Public retirement systems: reporting.

The Public Employees' Retirement Law provides a defined benefit to members of the Public Employees' Retirement System (PERS) based on age at retirement, service credit, and final compensation, as those terms are defined. The management and control of PERS is vested in the Board of Administration of PERS, including the calculation of the contribution rates for specified state employees and state employers. Existing law requires the board to submit a report to the Legislature, the Governor, and the Treasurer describing the investment return assumptions, discount rates, and amortization periods utilized by the board in the calculations of the contribution rates and to include recalculations of those rates based on specified adjustments of the investment return assumptions, amortization periods, and discount rates utilized by the board any time it calculates the contribution rates. Existing law requires the Treasurer, within 30 days following receipt of the report, to provide each house of the Legislature, at a publicly noticed floor session, with an explanation of the role played by the investment return assumption and amortization period in the calculation of the contribution rates and the consequences for future state budgets if the investment return assumptions are not realized, to report whether the board's amortization period exceeds the estimated average remaining service periods of employees covered by the contributions, and to express his or her opinion of the reasonableness of the board's calculation of the contribution rates. This bill would require the Board of Administration of PERS to submit that report annually to the Legislature, the Governor, and the Chair of the California Actuarial Advisory Panel, would limit the scope of the report to state employee retirement plans, and would revise the adjustments of the investment return assumptions and discount rates utilized by the board any time it calculates the contribution rates. The bill would delete the requirement that the Treasurer express his or her opinion of the reasonableness of the board's calculation of the contribution rates. The bill would require the Chair of the California Actuarial Advisory Panel, or his or her designee, instead of the Treasurer, within 30 days following receipt of the report, to provide the Senate Committee on Public Employment and Retirement and the Assembly Committee on Public Employees, Retirement and Social Security, at a publicly noticed joint hearing, with an explanation of the role played by the investment return assumption and amortization period in the calculation of the contribution rates, a description of the consequences for future state budgets if the investment return assumptions are not realized, and a report on whether the board's amortization period exceeds the estimated average remaining service periods of employees covered by the contributions. Existing law also requires the board, at any time it forecasts contribution rates, to submit a report to the Legislature with a revised calculation of the forecasted contribution rates utilizing a specified investment rate assumption. This bill would delete this reporting requirement of the board.