BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 197|
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THIRD READING
Bill No: AB 197
Author: Monning (D)
Amended: 8/31/12 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SUBJECT : California Pension Reform: cleanup
SOURCE : Author
DIGEST : This bill clarifies two sections of the
conference report creating Public Employees Pension Reform
Act of 2013 (PEPRA).
Senate Floor Amendments of 8/31/12 delete the previous
version concerning farm labor contributions, and replaces
it with clean-up language to AB 340 (Furutani), the pension
reform bill.
ANALYSIS : AB 340 (Furutani) contains the report of the
Conference Committee on Public Employee's Pension Reform.
A conference report may not be amended once it has been
transmitted to the floor of the houses for vote. Two
sections of AB 340 have been found in need of technical
clarification in order to prevent unintended consequences.
SEC 20 Section 20516 (b) of the Government Code . This
section is intended to allow enhanced bargaining for local
and school employers in California Public Employees'
CONTINUED
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Retirement System (CalPERS) with regard to increased member
cost sharing. The section eliminates former requirements
that employers provide offsetting increases in benefits in
exchange for higher member contributions, and allows
employers to bargain increased cost sharing by bargaining
unit vs. retirement membership class . The section requires
that the employer bargain these increases and not be
allowed to increase the member share through impasses
procedures above the contribution amount "which is required
by law."
This bill, in subdivision (b) changes the word "required"
to "authorized." The Governor has requested this change to
clarify that the contribution authorized by law is the
amount above which, an employer cannot impose increased
contributions.
SEC 28. Section 31461 (b) (1) (C) and (b) (2) and (4) of
the Government Code . This section implies to current
members in the 1937 Act County Retirement System who have
not yet retired. The intent of this section is to reign in
pension spiking by current members of the system to the
extent allowable by court cases that have governed
compensation earnable in that system since 2003. These
cases allow certain cash payments to be included in
compensation for the purpose of determining a benefit, but
only to the extent that the cash payments were limited to
what the employee earned in a year.
A concern has been raised that, as written, the conference
report would increase the ability of some current employees
to spike their pensions rather than achieving the intended
outcome of reduction spiking opportunities.
This bill clarifies the intent of the conference report
with regard to these current employees by specifying that
payments for termination pay and leave, as specified, may
not exceed what is earned in a year and payable, consistent
with the applicable court cases in regard to this issue.
All new members in the 1937 Act system will be subject to
section 7522.34 of the Government Code, which is added by
PEPRA to narrowly define the types of pay that will be
pensionable for public employees. Under PEPRA, new public
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employees will not be able to have terminal or leave pay
count toward a pension.
This bill will be transmitted to the Governor with the
request that it be signed after AB 340. The two sections
in this bill will chapter-out the same section in AB 340,
thus correcting the errors described in this analysis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
DWL:d 8/31/12 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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