 100% disabled veteran achieves a passing score on an entrance examination for state employment, he or she will be placed in the top rank of the resulting hiring eligibility list. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No SUPPORT: CAL FIRE, Local 2881 (co-source) California Association of Highway Patrolmen (co-source) Peace Officers Research Association of California (co-source) California Correctional Peace Officers Association California Professional Firefighters Organization of SMUD Employees San Diego County Court Employees Association San Luis Obispo County Employees Association OPPOSITION: None received ARGUMENTS IN SUPPORT: As stated by sponsors: Current law allows for public employees who have taken a leave of absence for active military duty to return to their previous jobs and receive any salary increases and /or promotions they would have received while on duty. In addition, they are also entitled to fully employer-paid contributions to CalPERS for applicable service credit. In order to receive this benefit, proper paperwork must be filed with CalPERS. Unfortunately, most public employees are ill-informed or misinformed on their rights and do not apply for the benefit. According to the California Professional Firefighters: Firefighters in California proudly serve their communities every day. Many serve their country as reservists or, SB 294 (Pan) Page 5 of ? prior to becoming a firefighter, were enlisted as active duty members in various branches of the military. SB 294 helps to ensure that veterans who return to their public service jobs after taking leave to perform active military service can in fact receive the service credit that they are entitled to in the Public Employees' Retirement System (CalPERS). Further, this bill requires the state and school employers that hire veterans to inform them of their rights to purchase service credit in CalPERS for their period of military service prior to employment.