BILL ANALYSIS
AB 1354
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1354 (Fong)
As Amended June 24, 2010
Majority vote
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|ASSEMBLY: |73-0 |(May 14, 2009) |SENATE: |33-0 |(August 2, |
| | | | | |2010) |
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Original Committee Reference: P.E.,R. & S.S.
SUMMARY : Brings the County Employees' Retirement Law of 1937
('37 Act) into conformity with federal laws regarding public
employees who die while serving on active military duty, and
make other clarifying changes to bring the statutes into
conformity with provisions of the federal Internal Revenue Code
(IRC).
The Senate amendments add the following provisions to the bill:
1)Specify that the survivors of an employee who dies while on
active military duty will receive the benefits that would have
been due had the employee reinstated, following the military
duty, into active service and then died from non-work related
causes.
2)Specify that the above death benefits will not include benefit
accruals occurring during the period of military service, but
that the military service time will be credited for purposes
of vesting.
3)Clarify that this provision is effective for deaths occurring
on or after January 1, 2007, the effective date of the federal
Heroes Earnings Assistance and Relief Tax Act (HEART Act).
EXISTING FEDERAL LAW , as contained in the HEART Act, requires
that the survivors of a public employee who is killed while on
active military service must receive whatever benefits would
have been paid had the employee died from non-industrial causes
while actively employed.
EXISTING STATE LAW :
1)Requires the board of retirement of a '37 Act retirement
AB 1354
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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.
2)Provides death benefits for active employees who die prior to
retirement and while in active service that are based on
factors such as years of service, and age and compensation at
the time of death.
AS PASSED BY THE ASSEMBLY, prohibited the amount payable,
including cost-of-living adjustments, to a member of a county
retirement system being operated under the '37 Act from
exceeding the 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.
FISCAL EFFECT : None
COMMENTS : According to the author, the State Association of
County Retirement Systems 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 and conforms to the HEART Act
with regard to public employees who die while on leave to
perform active military duty.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0005114