Amended in Assembly April 28, 2014

Amended in Assembly April 8, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2474

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 31462.05, 31462.2, 31563, 31631, begin insert 31649, 31649.6, 31653, end insert 31781, 31781.3, 31781.31, and 31787.6 of the Government Code, relating to county employees’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

AB 2474, as amended, Committee on Public Employees, Retirement and Social Security. County employees begin delete retirement: final compensation: forfeiture of benefits: employee contributions: death benefits. end delete begin insert retirement: benefits. end insert

The County Employees Retirement Law of 1937 (CERL) authorizes counties to establish retirement systems pursuant to its provisions in order to provide pension benefits to county, city, and district employees and their beneficiaries. The CERL provides for a defined retirement benefit based upon credited service, final compensation, and age at retirement subject to specified formulas relating to membership classification.

The California Public Employees’ Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, including county and district retirement systems created pursuant to CERL, to modify its pension plan or plans to comply with the act and, among other provisions, establishes new limits of pensionable compensation that may not be exceeded whenever pensionable compensation is used in the calculation of a benefit. PEPRA defines pensionable compensation for purposes of its provisions.

This bill would clarify that the definition of final compensation for members whose services is on a tenure that is temporary, seasonal, intermittent, or part time in the CERL, as described, also applies to those members meeting the same service criteria who are subject to PEPRA.

The CERL provides that for a member who is subject to PEPRA for all or any portion of his or her membership in the county retirement system, final compensation means the highest average pensionable compensation earned by the member during a period of at least 36 consecutive months, immediately preceding his or her retirement or last separation from service if earlier, or during any other period of 36 consecutive months designated by the member.

begin delete

This bill would require the computation for any absence to be based on the compensation of the position held by the member at the beginning of the absence.

end delete begin insert

This bill would require, when determining final compensation, the computation for any absence to be based on the pensionable compensation earned by the member during the absence. This bill would specify a formula for determining the final compensation in the event the member does not have 3 years of earned pensionable compensation.

end insert

PEPRA requires a public employee, including one who is elected or appointed to a public office, who is convicted of any state or federal felony for conduct arising out of, or in the performance of, his or her official duties in pursuit of the office or appointment, or in connection with obtaining salary, disability retirement, service retirement, or other benefits, to forfeit retirement benefits earned or accrued from the earliest date of the commission of the felony to the forfeiture date, as specified.

This bill would make a conforming change to the CERL to specify that a person ceases to be a member for any portion of his or her service as an elected public officer or as a public employee that is forfeited under those circumstances.

Under the CERL, except as otherwise specified, a board of supervisors or the governing body of a district may require that members pay all or part of the contributions of a member or employer, or both, for any retirement benefits provided under the CERL, and designates those payments as employee contributions. Existing law requires the contributions to be uniform either (1) with respect to all members of a recognized bargaining unit or (2) within each of the following classifications: local miscellaneous members, local police officers, local firefighters, county peace officers, and all local safety members other than local police officers, local firefighters, and county peace officers and classifications covered pursuant to specified provisions in PEPRA.

This bill would revise that latter provision to require the contributions to be uniform either (1) with respect to all members of a recognized bargaining unit or (2) within both of the following categories: nonsafety and safety members referenced pursuant to specified provisions in PEPRA.

begin delete

The CERL provides that upon the death before retirement of a member under specified circumstances, the retirement system is liable for a death benefit. The CERL requires the death benefit to consist of the member’s accumulated contributions and an amount calculated using the annual compensation earned by the deceased, as specified.

end delete begin delete

This bill would instead require that latter amount to be calculated using the pensionable compensation earned by the deceased member, if that member was subject to PEPRA.

end delete begin delete

The CERL authorizes the surviving spouses of members who die in service after a specified number of years of service or as a result of service-connected injury or disease to elect a benefit calculated using the annual compensation earned by the deceased in lieu of a death benefit or life annuity.

end delete begin delete

This bill would instead require that benefit to be calculated using the pensionable compensation earned by the deceased member, if that member was subject to PEPRA.

end delete begin delete

The CERL requires a surviving spouse of a safety member who is killed in the performance of duty or who dies as the result of an accident or injury caused by external violence or physical force incurred in the performance of his or her duty to be paid a one-time lump-sum benefit calculated using the annual compensation earnable by the deceased.

end delete begin delete

This bill would instead require those benefits to be calculated using the pensionable compensation earned by the deceased member, if that member was subject to PEPRA.

end delete begin insert

The CERL requires specified death benefits, benefits in lieu of death benefits, and lump-sum benefits paid to surviving spouses of deceased members to be calculated using the annual compensation earned by the deceased, as provided.

end insert begin insert

This bill would instead require those benefits to be calculated using the pensionable compensation earned by the deceased member, for a member subject to PEPRA.

end insert begin insert

The CERL allows certain benefits to members who reenter county service after an absence from serving in the Armed Forces, and requires the contributions for those benefits to be calculated or determined using his or her compensation earnable at the commencement of the absence.

end insert begin insert

This bill would instead require those contributions to be calculated or determined using the pensionable compensation earned at the commencement of the absence for a member subject to PEPRA.

end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 31462.05 of the Government Code is
amended to read:

31462.05.  

