BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2472|
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CONSENT
Bill No: AB 2472
Author: Assembly Public Employees, Retirement and Social
Security Committee
Amended: 6/16/14 in Senate
Vote: 21
SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM. : 5-0, 6/23/14
AYES: Torres, Walters, De Le�n, Gaines, Steinberg
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 4/24/14 (Consent) - See last page for
vote
SUBJECT : Public employees: retirement and health benefits
SOURCE : California Public Employees Retirement System
DIGEST : This bill makes changes to various sections of the
Government Code governing the California Public Employees
Retirement System (CalPERS), including sections related to the
Judges' Retirement System (JRS), and the Judges' Retirement
System II (JRS II), to increase administrative efficiency.
ANALYSIS :
Existing law:
1. Requires that, in addition to any other reports that it may
be required to make by law, the CalPERS Board to annually
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file a separate report with the Governor and each house of
the Legislature on all matters under the jurisdiction of the
Board.
2. Requires CalPERS to annually provide a report to the
Legislature and to the Governor summarizing its experience of
paying interest, as specified, resulting from making late
payments of initial or of lump sum payments of a
preretirement or postretirement death allowance or lump sum
benefit of $10 or more.
3. Directs CalPERS to produce a report on the feasibility of
developing a statewide pool to provide health insurance to
all school employees, as specified.
4. Provides criteria for when membership in the retirement
system terminates, including upon retirement, refund of
contributions as specified, or termination of service with a
CalPERS employer if the member has less than five years of
service.
5. Provides that if a member is subject to Tier 2, his/her
membership terminates upon termination of service with a
CalPERS employer if the member has less than 10 years of
service, as specified.
6. Provides that if a correction of the amount of compensation
reported by a contracting agency requires additional employer
contributions, the contributions must be computed using the
employer contribution rate in effect at the time of the
adjustment.
7. Provides that a state member with service under both the
Tier 1 and Tier 2 benefit formulas shall be eligible to
receive a retirement allowance at age 50.
8. Authorizes CalPERS, JRS, and JRSII members to make an
election to receive an actuarial reduced monthly pension
allowance in order to provide either a lump sum amount equal
to the member's remaining contributions or an ongoing monthly
allowance to the member's designated beneficiary upon the
member's death. Members may change their option election, as
specified, prior to receiving their first pension allowance
benefit payment.
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9. Permits a JRS II member to redeposit funds to the member's
account in an amount equal to the amount that was paid out by
the retirement system to a non-member divorced spouse as part
of a community property settlement order and specifies the
interest to be paid by the member upon the redeposit.
10.Provides that if a person who is retired under JRS is
appointed or elected to serve as a judge, he/she shall
reinstate from retirement and again become a member of JRS.
11.Clarifies that a retired judge under JRS II who is
subsequently elected or appointed to judicial office must
also reinstate from retirement and again become a member of
JRS II.
This bill:
1. Eliminates the statutory language requiring the reports
mentioned in existing law #1 to #3.
2. Clarifies that termination of membership for a Tier 2 member
occurs upon termination of service with a CalPERS employer if
the member has less than 10 years of service and has no
accumulated contributions in the retirement fund at the time.
3. Requires CalPERS to use the employer contribution rate in
effect for the period in which the compensation was earned to
more accurately reflect the correct contributions owed and
minimize inequity among employers.
4. Clarifies that state member eligibility for retirement at
age 50 for service under both Tier 1 and Tier 2 benefit
formulas only applies to members who are not subject to the
Public Employees' Pension Reform Act of 2013 benefit
formulas.
5. Allows members to make a change to their option beneficiary
election even if the member has already received their first
benefit provided that CalPERS receives their request within
30 days of the issuance of their first retirement benefit
payment.
6. Updates the statutory reference specifying the interest rate
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to be paid by the member along with the redeposit.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/6/14)
California Public Employees' Retirement System (source)
AFSCME
ARGUMENTS IN SUPPORT : According to the sponsor, CalPERS, AB
1518 (Anderson, Chapter 7, Statutes of 2010) "eliminated
hundreds of underutilized and unnecessary annual reports to the
Legislature produced by state agencies, including the following
two CalPERS reports: Annual Report on All Matters Under Board
Jurisdiction and Pre/Post Retirement Death Allowance Payments."
Also, "AB 256 ([De La Torre],Chapter 708, Statutes of 2005)
required CalPERS to examine the feasibility and
cost-effectiveness of creating a single statewide health care
pool for all school employees. CalPERS submitted the study
titled Feasibility of Offering Healthcare Coverage to School
Employees as Outlined in AB 256 to the Legislature In March
2008."
According to CalPERS, "AB 2472 supports CalPERS' strategic goal
to improve long-term pension and health benefit sustainability,
and also ensures the statutes administered by CalPERS are as
clear and unambiguous as possible."
According to AFSCME, this bill "will maintain the security and
soundness of our public retirement systems."
According to CalPERS, technological database upgrades have
increased CalPERS' capacity "to release several types of member
payments on a weekly basis, and provides CalPERS additional
flexibility to accept members' changes to their option elections
even after the first payment is made. This will allow members
who may not realize the extent to which the option they elected,
combined with tax and other benefit deductions, has reduced
their monthly retirement allowance, to make a different choice."
ASSEMBLY FLOOR : 75-0, 4/24/14
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AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Grove, Hagman, Hall, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Medina, Melendez, Mullin, Muratsuchi, Nestande, Olsen, Pan,
Patterson, Perea, V. Manuel P�rez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas,
Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Gray, Harkey, Mansoor, Nazarian, Vacancy
JL:k 8/6/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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