AB 84 — Public employment and retirement.

Summary

(1) Existing law, the Teachers' Retirement Law, establishes the State Teachers' Retirement System and creates the Defined Benefit Program of the State Teachers' Retirement Plan, which provides a defined benefit to members of the program. The Defined Benefit Program is funded by employer and employee contributions, investment returns, and state appropriations, which are deposited or credited to the Teachers' Retirement Fund, which is continuously appropriated. Existing law appropriates $2,246,000,000 from the General Fund for the 2018–19 fiscal year to the Teachers' Retirement Fund for the Defined Benefit Program, to be apportioned in specified amounts to the credit of required employer contributions for the 2019–20 and 2020–21 fiscal years, pursuant to the direction of the Department of Finance. For the 2020–21 fiscal year, the apportioned payment to the Teachers' Retirement Fund is an amount to pay in advance a part of the contributions required of the employers for the 2020–21 fiscal year that results in a reduction of employer contributions of 0.70 percentage point for that fiscal year from the percentage set by another specified provision. Existing law requires the uncommitted remainder of the payment to be allocated to reducing the employers' unfunded actuarial obligations, as specified. This bill would revise the application of the 2018–19 fiscal year General Fund appropriation described above. For the 2020–21 fiscal year, the apportioned payment amount would be revised to an amount to pay in advance on behalf of employers a part of the employer contributions for the 2020–21 fiscal year that results in employers having to contribute 2.95 percentage points less in the 2020–21 fiscal year than the percentage set by another specified provision. The bill would authorize an additional apportionment for the 2021–22 fiscal year that would result in employers having to contribute 2.18 percentage points less in the 2021–22 fiscal year than the percentage set by the board pursuant to another specified provision. The bill would make a conforming change regarding the uncommitted remainder of the payment to reflect the additional allocation for the 2021–22 fiscal year. By authorizing the application of an appropriation for a new purpose, this bill would make an appropriation. This bill, for the 2020–21 fiscal year, would require that the percentage set by the Teachers' Retirement Board for the 2019–20 fiscal year govern the state appropriation to the Teachers' Retirement Fund to eliminate the unfunded actuarial obligation, as described above. The bill would prohibit the board from increasing or decreasing this percentage for the 2020–21 fiscal year. The bill would specify that its provisions do not prevent payments towards the unfunded actuarial obligation from being made from other sources. The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System (PERS) for the purpose of providing pension and benefits to state employees and their beneficiaries and prescribes the rights and duties of employers participating in the system. Under PERL, benefits are funded generally by investment income and employer and employee contributions, which are deposited into the Public Employees' Retirement Fund, which is continuously appropriated. Existing law appropriates $904,000,000 from the General Fund for the 2018–19 fiscal year to the Public Employees' Retirement Fund, for payments relating to school employer contributions and unfunded liabilities, pursuant to the direction of the Department of Finance. In this regard, existing law apportions $100,000,000 for advance payments of required school employer contributions for the 2020–21 fiscal year and apportions $660,000,000 for the unfunded liabilities of school employers whose assets and liabilities are merged, as specified. This bill would revise the application of the 2018–19 fiscal year General Fund appropriation described above. The bill would increase the apportionment for advance payments of required school employer contributions for the 2020–21 fiscal year to $430,000,000. The bill would repeal the apportionment of $660,000,000 for the unfunded liabilities of specified school employers. The bill would authorize $330,000,000 to be apportioned for advance payments of required school employer contributions for the 2021–22 fiscal year. By authorizing the application of an appropriation for a new purpose, this bill would make an appropriation. (2) The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System (PERS) for the purpose of providing pension and benefits to state employees and their beneficiaries and prescribes the rights and duties of employers participating in the system. Under PERL, benefits are funded by investment income and employer and employee contributions, which are deposited into the Public Employees' Retirement Fund, a continuously appropriated trust fund administered by the system's board of administration. PERL prescribes methods for the calculation and payment of the state employer contribution for its employees who are PERS members. PERL provides for an annual adjustment of the state's contribution in the budget and quarterly appropriations to the Public Employees' Retirement Fund from the General Fund and other funds that are responsible for payment of the employer contribution. Existing law makes additional, supplemental General Fund appropriations to the Public Employees' Retirement Fund for the 2020–21, 2021–22, and 2022–23 fiscal years. In this regard, $243,000,000 of supplemental payments are made to the Public Employees' Retirement Fund for the 2020–21 fiscal year to be apportioned to the patrol member category, as directed by the Department of Finance, and a supplemental payment of $22,000,000 for that fiscal year is made to the fund to be apportioned to state employee member categories generally, as directed by the Department of Finance, as specified. Supplemental payments connected with appropriations for the 2021–22 and 2022–23 fiscal years are to be apportioned to the state employee member categories generally, as directed by the Department of Finance, as specified. The California Constitution establishes the Budget Stabilization Account in the General Fund and requires the Controller, in each fiscal year, to transfer