California 2011-2012 Regular Session Status: Enacted

AB 340 — Public employees' retirement.

Last action — Chaptered by Secretary of State - Chapter 296, Statutes of 2012.

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Assembly
  4. ✓
    Passed Senate
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced February 10, 2011. Enacted.

Prognosis

Advancing 58% · moderate confidence

Where this bill stands today.

Odds of enactment

High

How often bills like it became law.

  • Enacted

    Current position in the legislative process.

  • 3 sponsors

    1 primary, 2 co-sponsors signed on.

  • Mixed recorded votes

    8 passed, 1 failed in recorded votes so far.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Summary

(1) The Public Employees' Retirement Law (PERL) establishes the Public Employees' Retirement System (PERS) and the Teachers' Retirement Law establishes the State Teachers' Retirement System (STRS) for the purpose of providing pension benefits to specified public employees. Existing law also establishes the Judges' Retirement System II which provides pension benefits to elected judges and the Legislators' Retirement System which provides pension benefits to elective officers of the state other than judges and to legislative statutory officers. The County Employees Retirement Law of 1937 authorizes counties to establish retirement systems pursuant to its provisions in order to provide pension benefits to county, city, and district employees. This bill would require a public retirement system, as defined, to modify its plan or plans to comply with this act. The bill would establish new retirement formulas that could not be exceeded by a public employer offering a defined benefit pension plan, setting the maximum benefit allowable for employees first hired on or after January 1, 2013, as a formula commonly known as 2.5% at age 67 for nonsafety members, one of 3 formulas for safety members, 2% at age 57, 2.5% at age 57, or 2.7% at age 57, and 1.25% at age 67 for new state miscellaneous or industrial members who elect to be in Tier 2. The amount of pensionable compensation upon which a defined benefit for new members, as defined, could be based would be limited to an amount determined under a specified provision of federal law for an employee whose service is included in the federal system, which is $110,100 for 2012, and 120% of that amount for an employee whose service is not included in the federal system. Those amounts would be adjusted annually, as specified. The bill would authorize an employer to contribute to a defined contribution plan, as specified. The bill would prohibit a public employer from making contributions on behalf of a person who first becomes a member on or after January 1, 2013, to any qualified retirement plan based on any portion of compensation that exceeds an amount specified in federal law, which is $250,000 for 2012. The bill would also prohibit, for the purposes of determining a retirement benefit paid to a new member of a public retirement system, the maximum salary, compensation, or payrate taken into account under the retirement plan for any year from exceeding the amount specified in that federal provision, and would prohibit a public employer from seeking an exception to that prohibition. The bill would prohibit a public employer from offering a plan of replacement benefits for a person who is first hired on or after January 1, 2013, and any survivors or beneficiaries whose retirement benefits are limited by a specified provision of federal law. The bill would prohibit a public employer from providing a retirement health benefit vesting schedule or other specified retirement benefits to a manager or an employee or officer who is excluded from collective bargaining that is more advantageous than that provided generally to other public employees of the same employer who are in related membership classifications. Under existing law, state miscellaneous and industrial employees first hired on or after August 11, 2004, who qualify for membership in PERS do not make contributions to the system or receive service credit for their service and the state employer does not make contributions on their behalf during their first 24 months of employment. These members are instead required to contribute into a tax-deferred savings account, commonly known as the alternate retirement program. This bill would end that program and instead provide that new members immediately make their contributions to the system. (2) Existing law defines final compensation for various employment classifications in connection with the benefits provided by the retirement systems. This bill, for the purposes of determining a retirement benefit paid to a person who first becomes a member of a public retirement system on or after January 1, 2013, would require that final compensation mean the member's highest average annual pensionable compensation earned, as defined, during a period of at least 36 consecutive months, or at least 3 school years, as specified. (3) Existing state and local public employee retirement systems are funded by investment returns and employer and employee contributions. The California Constitution provides that the retirement board of a public pension or retirement system has the exclusive power to provide for actuarial services in order to ensure the competency of the assets of the system. Existing law, with respect to PERS, requires the Governor to include in the annual Budget Act the contribution rates submitted by the system actuary of the liability on account of employees of the state. This bill would require public employees who are first employed on and after January 1, 2013, and who contribute to a defined benefit plan to contribute at least 12 of the annual actuarially determined normal costs, and would prohibit a public employer from contributing in any fiscal year, in combination with employee contributions, less than the plan normal cost, except as specified. The bill would authorize employee contributions to be more than 12 of the normal costs if agreed to through collective bargaining, but would prohibit the employer from using impasse procedures to increase an employee rate. The bill would also state that equal sharing of the normal cost between the employer and employees shall be the standard and would prescribe specified increases in employee contribution rates for existing employees. By increasing the contribution to continuously appropriated funds, this bill would make an appropriation. (4) The Teachers' Retirement Law establishes the Defined Benefit Program of STRS, which provides a defined benefit to members of the system based on final compensation, credited service, and age at retirement, subject to certain variations. The Teachers' Retirement Law also establishes the Defined Benefit Supplement Program, which provides supplemental retirement, disability, and other benefits, payable either in a lump-sum payment or an annuity, or both, to members of the State Teachers' Retirement Plan. The Teachers' Retirement Law defines creditable compensation for these purposes as remuneration that is payable in cash to all persons in the same class of employees, as specified, for performing creditable service. This bill would revise the definition of creditable compensation for these purposes and would identify certain payments, reimbursements, and compensation that are creditable compensation to be applied to the Defined Benefit Supplement Program. The bill would prohibit an employer from offering a supplemental defined benefit plan unless it offered one before January 1, 2013. The bill would establish a retirement formula of 2.4% at age 65 and set a minimum retirement age of 55 for a member of STRS who is hired on or after January 1, 2013. The bill would state the intent of the Legislature that STRS propose statutory changes to fully effectuate those changes by June 30, 2013. (5) Existing law permits members of PERS, STRS, and county, city, and district retirement systems that have adopted specified