BILL ANALYSIS Ó
SB 1203
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Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1203
(Hertzberg) - As Amended April 13, 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 authorizes a joint powers authority (JPA) formed on or
after January 1, 2013, to provide employees who transfer to the
JPA the same defined benefit plan or formula that they received
from their respective employer prior to the JPA's formation
SB 1203
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rather than the benefit required under the California Public
Employees' Pension Reform Act of 2013 (PEPRA).
FISCAL EFFECT:
One-time special fund costs to the California Public Employees'
Retirement System (CalPERS) of approximately $200,000 for
implementation and systems changes.
COMMENTS:
1)JPA and PEPRA. A JPA is the authority created by an agreement
between multiple public agencies to exercise powers common to
each of them for the purpose of accomplishing specific common
goals. A JPA can be used by agencies to share regional
responsibilities, such as fire services.
Under PEPRA, new public agencies formed after January 1, 2013
must use the new pension formulas for their employees. As a
result, current employees cannot be transferred into a JPA
without losing their benefits, even if no lapse in public
service or change in duties and responsibilities occur.
2)Purpose. This bill is intended to allow local agencies to
leverage the cost benefits and efficiency advantages JPAs can
offer without prejudice to existing employee pensions.
3)Related legislation. SB 24 (Hill) of 2016, currently in this
committee, authorizes a JPA formed by the Cities of Belmont,
Foster City, and San Mateo to provide the JPA employees a
defined benefit plan or formula that those employees received
as classic CalPERS members from their employment with the
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cities.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081