BILL NUMBER: SB 689 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 25, 2011
INTRODUCED BY Senator Harman
FEBRUARY 18, 2011
An act to add and repeal Section 7503.1
amend Sections 7503 and 7504 of the Government Code, relating
to public retirement systems.
LEGISLATIVE COUNSEL'S DIGEST
SB 689, as amended, Harman. Public retirement systems.
Existing law requires all state and local public retirement
systems to prepare an annual report in accordance with generally
accepted accounting principles.
This bill would require those reports to be prepared quarterly.
Existing law also requires all state and local public retirement
systems to secure, not less than triennially, the services of an
enrolled actuary.
This bill would require those systems instead to secure those
services not less than biennially.
Existing law also requires the Controller to compile and publish a
report annually on the financial condition of all state and local
public retirement systems containing specified data.
This bill would require that report to include specified
information about any retired member who receives a pension of
$100,000 or more annually. The bill would also require that report to
be filed with the Legislature, the Department of Finance, and the
Legislative Analyst's Office.
The bill would, until January 1, 2016, require all state and local
public retirement systems to file an annual report with the
Legislature, the Department of Finance, and the Legislative Analyst's
Office that would include specified information about any retired
member who receives a pension of $100,000 or more annually.
The bill would express a legislative finding and declaration that
to ensure the security of the University of California funds,
including retirement funds, it is necessary for this act to apply to
the University of California.
The bill would also express a legislative finding and declaration
that to ensure the statewide integrity of local government, to
cultivate an attractive business climate, and to improve the
sufficiency of local public safety services, the disclosure of
generous pensions paid to public retirees is an issue of statewide
concern and not a municipal affair, and that therefore, all cities,
including charter cities, would be subject to the provisions of the
bill.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7503 of the
Government Code is amended to read:
7503. All state and local public retirement systems shall prepare
an annual a quarterly report in
accordance with generally accepted accounting principles.
SEC. 2. Section 7504 of the Government
Code is amended to read:
7504. (a) All state and local public retirement systems shall
secure , not less than triennially, secure
biennially, the services of an enrolled actuary.
An enrolled actuary, for the purposes of this section, means an
actuary enrolled under subtitle C of Title III of the federal
Employee Retirement Income Security Act of 1974 (Public Law 93-406)
and who has demonstrated experience in public retirement systems. The
actuary shall perform a valuation of the system utilizing actuarial
assumptions and techniques established by the agency that are, in the
aggregate, reasonably related to the experience and the actuary's
best estimate of anticipated experience under the system. Any
differences between the actuarial assumptions and techniques used by
the actuary that differ significantly from those established by the
agency shall be disclosed in the actuary's report and the effect of
the differences on the actuary's statement of costs and obligations
shall be shown.
(b) All state and local public retirement systems shall secure the
services of a qualified person to perform an attest audit of the
system's financial statements. A qualified person means any of the
following:
(1) A person who is licensed to practice as a certified public
accountant in this state by the California Board of Accountancy.
(2) A person who is registered and entitled to practice as a
public accountant in this state by the California Board of
Accountancy.
(3) A county auditor in any county subject to the County Employees
Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of
Part 3 of Division 4 of Title 3).
(4) A county auditor in any county having a pension trust and
retirement plan established pursuant to Section 53216.
(c) All state and local public retirement systems shall submit
audited financial statements to the State
Controller at the earliest practicable opportunity within six months
of the close of each fiscal year. However, the State
Controller may delay the filing date for reports due in the
first year until the time as report forms have been developed that,
in his or her judgment, will satisfy the requirements of this
section. The financial statements shall be prepared in accordance
with generally accepted accounting principles in the form and manner
prescribed by the State Controller. The penalty
prescribed in Section 53895 shall be invoked for failure to comply
with this section. Upon a satisfactory showing of good cause, the
State Controller may waive the penalty for late
filing provided by this subdivision.
(d) The State (1)
Notwithstanding Section 10231.5, the Controller shall compile
and publish a report annually on the financial condition of all state
and local public retirement systems containing, but not limited to,
the data required in Section 7502. The report shall be published
within 12 months of the receipt of the information, and in no case
later than 18 months after the end of the fiscal year upon which the
information in the report is based.
(2) The report required by this subdivision shall also include the
following information regarding any retired member who receives a
pension of one hundred thousand dollars ($100,000) or more annually:
(A) The classification from which the member retired.
(B) The department or agency from which the member retired.
(C) The amount of the pension that the member receives annually.
(3) The report required by this subdivision shall be filed with
the Legislature, the Department of Finance, and the Legislative
Analyst's Office.
SECTION 1. Section 7503.1 is added to the
Government Code, to read:
7503.1. (a) In addition to the report required by Section 7503,
all state and local public retirement systems, including those of the
University of California, charter cities, and charter counties,
shall file an annual report with the Legislature, the Department of
Finance, and the Legislative Analyst's Office that includes the
following information regarding any retired member who receives a
pension of one hundred thousand dollars ($100,000) or more annually:
(1) The classification from which the member retired.
(2) The department or agency from which the member retired.
(3) The amount of the pension that the member receives annually.
(b) (1) The report to the Legislature shall be submitted in
compliance with Section 9795.
(2) Pursuant to Section 10231.5, this section shall remain in
effect only until January 1, 2016, and as of that date is repealed,
unless a later enacted statute, that is enacted before January 1,
2016, deletes or extends that date.
SEC. 2. The Legislature finds and declares the
following:
(a) To ensure the security of the University of California funds,
including retirement funds, it is necessary for this act to apply to
the University of California.
(b) The security of public moneys and the fiscal integrity of
local governmental agencies in this state, including charter cities,
have a direct impact on the long-term well-being of all residents of
this state. A functioning, transparent, and practical governmental
structure is critical to businesses either staying in or relocating
to California. Further, local governments that are incapacitated by
excessively generous pension obligations have difficulty providing
sufficient public safety services and place additional resourcing
burdens on the state. Accordingly, the Legislature finds and declares
that to ensure the statewide integrity of local government, to
cultivate an attractive business climate, and to improve the
sufficiency of local public safety services, the disclosure of
generous pensions paid to public retirees is an issue of statewide
concern and not a municipal affair, as that term is used in Section 5
of Article XI of the California Constitution. Therefore, this act
shall apply to all cities, including charter cities.