AB 1783, as amended, Jones-Sawyer. Public employees’ retirement.
The California Public Employees’ Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas that may not be exceeded by a public employer offering a defined benefit pension plan for employees first hired on or after January 1, 2013. PEPRA exempts from its provisions public employees whose collective bargaining rights are subject to specified provisions of federal law until a specified federal district court decision on a certification by the United States Secretary of Labor, or until January 1, 2015, whichever is sooner.
This bill would extend that exemption with respect to the above-described date to January 1, 2016.
begin insertThis bill would incorporate additional changes to Section 7522.02 of the Government Code proposed by SB 1251, to be operative only if SB 1251 and this bill are both chaptered and become effective on or before January 1, 2015, and this bill is chaptered last.
end insertThis bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 7522.02 of the Government Code is
2amended to read:
(a) (1) Notwithstanding any other law, except as
4provided in this article, on and after January 1, 2013, this article
5shall apply to all state and local public retirement systems and to
6their participating employers, including the Public Employees’
7Retirement System, the State Teachers’ Retirement System, the
8Legislators’ Retirement System, the Judges’ Retirement System,
9the Judges’ Retirement System II, county and district retirement
10systems created pursuant to the County Employees Retirement
11Law of 1937 (Chapter 3 (commencing with Section 31450) of Part
123 of Division 4 of Title 3), independent public retirement systems,
13and to individual retirement plans offered by public employers.
14However, this article shall be subject to the Internal Revenue Code
15and Section 17 of Article XVI of the California
Constitution. The
16administration of the requirements of this article shall comply with
17applicable provisions of the Internal Revenue Code and the
18Revenue and Taxation Code.
19(2) Notwithstanding paragraph (1), this article shall not apply
20to the entities described in Section 9 of Article IX of, and Sections
214 and 5 of Article XI of, the California Constitution, except to the
22extent that these entities continue to be participating employers in
23any retirement system governed by state statute. Accordingly, any
24retirement plan approved before January 1, 2013, by the voters of
25any entity excluded from coverage by this section shall not be
26affected by this article.
27(3) (A) Notwithstanding paragraph (1), this article shall not
28apply to a public employee whose interests are protected under
29Section 5333(b) of Title 49 of the United States Code until a federal
30district
court rules that the United States Secretary of Labor, or
31his or her designee, erred in determining that the application of
P3 1this article precludes certification under that section, or until
2January 1, 2016, whichever is sooner.
3(B) If a federal district court upholds the determination of the
4United States Secretary of Labor, or his or her designee, that
5application of this article precludes him or her from providing a
6certification under Section 5333(b) of Title 49 of the United States
7Code, this article shall not apply to a public employee specified
8in subparagraph (A).
9(4) Notwithstanding paragraph (1), this article shall not apply
10to a multiemployer plan authorized by Section 302(c)(5) of the
11federal Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) if the public
12employer began participation in that plan prior to January 1, 2013,
13and the plan is regulated by the federal Employee
Retirement
14Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.).
15(b) The benefit plan required by this article shall apply to public
16employees who are new members as defined in Section 7522.04.
17(c) (1) Individuals who were employed by any public employer
18before January 1, 2013, and who became employed by a subsequent
19public employer for the first time on or after January 1, 2013, shall
20be subject to the retirement plan that would have been available
21to employees of the subsequent employer who were first employed
22by the subsequent employer on or before December 31, 2012, if
23the individual was subject to concurrent membership for which
24creditable service was performed in the previous six months or
25reciprocity established under any of the following provisions:
26(A) Article 5 (commencing with
Section 20350) of Chapter 3
27of Part 3 of Division 5 of Title 2.
28(B) Chapter 3 (commencing with Section 31450) of Part 3 of
29Division 4 of Title 3.
30(C) Any agreement between public retirement systems to provide
31reciprocity to members of the systems.
32(D) Section 22115.2 of the Education Code.
33(2) An individual who was employed before January 1, 2013,
34and who, without a separation from employment, changed
35employment positions and became subject to a different defined
36benefit plan in a different public retirement system offered by his
37or her employer shall be subject to that defined benefit plan as it
38would have been available to employees who were first employed
39on or before December 31, 2012.
P4 1(d) If a public employer, before January 1, 2013, offers a defined
2benefit pension plan that provides a defined benefit formula with
3a lower benefit factor at normal retirement age and results in a
4lower normal cost than the defined benefit formula required by
5this article, that employer may continue to offer that defined benefit
6formula instead of the defined benefit formula required by this
7article, and shall not be subject to the requirements of Section
87522.10 for pensionable compensation subject to that formula.
9However, if the employer adopts a new defined benefit formula
10on or after January 1, 2013, that formula must conform to the
11requirements of this article or must be determined and certified by
12the retirement system’s chief actuary and the retirement board to
13have no greater risk and no greater cost to the employer than the
14defined benefit formula required by this article and must be
15approved by the Legislature. New members of the defined benefit
16plan may only participate in the lower
cost defined benefit formula
17that was in place before January 1, 2013, or a defined benefit
18formula that conforms to the requirements of this article or is
19approved by the Legislature as provided in this subdivision.