provisions, to purchase up to 5 years of nonqualified service credit by making specified contributions to the system. This bill, on and after January 1, 2013, would prohibit a public retirement system from allowing the purchase of nonqualified service credit, as described above, except as specified. Under existing law, retirement benefits may be increased retroactively or prospectively. This bill would provide that any enhancement to a public retirement system's retirement formula or benefit that is adopted on or after January 1, 2013, would apply only to service performed on or after the operative date of the enhancement. The bill would also provide that, if a change to a member's classification or employment results in an increase in the retirement formula or benefit applicable to that member, the increase would apply only to service performed on or after the operative date of the change. The bill would also, until January 1, 2018, specify the benefit amount for industrial disability retirement. (6) Existing law requires the final compensation of a local member for the purpose of determining any pension or benefit resulting from state service as an elective or appointed officer on a city council or a county board of supervisors accrued while in membership, to be based on the highest average annual compensation earnable by the member during the period of state service in each elective or appointed office. This bill, for the purpose of determining any pension or benefit resulting from the local service, would require final compensation to be based on the highest average annual pensionable compensation earned. (7) Existing law provides that any elected public officer who takes public office, or is reelected to public office, on or after January 1, 2006, who is convicted of any specified felony arising directly out of his or her official duties, forfeits all rights and benefits accrued on and after January 1, 2006, under, and membership in, any public retirement system in which he or she is a member, effective on the date of final conviction, as specified. This bill would instead require that 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, forfeit retirement benefits earned or accrued from the earliest date of the commission of the felony to the forfeiture date, as specified. The bill would also require any contributions to the public retirement system made by the public employee on or after the earliest date of commission of the felony to be returned, without interest, to the public employee upon the occurrence of a distribution event, as defined, unless otherwise ordered by a court or determined by the pension administrator. The bill would also make related, conforming changes. (8) PERL establishes the circumstances in which a retired person may serve without reinstatement from retirement or loss or interruption of benefits, including as a member of a board, commission, or advisory committee, upon appointment by certain state officials, by the director of a state department, or by the governing board of a contracting agency. Existing law generally prohibits any person who has been retired from being employed in any capacity with the same public employer unless he or she is first reinstated from retirement, except as authorized. This bill would authorize a retired person, who is first appointed on or after January 1, 2013, to a part-time or nonsalaried position on a state board or commission, to serve without reinstatement, as specified. The bill would prohibit a retired person who retires from a public employer from serving, being employed by, or being employed through a contract directly by a public employer in the same retirement system from which the retiree receives a pension benefit without reinstatement, except as specified. (9) The Teachers' Retirement Law limits the amount of compensation for certain creditable service activities by a retired member to be $22,000 adjusted by the percentage change in the average compensation earnable by active members of the Defined Benefit Program, from the 1998–99 fiscal year to the fiscal year ending in the previous calendar year. The bill would change that limit in the Teachers' Retirement Law to be 12 of the median final compensation of all members who retired for service during the fiscal year ending in the previous calendar year and would define those activities as retired member activities. (10) The Legislators' Retirement Law (LRL) provides pension benefits based in part upon credited service. The LRL also authorizes the Insurance Commissioner and every legislative statutory officer and every elective officer of the state whose office is provided for by the California Constitution, except judges, to become a member of the Legislators' Retirement System (LRS) . PERL authorizes legislative statutory officers and elective officers, as defined, to elect to become members of PERS. This bill would prohibit anyone who first becomes, on or after January 1, 2013, the Insurance Commissioner, a legislative statutory officer, or an elective officer of the state whose office is provided for by the California Constitution from becoming a member of the LRS but would continue to provide optional membership in PERS. (11) Existing law authorizes any public agency to participate in, and make its employees members of, PERS by contract. In the case of an employee who has been employed by one or more contracting public agencies, retirement benefits distributed to that employee are based on the highest final compensation under any system, and each system makes a separate retirement payment to the employee based upon the number of years that the employee worked for each of those agencies. The bill would require the Board of Administration of PERS to implement program changes to ensure that a contracting agency that creates a significant increase in actuarial liability bears the associated liability. The bill would require the system actuary to assess an increase in liability in this regard to the employer that created it at the time the increase is determined and to make adjustments to that employer's rates to account for the increased liability. The bill would apply these requirements to any significant increase in actuarial liability due to increased compensation paid to a nonrepresented employee regardless of when the increase in compensation occurred. (12) The County Employees Retirement Law of 1937 (CERL) authorizes counties and districts, as defined, to provide a system of retirement benefits to their employees. CERL defines compensation earnable for the purpose of calculating benefits as the average compensation for the period under consideration with respect to the average number of days ordinarily worked by persons in the same grade or class of positions during the period, and at the same rate of pay, as determined by the retirement board. This bill would prohibit a variety of payments, including unscheduled overtime, payments for unused vacation, sick leave, or compensatory time off, exceeding what may be earned and payable in each 12-month period during the final average salary period, and specified payments made at the termination of employment from being included in compensation earnable. The bill would require the board to establish a procedure for assessing and determining whether an element of compensation was paid to enhance a member's retirement benefit and would prohibit that compensation from being included in compensation earnable. The bill would require the board to provide notice to the member and employer upon a final determination that compensation was paid to enhance a member's retirement benefit. The bill would authorize the member or employer to obtain judicial review of the board's action by filing a petition for writ of mandate, as specified. The bill would authorize the board to assess a county or district a reasonable amount to cover the cost of audit, adjustment, or correction, if it determines that a county or district knowingly failed to comply with specified reporting requirements.

