AB 966 — Public employee benefits.

Summary

(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. PERL defines final compensation in this regard for members of certain state bargaining units who became a state member of the system on or after January 1, 2006, or January 1, 2007, with specified exceptions. This bill would specify that the provisions described above apply to members in state bargaining units 1, 2, 3, 4, 7, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, and 21 who were employed by the state for the first time on or after January 1, 2006, or January 1, 2007. (2) PERL requires that the entire compensation of a local member of PERS be used for the calculation of service rendered as an employee of the contracting agency for specified contracts, including contracts entered prior to July 1, 1952, that contained an election in this regard. PERL provides a definition of final compensation for a local member of PERS in connection with this requirement. This bill would delete these provisions. (3) PERL permits officers, warrant officers, and enlisted personnel of the California National Guard to become members of PERS upon filing a written election and making the necessary contributions to the retirement fund. Existing law defines final compensation and state service in this regard. Existing law prohibits a National Guard member from receiving health care benefits under the Public Employees' Medical and Hospital Care Act based on his or her service with the California National Guard. This bill would revise the definition of final compensation for a National Guard member to specify that it is the highest annual compensation that was earned during a consecutive 12-month period while rendering service with the California National Guard. The bill would also make technical changes, including revising the definition of state service with regard to a National Guard member to specify that it does not apply to qualification for health and dental benefits. (4) PERL prescribes the period of limitation within which an action for adjustment of errors and omissions regarding payments into or out of the retirement fund must be filed, and generally sets that period at 3 years. The law provides that the period of limitation commences with the discovery of the erroneous payment in cases in which payment is erroneous because of death or remarriage, as specified. This bill would provide in cases in which payment is erroneous because of death or remarriage, as described above, that the period of limitation is 10 years. (5) PERL permits the Board of Directors of PERS to select, purchase, or acquire in the name of the system real property, improved or unimproved, and to construct or remodel, and equip an office building, including appropriate satellite structures, as specified. This bill would permit the Board of Directors of PERS to select, purchase, or acquire real property and to construct or remodel, and equip business recovery centers in California for use by the system as an alternate facility, emergency operations center, or data center that the board determines is appropriate for disaster preparedness. (6) PERL requires every state agency, school employer, and the chief administrative officer of a contracting agency to provide immediate written notice to the Board of Directors of PERS of the change in status of any member resulting from transfer, promotion, leave of absence, resignation, reinstatement, dismissal, or death. This bill would revise these provisions to provide that the notice be filed in the manner prescribed by PERS. (7) PERL requires the Board of Directors of PERS to annually employ a certified public accountant, who is not in public employment, to audit the financial statements of this system. This bill would specify that these provisions do not affect the ability of the State Auditor or the Department of Finance to conduct other types of audits of the system as otherwise authorized. (8) PERL provides that an employer that fails to enroll an employee into PERS membership when he or she becomes eligible, or within 90 days of that date, when the employer knows or should have known of that eligibility, is required to pay all arrears costs for member contributions and administrative costs of $500 per member. PERL provides that a contribution adjustment is not required when a member paid less than the correct amount of normal contributions, if the board finds that the error was not known to the member and was not the result of erroneous information provided by the employee to the system or to his or her employer. This bill would prohibit an employer from passing on to an employee costs associated with the employer's failure to enroll an employee into membership, as described above. The bill would also require an employer that fails to withhold and submit an employee's normal contributions within the applicable time limitations to notify PERS and to take no action until authorized by PERS. (9) PERL excludes an employee who serves on a less than full-time basis from membership in PERS unless that person comes within specified exceptions. PERL provides an exception for a person whose employment is on a seasonal, limited-term, on-call, or other irregular basis, and the person works more than 125 days, or 1,000 hours within the fiscal year, as specified. This bill would instead provide that an employee whose appointment or employment contract does not fix a term of full-time, continuous employment in excess of 6 months is excluded from PERS membership unless specified exceptions apply. Among those exceptions, the bill would provide that a position is not excluded if it requires service equivalent to an average of 20 hours a week for one year or longer. The bill would also revise the exception described above, regarding seasonal, limited-term, or on-call employment, to have it apply if the person completes 125 days or 1,000 hours, as specified. (10) PERL permits a contracting agency to amend its contract with PERS without election among its employees, as specified, if the contracting agency has fully discharged obligations imposed on it with respect to the amendments, and if the amendment meets certain requirements, including that the amendments apply uniformly to a member in specified member classes. This bill would include local safety officers and school safety members within the member classes to which the amendments must apply uniformly. (11) PERL prohibits making a contract or contract amendment to provide retirement benefits for some, but not all members of specified membership classifications. This bill would include local safety officers and school safety members within these classifications. (12) PERL defines compensation earnable with respect to a school member of PERS, and in this regard, particularly defines payrate for noncertificated members for whom the normal work schedule is less than 40 hours a week. For the purpose of calculating retirement benefits based on part-time service, PERL requires that compensation earnable be taken as the compensation that would have been earnable if the employment had been on a full-time basis and the member had worked full time, except as specified. This bill would redefine noncertificated members as classified members for these purposes and make clarifying changes in the definition of payrate in this context. The bill would specify that compensation earnable must also conform to other specified standards for members and school members. (13) PERL requires that a state miscellaneous member or industrial member, other than a university member, or a local member of PERS be retired for service if he or she has elected to participate in partial service retirement, as specified, has been credited with 20 years of state service, and has attained normal retirement age. This bill would eliminate the requirement of 20 years service credit for the purpose of these provisions. (14) PERL requires that the effective date of a written application for retirement submitted to the board more than 9 months after the member's discontinuance of state service be determined by the Board of Administration of PERS consistent with criteria established for the correction of errors and omissions. This bill would require that the effective date of a written application for retirement submitted to the board more than 9 months after the member's discontinuance of state service be the first day of the month in which the member's application is received at an office of the board or by an employee of PERS designated by the board. (15) PERL provides for the preservation of the purchasing power of benefits through a system of adjustments in benefits based on changes in living costs. The law also establishes provisions to ensure the federal tax-exempt status of the system and to preserve the deferred treatment of federal income tax on public employer contributions to public employee pensions. Existing federal law limits the amount a defined benefit plan may pay a participant annually, and requires that this limitation be adjusted annually by regulation to account for increases in the cost of living. This bill would specify that the amount payable to a member, including any cost-of-living adjustments, is prohibited from exceeding the limit on annual benefit payments prescribed by federal law, and would incorporate specified provisions of federal law by reference. The bill would also make related changes. (16) The Public Employees Medical and Hospital Care Act requires that 30 days prior to, or 30 days after, retirement and during the open enrollment period, a state employee enrolled in a flexible benefit plan administered by the state be given the option to enroll in a health benefit plan, as specified. This bill would change the period described above to provide that a state employee may be given the option to enroll 30 days prior to, or 60 days following, retirement and during the open enrollment period. (17) The Judges' Retirement Law establishes the Judges' Retirement System to provide retirement benefits for retired judges. Existing law also establishes the Judges' Retirement System II Law for judges elected or appointed on or after November 9, 1994. Both of these laws provide for the payment of accrued allowances that remain unpaid at the time of the death of a judge pursuant to a specified order. This bill would require that a person who is retired under the Judges' Retirement System who is again appointed or elected to serve as a judge reinstate from retirement and become a member of the system, as specified. The bill would also revise provisions governing the payment of accrued, unpaid allowances in both judges' retirement systems to provide for their payment to either the estate of the deceased or the duly authorized representative of the estate when the court receives a court order appointing an executor, administrator, or personal representative. If the estate does not require probate, the bill would also authorize the payment to be made to a successor trustee, or to a beneficiary of the deceased named in a valid will, as applicable. (18) The bill would also make technical changes.

