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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