Bill Text

Action History

  1. Chaptered by Secretary of State - Chapter 296, Statutes of 2012.

  2. Approved by the Governor.

  3. Enrolled and presented to the Governor at 4:55 p.m.

  4. Ordered to Engrossing and Enrolling.

  5. Senate adopted Conference Committee report. (Ayes 38. Noes 1. Page 5073.)

  6. Assembly adopts Conference Committee report. (Ayes 66. Noes 9. Page 6733.).

  7. From printer.

  8. From Conference Committee: Be adopted. Assembly (Ayes 2 (Allen and Furutani). Noes 0.). Senate (Ayes 2 (Negrete McLeod and Simitian. Noes 0.). To print.

  9. Assembly Members Allen, Furutani, and Silva appointed to Conference Committee.

  10. Senators Negrete McLeod, Simitian, and Walters appointed to Conference Committee.

  11. Assembly refused to concur in Senate amendments. To Conference Committee. (Ayes 4. Noes 75. Page 3210.)

  12. In Assembly. Concurrence in Senate amendments pending.

  13. Read third time. Passed. Ordered to the Assembly. (Ayes 25. Noes 15. Page 2422.).

  14. Ordered to third reading.

  15. (Ayes 23. Noes 14. Page 2392.)

  16. Withdrawn from committee.

  17. Senate Rule 29.3(b) suspended. (Ayes 23. Noes 2. Page 2338.)

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

  19. Re-referred to Com. on RLS.

  20. Read second time. Ordered to third reading.

  21. Read third time and amended. Ordered to second reading.

  22. Action rescinded whereby the bill was read third time, passed, and to Assembly.

  23. In Senate. Held at Desk.

  24. Ordered to the Senate.

  25. In Assembly. Concurrence in Senate amendments pending. May be considered on or after July 13 pursuant to Assembly Rule 77.

  26. Read third time. Passed. Ordered to the Assembly. (Ayes 35. Noes 0. Page 1781.).

  27. Read second time. Ordered to third reading.

  28. From committee: Do pass. (Ayes 5. Noes 0.) (June 27).

  29. 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.

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

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

  32. Read third time. Passed. Ordered to the Senate. (Ayes 73. Noes 0. Page 1339.)

  33. Read second time. Ordered to third reading.

  34. From committee: Do pass. (Ayes 5. Noes 0.) (May 4).

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

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

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

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

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

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

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

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

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

  44. From printer. May be heard in committee March 13.

  45. Read first time. To print.

Sponsors

  • Negrete McLeod · Cosponsor
  • Furutani · Primary
  • Travis Allen · Cosponsor

Sponsorship breakdown

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1 sponsors · 2 co-sponsors · 119 not signed on · 10 voted No

Sponsors (1)

  • Furutani

Co-sponsors (2)

Not signed on (119)

119 members have not signed on to this bill.

