BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 3094
                                                                  Page  1

          Date of Hearing:   April 28, 2004

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                   Judy Chu, Chair

               AB 3094 (PERSS Committee) - As Amended:  April 12, 2004 

          Policy Committee:                              PERSSVote:9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill requires retirement benefit payments from a public  
          retirement system directly deposited by electronic fund transfer  
          following the date of death of the person entitled to receive  
          the benefits to be refunded to the retirement system.  In  
          addition, the bill adds an exemption to the California Right to  
          Financial Privacy Act to require a financial institution to  
          provide public retirement systems with specified information  
          about accounts of a customer who received direct deposit  
          transfers after the date of his or her death.

           FISCAL EFFECT  

          Moderate savings to CalPERS, CalSTRS and county retirement  
          systems established under the County Employees Retirement Law of  
          1937.  Because of the legal complexities associated with  
          recovering overpayments, CalPERS presently writes-off  
          overpayments under $2,500.  Over the past 4 years, CalPERS has  
          written off 274 cases totaling $528, 411.   CalSTRS estimates  
          that this bill would allow it to recover $270,000 annually. 


           COMMENTS  

           1)Background  .  CalPERS retirees have the option of receiving  
            their retirement allowances via direct deposit to their bank  
            accounts. If CalPERS is not informed immediately of a  
            retiree's death, the payments continue until CalPERS is  
            notified. Sometimes other parties who have access to those  
            accounts withdraw the funds paid to the deceased retiree.   
            Financial institutions will not release the names and  
            addresses of these individuals without subpoenas, which are  








                                                                  AB 3094
                                                                  Page  2

            costly and increase administrative costs for the retirement  
            system.

           2)Purpose  . This bill would require financial institutions to  
            disclose the names and addresses of financial account  
            owners-or any people having access to the accounts-to CalPERS  
            for all overpayment cases, without the need for individual  
            subpoenas to be issued.  The exemption from the California  
            Right to Financial Privacy Act,allowing CalPERS to obtain  
            necessary information from financial institutions in order to  
            recover overpayments is narrowly drawn and mirrors similar  
            exemptions in law.



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