BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1354
                                                                  Page  1

          Date of Hearing:   May 6, 2009

            ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL  
                                      SECURITY
                                 Ed Hernandez, Chair
                  AB 1354 (Fong) - As Introduced:  February 27, 2009
           
          SUBJECT  :   County employees' retirement: cost-of-living  
          adjustments.

           SUMMARY  :   Prohibits the amount payable, including  
          cost-of-living adjustments, to a member of a county retirement  
          system being operated under the County Employees' Retirement Law  
          of 1937 ('37 Act) from exceeding the Internal Revenue Code (IRC)  
          Section 415 limits, as specified, and specifies that adjustments  
          to the IRC Section 415 limits continue to apply after a member's  
          severance from employment or annuity starting date.   

           EXISTING LAW  requires the board of retirement of a '37 Act  
          retirement system to adjust the payment of benefits from the  
          system to members as necessary in order to maximize the benefits  
          available to members who are subject to the IRC Section 415  
          limits.  Those adjustments include, but are not limited to,  
          cost-of-living adjustments, cost-of-living banks, temporary  
          annuities, or survivor continuance benefits. 

           FISCAL EFFECT  :   Unknown.

           COMMENTS  :   According to that author, the State Association of  
          County Retirement Systems (SACRS) is in the process of reviewing  
          the '37 Act body of law for areas where the '37 Act may not  
          comply precisely with the IRC or Internal Revenue Service (IRS)  
          regulations.  This bill conforms to IRS rules for compliance  
          with IRC Section 415 distributions.  

          The Committee is informed that the author anticipates including  
          further amendments in this bill as it moves through the process  
          this year as is necessary to bring the '37 Act law into full  
          compliance with federal tax law.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          State Association of County Retirement Systems (SACRS)








                                                                  AB 1354
                                                                  Page  2


           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Karon Green / P.E., R. & S.S. / (916)  
          319-3957