(a) For a member who is subject to the California
Public Employees’ Pension Reform Act of 2013 for all or any
portion of his or her membership in the county retirement system,
“final compensation” as defined in Section 7522.32 shall apply.

(b) If a member has less than three years of service, that
member’s final compensation shall be determined by dividing the
total compensation by the number of months of service credited
to the member and multiplying by 12.

begin delete

(c) The computation for any absence shall be based on the
compensation of the position held by the member at the beginning
of the absence.

end delete begin insert

(c) When determining final compensation, the computation for
any absence shall be based on the pensionable compensation
earned by the member during the absence. In the event the member
does not have three years of earned pensionable compensation,
the computation shall be determined by dividing the total
pensionable compensation by the number of months of service
credited to the member and multiplying by 12.

end insert

SEC. 2.  

Section 31462.2 of the Government Code is amended
to read:

31462.2.  

(a) “Final compensation” for members whose service
is on a tenure that is temporary, seasonal, intermittent, or for part
time only means one-third of the total compensation earned for
that period of time during which the member rendered the
equivalent of three years of full-time service.

(b) The member may elect at or before the time he or she files
an application for retirement the period of time during which he
or she has earned three full years of credit upon which final
compensation shall be calculated. If he or she does not so elect,
that period of time immediately preceding his or her retirement
shall be used.

(c) This section also applies to a member meeting the conditions
specified in subdivision (a), whose service is described in
subdivision (a), and who is subject to the California Public
Employees’ Pension Reform Act of 2013 (Article 4 (commencing
with Section 7522) of Chapter 21 of Division 7 of Title 1).

SEC. 3.  

Section 31563 of the Government Code is amended
to read:

31563.  

Notwithstanding any other provision of law, a person
ceases to be a member for any portion of his or her service as an
elected public officer or as a public employee that is forfeited
pursuant to Sections 7522.70, 7522.72, and 7522.74.

SEC. 4.  

Section 31631 of the Government Code is amended
to read:

31631.  

(a) Notwithstanding any other law, a board of
supervisors or the governing body of a district may, by resolution,
ordinance, contract, or contract amendment under this chapter,
without a change in benefits, require that members pay all or part
of the contributions of a member or employer, or both, for any
retirement benefits provided under this chapter. All of those
payments are hereby designated as employee contributions. For
members who are represented in a bargaining unit, the payment
requirement shall be approved in a memorandum of understanding
executed by the board of supervisors or the governing body of a
district and the employee collective bargaining representative. The
contributions shall be uniform either (1) with respect to all
members of a recognized bargaining unit or (2) within both of the
following categories: nonsafety and safety members subject to
Sections 7522.20 and 7522.25.

(b) Nothing in this section shall modify a board of supervisors’
or the governing body of a district’s authority under law as it
existed on December 31, 2012, including any restrictions on that
authority, to change the amount of member contributions.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 31649 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

31649.  

(a) Any member who resigns to enter and does enter
the armed forces of the United States on a voluntary or involuntary
basis, and within 90 days after the termination of that service under
honorable conditions, reenters county service, or

(b) Any member who obtains a leave of absence to enter and
does enter the armed forces of the United States on a voluntary or
involuntary basis, and within one year after the termination under
honorable conditions of leave of absence reenters county service,
if he or she has not contributed to the retirement fund the total
percentage of his or her compensation earnable due pursuant to
Section 31461 begin insert or pensionable compensation as defined in Section
7522.34, whichever is applicable, end insert due under this chapter for the
entire period during which he or she was out of county service and
in military service, may, not more than 90 days after his or her
reentrance into county service, file with the board his or her
election that no further contributions be deducted from his or her
compensation except contributions due because of current service.

(c) A member who reenters county service under either (a) or
(b) above may be allowed up to five years credit for vesting in the
system.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 31649.6 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

31649.6.  

(a) Notwithstanding Section 31649 or 31649.5, a
member who resigned from county service, or who obtained a
leave of absence from county service, to enter and did enter the
Armed Forces of the United States on a voluntary or involuntary
basis and who then returned to county service within one year after
separation from the Armed Forces under honorable conditions,
shall receive credit for service and prior service for all or any part
of his or her military service, if, before retirement from the county,
he or she contributes what he or she would have paid to the fund
based on his or her compensation earnable pursuant to Section
31461 begin insert or pensionable compensation as defined in Section 7522.34,
whichever is applicable, end insert at the time he or she resigned or obtained
the leave of absence, together with regular interest thereon.