Show all 119 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

AB 340 FURUTANI Conference Report Appeal the Decision of the Chair By DONNELLY

Passed 30 Yea · 46 Nay · 4 Other
Party YeaNayPresentNot Voting
Republican 2000
Unaffiliated 284504
Democratic 0100
Total 304604
% of votes cast 38%58%0%5%
How each member voted (80)
Member Party Vote
Hall — Yea
Butler — Nay
Feuer — Nay
Campos — Nay
Furutani — Yea
Galgiani — Nay
Gatto — Nay
Fong — Nay
Gordon — Yea
Allen — Nay
Gorell — Yea
Hagman — Yea
Halderman — Yea
Carter — Nay
Portantino — Nay
John A. Pérez — Nay
Mitchell — Nay
Harkey — Yea
Fletcher — Nay
Hayashi — Nay
Huber — Nay
Cedillo — Nay
Hueso — Nay
Bonilla — Nay
Atkins — Nay
Jeffries — Yea
Alejo — Nay
Beall — Nay
Block — Nay
Chesbro — Nay
Conway — Yea
Davis — Nay
Donnelly — Yea
Knight — Yea
Logue — Yea
Mendoza — Nay
Miller — Yea
Monning — Nay
Morrell — Yea
Nestande — Yea
Norby — Yea
Olsen — Yea
Perea — Nay
Skinner — Nay
Smyth — Yea
Valadao — Yea
Wieckowski — Yea
Cook — Not Voting
Solorio — Nay
Swanson — Not Voting
Wagner — Not Voting
Achadjian — Yea
Ammiano — Nay
Blumenfield — Nay
Bradford — Nay
Brownley — Nay
Buchanan — Nay
Hill — Nay
Huffman — Yea
Lara — Nay
Ma — Nay
Mansoor — Yea
Nielsen — Yea
Pan — Nay
Silva — Yea
Torres — Nay
Williams — Nay
Eng — Nay
Dickinson — Nay
Yamada — Nay
Fuentes — Nay
Garrick — Yea
Beth Gaines — Not Voting
Bill Berryhill — Yea
Bonnie Lowenthal — Nay
Roger Hernández — Yea
V. Manuel Pérez — Nay
Calderon, Lisa Democratic Nay
Grove, Shannon Republican Yea
Jones, Brian W. Republican Yea

Official roll call →

AB 340 FURUTANI Conference Report

Passed 66 Yea · 9 Nay · 5 Other
Party YeaNayPresentNot Voting
Unaffiliated 65705
Republican 0200
Democratic 1000
Total 66905
% of votes cast 83%11%0%6%
How each member voted (80)
Member Party Vote
Gorell — Yea
Hagman — Not Voting
Butler — Yea
Carter — Yea
Eng — Yea
Cedillo — Yea
Fuentes — Yea
Furutani — Yea
Gatto — Yea
Fong — Yea
Chesbro — Yea
Gordon — Yea
Allen — Yea
Hall — Yea
Davis — Yea
Portantino — Yea
John A. Pérez — Yea
Mitchell — Yea
Hill — Yea
Fletcher — Yea
Hueso — Yea
Huffman — Yea
Knight — Yea
Bonilla — Yea
Alejo — Yea
Ammiano — Yea
Dickinson — Yea
Lara — Yea
Ma — Yea
Miller — Yea
Nestande — Yea
Nielsen — Yea
Olsen — Yea
Pan — Yea
Perea — Yea
Silva — Yea
Smyth — Yea
Torres — Yea
Williams — Yea
Atkins — Yea
Garrick — Nay
Halderman — Not Voting
Campos — Yea
Harkey — Nay
Hayashi — Nay
Conway — Not Voting
Cook — Not Voting
Donnelly — Nay
Mendoza — Nay
Morrell — Yea
Solorio — Yea
Swanson — Nay
Wagner — Not Voting
Wieckowski — Yea
Achadjian — Yea
Beall — Yea
Block — Yea
Blumenfield — Yea
Bradford — Yea
Brownley — Yea
Buchanan — Yea
Huber — Yea
Jeffries — Yea
Logue — Yea
Mansoor — Nay
Monning — Yea
Norby — Yea
Skinner — Yea
Valadao — Yea
Feuer — Yea
Galgiani — Yea
Yamada — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
Bonnie Lowenthal — Yea
Roger Hernández — Yea
V. Manuel Pérez — Yea
Calderon, Lisa Democratic Yea
Grove, Shannon Republican Nay
Jones, Brian W. Republican Nay

Official roll call →

Conference Reports AB340 Furutani By Negrete McLeod

Passed 38 Yea · 1 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 35101
Republican 1000
Democratic 2000
Total 38101
% of votes cast 95%3%0%3%
How each member voted (40)
Member Party Vote
Wyland — Yea
Lieu — Yea
Yee — Yea
Lowenthal — Yea
De León — Yea
Negrete McLeod — Yea
Rubio — Yea
Cannella — Yea
Runner — Not Voting
Hancock — Yea
Harman — Yea
Hernandez — Yea
Alquist — Yea
Anderson — Nay
Blakeslee — Yea
Corbett — Yea
Correa — Yea
Dutton — Yea
Liu — Yea
Pavley — Yea
Price — Yea
Simitian — Yea
Steinberg — Yea
Vargas — Yea
Walters — Yea
Huff — Yea
Kehoe — Yea
Leno — Yea
Wolk — Yea
Wright — Yea
Emmerson — Yea
Evans — Yea
DeSaulnier — Yea
Fuller — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
La Malfa — Yea
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Yea

