BILL ANALYSIS �
AB 837
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 837 (Wieckowski)
As Amended August 4, 2014
Majority vote
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|ASSEMBLY: | |(May 23, 2013) |SENATE: |31-2 |(August 25, |
| | | | | |2014) |
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(vote not relevant)
Original Committee Reference: J., E.D., & E.
SUMMARY : Exempts judges who were elected to office prior to
January 1, 2013, but who did not take office until on or after
that date, from the provisions of the Public Employees' Pension
Reform Act (PEPRA).
The Senate amendments delete the Assembly version of the bill
and instead exempt judges who were elected to office prior to
January 1, 2013, from the PEPRA requirement to pay on half of
the normal cost of their retirement benefits.
EXISTING LAW :
1)Establishes the Judges Retirement System II (JRSII), which is
administered by the board of the California Public Employees'
Retirement System (CalPERS).
2)Provides in JRS II a retirement formula equal to 3.75% of the
judge's final compensation for each year of service. However,
in order to receive these benefits the judge must be either
age 70 or older with at least 5 years of service, or be age 65
or older with at least 20 years of service. Final
compensation is based on the highest twelve months and the
judges' retirement benefit may not exceed 75% of final
compensation. A judge who is not eligible for a retirement
benefit may receive monetary credits in either a lump sum or
as an annuity.
3)Requires a judge who is not subject to PEPRA to pay 8% of
compensation as member contributions.
4)Establishes PEPRA, which requires the following for public
employees who first become members of public retirement
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systems on or after January 1, 2013:
a) For non-safety employees, a benefit based on 2% of final
compensation at age 62, increasing to 2.5% at age 67;
b) A final compensation period of three years;
c) A limit on the compensation that can count toward a
pension, established as the Social Security wage base
(approximately $113,000 in 2013) with annual increases to
the limit based on increases to the Consumer Price Index,
as specified; and,
d) The requirement that all employees subject to PEPRA pay
one half of the normal cost of their retirement benefits as
member contributions.
5)Exempts, in PEPRA, new members in JRSII from the requirements
of PEPRA except for the requirement to pay one half of the
normal cost of their retirement benefits as member
contributions. For JRSII members, this is currently 15%.
FISCAL EFFECT : According to the Senate Appropriations
Committee, minor, absorbable administrative costs to CalPERS
(Special Fund) and increased employer costs of approximately
$75,000 annually (General Fund).
COMMENTS : According to the author, "The 2012 public pension
reform bill (PEPRA) required an equalization of employer and
employee contributions to the Judges Retirement System (JRS II)
for new judges. This change approximately doubled the judge's
contribution to the retirement system from 8% to roughly 15-16%.
No benefit increases or other changes were included in PEPRA.
"The change for new judges was intended to apply to judges first
elected or appointed after January 1, 2013. It is clear under
PEPRA that judges appointed before this date are included under
the old pension contribution rules. PERS also takes the
position that judges elected in 2012 but coming from public
legal positions (DAs [District Attorneys], PDs [Police
Departments], county counsel, etc.) are covered under the old
rules. But there were seven judges elected in 2012 (most in
June 2012 but some in November run-off elections) from private
practice who could not take office until the first few days of
January 2013. This created the anomaly that judges appointed
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anytime during 2012 are treated differently than those elected
months earlier.
"Assembly Bill 837 corrects this technical issue by clarifying
that the seven judges elected during 2012 but not taking office
until 2013 are not 'new members' of the Judges Retirement
System. The bill thus standardizes the treatment of all judges
elected or appointed during 2012 under PEPRA."
According to the sponsor, the California Judges Association, "AB
837 is designed to insure that judges elected to office during
2012 are subject to retirement provisions in effect at the time
of their election. By our count, the bill applies to seven
judges. These are individuals who came from private legal
positions and were elected in 2012. Most were elected in June,
but a small number were elected in November run-off elections.
They were not able to assume office until early in January,
2013, because the seats they were filling were not yet vacant.
We believe that simple fairness suggests that these judges
should be subject to the retirement law in effect when they were
elected to office."
There is no registered opposition to this bill.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0005368