20(e) If a public employer, before January 1, 2013, offers a
21retirement benefit plan that consists solely of a defined contribution
22plan, that employer may continue to offer that plan instead of the
23defined benefit pension plan required by this article. However, if
24the employer adopts a new defined benefit pension plan or defined
25benefit formula on or after January 1, 2013, that plan or formula
26must conform to the requirements of this article or must be
27determined and certified by the retirement system’s chief actuary
28and the system’s board to have no greater risk and no greater cost
29to the employer than the defined benefit formula required by this
30article and must be approved by the Legislature. New members of
31the employer’s plan
may only participate in the defined
32contribution plan that was in place before January 1, 2013, or a
33defined contribution plan or defined benefit formula that conforms
34to the requirements of this article. This subdivision shall not be
35construed to prohibit an employer from offering a defined
36contribution plan on or after January 1, 2013, either with or without
37a defined benefit plan, whether or not the employer offered a
38defined contribution plan prior to that date.
39(f) The Judges’ Retirement System and the Judges’ Retirement
40System II shall not be required to adopt the defined benefit formula
P5 1required by Section 7522.20 or 7522.25 or the compensation
2limitations defined in Section 7522.10.
3(g) This article shall not be construed to provide membership
4in any public retirement system for an individual who would not
5otherwise be eligible for membership under that system’s
6applicable
rules or laws.
7(h) On and after January 1, 2013, each public retirement system
8shall modify its plan or plans to comply with the requirements of
9this article and may adopt regulations or resolutions for this
10purpose.
begin insertSection 7522.02 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
12to read:end insert
(a) (1) Notwithstanding any other law, except as
14provided in this article, on and after January 1, 2013, this article
15shall apply to all state and local public retirement systems and to
16their participating employers, including the Public Employees’
17Retirement System, the State Teachers’ Retirement System, the
18Legislators’ Retirement System, the Judges’ Retirement System,
19the Judges’ Retirement System II, county and district retirement
20systems created pursuant to the County Employees Retirement
21Law ofbegin delete 1937,end deletebegin insert end insertbegin insert1937 (Chapter 3 (commencing with Section 31450)
22of Part 3 of Division 4 of Title 3),end insert independent public retirement
23systems, and to individual retirement plans offered by public
24employers. However, this article shall be subject to the Internal
25Revenue Code and Section 17 of Article XVI of the California
26Constitution. The administration of the requirements of this article
27shall comply with applicable provisions of the Internal Revenue
28Code and the Revenue and Taxation Code.
29(2) Notwithstanding paragraph (1), this article shall not apply
30to the entities described in Section 9 of Article IX of, and Sections
314 and 5 of Article XI of, the California Constitution, except to the
32extent that these entities continue to be participating employers in
33any retirement system governed by state statute. Accordingly, any
34retirement
plan approved before January 1, 2013, by the voters of
35any entity excluded from coverage by this section shall not be
36affected by this article.
37(3) (A) Notwithstanding paragraph (1), this article shall not
38apply to a public employee whose interests are protected under
39Section 5333(b) of Title 49 of the United States Code until a federal
40district court rules that the United States Secretary of Labor, or
P6 1his or her designee, erred in determining that the application of
2this article precludes certification under that section, or until
3January 1,begin delete 2015,end deletebegin insert 2016,end insert whichever is sooner.
4(B) If a federal district court upholds the determination of the
5United States Secretary of
Labor, or his or her designee, that
6application of this article precludes him or her from providing a
7certification under Section 5333(b) of Title 49 of the United States
8Code, this article shall not apply to a public employee specified
9in subparagraph (A).
10(4) Notwithstanding paragraph (1), this article shall not apply
11to a multiemployer plan authorized by Section 302(c)(5) of the
12begin insert federalend insert Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) if the public
13employer began participation in that plan prior to January 1, 2013,
14and the plan is regulated by thebegin insert federalend insert Employee Retirement
15Income Security Act of 1974begin insert end insertbegin insert(29 U.S.C. Sec. 1001 et seq.)end insert.
16(b) The benefit plan required by this article shall apply to public
17employees who are new members as defined in Section 7522.04.
18(c) (1) Individuals who were employed by any public employer
19before January 1, 2013, and who became employed by a subsequent
20public employer for the first time on or after January 1, 2013, shall
21be subject to the retirement plan that would have been available
22to employees of the subsequent employer who were first employed
23by the subsequent employer on or before December 31, 2012, if
24the individual was subject to concurrent membership for which
25creditable service was performed in the previous six months or
26reciprocity established under any of the following provisions:
27(A) Article 5 (commencing with Section 20350) of Chapter 3
28of Part 3 of Division 5 of Title 2.
29(B) Chapter 3 (commencing with Section 31450) of Part 3 of
30Division 4 of Title 3.