Official roll call →

AB 340 FURUTANI Concurrence in Senate Amendments

Failed 4 Yea · 75 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 47201
Republican 0200
Democratic 0100
Total 47501
% of votes cast 5%94%0%1%
How each member voted (80)
Member Party Vote
Hagman — Nay
Eng — Nay
Furutani — Yea
Garrick — Nay
Hayashi — Yea
Hill — Nay
Butler — Nay
Huber — Nay
Mitchell — Yea
Fong — Nay
Carter — Nay
Allen — Nay
Alejo — Nay
Cedillo — Yea
Conway — Nay
Cook — Nay
Olsen — Nay
Wagner — Nay
Block — Nay
Chesbro — Nay
Davis — Nay
Dickinson — Nay
Galgiani — Nay
Gordon — Nay
Halderman — Nay
Hall — Nay
Portantino — Nay
John A. Pérez — Nay
Hueso — Nay
Fletcher — Nay
Huffman — Nay
Knight — Nay
Lara — Nay
Mendoza — Nay
Bonilla — Nay
Miller — Nay
Nestande — Nay
Nielsen — Nay
Pan — Nay
Perea — Nay
Skinner — Nay
Smyth — Nay
Valadao — Nay
Atkins — Nay
Yamada — Nay
Gorell — Not Voting
Campos — Nay
Morrell — Nay
Donnelly — Nay
Solorio — Nay
Achadjian — Nay
Ammiano — Nay
Beall — Nay
Blumenfield — Nay
Bradford — Nay
Brownley — Nay
Buchanan — Nay
Harkey — Nay
Jeffries — Nay
Logue — Nay
Ma — Nay
Mansoor — Nay
Monning — Nay
Norby — Nay
Silva — Nay
Swanson — Nay
Torres — Nay
Wieckowski — Nay
Williams — Nay
Feuer — Nay
Fuentes — Nay
Gatto — Nay
Beth Gaines — Nay
Bill Berryhill — Nay
Bonnie Lowenthal — Nay
Roger Hernández — Nay
V. Manuel Pérez — Nay
Calderon, Lisa Democratic Nay
Grove, Shannon Republican Nay
Jones, Brian W. Republican Nay

Official roll call →

3rd Supp 1 AB340 Furutani By Simitian

Passed 25 Yea · 15 Nay
Party YeaNayPresentNot Voting
Unaffiliated 231400
Democratic 2000
Republican 0100
Total 251500
% of votes cast 63%38%0%0%
How each member voted (40)
Member Party Vote
Yee — Yea
Wyland — Nay
Lowenthal — Yea
De León — Yea
Negrete McLeod — Yea
Rubio — Yea
Fuller — Nay
Hancock — Yea
Runner — Nay
Huff — Nay
Leno — Yea
Lieu — Yea
Alquist — Yea
Blakeslee — Nay
Dutton — Nay
Pavley — Yea
Price — Yea
Simitian — Yea
Steinberg — Yea
Wolk — Yea
Anderson — Nay
Harman — Nay
Hernandez — Yea
Kehoe — Yea
Liu — Yea
Vargas — Yea
Walters — Nay
Wright — Yea
Cannella — Nay
Corbett — Yea
Emmerson — Nay
Correa — Yea
Evans — Yea
DeSaulnier — Yea
Beth Gaines — Nay
Bill Berryhill — Nay
La Malfa — Nay
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Nay

Official roll call →

3rd Reading AB340 Furutani By Negrete McLeod

Passed 35 Yea · 0 Nay · 5 Other
Party YeaNayPresentNot Voting
Unaffiliated 33004
Republican 1000
Democratic 1001
Total 35005
% of votes cast 88%0%0%13%
How each member voted (40)
Member Party Vote
Yee — Yea
Huff — Yea
Wolk — Yea
Wyland — Yea
Runner — Yea
Lowenthal — Yea
Cannella — Yea
Negrete McLeod — Yea
Evans — Yea
Rubio — Yea
Fuller — Yea
De León — Not Voting
Hancock — Not Voting
Corbett — Not Voting
Dutton — Yea
Anderson — Yea
Harman — Yea
Kehoe — Yea
Leno — Yea
Liu — Yea
Pavley — Not Voting
Price — Yea
Simitian — Yea
Steinberg — Yea
Vargas — Yea
Wright — Yea
Alquist — Yea
Blakeslee — Yea
Hernandez — Yea
Lieu — Yea
Walters — Yea
Emmerson — Yea
Correa — Yea
DeSaulnier — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
La Malfa — Yea
Calderon, Lisa Democratic Not Voting
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Yea

Official roll call →

Do pass.

