BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 503|
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CONSENT
Bill No: SB 503
Author: Vargas (D)
Amended: As introduced
Vote: 21
SEN. PUB. EMPLOY. & RETIRE. COMMITTEE : 5-0, 4/11/11
AYES: Negrete McLeod, Walters, Gaines, Padilla, Vargas
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Judges retirement
SOURCE : California Judges Association
Judicial Council of California
DIGEST : This bill allows a judge to make a one-time
written election, prior to retirement, to purchase service
credit in the Judges' Retirement System II for any number
of whole years a judge served as a full-time subordinate
judicial officer.
ANALYSIS :
Existing Law
1.Establishes a Judges' 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).
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2.Establishes the Judges' Retirement System II (JRS II)
which provides a set of rights and benefits to members of
JRS II and is administered by the CalPERS Board of
Administration.
3.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"
(SJO) if a written election is filed with the CalPERS
Board of Administration.
4.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).
5.Defines a SJO 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.
This bill changes existing law to permit a judge to make a
one-time written election to the CalPERS Board of
Administration, prior to retirement, to purchase service
credit for any number of whole years or all of the time
served as a SJO prior to becoming a judge.
Comments
Although CalPERS has not yet taken a position on the bill,
according to its analysis:
1. Subordinate Judicial Officers and Retirement System
Membership . Subordinate judicial officers are not members
of JRS I or JRS II, but are either members of CalPERS, a
'37 Act County Retirement System, or another county
retirement system. There are currently 360 SJOs.
However, 98 of those positions, upon vacancy, will be
converted to judgeships and will no longer be eligible to
be filled by a SJO. Since January 1, 2002, only one JRS
II member has elected to purchase SJO service.
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2. Partial Service Credit Purchase . Currently, members of
JRS II are allowed to purchase service credit for their
time as a 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 provides 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 bill, as with existing law, the judge would be
required to pay the full employee and employer cost of
any SJO service purchased.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/2/11)
California Judges Association (co-source)
Judicial Council of California (co-source)
ARGUMENTS IN SUPPORT : According to the author's office,
"Judges choosing to purchase their subordinate judicial
officer 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
SJO to purchase all of the time he or she served as a SJO,
which can be prohibitively expensive and more time than
necessary to qualify for full retirement under JRS II."
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According to the California Judges Association, "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 SLO experience to
purchase service credit in the judges' retirement system
for their SJO time. Unfortunately, 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
system or the state."
CPM:cm 5/2/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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