The Public Employees' Retirement System.

(1) The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System (PERS) for the purpose of providing pension benefits to specified public employees and prescribes the rights and duties of members and annuitants of the system. PERL vests management and control of PERS in the Board of Administration. The California Constitution and PERL grant the board control over the investment of the retirement fund subject to certain restrictions. PERL directs the board to invest not less than 25% of all funds that become available in a fiscal year for new investments in specified obligations and securities connected with residential realty, subject to the board's authority to substitute other investments consistent with its fiduciary obligations to the retirement system and standards for prudent investment. PERL requires the board to report on these investments. This bill would repeal the provisions regarding investing in residential realty, described above. (2) PERL authorizes the board to require employers participating in the system to provide specified information, as deemed necessary by the board, for examination and copying in the course of an audit to determine the correctness of retirement benefits, reportable compensation, enrollment in the system, and reinstatement to the system. This bill would provide that the authority described above also applies to determining the eligibility for retirement benefits. (3) PERL requires the board to submit a quarterly review of system assets to the Legislature, which is required to include reporting on the system's portfolio on the basis of cost and market value, among other things. This bill would change the frequency of this report to semiannual, would eliminate the requirement to report on the investments on a cost basis, and would make other changes to the content of the report. (4) PERL permits a member who returns to active service following an employer-approved uncompensated leave of absence, as defined, because of his or her serious illness or injury to purchase service credit for that period of absence upon the payment of contributions, as specified. This bill would specify that the option to purchase service credit shall be elected prior to retirement, that the member be returning to state service, and would make other related and clarifying changes.