BILL ANALYSIS �
AB 2429
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Date of Hearing: April 26, 2012
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Warren T. Furutani, Chair
AB 2429 (Hagman) - As Introduced: February 24, 2012
SUBJECT : Public employee benefits: local appointed and elected
officials.
SUMMARY : Prohibits a person appointed or publicly elected to a
local public office of any kind that is less than full-time, as
defined, on or after January 1, 2013, from becoming a member of
any public retirement system by virtue of that service, from
acquiring any retirement right or benefit, or from receiving
health benefits or other specified benefits for serving in that
elective office. This prohibition would not apply to a local
official who held office prior to January 1, 2013, and remains
in, or is reappointed or reelected to that office.
EXISTING LAW :
1)Proposition 140, which was passed by the voters 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 Legislators' Retirement System to continue
membership in the system.
2)Under current Public Employees' Retirement Law, "optional"
membership is provided to some officials elected or appointed
to a fixed term of office with a city or county (this may
include city attorneys and elected/appointed officials of
schools and contracting agencies; eligibility is determined by
the dates of your term of office).
The following employees of contracting agencies are optional
members who, if they are compensated for their service, may
elect membership by completing a specified California Public
Employees' Retirement System (CalPERS) form:
a) Elective Officers: Persons elected by the vote of the
people (e.g., Mayor, City Council, County Supervisors,
Sheriff, District Attorney, City Clerk, etc.)
AB 2429
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b) City Attorney, Deputy/Assistant City Attorney if hired,
elected or appointed to office prior to July l, 1994 (with
no break in service while serving in the office held on
June 30, 1994).
Since July 1, 1994, a large number of persons who formerly had
"optional" membership rights have been excluded from
membership entirely. Thus, not only are they no longer
"optional" members, they are no longer eligible for CalPERS
membership at all. The excluded positions are:
a) School Board Members first elected/appointed to their
position July 1, 1994 or later (unless they have been
continuously in the same position since before July 1,
1994).
b) Members of commissions, boards, councils or similar
legislative or administrative bodies (e.g., water
districts, sanitation districts, redevelopment agencies,
transportation districts, etc.) of any contracting agency,
if they are first elected/appointed to their position
January 1, 1997 or later (unless they have been
continuously in the same position since before January 1,
1997).
3)Under current Teachers' Retirement Law, a person who is an
employee of the California public school system,
prekindergarten through community college, is a member of the
Defined Benefit (DB) Program. However, existing law excludes
from mandatory DB membership a person employed less than 50%
of full-time, a person employed as a substitute teacher, or a
person employed on a part-time basis, and who performs less
than 60 hours of creditable service in a pay period if
employed on an hourly basis or less than 10 days of creditable
service if employed on a daily basis.
4)The County Employees' Retirement Law of 1937 specifically
excludes from membership all elected officials who do not
declare their intentions to become members of the retirement
system, judges of the Superior Court, and judges of the
Municipal Court.
FISCAL EFFECT : Unknown.
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COMMENTS : According to the author, "While the recession has
contributed to government underfunding, another major cause if
politician benefit abuses, of which local elected officials are
often most guilty. Such abuses can consist of retiring from one
public office and collecting benefits, and then returning to a
part-time office to receive additional benefits. AB 2429 would
prevent part-time politician pensions for this reason, in
addition to prohibiting them from receiving additional perks
such as health benefits and taxpayer-funded vehicles."
This bill is similar to AB 738 (Hagman) of 2011 which failed
passage in this Committee.
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
None on file
Opposition
AB 2429
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California Professional Firefighters
California School Employees Association
California State Association of Counties
El Dorado Irrigation District
Los Angeles County District Attorney's Office
Regional Council of Rural Counties
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957