BILL NUMBER: AB 446	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 2, 2009

INTRODUCED BY   Assembly Member Niello

                        FEBRUARY 24, 2009

   An act  to amend Section 20909 of the Government Code,
  relating to public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 446, as amended, Niello. Public employees' retirement: 
benefits.   additional retirement service credits.

   The Public Employees' Retirement Law calculates service retirement
allowances, in part, based on years of credited service. Members of
the Public Employees' Retirement System may receive service credit
for public service not otherwise subject to credit, upon payment of
specified additional contributions. Existing law authorizes specified
members of that system, including employees or officers of the
state, the university, a school employer, or a contracting agency and
certain legislative employees, to elect to make additional
contributions and receive up to 5 years of additional retirement
service credit, as defined, subject to specified limitations.

   This bill would make a technical, nonsubstantive change to that
provision.  
   This bill would require the administrators of the Public Employees'
Retirement System to prepare a report on the use of the additional
retirement service credits, as specified, and to file that report
with the Legislature by February 1, 2010. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature finds and declares the
following:  
   (a) The California Public Employees' Retirement System (CalPERS)
is currently experiencing a sizeable unfunded liability, which has
been growing over the last decade.  
   (b) Public perception is that the increase in additional
retirement service credit purchases creates an unfunded liability for
the program and further exacerbates CalPERS total unfunded
liability.  
   (c) There is significant and growing public concern about the
method of calculation of the receipt of additional retirement service
credits available under Section 20909 of the Government Code. 

   (d) In order to determine whether or not public perception and
concern is valid, it is necessary for the CalPERS to provide
pertinent information to the Legislature.  
   (e) This information will enable the Legislature to properly
address those concerns. 
   SEC. 2.    The Public Employees Retirement System
administrators shall prepare and file a report with the Legislature
by February 1, 2010, that contains the following information
regarding the receipt of additional retirement service credits under
Section 20909 of the Government Code:  
   (a) The number of members who have purchased additional retirement
service credit, including estimated subtotals of state members
(including in each retirement tier), California State University
members, public agency members, and school members.  
   (b) The number of those members who have retired, including
estimated subtotals of state members (including in each retirement
tier), California State University members, public agency members,
and school members.  
   (c) The average number of service credit years purchased,
including a breakdown of how many purchases were for one, two, three,
four, and five years of service credit respectively.  
   (d) The average purchase price, taking into account the number of
years purchased and the members's age and compensation level. 

   (e) An estimate of how many members have paid by lump sum,
installment, rollover, and other methods, and whether there has been
a significant change in the payment methods by members in the last
three years (that is, noticeably more choosing one method over
another).  
   (f) For state miscellaneous, state peace officer/firefighter,
state safety, state industrial, and California Highway Patrol tier
members, respectively, a list of key assumptions currently used in
the pricing of additional retirement service credits and whether any
of those major assumptions changed significantly within the last five
years.  
   (g) For state members who have purchased additional retirement
service credits and subsequently retired, an estimate of the
following:  
   (1) The percentage of members who have retired earlier than the
effective assumption used in the pricing of their additional
retirement service credits.  
   (2) The percentage of members who have retired with final
compensation higher than that effectively assumed in the pricing of
their additional retirement service credits.  
   (3) The percentage of members who have retired with a larger
monthly retirement allowance than that effectively assumed in the
pricing of their additional retirement service credits.  
   (h) An estimate of the percentage of members purchasing additional
retirement service credits who retire within one year, within two
years, within three years, within four years, and within five years
of their purchase of additional retirement service credits. 

   (i) For state members who have purchased additional retirement
service credits, subsequently retired, and have retired earlier than
the effective assumption used in the pricing of their additional
retirement service credits, an estimate of annual state costs for
their retiree health and dental benefits and the amount that the
earlier-than-expected retirement of these individuals contributes to
the state's unfunded other postemployment benefits liability. 

   (j) An estimate of the amount of the state's unfunded actuarial
accrued liability for pensions that is attributable to issues
concerning the pricing of additional retirement service credits
purchases.  
   (k) An estimate of the amount of present value paid compared to
the present value gained, on average.  
  SECTION 1.    Section 20909 of the Government Code
is amended to read:
   20909.  (a) A member who has at least five years of credited state
service, may elect, by written notice filed with the board, to make
contributions pursuant to this section and receive not less than one
year, nor more than five years, in one-year increments, of additional
retirement service credit in the retirement system.
   (b) A member may elect to receive this additional retirement
service credit at any time prior to retirement by making the
contributions as specified in Sections 21050 and 21052. A member may
not elect additional retirement service credit under this section
more than once.
   (c) For purposes of this section, "additional retirement service
credit" means time that does not qualify as public service, military
service, leave of absence, or any other time recognized for service
credit by the retirement system.
   (d) Additional retirement service credit elected pursuant to this
section may not be counted to meet the minimum qualifications for
service or disability retirement or for health care benefits, or any
other benefits based upon years of service credited to the member.
   (e)  This section shall only apply to the following members:
   (1) A member while he or she is employed in state service at the
time of the additional retirement service credit election.
   (2) A member of the system defined in Section 20324.
   (f) For purposes of this section, "state service" means service as
defined in Section 20069.