BILL ANALYSIS �
AB 1824
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Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Rob Bonta, Chair
AB 1824 (Rendon) - As Amended: April 22, 2014
SUBJECT : County employees' retirement: optional settlements
revision.
SUMMARY : Permits, upon adoption by a county board of
retirement, a retired member of a county retirement system being
operated under the County Employees' Retirement Law of 1937 ('37
Act) to change previously elected optional settlements, as
specified. Specifically, this bill :
1)Allows a '37 Act retired member, in order to provide for his
or her spouse, to revise an optional settlement, as specified,
if all of the following apply:
a) The retired member retired on or before the date the
post-retirement spouse provision was made applicable in the
county from which he or she retired;
b) The member was unmarried or had been married less than
one year at the time of retirement;
c) The retired member's spouse is at least age 55 and is
older than the originally designated beneficiary; and,
d) The application requirements, including requiring
notification of, and acknowledgement by, beneficiaries who
may be affected by the revision, have been satisfied.
2)Specifies that a person who knowingly provides false
information in the required written declaration is subject to
a civil penalty of not less than one thousand dollars ($1,000)
and not more than twenty-five thousand dollars ($25,000), in
addition to any civil remedies available to the board. An
action to impose a civil penalty pursuant to this provision
may be brought by any public prosecutor in the name of the
people of the state.
3)Specifies that after revision, the member's retirement
allowance will remain the same as provided by the optional
AB 1824
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settlement, adjusted to reflect any cost-of-living increases
that have been added to the retirement allowance.
4)Specifies that the retirement system is under no obligation to
locate or otherwise contact retired members who may qualify
for these provisions.
5)Specifies that any action taken pursuant to these provisions
does not excuse the obligation of a member to provide a
continuing benefit to a former spouse pursuant to a court
order.
6)Specifies that these provisions will not become effective in a
county until adopted by the county board of retirement.
EXISTING LAW :
1)Permits a member of a '37 Act retirement system, prior to the
first payment of any retirement allowance, to elect certain
optional settlements, which reduce the allowance payable to
the member through his or her life and provide for a
subsequent payment to another party or parties, including a
spouse.
2)Provides that, upon the death of a '37 Act member who died
after a service retirement or non-service related disability
and did not elect an optional settlement, an allowance
equaling 60% of his or her retirement allowance will be
continued throughout life to a surviving spouse to whom he or
she was married to for at least one year prior to the
effective date of retirement.
3)Pursuant to AB 979 (Negrete McLeod), Chapter 441, Statutes of
2004, allows, upon adoption by a county board of supervisors,
retired '37 Act members, who marry after retirement, to
purchase, at no cost to the retirement system, an optional
survivor benefit in order to increase the survivor benefit
that would be paid to their new spouse if the member dies
first.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal by
Legislative Counsel.
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COMMENTS : According to the author, "The Legislature added a
provision to the County Employees' Retirement Law, commonly
referred to as the 'Post-retirement spouse" provision, which
makes a spouse eligible for a survivor's continuance of an
unmodified allowance, if the spouse was married to the retiree
at least two years prior to the retiree's death, and was 55
years old on or before the retirees death. Application of this
provision is optional by county, and a number of retirement
boards have exercised this option at various times."
"A number of retirees who were unmarried or married for less
than one year and who selected an optional settlement in lieu of
the unmodified allowance at the time they retired might not have
done so had the post-retirement spouse provision been made
applicable in the county from which they retired."
This bill would enable a retiree to change the beneficiary of an
optional settlement in a county in which the post-retirement
spouse provision has been made applicable provided certain
criteria have been met.
This bill is similar to AB 1136 (Fong) of 2009, which was vetoed
by the Governor. In his veto message, Governor Schwarzenegger
stated, in part, "This bill would create a situation whereby
certain county retirees could change their retirement elections
and increase their benefits as a result. I am concerned that
this could create unfunded increases to county retirement costs.
At this time, even small increases would be unacceptable."
REGISTERED SUPPORT / OPPOSITION :
Support
California Retired County Employees Association (Sponsor)
Opposition
AB 1824
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None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957