Passed 5 Yea · 0 Nay
Party YeaNayPresentNot Voting
Unaffiliated 4000
Democratic 1000
Total 5000
% of votes cast 100%0%0%0%
How each member voted (5)
Member Party Vote
Negrete McLeod — Yea
Walters — Yea
Vargas — Yea
Beth Gaines — Yea
Padilla, Stephen C. Democratic Yea

Official roll call →

AB 340 FURUTANI Assembly Third Reading

Passed 73 Yea · 0 Nay · 7 Other
Party YeaNayPresentNot Voting
Unaffiliated 68007
Republican 2000
Democratic 3000
Total 73007
% of votes cast 91%0%0%9%
How each member voted (80)
Member Party Vote
Hagman — Yea
Feuer — Yea
Butler — Yea
Furutani — Yea
Carter — Yea
Hill — Yea
Huber — Yea
Huffman — Yea
Alejo — Yea
Ammiano — Yea
Blumenfield — Yea
Logue — Yea
Perea — Yea
Skinner — Yea
Smyth — Yea
Swanson — Yea
Wagner — Yea
Williams — Yea
John A. Pérez — Yea
Mitchell — Yea
Fletcher — Yea
Galgiani — Not Voting
Bonilla — Yea
Atkins — Yea
Gordon — Yea
Gorell — Not Voting
Halderman — Yea
Portantino — Not Voting
Hall — Yea
Harkey — Yea
Campos — Yea
Cedillo — Not Voting
Jeffries — Yea
Knight — Yea
Chesbro — Yea
Beall — Yea
Donnelly — Yea
Lara — Yea
Miller — Yea
Monning — Yea
Nestande — Yea
Nielsen — Yea
Pan — Yea
Solorio — Yea
Valadao — Yea
Wieckowski — Yea
Achadjian — Yea
Block — Yea
Bradford — Yea
Brownley — Yea
Buchanan — Yea
Hayashi — Yea
Hueso — Yea
Ma — Yea
Mansoor — Yea
Mendoza — Yea
Morrell — Yea
Norby — Yea
Olsen — Yea
Silva — Yea
Torres — Not Voting
Conway — Not Voting
Cook — Yea
Eng — Yea
Davis — Yea
Dickinson — Yea
Yamada — Yea
Fuentes — Yea
Garrick — Not Voting
Gatto — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
Bonnie Lowenthal — Yea
Roger Hernández — Yea
V. Manuel Pérez — Yea
Allen, Benjamin Democratic Yea
Calderon, Lisa Democratic Yea
Fong, Mike Democratic Yea
Grove, Shannon Republican Yea
Jones, Brian W. Republican Yea

Official roll call →

Do pass.

Passed 5 Yea · 0 Nay · 1 Other
Party YeaNayPresentNot Voting
Democratic 1000
Unaffiliated 4001
Total 5001
% of votes cast 83%0%0%17%
How each member voted (6)
Member Party Vote
Harkey — Yea
Wieckowski — Not Voting
Ma — Yea
Mansoor — Yea
Furutani — Yea
Allen, Benjamin Democratic Yea

Official roll call →

Subjects

finance veterans labor
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Frequently asked questions