from the General Fund to the Budget Stabilization Account amounts that include a sum equal to 1.5% of the estimated amount of General Fund revenues for that fiscal year. These provisions further require, until the 2029–30 fiscal year, that the Legislature appropriate a percentage of these moneys, the amount of which is generated pursuant to specified calculations, for certain obligations and purposes, including addressing unfunded liabilities for state-level pension plans. This bill would repeal the above-described supplemental General Fund appropriations to the Public Employees' Retirement Fund for the 2020–21, 2021–22, and 2022–23 fiscal years, and the associated requirements for apportionment. The bill would appropriate $243,000,000 from the General Fund, for the purposes identified in the constitutional provisions described above, to supplement the state's appropriation to the Public Employees' Retirement Fund and reduce unfunded liabilities for state-level pension plans. Specifically, the bill would require the appropriation to be applied to the unfunded liabilities of the patrol member category that are in excess of base amounts for the 2020–21 fiscal year. The bill would require the Department of Finance to provide to the Controller a schedule establishing the timing of specific transfers to be used for this purpose. The bill would also require the Controller to transfer, in aggregate, up to $2,500,000,000 to the General Fund over the 2020–21 and 2021–22 fiscal years from other funds and accounts that are required by law to fund the state's employer contribution to the Public Employees' Retirement Fund, in accordance with a schedule provided by the Department of Finance that specifies the timing and amounts of transfers to the General Fund. (3) Existing law states that it is the policy of the state that the workweek of the state employee shall be 40 hours, and the workday of state employees 8 hours, except that workweeks and workdays of a different number of hours may be established in order to meet the varying needs of the different state agencies. Existing law, notwithstanding that policy, required a state employee, except as specified, during the period from July 1, 2012, to June 30, 2013, inclusive, either as required by an applicable memorandum of understanding or by the direction of the Department of Human Resources for excluded employees, to participate in the Personal Leave Program 2012 (PLP 2012 Program) , under which each employee received a reduction in pay not greater than 5% in exchange for 8 hours of PLP 2012 Program leave credits per month. This bill would require a state employee, except as specified, for the period from July 1, 2020, to June 30, 2021, inclusive, to participate in the Personal Leave Program 2020 (PLP 2020 Program) , either as required by an applicable memorandum of understanding reached or by the direction of the department for excluded employees, under which each employee would receive a reduction in pay not greater than 10% in exchange for up to 16 hours of PLP 2020 Program leave credits per month. (4) Existing law requires the department to adopt rules governing hours of work and overtime compensation and the keeping of related records, except that conflicting provisions of a memorandum of understanding are controlling, as specified. Existing law required the department, notwithstanding any conflicting provisions of a memorandum of understanding, to adopt a plan for the period from July 1, 2012, to June 30, 2013, inclusive, by which all state employees, except as specified, who were not subject to the PLP 2012 Program, as described above, were furloughed for one workday per calendar month, pursuant to rules adopted for the implementation, administration, and enforcement of this furlough plan. This bill would require the department to adopt a plan for the period of July 1, 2020, to June 30, 2021, inclusive, by which all state employees who are not subject to the PLP 2020 Program, as described above, and except as specified, would be furloughed for 2 workdays per calendar month. (5) Existing law provides that the State Compensation Insurance Fund shall not be subject to the provisions of the Government Code made applicable to state agencies generally or collectively, unless the provision specifically names the fund as an agency to which it applies. Existing law also provides that employee positions funded by the State Compensation Insurance Fund are exempt from any hiring freezes and staff cutbacks otherwise required by law. Existing law, notwithstanding that provision, made employees of the fund subject to any and all reductions in state employee compensation imposed by the Legislature on other state employees for the period from July 1, 2012, to June 30, 2013, inclusive, regardless of the means adopted to effect those reductions. This bill would provide that employees of the fund shall, without limitation, be subject to any and all reductions in state employee compensation imposed by the Legislature on other state employees for the period from July 1, 2020, to June 30, 2021, inclusive, regardless of the means adopted to effect these reductions. (6) Existing law requires the state, in order to recruit and retain the highest qualified employees, to pay sworn members of the California Highway Patrol who are rank-and-file members of State Bargaining Unit 5 the estimated average total compensation for each corresponding rank for the Los Angeles Police Department, Los Angeles County Sheriff's Office, San Diego Police Department, Oakland Police Department, and San Francisco Police Department, as specified. This bill, notwithstanding those provisions, would require employees of the California Highway Patrol who are rank-and-file members of State Bargaining Unit 5, to be subject to any and all reductions in state employee compensation imposed by the Legislature on other state employees for the period from July 1, 2020, to June 30, 2021, inclusive, regardless of the means adopted to effect those reductions, which would include suspension of the duty to compensate sworn represented members of the California Highway Patrol in accordance with a specified formula, and regardless of the provisions in an existing memorandum of understanding. (7) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Bill Text

