BILL ANALYSIS
SB 519
Page 1
Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Ed Hernandez, Chair
SB 519 (Ashburn) - As Amended: June 25, 2009
SENATE VOTE : 36-0
SUBJECT : Public Employees' Retirement System: death benefits.
SUMMARY : Eliminates the January 1, 2010 sunset on the 5th
level 1959 Survivor Benefit for certain state and school
employees covered under the California Public Employees'
Retirement System (CalPERS) who do not participate in the social
security program. The bill also prevents an increase in age
eligibility and a decrease in benefits that would coincide with
the sunset.
EXISTING LAW :
The 1959 Survivor Benefit was created in 1959 as a substitute
for Social Security for survivors of state and school employees
who die prior to retirement. The benefit is paid for employees
who are not included in Social Security and who die while in
active service prior to retirement. In regard to the State, this
group includes Highway Patrol officers, all peace officers and
firefighters, and safety employees working in correctional
institutions and in support of law enforcement.
The benefit is only paid when the employee dies due to non-work
related causes. If the safety employee dies due to injury or
illness incurred on the job, he or she is subject to the
"Special Death Benefit," which cannot be paid in conjunction
with the 1959 Survivor Benefit.
In the case of state and school employers, employees pay a
portion of the cost of ensuring for the benefit via payroll
deduction, and the State or school district pays any remaining
costs. The cost for employees is $2 per month unless the
monthly premium exceeds $4, in which case the premium is shared
equally between employee and employer. Some school districts
are coordinated with Social Security, and would therefore not be
subject to this benefit.
The benefit has evolved over the years, and there are several
monetary levels of benefits. The original 1st level of benefits
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and the 2nd level, which was established in 1975, are closed and
no longer available to CalPERS contracting agencies. The 3rd,
4th, and "Indexed" levels are available to CalPERS contracting
agencies, which may contract for whichever levels they choose.
Survivors of state and school employee members are eligible for
the 5th level of benefits.
The benefit is paid to dependents of the deceased employee in a
specified order. In the majority of cases, a spouse who has the
care of dependent children receives a benefit until the children
are 22 (or longer if the child is incapacitated due to
disability occurring prior to age 22). The benefit then ceases
until the surviving spouse reaches age 60, at which time the
spouse receives a lifetime benefit. When there is no eligible
spouse or child, the benefit can also be paid to parents who
were financially dependent on the deceased employee.
FISCAL EFFECT : Unknown.
COMMENTS : According to the Department of Personnel
Administration, the sponsor of the bill, "CHP officers,
firefighters, peace officers, and school classified employees
who die unexpectedly in their prime earning years do not have
Social Security coverage for their surviving dependent children
and spouses. The 1959 Survivor Benefit Program, in effect for
50 years, provides an extremely valuable safety net for these
employees and their families, at a little over $5 per employee
per month in state costs and at no cost currently to school
districts.
"Departments already are funded for this benefit in their
current budgets, so continuing the benefit creates no new costs.
And while any savings achieved by reducing benefits for these
survivors would create negligible costs savings for the state,
the cost to the individual survivors of these safety members
would be felt profoundly.
"Compared to the costs saved by the State by not paying for
Social Security for these employees (at 6.2 percent of payroll),
the 5th level survivor benefit provides a highly cost effective
safety net that our classified school employees, CHP officers,
firefighters, peace officers, safety personnel and their
families have come to rely upon. Social Security survivor
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benefits, on average, are already higher than the 5th Level 1959
Survivor benefit, and Social Security benefits receive cost of
living increases. Allowing survivors to fall back to a lower
benefit than they currently receive would be unfair to the
employees who put their health and safety on the line everyday
in service to the public.
REGISTERED SUPPORT / OPPOSITION :
Support
Department of Personnel Administration (Sponsor)
American Federation of State, County and Municipal Employees
California Association of Highway Patrolmen
California Federation of Teachers
California Professional Firefighters
California Public Employees' Retirement System
California State Employees Association
California Statewide Law Enforcement Association
California Teachers Association
CDF Firefighters
Peace Officer's Research Association of California
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957