BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2711
                                                                  Page  1

          Date of Hearing:   April 14, 2004

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                   Judy Chu, Chair

                 AB 2711 (Leno) - As Introduced:  February 20, 2004 

          Policy Committee:                               
          P.E.R.&S.S.Vote:9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY
           
          This bill allows CalPERS and the City and County of San  
          Francisco Retirement System (SFERS) to enter into an agreement  
          to transfer assets and liabilities of certain employees.  
          (Existing law allows CalPERS to enter into these agreements with  
          specified counties under the 1937 Act County Retirement System,  
          but not with the SFERS.)
           
          FISCAL EFFECT  

          CalPERS administrative costs would be offset by fees.

           COMMENTS  

                    1)         Background  .  In 1996, the San Francisco  
                     Airport Police, who had been members of CalPERS, were  
                     transferred to the San Francisco Police Department,  
                     who are members of SFERS. At that time, both the San  
                     Francisco Police Department and the San Francisco  
                     Airport Police provided the 2 percent at age 50  
                     formula. For retirement purposes, the members were  
                     transferred prospectively, and their prior service  
                     and contributions as airport police remained in  
                     CalPERS.

            Recently, the City and County of San Francisco agreed to  
            increase the San Francisco police retirement formula to 3  
            percent at age 55 for all service, both prior and future.  
            However, the former San Francisco airport police employees  
            still have their prior service with CalPERS at the 2 percent  
            at age 50 formula, so their prior service has not been  








                                                                  AB 2711
                                                                  Page  2

            increased to the higher formula along with the other officers.  


            Although San Francisco could contract with CalPERS to increase  
            the retirement formula on the prior service of the former  
            airport police, they would have to increase the formula for  
            other county peace officers included in their CalPERS  
            contract, since the law prohibits an employer from increasing  
            benefits for a subgroup within a member classification.

                    2)         Purpose  .  This bill would allow CalPERS to  
                     transfer to the SFERS both the prior service  
                     liabilities and member contribution assets of the  
                     former San Francisco Airport Police, which in turn  
                     would allow the SFERS to conform the benefits for  
                     these members to those provided generally to the San  
                     Francisco Police Department.

           Analysis Prepared by  :    Stephen Shea / APPR. / (916) 319-2081