• Chaptered 06/29/20 - Chaptered Current pdf June 29, 2020
• Enrolled 06/26/20 - Enrolled pdf June 26, 2020
• Amended 06/22/20 - Amended Senate pdf June 22, 2020
• Amended 06/06/19 - Amended Senate pdf June 06, 2019
• Introduced 12/03/18 - Introduced pdf December 03, 2018
• AB84 View text html

Action History

1. June 29, 2020

   Chaptered by Secretary of State - Chapter 16, Statutes of 2020.

2. June 29, 2020

   Approved by the Governor.

3. June 26, 2020

   Enrolled and presented to the Governor at 6:30 p.m.

4. June 26, 2020

   Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 58. Noes 16. Page 4970.).

5. June 26, 2020

   Assembly Rule 77 suspended. (Ayes 58. Noes 16. Page 4954.)

6. June 25, 2020

   In Assembly. Concurrence in Senate amendments pending. May be considered on or after June 27 pursuant to Assembly Rule 77.

7. June 25, 2020

   Reconsideration granted. (Ayes 40. Noes 0. Page 3860.)

8. June 25, 2020

   Read third time. Passed. Ordered to the Assembly. (Ayes 30. Noes 9. Page 3857.).

9. June 24, 2020

   Read second time. Ordered to third reading.

10. June 24, 2020

    From committee: Do pass. (Ayes 13. Noes 4.) (June 24).

11. June 22, 2020

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

12. June 26, 2019

    Re-referred to Com. on B. & F.R.

13. June 13, 2019

    Read second time. Ordered to third reading.

14. June 12, 2019

    From committee: Do pass. (Ayes 12. Noes 0.) (June 12).

15. June 10, 2019

    In committee: Hearing postponed by committee.

16. June 06, 2019

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

17. April 24, 2019

    Referred to Com. on B. & F.R.

18. April 11, 2019

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

19. April 11, 2019

    Read third time. Passed. Ordered to the Senate. (Ayes 54. Noes 13. Page 1169.)

20. April 08, 2019

    Read second time. Ordered to third reading.

21. April 04, 2019

    Ordered to second reading.

22. April 04, 2019

    Withdrawn from committee.

23. April 04, 2019

    Assembly Rule 96 suspended. (Ayes 53. Noes 15. Page 1032.)

24. January 24, 2019

    Referred to Com. on BUDGET.

25. December 04, 2018

    From printer. May be heard in committee January 3.

26. December 03, 2018

    Read first time. To print.

Sponsors

• Committee on Budget · Primary

Votes

Subjects