BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 1217
Lou Correa, Chair Hearing date: April 12, 2010
SB 1217 (Senate PE&R Comm) as introduced 2/18/10
FISCAL: YES
ALLOWS MULTIPLE DESIGNEES TO BE IDENTIFIED FOR RECEIPT OF
FINAL PAY WARRANTS UPON DEATH OF A STATE EMPLOYEE
HISTORY :
Sponsor: Office of the State Controller
Prior legislation: none
SUMMARY :
This bill would allow an employee of the State to designate
a primary person and up to three contingent persons for
receipt of final pay warrants upon the employee's death.
In addition, it clarifies that the employee could also
designate a corporation, trust, or the employee's estate as
a recipient of those warrants.
BACKGROUND AND ANALYSIS :
Existing law authorizes an employee of the State to file with
his or her employer a designation naming the person who will
receive the employee's final pay warrants in the event of the
employee's death. The employee may change the designation
from time to time and may name anyone as his or her designee.
In addition, the law gives the designee the right to claim
the final warrants, upon proof of identity, and to negotiate
the warrants as if he or she were the original payee.
This bill would allow an employee to designate a primary
recipient and up to three additional recipients, in order, to
receive the final warrants in situations in which the primary
designee predeceases the employee. Additionally, this bill
also specifies that the employee could name a corporation,
trust or the employee's estate as the designee.
Michael Bolden
Date: 4/6/10 Page 1
COMMENTS :
1) Sometimes Employees Die Without Having Updated Their
Designations
Upon entering employment, an employee designates a
recipient for his or her final warrant. In some cases,
many years go by between that initial designation and the
employee's death. After a number of years have passed,
an employee may not think to change a designation or even
remember having made a designation in the first place.
For example, an employee who is young and single
upon entering employment may designate a parent or
sibling as recipient. If the parent or sibling
predeceases the employee, or if the employee dies without
having changed the designation and the designee cannot be
found within a specified time, the State Controller's
Office (SCO) then has no legally designated recipient to
release the warrant to.
According to the SCO, this becomes a problem
because the final pay warrants of the decedent must then
be released under provisions of the Probate Code if the
sole designee is not eligible or cannot be located within
60 days of the employee's death.
2) Frequency of Incidents
According to the SCO, 42.6 death transactions
occurred in the last six months. Although incidences of
a beneficiary predeceasing the employee are rare, they do
occur from time to time. Amending this section would
enable the SCO to release a deceased employee's final pay
warrants to a contingent designee if the primary designee
is deceased minimizing financial hardship to the deceased
employee's family.
3) SUPPORT :
Michael Bolden
Date: 4/6/10 Page 2
Office of the State Controller (Sponsor)
California State Employees Association (CSEA)
4) OPPOSITION :
None to date
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Michael Bolden
Date: 4/6/10 Page 3