BILL ANALYSIS Ó SB 1162 Page 1 Date of Hearing: June 29, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 1162 (Berryhill) - As Amended June 15, 2016 ----------------------------------------------------------------- |Policy |Public Employees, |Vote:|6 - 0 | |Committee: |Retirement/Soc Sec | | | | | | | | | | | | | ----------------------------------------------------------------- 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 Page 2 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 Page 3