What does AB 340 do?
(1) The Public Employees' Retirement Law (PERL) establishes the Public Employees' Retirement System (PERS) and the Teachers' Retirement Law establishes the State Teachers' Retirement System (STRS) for the purpose of providing pension benefits to specified public employees. Existing law also establishes the Judges' Retirement System II which provides pension benefits to elected judges and the Legislators' Retirement System which provides pension benefits to elective officers of the state other than judges and to legislative statutory officers. The County Employees Retirement Law of 1937 authorizes counties to establish retirement systems pursuant to its provisions in order to provide pension benefits to county, city, and district employees. This bill would require a public retirement system, as defined, to modify its plan or plans to comply with this act. The bill would establish new retirement formulas that could not be exceeded by a public employer offering a defined benefit pension plan, setting the maximum benefit allowable for employees first hired on or after January 1, 2013, as a formula commonly known as 2.5% at age 67 for nonsafety members, one of 3 formulas for safety members, 2% at age 57, 2.5% at age 57, or 2.7% at age 57, and 1.25% at age 67 for new state miscellaneous or industrial members who elect to be in Tier 2. The amount of pensionable compensation upon which a defined benefit for new members, as defined, could be based would be limited to an amount determined under a specified provision of federal law for an employee whose service is included in the federal system, which is $110,100 for 2012, and 120% of that amount for an employee whose service is not included in the federal system. Those amounts would be adjusted annually, as specified. The bill would authorize an employer to contribute to a defined contribution plan, as specified. The bill would prohibit a public employer from making contributions on behalf of a person who first becomes a member on or after January 1, 2013, to any qualified retirement plan based on any portion of compensation that exceeds an amount specified in federal law, which is $250,000 for 2012. The bill would also prohibit, for the purposes of determining a retirement benefit paid to a new member of a public retirement system, the maximum salary, compensation, or payrate taken into account under the retirement plan for any year from exceeding the amount specified in that federal provision, and would prohibit a public employer from seeking an exception to that prohibition. The bill would prohibit a public employer from offering a plan of replacement benefits for a person who is first hired on or after January 1, 2013, and any survivors or beneficiaries whose retirement benefits are limited by a specified provision of federal law. The bill would prohibit a public employer from providing a retirement health benefit vesting schedule or other specified retirement benefits to a manager or an employee or officer who is excluded from collective bargaining that is more advantageous than that provided generally to other public employees of the same employer who are in related membership classifications. Under existing law, state miscellaneous and industrial employees first hired on or after August 11, 2004, who qualify for membership in PERS do not make contributions to the system or receive service credit for their service and the state employer does not make contributions on their behalf during their first 24 months of employment. These members are instead required to contribute into a tax-deferred savings account, commonly known as the alternate retirement program. This bill would end that program and instead provide that new members immediately make their contributions to the system. (2) Existing law defines final compensation for various employment classifications in connection with the benefits provided by the retirement systems. This bill, for the purposes of determining a retirement benefit paid to a person who first becomes a member of a public retirement system on or after January 1, 2013, would require that final compensation mean the member's highest average annual pensionable compensation earned, as defined, during a period of at least 36 consecutive months, or at least 3 school years, as specified. (3) Existing state and local public employee retirement systems are funded by investment returns and employer and employee contributions. The California Constitution provides that the retirement board of a public pension or retirement system has the exclusive power to provide for actuarial services in order to ensure the competency of the assets of the system. Existing law, with respect to PERS, requires the Governor to include in the annual Budget Act the contribution rates submitted by the system actuary of the liability on account of employees of the state. This bill would require public employees who are first employed on and after January 1, 2013, and who contribute to a defined benefit plan to contribute at least 12 of the annual actuarially determined normal costs, and would prohibit a public employer from contributing in any fiscal year, in combination with employee contributions, less than the plan normal cost, except as specified. The bill would authorize employee contributions to be more than 12 of the normal costs if agreed to through collective bargaining, but would prohibit the employer from using impasse procedures to increase an employee rate. The bill would also state that equal sharing of the normal cost between the employer and employees shall be the standard and would prescribe specified increases in employee contribution rates for existing employees. By increasing the contribution to continuously appropriated funds, this bill would make an appropriation. (4) The Teachers' Retirement Law establishes the Defined Benefit Program of STRS, which provides a defined benefit to members of the system based on final compensation, credited service, and age at retirement, subject to certain variations. The Teachers' Retirement Law also establishes the Defined Benefit Supplement Program, which provides supplemental retirement, disability, and other benefits, payable either in a lump-sum payment or an annuity, or both, to members of the State Teachers' Retirement Plan. The Teachers' Retirement Law defines creditable compensation for these purposes as remuneration that is payable in cash to all persons in the same class of employees, as specified, for performing creditable service. This bill would revise the definition of creditable compensation for these purposes and would identify certain payments, reimbursements, and compensation that are creditable compensation to be applied to the Defined Benefit Supplement Program. The bill would prohibit an employer from offering a supplemental defined benefit plan unless it offered one before January 1, 2013. The bill would establish a retirement formula of 2.4% at age 65 and set a minimum retirement age of 55 for a member of STRS who is hired on or after January 1, 2013. The bill would state the intent of the Legislature that STRS propose statutory changes to fully effectuate those changes by June 30, 2013. (5) Existing law permits members of PERS, STRS, and county, city, and district retirement systems that have adopted specified provisions, to purchase up to 5 years of nonqualified service credit by making specified contributions to the system. This bill, on and after January 1, 2013, would prohibit a public retirement system from allowing the purchase of nonqualified service credit, as described above, except as specified. Under existing law, retirement benefits may be increased retroactively or prospectively. This bill would provide that any enhancement to a public retirement system's retirement formula or benefit that is adopted on or after January 1, 