(b) This section shall not be operative in any county until the
board of supervisors, by resolution, makes this section applicable
in the county.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 31653 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

31653.  

Notwithstanding the provisions of this article, the
governing board of the county or district may elect to contribute
for any member of this system who is absent from and reenters
the service of the county or district pursuant to Section 31649 of
this code, amounts equal to the contributions which would have
been made by the member and his employer to the system on the
basis of his compensation earnable begin insert or pensionable compensation
as defined in Section 7522.34, whichever is applicable, end insert at the
commencement of his absence, if he had not been so absent.

If the governing board elects to make any member’s contributions
pursuant to this section:

(a) Any such member who exercises or did exercise the right
to contribute to the system during the period of military service
shall have such contributions refunded or credited to his account.

(b) Any such member who withdraws or has withdrawn his
accumulated contributions during his military service and who
does not or did not redeposit the amount withdrawn upon his return
to employment with the county or district is entitled to be credited
with any contribution the governing board elects to make, and to
receive credit for service during the period he was absent on
military service, the same as if he had not withdrawn his
accumulated contributions, and his rate for future contributions
shall be based upon his age at the commencement of his absence
on military service.

(c) The contributions made by the governing board pursuant to
this section shall be available only for the purpose of retirement
for service or for disability, and shall be made available only for
the purpose of retirement, and a member resigning from the service
of the county or district after reinstatement from military service
shall be entitled to withdraw only that portion of his accumulated
contributions personally made by him.

(d) This section shall be retroactively applied to extend its
benefits to such members of this system as the governing board
may determine whose absence from county service on military
service commenced on or after September 16, 1940, and who return
or have returned to this service upon the termination of their
military service.

begin delete SEC. 5. end delete
begin insert SEC. 8. end insert   

Section 31781 of the Government Code is amended
to read:

31781.  

The death benefit shall consist of:

(a) The member’s accumulated contributions.

(b) An amount, provided from contributions by the county or
district, equal to one-twelfth of the annual compensation earnable
or pensionable compensation as defined in Section 7522.34,
whichever is applicable, by the deceased during the 12 months
immediately preceding his death, multiplied by the number of
completed years of service under the system, but not to exceed 50
percent of such annual compensation.

begin delete SEC. 6. end delete
begin insert SEC. 9. end insert   

Section 31781.3 of the Government Code is amended
to read:

31781.3.  

The surviving spouse of a member who dies in service
after five years of service or as a result of service-connected injury
or disease may elect, in lieu of the death benefit in Section 31781
or the life annuity provided in Section 31781.1 or 31787, the
benefit that is the sum of both of the following:

(a) An amount, provided from contributions by the county or
district, equal to one-twelfth of the annual compensation earnable
or pensionable compensation as defined in Section 7522.34,
whichever is applicable, by the deceased during the 12 months
immediately preceding his or her death, multiplied by the number
of completed years of service under the system, but not to exceed
50 percent of that compensation.

(b) A monthly allowance as provided in Section 31781.1 or
31787 reduced by a monthly amount which is the actuarial
equivalent of the amount in subdivision (a) as applied to the life
of the surviving spouse.

begin delete SEC. 7. end delete
begin insert SEC. 10. end insert   

Section 31781.31 of the Government Code is amended
to read:

31781.31.  

Notwithstanding Sections 31781.1 and 31781.3, the
surviving spouse of a member subject to Section 31751 who dies
in service after 10 years of service, or as a result of
service-connected injury or disease, may elect, in lieu of the life
annuity provided in Section 31765.11 or the death benefit provided
in Section 31781.01, the benefit that is the sum of both of the
following:

(a) An amount, provided from contributions by the county or
district, equal to one-twelfth of the annual compensation earnable
or pensionable compensation as defined in Section 7522.34,
whichever is applicable, by the deceased during the 12 months
immediately preceding his or her death, multiplied by the number
of completed years of service under the system, but not to exceed
50 percent of that compensation.

(b) A monthly allowance as provided in Section 31765.11
reduced by a monthly amount which is the actuarial equivalent of
the amount in subdivision (a) as applied to the life of the surviving
spouse.

begin delete SEC. 8. end delete
begin insert SEC. 11. end insert   

Section 31787.6 of the Government Code is amended
to read:

31787.6.  

A surviving spouse of a safety member who is killed
in the performance of duty or who dies as the result of an accident
or injury caused by external violence or physical force, incurred
in the performance of his or her duty, shall be paid the following
amount in addition to all other benefits provided by this chapter:

A one-time lump-sum benefit equal to an amount, provided from
contributions by the county or district, equal to the annual
compensation earnable or pensionable compensation as defined
in Section 7522.34, whichever is applicable, by the deceased at
his or her monthly rate of compensation at the time of his or her
death.

This section is not applicable to members described in Section
31469.2.