BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 194|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 194
Author: Torrico (D) and Torres (D), et al
Amended: 8/27/10 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE PUBLIC EMP. & RET. COMMITTEE : 4-2, 8/30/10
AYES: Correa, Corbett, Ducheny, Liu
NOES: Ashburn, Hollingsworth
SUBJECT : Retirement: local employees
SOURCE : Author
DIGEST : This bill limits the amount of compensation
earnable that a public employee may have included in
calculating a retirement benefit.
ANALYSIS : The Public Employees' Retirement Law (PERL)
creates the Public Employees' Retirement System (PERS),
which provides a defined benefit to its members based on
age at retirement, service credit, and final compensation,
as defined. The State Teachers' Retirement Law (STRL) and
the retirement laws for county employees and city employees
also provide for a defined benefit based on age at
retirement, service credit, and final compensation.
Existing law requires the California Citizens Compensation
Commission to establish the annual salary and the medical,
CONTINUED
AB 194
Page
2
dental, insurance, and other similar benefits of state
officers.
This bill:
1.Limits the amount a member of a public retirement system
may include in salary or pay rate for the purpose of
receiving a retirement benefit to 125 percent of the
salary recommended to be paid to the Governor by the
California Citizens Compensation Commission on December
7, 2009.
2.Requires that the base amount of $173,987 be adjusted
annually based on changes in the All Urban California
Consumer Price Index.
3.Clarifies that this limit applies to any individual who
first becomes a member of a public retirement system on
or after January 1, 2011.
4.Contains an urgency clause.
Comments
Federal law limits the amount of compensation a public
employee can include for the purpose of calculating a
retirement benefit (currently $245,000). The limit has
increased annually since its inception on July 1, 1996.
This limit applies to public employees who became members
of public retirement systems after July 1, 1996. Members
prior to that year are not limited in the amount that can
be included in compensation for the purposes of computing
retirement benefits.
This bill creates a compensation cap lower than that
currently imposed by federal law.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
CPM:cm 8/30/10 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
AB 194
Page
3
**** END ****