Amended in Assembly March 27, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2472

Introduced by Committee on Public Employees, Retirement and Social Security (Bonta (Chair), Rendon, Ridley-Thomas, and Wieckowski)

February 21, 2014

An act to amend Sections 20533, 21453, 21499, begin delete 22775, end delete and 75552 of, to add Section 75580.5 to, and to repeal Sections 20237 and 22849 of, the Government Code, relating to public employee benefits.

LEGISLATIVE COUNSEL’S DIGEST

AB 2472, as amended, Committee on Public Employees, Retirement and Social Security. Public employees: retirement and health benefits.

(1) The Public Employees’ Retirement Law (PERL) creates the Public Employees’ Retirement System (PERS), which provides a defined benefit to its members based on age at retirement, service credit, and final compensation. Existing law vests the management and control of the PERS in the Board of Administration of the PERS. Existing law requires the board, in addition to any other reports it is required to make, to annually file a separate report with the Governor and the Legislature on all matters under its jurisdiction.

This bill would repeal that requirement and make other conforming changes.

(2) Existing law provides that if a correction of the amount of compensation received by a member that is reported to the system requires additional employer contributions to be paid to the system, the contributions shall be computed using the employer rate in effect at the time of the adjustment.

This bill would instead provide that the employer contribution shall be computed using the employer contribution rate in effect at the time that the compensation requiring adjustment was earned.

(3) Existing law requires that an election, revocation, or change of retirement benefits be made prior to the making of the first payment on account of any retirement allowance, or any retirement allowance following a change in retirement status.

This bill would allow an election, revocation, or change of election to be made within 30 calendar days after the making of the first payment.

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(4) Existing law requires the Board of Administration of the Public Employees’ Retirement System to administer the Public Employees’ Medical and Hospital Care Act and authorizes the board to contract for health benefit plans for employees and annuitants. Existing law defines a family member, for purposes of the act as an employee’s or annuitant’s spouse or domestic partner and any child, including an adopted child, a stepchild, or recognized natural child.

end delete begin delete

This bill would include a foster child in the definition of family member.

end delete begin delete

(5)

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begin insert (4) end insert  Existing law requires the board to conduct a study to examine the feasibility and cost-effectiveness of creating a single statewide health care pool that would cover all public school employees.

This bill would repeal that requirement.

begin delete

(6)

end delete

begin insert (5) end insert  Existing law establishes the Judges’ Retirement System II which provides retirement benefits to elected judges. Existing law provides that if a retired judge becomes entitled to any salary for assignment to a court by the Chairperson of the Judicial Council after retirement for disability, the retirement allowance otherwise payable pursuant to the Judges’ Retirement System II Law shall, during the time he or she is entitled to receive that salary or other compensation, be reduced by the amount of that salary or compensation.

This bill would begin delete specify, end delete begin insert require, end insert except as provided, begin delete that if end delete begin insert a end insert person who is retired for service or disability under the system begin delete is appointed or elected to serve as a judge, he or she shall end delete begin insert to end insert reinstate from retirement and again become a member of the system begin insert if he or she is appointed or elected to serve as a judge end insert .

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(7)

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begin insert (6) end insert  The bill would make other conforming, and technical, nonsubstantive changes.

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 20237 of the Government Code is
repealed.

SEC. 2.  

Section 20533 of the Government Code is amended
to read:

20533.  

The employer contribution rate adopted under this part,
or because of amendments to the contract or to this part, apply to
all compensation upon the basis of which member’s contributions
are deducted after those employer contribution rates became or
become effective.

If correction of the amount of compensation reported is required,
the employer contributions shall be computed using the employer
contribution rate in effect at the time that the compensation
requiring adjustment was earned.

SEC. 3.  

Section 21453 of the Government Code is amended
to read:

21453.  

An election, revocation, or change of election shall be
made within 30 calendar days after the making of the first payment
on account of any retirement allowance or, in the event of a change
of retirement status after retirement, within 30 calendar days after
the making of the first payment on account of any retirement
allowance following the change in retirement status. “Change in
retirement status” includes, but is not limited to, change from
service to disability retirement, from disability retirement to service
retirement, from nonindustrial disability retirement to industrial
disability retirement, or from industrial to nonindustrial disability
retirement.

For purposes of this section, payment shall be deemed to have
been made on the date a warrant is mailed, or the date funds are
electronically transferred to a bank, savings and loan association,
or credit union account for deposit in the member’s account.

This section shall not be construed to authorize a member to
change his or her retirement status after the election, revocation,
or change of election provided in this section.

SEC. 4.  

Section 21499 of the Government Code is amended
to read:

21499.  

(a) Notwithstanding Section 21498, when either an
initial payment of a preretirement or postretirement death allowance
or a preretirement or postretirement lump-sum benefit is payable
in an amount of ten dollars ($10) or more, it shall be authorized
to the Controller within 45 days of receipt by this system of all the
necessary information, including the return of warrants issued or
any overpayment outstanding after the date of the death of the
annuitant.

(b) If any payment is not made within that time limitation, the
payment shall also include interest at the greater of the interest
crediting rate specified in Section 20178 or the net earnings rate
(including capital gains and losses) in effect at the time the payment
is made, for time following the expiration of that time limitation.

begin delete

SEC. 5.  

Section 22775 of the Government Code is amended
to read:

22775.  

“Family member” means an employee’s or annuitant’s
spouse or domestic partner and any child, including an adopted
child, a stepchild, an eligible foster child as defined in Section
152(f)(1)(c) of Title 26 of the United States Code, or recognized
natural child. The board shall, by regulation, prescribe age limits
and other conditions and limitations pertaining to children.

end delete

begin delete SEC. 6. end delete
begin insert SEC. 5. end insert   

Section 22849 of the Government Code is repealed.

begin delete SEC. 7. end delete
begin insert SEC. 6. end insert   

Section 75552 of the Government Code is amended
to read:

75552.  

(a) After payment of a portion of the member’s
contributions to a nonmember pursuant to subdivision (b) of
Section 75551, the member may redeposit the full amount in the
fund at any time before he or she retires or otherwise leaves judicial
office. The redeposit shall include interest at the rate of interest
then being required to be paid by members of the Public
Employees’ Retirement System under Section 20750 from the date
of payment to the date of redeposit. A partial redeposit shall not
be accepted.

(b) After payment of a portion of the member’s monetary credits
to a nonmember pursuant to subdivision (c) of Section 75551, the
member may redeposit the full amount in the fund at any time
before he or she retires or otherwise leaves judicial office. The
redeposit shall include interest at the greater of: (1) the rate of
interest then being required to be paid by members of the Public
Employees’ Retirement System under Section 20750 from the date
of payment to the date of redeposit; or (2) the compounded amounts
that would have been credited to the member’s monetary account
pursuant to subdivision (b) of Section 75520 had the payment not
been made to the nonmember. A partial redeposit shall not be
accepted.

begin delete SEC. 8. end delete
begin insert SEC. 7. end insert   

Section 75580.5 is added to the Government Code,
to read:

75580.5.  

(a) Except as provided in subdivision (b), if a person
who is retired for service or disability under this system is
appointed or elected to serve as a judge, he or she shall reinstate
from retirement and again become a member of the system pursuant
to this chapter.

(b) This section shall not apply to a retired judge who is assigned
to serve in a court pursuant to Section 68543.5, and he or she shall
not earn service credit or be entitled to retirement benefits under
this part for that service.