BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 503|
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UNFINISHED BUSINESS
Bill No: SB 503
Author: Vargas (D)
Amended: 9/1/11
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
SENATE FLOOR : 40-0, 5/9/11 (Consent)
AYES: Alquist, Anderson, Berryhill, Blakeslee, Calderon,
Cannella, Corbett, Correa, De Le�n, DeSaulnier, Dutton,
Emmerson, Evans, Fuller, Gaines, Hancock, Harman,
Hernandez, Huff, Kehoe, La Malfa, Leno, Lieu, Liu,
Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio,
Runner, Simitian, Steinberg, Strickland, Vargas, Walters,
Wolk, Wright, Wyland, Yee
ASSEMBLY FLOOR : Not available
SUBJECT : Judges retirement
SOURCE : California Judges Association
Judicial Council of California
DIGEST : This bill allows a judge to make a one-time
written election at the time of retirement to purchase
service credit in the Judge's Retirement System II for any
number of whole years a judge served as a full-time
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subordinate judicial.
Assembly Amendments delete language exempting subordinate
judicial officers whose position upon retirement is
converted to a judgeship and any person taking office as a
judge from the 180-day requirement that may be enacted this
year in other legislation.
ANALYSIS :
Existing law:
1. 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).
2. Establishes the Judge's Retirement System II (JRS II),
administered by the CalPERS Board of Administration,
which provides a set of rights and benefits to members
of JRS II.
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 if a
written election is filed with the CalPERS board.
4. Establishes specified reciprocity between JRS I and JRS
II, CalPERS, and counties operating retirement systems
under the County Employees' Retirement Law of 1937.
5. 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.
This bill allows a judge to make a one-time written
election at the time of retirement to purchase service
credit in the JRS II for any number of whole years as a
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judge served as a full-time subordinate judicial officer.
Comments
According to information provided by CalPERS, 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 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 a
subordinate judicial officer. Since January 1, 2002, only
one JRS II member has elected to purchase subordinate
judicial officer service.
Currently, members of JRS II are allowed to purchase
service credit for their time as a subordinate judicial
officer if all of the prior subordinate judicial officer
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 subordinate judicial officer
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 subordinate judicial officer
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
subordinate judicial officer service purchased.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 9/7/11)
California Judges Association (co-source)
Judicial Council of California (co-source)
OPPOSITION : (Verified 7/7/11)
Department of Finance
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."
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."
ARGUMENTS IN OPPOSITION : The Department of Finance, in
opposition, states that this bill is inconsistent with the
Administration's recent pension reform proposals which seek
to eliminate the purchase of additional service credit, it
provides enhanced flexibility to JRS II members to enrich
their retirement benefits, and, since the actuarial present
value may not cover the actual cost of the additional years
of service, it could result in a fiscal impact to the
state.
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CPM:mw 9/7/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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