2013, would apply only to service performed on or after the operative date of the enhancement. The bill would also provide that, if a change to a member's classification or employment results in an increase in the retirement formula or benefit applicable to that member, the increase would apply only to service performed on or after the operative date of the change. The bill would also, until January 1, 2018, specify the benefit amount for industrial disability retirement. (6) Existing law requires the final compensation of a local member for the purpose of determining any pension or benefit resulting from state service as an elective or appointed officer on a city council or a county board of supervisors accrued while in membership, to be based on the highest average annual compensation earnable by the member during the period of state service in each elective or appointed office. This bill, for the purpose of determining any pension or benefit resulting from the local service, would require final compensation to be based on the highest average annual pensionable compensation earned. (7) Existing law provides that any elected public officer who takes public office, or is reelected to public office, on or after January 1, 2006, who is convicted of any specified felony arising directly out of his or her official duties, forfeits all rights and benefits accrued on and after January 1, 2006, under, and membership in, any public retirement system in which he or she is a member, effective on the date of final conviction, as specified. This bill would instead require that 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, forfeit retirement benefits earned or accrued from the earliest date of the commission of the felony to the forfeiture date, as specified. The bill would also require any contributions to the public retirement system made by the public employee on or after the earliest date of commission of the felony to be returned, without interest, to the public employee upon the occurrence of a distribution event, as defined, unless otherwise ordered by a court or determined by the pension administrator. The bill would also make related, conforming changes. (8) PERL establishes the circumstances in which a retired person may serve without reinstatement from retirement or loss or interruption of benefits, including as a member of a board, commission, or advisory committee, upon appointment by certain state officials, by the director of a state department, or by the governing board of a contracting agency. Existing law generally prohibits any person who has been retired from being employed in any capacity with the same public employer unless he or she is first reinstated from retirement, except as authorized. This bill would authorize a retired person, who is first appointed on or after January 1, 2013, to a part-time or nonsalaried position on a state board or commission, to serve without reinstatement, as specified. The bill would prohibit a retired person who retires from a public employer from serving, being employed by, or being employed through a contract directly by a public employer in the same retirement system from which the retiree receives a pension benefit without reinstatement, except as specified. (9) The Teachers' Retirement Law limits the amount of compensation for certain creditable service activities by a retired member to be $22,000 adjusted by the percentage change in the average compensation earnable by active members of the Defined Benefit Program, from the 1998–99 fiscal year to the fiscal year ending in the previous calendar year. The bill would change that limit in the Teachers' Retirement Law to be 12 of the median final compensation of all members who retired for service during the fiscal year ending in the previous calendar year and would define those activities as retired member activities. (10) The Legislators' Retirement Law (LRL) provides pension benefits based in part upon credited service. The LRL also authorizes the Insurance Commissioner and every legislative statutory officer and every elective officer of the state whose office is provided for by the California Constitution, except judges, to become a member of the Legislators' Retirement System (LRS) . PERL authorizes legislative statutory officers and elective officers, as defined, to elect to become members of PERS. This bill would prohibit anyone who first becomes, on or after January 1, 2013, the Insurance Commissioner, a legislative statutory officer, or an elective officer of the state whose office is provided for by the California Constitution from becoming a member of the LRS but would continue to provide optional membership in PERS. (11) Existing law authorizes any public agency to participate in, and make its employees members of, PERS by contract. In the case of an employee who has been employed by one or more contracting public agencies, retirement benefits distributed to that employee are based on the highest final compensation under any system, and each system makes a separate retirement payment to the employee based upon the number of years that the employee worked for each of those agencies. The bill would require the Board of Administration of PERS to implement program changes to ensure that a contracting agency that creates a significant increase in actuarial liability bears the associated liability. The bill would require the system actuary to assess an increase in liability in this regard to the employer that created it at the time the increase is determined and to make adjustments to that employer's rates to account for the increased liability. The bill would apply these requirements to any significant increase in actuarial liability due to increased compensation paid to a nonrepresented employee regardless of when the increase in compensation occurred. (12) The County Employees Retirement Law of 1937 (CERL) authorizes counties and districts, as defined, to provide a system of retirement benefits to their employees. CERL defines compensation earnable for the purpose of calculating benefits as the average compensation for the period under consideration with respect to the average number of days ordinarily worked by persons in the same grade or class of positions during the period, and at the same rate of pay, as determined by the retirement board. This bill would prohibit a variety of payments, including unscheduled overtime, payments for unused vacation, sick leave, or compensatory time off, exceeding what may be earned and payable in each 12-month period during the final average salary period, and specified payments made at the termination of employment from being included in compensation earnable. The bill would require the board to establish a procedure for assessing and determining whether an element of compensation was paid to enhance a member's retirement benefit and would prohibit that compensation from being included in compensation earnable. The bill would require the board to provide notice to the member and employer upon a final determination that compensation was paid to enhance a member's retirement benefit. The bill would authorize the member or employer to obtain judicial review of the board's action by filing a petition for writ of mandate, as specified. The bill would authorize the board to assess a county or district a reasonable amount to cover the cost of audit, adjustment, or correction, if it determines that a county or district knowingly failed to comply with specified reporting requirements.
Who sponsors AB 340?
AB 340 is sponsored by Negrete McLeod, Furutani, and Travis Allen.
What is the current status of AB 340?
This bill has been enacted into law. Introduced February 10, 2011. Enacted.
Where can I track AB 340?
Track AB 340 free on One Click Politics — get push/email alerts when it moves.

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