BILL ANALYSIS �
AB 1874
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Date of Hearing: April 26, 2012
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Warren T. Furutani, Chair
AB 1874 (Mansoor) - As Introduced: February 22, 2012
SUBJECT : Legislators' Retirement System.
SUMMARY : Closes the Legislators' Retirement System (LRS) to
new members first elected on or after January 1, 2013, prohibits
certain specified individuals appointed on or after January 1,
2013 from opting into membership in the California Public
Employees' Retirement System (CalPERS), and makes all four
legislative statutory officers elected after January 1, 2013
compulsory members of CalPERS. Specifically, this bill :
1)Prohibits all Constitutional Officers, the Insurance
Commissioner, and legislative statutory officers, first
elected or appointed on or after January 1, 2013, from
becoming LRS members. These individuals would now become
members of CalPERS.
2)Requires legislative statutory officers elected after January
1, 2013 to become mandatory CalPERS members.
3)Defines "elective officer" to include: those individuals
elected by the members of the Legislature; a city or county
appointive officer with a fixed term; state or contracting
agency officers elected by the people; and those elected to
city council or a county board of supervisors.
4)Excludes from CalPERS membership individuals directly
appointed by the Governor, without nomination of any officer
or board, on or after January 1, 2013.
5)Excludes from CalPERS membership individuals that are exempt
from civil service and directly appointed by the Attorney
General, Lieutenant Governor, Controller, Secretary of State,
Treasurer and Superintendent of Public Instruction on or after
January 1, 2013.
EXISTING LAW :
1)As enacted by Proposition 140, which was passed by the voters
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in 1990, prohibited legislators elected or serving after
November 7, 1990 from accruing pension or retirement benefits
other than through the federal Social Security program. Based
on vested rights, a later court ruling allowed existing
legislators that participate in the LRS to continue membership
in the system.
2)Allows the Constitutional Officers, Insurance Commissioner and
legislative statutory officers the option of joining either
LRS or CalPERS. The employees they appoint to office, as
specified, have the option to join CalPERS.
3)Specifies the CalPERS Board of Administration (Board) is
responsible for administering the LRS. Positions currently
eligible for LRS membership include specific statewide elected
officials, known as constitutional officers, which consist of
the Governor, Lieutenant Governor, Secretary of State,
Attorney General, Treasurer, Controller, Superintendent of
Public Instruction, and the four members of the State Board of
Equalization. The LRS also provides retirement benefits for
the elected Insurance Commissioner.
4)Specifies that the four statutory legislative officers
selected by the members of the Legislature to oversee the
operations of each house are also eligible for LRS membership.
As of February 2012, there are 31 active and inactive LRS
members and approximately 247 people receiving LRS benefits.
5)Specifies five classes of state employees that are eligible
for "Optional" membership in CalPERS:
a) State officers elected by the people - The Governor,
Lieutenant Governor, Secretary of State, Controller,
Treasurer, Attorney General or Insurance Commissioner.
b) Appointees of state officers -
i) Persons directly appointed by the Governor, without
nomination of any officer or board. Normal membership
eligibility must be met.
ii) Persons exempt from civil service, and directly
appointed by the Attorney General, Lieutenant Governor,
Controller, Treasurer, Secretary of State, Superintendent
of Public Instruction (except for teaching staff of
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schools).
iii) Members of the Board of Prison Terms, the State
Personnel Board, or the State Air Resources Board.
c) Officers of the Senate or Assembly - Elected by either
or both such houses.
d) Legislative Employees - Employees of the Senate or the
Assembly whose salaries are paid from the operating funds
of the Senate or the Assembly.
e) California National Guard - California National Guard
officers, warrant officers, and enlisted personnel may
elect membership.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "The Legislators'
Retirement System should have been completely closed in 1990
when the Legislators were taken out of the system, but
constitutional officers, including the Governor are still
receiving a pension from the system."
In 2011, the Legislature established the Conference Committee on
Public Employee Pensions under the provisions of AB 340
(Furutani) and SB 827 (Simitian). The Conference Committee is
tasked with crafting "?responsible, comprehensive legislation to
reform state and local pension systems in a manner that reflects
both the legitimate needs of public employees and the fiscal
circumstances of state and local governments." Since that time,
the Conference Committee has met five times and anticipates
releasing its report in the next several months. The
Legislature will then have the opportunity to vote on the
Conference Committee report in both houses.
The subject matter of this bill is under the purview of the
Conference Committee. It is, therefore, the recommendation of
this Committee that this bill be referred to interim study.
REGISTERED SUPPORT / OPPOSITION :
Support
California Foundation for Fiscal Responsibility
AB 1874
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Howard Jarvis Taxpayers Association
National Tax-Limitation Committee
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957