31(C) Any agreement between public retirement systems to provide
32reciprocity to members of the systems.
33(D) Section 22115.2 of the Education Code.
34(2) An individual who was employed before January 1, 2013,
35and who, without a separation from employment, changed
36employment positions and became subject to a different defined
37benefit plan in a different public retirement system offered by his
38or her employer shall be subject to that defined benefit plan as it
39would have been available to employees who were first employed
40on
or before December 31, 2012.
P7 1(d) If a public employer, before January 1, 2013, offers a defined
2benefit pension plan that provides a defined benefit formula with
3a lower benefit factor at normal retirement age and results in a
4lower normal cost than the defined benefit formula required by
5this article, that employer may continue to offer that defined benefit
6formula instead of the defined benefit formula required by this
7article, and shall not be subject to the requirements of Section
87522.10 for pensionable compensation subject to that formula.
9However, if the employer adopts a new defined benefit formula
10on or after January 1, 2013, that formula must conform to the
11requirements of this article or must be determined and certified by
12the retirement system’s chief actuary and the retirement board to
13have no greater risk and no greater cost to the employer than the
14defined benefit formula required by this article and must be
15approved by the
Legislature. New members of the defined benefit
16plan may only participate in the lower cost defined benefit formula
17that was in place before January 1, 2013, or a defined benefit
18formula that conforms to the requirements of this article or is
19approved by the Legislature as provided in this subdivision.
20(e) If a public employer, before January 1, 2013, offers a
21retirement benefit plan that consists solely of a defined contribution
22plan, that employer may continue to offer that plan instead of the
23defined benefit pension plan required by this article. However, if
24the employer adopts a new defined benefit pension plan or defined
25benefit formula on or after January 1, 2013, that plan or formula
26must conform to the requirements of this article or must be
27determined and certified by the retirement system’s chief actuary
28and the system’s board to have no greater risk and no greater cost
29to the employer than the defined benefit formula required by this
30
article and must be approved by the Legislature. New members of
31the employer’s plan may only participate in the defined
32contribution plan that was in place before January 1, 2013, or a
33defined contribution plan or defined benefit formula that conforms
34to the requirements of this article. This subdivision shall not be
35construed to prohibit an employer from offering a defined
36contribution plan on or after January 1, 2013, either with or without
37a defined benefit plan, whether or not the employer offered a
38defined contribution plan prior to that date.
39(f) (1) If, on or after January 1, 2013, the Cities of Brea and
40Fullerton form a joint powers authority pursuant to the provisions
P8 1of the Joint Exercise of Powers Act (Article 1 (commencing with
2Section 6500) of Chapter 5), that joint powers authority may
3provide employees the defined benefit plan
or formula that those
4employees received from their respective employers on December
531, 2012, to any employee of the City of Brea, the City of Fullerton,
6or a city described in paragraph (2) who is not a new member and
7subsequently is employed by the joint powers authority without a
8break in service of more than 180 days.
9(2) On or before January 1, 2017, a city in Orange County that
10is contiguous to the City of Brea or the City of Fullerton may join
11the joint powers authority described in paragraph (1) but not more
12than three cities shall be permitted to join.
13(3) The formation of a joint powers authority on or after January
141, 2013, shall not act in a manner as to
exempt a new employee
15or a new member, as defined by Section 7522.04, from the
16requirements of this article. New members may only participate
17in a defined benefit plan or formula that conforms to the
18requirements of this article.
19(f)
end delete
20begin insert(g)end insert The Judges’ Retirement System and the Judges’ Retirement
21System II shall not be required to adopt the defined benefit formula
22required by Section 7522.20 or 7522.25 or the compensation
23limitations defined in Section 7522.10.
24(g)
end delete
25begin insert(h)end insert This article shall not be construed to provide membership
26in any public retirement system for an individual who would not
27otherwise be eligible for membership under that system’s
28applicable rules or laws.
29(h)
end delete
30begin insert(i)end insert On and after January 1, 2013, each public retirement system
31shall modify its plan or plans to comply with the requirements of
32this article and may adopt regulations or resolutions for this
33purpose.
Section 2 of this bill incorporates amendments to
35Section 7522.02 of the Government Code proposed by both this
36bill and SB 1251. It shall only become operative if (1) both bills
37are enacted and become effective on or before January 1, 2015,
38but this bill becomes operative first, (2) each bill amends Section
397522.02 of the Government Code, and (3) this bill is enacted after
40SB 1251, in which case Section 7522.02 of the Government Code,
P9 1as amended by Section 1 of this bill, shall remain operative only
2until the operative date of SB 1251, at which time Section 2 of this
3bill shall become operative.
This act is an urgency statute necessary for the
6immediate preservation of the public peace, health, or safety within
7the meaning of Article IV of the Constitution and shall go into
8immediate effect. The facts constituting the necessity are:
9In order to remain eligible for federal transportation funds that
10would be forfeited if transit employees are not exempt from
11PEPRA, it is necessary for this act to go into effect immediately.
O
96