Public Employees' Retirement System: Board of Administration.

The California Constitution prescribes that, with regard to the retirement board of a public pension or retirement system that includes in its composition elected employee members, the number, terms, and method of selection or removal of members of the retirement board that were required by law or otherwise in effect on July 1, 1991, shall not be changed, amended, or modified by the Legislature unless the change, amendment, or modification enacted by the Legislature is ratified by a majority vote of the electors of the jurisdiction in which the participants of the system are or were, prior to retirement, employed. The Public Employees' Retirement Law requires the Board of Administration of the Public Employees' Retirement System to administer the Public Employees' Retirement Law. Under that law, state employees and employees of local agencies that contract with the Board of Administration for retirement benefits are within the membership of the retirement system. That law, as in effect on July 1, 1991, requires the Board of Administration to consist of 13 members including 2 members elected from the membership of the retirement system by the members of the retirement system, one member elected from state membership by active state members, 2 members elected by and from active local members, and one member elected by and from the retired members of the retirement system, among others. The law also provides, in the event of a vacancy, for a special election or the appointment of a new member, as specified. The Trust Law provides for the removal of a trustee by the court under specified circumstances, including, but not limited to, when the trustee has committed a breach of the trust, or when the trustee is insolvent or otherwise unfit to administer the trust. The law provides that there is a vacancy in the office of trustee in specified circumstances, including, but not limited to, that the trustee resigns or is removed, or the trustee files a petition for adjudication of bankruptcy, as specified. This bill similarly would provide for the removal of a member of the Board of Administration if the board member has committed a breach of his or her fiduciary duties to the system, or if the board member is insolvent or otherwise unfit to administer the system. The bill would provide that there is a vacancy in the office of member of the board in specified circumstances, including, but not limited to, that the board member resigns or is removed, or the board member files a petition for adjudication of bankruptcy, as specified. The bill would provide that these changes would take effect only when submitted to and approved by the voters, and would require its provisions to be submitted for approval by the voters.