BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1162  


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          Date of Hearing:  June 29, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1162  
          (Berryhill) - As Amended June 15, 2016


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          |Policy       |Public Employees,              |Vote:|6 - 0        |
          |Committee:   |Retirement/Soc Sec             |     |             |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill allows the Mammoth Lake Fire District (MLFD) to  
          request that California Public Employees' Retirement System  
          (CalPERS) transfer all or a portion of available excess assets  
          from MLFD's miscellaneous employee plan to its safety employee  
          plan in order to pay unfunded accrued actuarial obligations in  
          the safety plan. This bill also specifies that the amount that  
          may be transferred cannot exceed the difference between the  
          market value of assets attributable to the MLFD's miscellaneous  
          plan and 150% of the amount of which is the actuarial equivalent  
          of the amount the system would be obligated to pay for benefits  
          for service attributed to the miscellaneous plan if MLFD were to  
          terminate its contract with CalPERS. 








                                                                    SB 1162  


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          FISCAL EFFECT:


          Negligible state costs. 


          COMMENTS:


          1)Background on MLFD retirement plan funding. The MLFD  
            miscellaneous employee plan is currently overfunded while the  
            safety employee plan remains underfunded. As of 2014, the MLFD  
            miscellaneous plan was 302% funded, and the MLFD currently has  
            only one miscellaneous employee. In order to free employer  
            monies in the miscellaneous plan, MLFD's only current option  
            is to terminate the miscellaneous plan and terminate the  
            employment of the miscellaneous employee. This action would  
            require CalPERS to reserve enough money in the terminated  
            agency fund to cover the service of the terminated employee  
            and revert excess monies back to the employer. 



          2)Purpose. According to the author, SB 1162 will allow MLFD to  
            redistribute excess assets to portions of their contract that  
            are in the most financial stress, which could help prevent  
            layoffs and additional financial hardship.  



          Analysis Prepared by:Luke Reidenbach / APPR. / (916)  
          319-2081













                                                                    SB 1162  


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