BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1902|
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THIRD READING
Bill No: AB 1902
Author: Portantino (D)
Amended: 3/9/10 in Assembly
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 5-0, 6/23/10
AYES: Correa, Corbett, Ducheny, Hollingsworth, Liu
NO VOTE RECORDED: Ashburn
ASSEMBLY FLOOR : 72-0, 05/10/10 - See last page for vote
SUBJECT : County employees retirement: Los Angeles
County
SOURCE : Los Angeles County Employees Retirement
Association
DIGEST : This bill make technical and non-controversial
changes to laws governing the Los Angeles County Employees
Retirement Association (LACERA) regarding employee transfer
of membership between retirement plans D and E, pay
periods, and reciprocity with other public retirement
systems for former Plan E members.
ANALYSIS :
Existing Law
1.Establishes the 1937 Act County Retirement Law for 20
independent county retirement systems, of which Los
CONTINUED
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Angeles County is a participant.
2.Provides two retirement plans for Los Angeles County
Employees Retirement Association (LACERA) general
members: Plan D (members make contributions in exchange
for higher benefits at younger retirement ages) and Plan
E (members do not make contributions but receive lower
benefits at older ages).
3.Allows members to choose which plan to participate in,
and provides that a member in one plan may elect, no more
than once every three years, to transfer from one plan to
the other.
4.Provides disability retirement benefits for Plan D
members but not for Plan E members, and requires that
someone who transfers from Plan E to Plan D must perform
two continuous years of service, or five total years of
service, in Plan D before being eligible for disability
retirement in Plan D.
5.Provides reciprocity benefits for an employee who moves
between public employers within specified timeframes,
which include transferability of certain rights and
benefits, and requires that to be eligible for
reciprocity an employee may not receive service credit in
more than one system for the same period of service.
This bill:
1.Clarifies that Plan E members may only be credited for
service earned during payroll periods for which they
received compensation.
2.Allows a member who transfers to Plan D and becomes
permanently disabled, and who does not have enough
service credited in Plan D to retire for disability, to
transfer back to Plan E even though it has been less than
three years, and receive the Long Term Disability offered
to Plan E members until he or she is old enough to retire
for service from Plan E.
3.Allows a former Plan E member who changes public
employers to retain certain reciprocity rights and
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purchase service with the new employer that was earned
and forfeited under Plan E, as specified.
Comments
According to the author's office, "Disabled workers who
change retirement plan tiers may receive inequitable
treatment that limits rehabilitation periods. Plan D
offers disability benefits while Plan E does not.
"A worker participating in Plan E who prospectively
transfers to Plan D must meet one of two waiting period
requirements before applying for Plan D disability
retirement benefits: (1) complete two continuous years of
active service, or (2) earn five years of retirement
service credit under Plan D. The intent of the waiting
period requirement is to limit the possibility of a worker
transferring from Plan E to Plan D and filing for
disability benefits.
"However, disabled workers in Plan D are required to leave
employment and file for retirement benefits at the earliest
possible age following the 24 month period (generally age
50 with 10 years of retirement credit). As such, a worker
who prospectively transfers from Plan E to Plan D and
becomes disabled prior to satisfying the waiting period
receives inequitable treatment compared to other disabled
workers who remained in Plan E by being forced to leave
employment and losing the opportunity to participate in the
employer's Return to Work rehabilitation programs.
"This bill allows a disabled worker who prospectively
transfers to Plan D and does not meet the requirements to
apply for a Plan D disability retirement benefit the option
of transferring back to Plan E even though fewer than three
years may have elapsed since the member's most recent
transfer date."
Regarding benefit portability . This bill re-links
[reciprocal] retirement plan benefits between California
public retirement systems when a Plan E member forfeits
their LACERA retirement benefit, and keeps intact the
prohibition of workers receiving a retirement benefit from
multiple California government employers for the same time
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period worked.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/30/10)
Los Angeles County Employees Retirement Association
(source)
ARGUMENTS IN SUPPORT : LACERA, the sponsor states,
"Enactment of Assembly Bill 1902 will greatly improve and
update Plan E statutes by allowing for precise crediting of
Plan E service, a needed safety net for former Plan E
members who recently transferred to contributory Plan D and
became disabled, and greater benefit portability under the
reciprocity provisions of Plan E."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall,
Bill Berryhill, Tom Berryhill, Blakeslee, Block,
Blumenfield, Bradford, Brownley, Buchanan, Caballero,
Charles Calderon, Carter, Chesbro, Conway, Cook, Coto,
Davis, De Leon, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Gilmore, Hagman, Hall, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,
Bonnie Lowenthal, Ma, Miller, Monning, Nava, Nestande,
Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,
Salas, Silva, Skinner, Smyth, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
A. Perez
NO VOTE RECORDED: De La Torre, DeVore, Harkey, Mendoza,
Norby, Saldana, Solorio, Vacancy
CPM:cm 6/30/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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