Bill Text

• Chaptered 08/06/09 - Chaptered Current pdf August 06, 2009
• Enrolled 07/15/09 - Enrolled pdf July 15, 2009
• Amended 06/02/09 - Amended Senate pdf June 02, 2009
• Amended 03/26/09 - Amended Assembly pdf March 26, 2009
• Introduced 02/26/09 - Introduced pdf February 26, 2009
• AB966 View text html

Action History

1. August 06, 2009

   Chaptered by Secretary of State - Chapter 130, Statutes of 2009.

2. August 05, 2009

   Approved by the Governor.

3. July 30, 2009

   Enrolled and to the Governor at 2:30 p.m.

4. July 13, 2009

   Senate amendments concurred in. To enrollment. (Ayes 76. Noes 0. Page 2475.)

5. July 09, 2009

   In Assembly. Concurrence in Senate amendments pending. May be considered on or after July 11 pursuant to Assembly Rule 77.

6. July 09, 2009

   Read third time, passed, and to Assembly. (Ayes 34. Noes 0. Page 1667.)

7. July 02, 2009

   Ordered to Special Consent Calendar.

8. June 30, 2009

   Read second time. To third reading.

9. June 29, 2009

   From committee: Be placed on second reading file pursuant to Senate Rule 28.8.

10. June 08, 2009

    From committee: Do pass, and re-refer to Com. on APPR with recommendation: To Consent Calendar. Re-referred. (Ayes 7. Noes 0.) (June 8).

11. June 02, 2009

    From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on P.E. & R.

12. May 21, 2009

    Referred to Com. on P.E. & R.

13. May 14, 2009

    In Senate. Read first time. To Com. on RLS. for assignment.

14. May 14, 2009

    Read third time, passed, and to Senate. (Ayes 73. Noes 0. Page 1469.)

15. May 11, 2009

    Read second time. To Consent Calendar.

16. May 07, 2009

    From committee: Do pass. To Consent Calendar. (May 6).

17. April 22, 2009

    From committee: Do pass, and re-refer to Com. on APPR. with recommendation: To Consent Calendar. Re-referred. (Ayes 6. Noes 0.) (April 22).

18. March 27, 2009

    Re-referred to Com. on P.E.,R. & S.S.

19. March 26, 2009

    From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E.,R. & S.S. Read second time and amended.

20. March 26, 2009

    Referred to Com. on P.E.,R. & S.S.

21. February 27, 2009

    From printer. May be heard in committee March 29.

22. February 26, 2009

    Read first time. To print.

Sponsors

• Retirement and Social Security Committee on Public Employees · Primary

Votes

Subjects