BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 1519
Gloria Negrete McLeod, Chair Hearing date: May 7, 2012
AB 1519 (Wieckowski) as amended 3/06/12 FISCAL: NO
1937 ACT COUNTY RETIREMENT SYSTEMS: BOARD MEMBER EDUCATION
HISTORY :
Sponsor: State Association of County Retirement Systems
(SACRS)
Other legislation: SB 203 (Correa)
Chapter 124, Statutes of 2011
ASSEMBLY VOTES :
PER & SS 5-0 3/28/12
Assembly Floor 68-7 4/09/12
SUMMARY :
AB 1519 establishes educational requirements for retirement
and investment board members serving on boards governing the
20 county retirement systems under the 1937 Act County
Employees Retirement Law.
BACKGROUND AND ANALYSIS :
1) Existing law :
a) establishes the 1937 Act County Employees' Retirement
Law, which covers 20 independent county retirement
systems, each governed by an independent board of
retirement.
b) sets forth the composition of the nine-member board of
retirement for any '37 Act county retirement system, as
follows:
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i) The county treasurer,
ii) Two general (non-safety) members elected by the
general members of the system (2nd and 3rd members),
iii) Four members who are qualified electors not in any
way connected with county government, except one may
be a county supervisor, appointed by the board of
supervisors (4th, 5th, 6th and 9th members),
iv) One safety member elected by the safety members of
the system (7th member), and
v) One retired member elected by the retired members of
the system (8th member).
c) allows, in any '37 Act county in which the assets of
the retirement system exceed $800 million, the board of
supervisors to establish a retirement system board of
investments that is responsible for all investments of
the retirement system. The Los Angeles County Employees
Retirement Association is currently the only county with
a board of investment.
2) This bill :
a) requires '37 Act county retirement system boards (both
boards of retirement and boards of investment), to adopt
policies for providing education to board members. At a
minimum the policies must do the following:
i) Identify appropriate educational topics, including,
but not limited to, fiduciary responsibilities, ethics,
pension fund investments and investment program
management, actuarial matters, pension funding,
benefits administration, disability evaluation, fair
hearings, and pension fund governance.
ii) Determine the programs, training, and educational
systems that shall qualify as board member education.
Educational seminars sponsored by the state or
national pension fund organizations, and seminars
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sponsored by accredited academic institutions shall
be deemed to meet board member education
requirements.
b) require each board member to receive at least 24 hours
of education within the first 2 years of assuming office
and for every two-year period that the board member
continues to hold office.
c) require the retirement board to maintain a record of
board member compliance with the educational policy and
to place the educational policy and an annual report of
compliance on the retirement system's internet web site.
COMMENTS :
1) Argument in Support :
According to the sponsor, the trustees of a '37 Act
retirement system are, "?charged with administering the
retirement benefits of county employees, adjudicating
disability and retirement compensation disputes that may
arise between the county and its employees, and making
sound investment decisions to ensure the long-term
financial stability of the county retirement system."
"Despite the important decisions that trustees are required
to perform, under current law, there are not specific
educational or training standards that a retirement board
trustee must meet. Now more than ever, county retirement
systems need the most professional and well trained people
making investment decisions. Most investment professionals
who already possess the knowledge and expertise that
greatly benefit retirement boards choose not to serve on
county retirement boards because of existing conflict of
interest laws. Therefore, it is important for trustees who
do not work in the financial and investment world to gain
as much knowledge and training as possible about duties
they must perform."
2) SUPPORT :
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State Association of County Retirement Systems (SACRS),
Sponsor
American Federation of State, County and Municipal
Employees (AFSCME), AFL-CIO
California Professional Firefighters (CPF)
Los Angeles County Employees Retirement Association
(LACERA)
Peace Officers Research Association of California (PORAC)
Service Employees International Union (SEIU), California
3) OPPOSITION :
None to date
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