BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 503
Gloria Negrete McLeod, Chair
Hearing date: April 11, 2011
SB 503 (Vargas) as introduced 2/17/11 FISCAL: YES
JUDGES' RETIREMENT SYSTEM II: SERVICE CREDIT FOR TIME SERVED
AS A SUBORDINATE JUDICIAL OFFICER
HISTORY :
Sponsor: California Judges Association (CJA)
Prior legislation: AB 1099 (Havice)
Chapter 433, Statutes of 2001
SUMMARY :
Would allow a judge to make a one-time written election,
prior to retirement, to purchase service credit in the
Judge's Retirement System II (JRS II) for any number of whole
years a judge served as a full-time subordinate judicial
officer.
BACKGROUND AND ANALYSIS :
1)Existing law :
a) establishes the Judge's Retirement System I (JRS I)
which provides a set of rights and benefits to members
of JRS I and is administered by the California Public
Employees' Retirement System (CalPERS) Board of
Administration (this system was closed to new members as
of November 1994);
b) establishes the JRS II which provides a set of rights
and benefits to members of JRS II and is administered by
the CalPERS Board of Administration;
c) permits a judge at any time prior to retirement to
purchase service credit in JRS II for all of the time
served as a full-time "subordinate judicial officer" if
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a written election is filed with the CalPERS board;
d) establishes specified reciprocity between JRS I and
JRS II, CalPERS, and counties operating retirement
systems under the County Employees' Retirement Law of
1937 ('37 Act); and
e) defines a "subordinate judicial officer" as an
officer appointed to perform subordinate judicial duties
as authorized by the State Constitution, including, but
not limited to, duties as a court commissioner, probate
commissioner, child support commissioner, referee,
traffic referee, juvenile court referee, and juvenile
hearing officer.
2)This bill :
a) would change existing law to permit a judge to make a
one-time written election to the CalPERS board, prior to
retirement, to purchase service credit for any number of
whole years or all of the time served as a subordinate
judicial officer prior to becoming a judge.
COMMENTS :
Although CalPERS has not yet taken a position on the bill,
according to its analysis:
1)SJOs and Retirement System Membership
SJO's are not members of JRS I or JRS II, but are either
members of CalPERS, a 1937 Act County Retirement System, or
another county retirement system. There are currently 360
subordinate judicial officers. However, 98 of those
positions, upon vacancy, will be converted to judgeships
and will no longer be eligible to be filled by SJOs. Since
January 1, 2002, only one JRS II member has elected to
purchase SJO time.
2)Partial Service Credit Purchase
Currently, members of JRS II are allowed to purchase
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service credit for their time as an SJO if all of the prior
SJO service is purchased and the member pays the actuarial
present value of the increase in benefits due to the
additional service. In addition, to meet the requirements
of the federal Internal Revenue Code, members cannot
receive a benefit for their SJO service from any other
retirement system. This requires JRS II members to seek a
refund of contributions from the public retirement system
that provided the benefits associated with their former SJO
service to complete their service credit purchase under JRS
II. These systems include CalPERS and various county
retirement systems.
This bill would provide the less costly option of
purchasing partial service credit to increase their JRS II
benefits, however, because the Public Employees' Retirement
Law prohibits its members from receiving a partial refund,
the JRS II member would be required to refund all of their
CalPERS-covered service.
Under this proposal, as with existing law, the judge would
be required to pay the full employee and employer cost of
any SJO service purchased.
3)Arguments in support
According to the author:
"Judges choosing to purchase their subordinate judicial
officer (SJO) service time under JRS II are required to
pay for the JRS II service credit, at the actuarial
present value as determined by CalPERS. Current law
requires the former subordinate judicial officer to
purchase all of the time he or she served as an SJO,
which can be prohibitively expensive and more time than
necessary to qualify for full retirement under JRS II."
According to the sponsor:
"SB 503 makes a technical change applicable to the
circumstance where an SJO is appointed or elected as a
judge. Present law permits former judges with prior SJO
experience to purchase service credit in the judges'
retirement system for their SJO time. Unfortunately,
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the law requires the purchase of the entire SJO time,
rather than a portion of that time. Not only is it
likely that a judge would not need to purchase the
entirety of the SJO time, but the cost could be
prohibitively expensive. This bill provides judges with
an additional bit of flexibility in retirement planning,
without imposing any costs on the retirement systems or
the state."
4) SUPPORT :
California Judges Association (CJA), sponsor
Judicial Council of California, co-sponsor
5) OPPOSITION :
None to date
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