Public employees' retirement: pension prefunding.

Existing law creates the Public Employees' Retirement System, which provides defined retirement benefits to employees of the state and to employees of other public agencies contracting with the Board of Administration of the Public Employees' Retirement System for this purpose. The benefits provided by the system are funded by employer and employee contributions and investment returns. This bill would enact the California Employers' Pension Prefunding Trust Program and establish the California Employers' Pension Prefunding Trust Fund to allow state and local public agency employers that provide a defined benefit pension plan to their employees to prefund their required pension contributions. The bill would authorize an employer, upon terms and conditions set by the board, to elect to participate in the prefunding plan, and would require the governing body of that employer to enter into a contract with the board relative to the prefunding plan. The bill would require the board to offer participating employers, as defined, specified cost-effective, diversified investment portfolios. The bill would require each participating employer to pay an amount, determined by the board, for administrative and asset management costs of the prefunding plan to the fund and would grant the board the sole and exclusive control of the administration and investment of the fund. The bill would also set the terms under which a prefunding plan contract could be terminated or transferred. The bill would specify that all moneys in the fund would be continuously appropriated to the board for the purposes of these provisions. The bill would also authorize the board to adopt emergency regulations for the purposes of these provisions and would appropriate the sum of $695,140 from the General Fund to the Board of Administration of the Public Employees' Retirement System for expenditure in the 2019–20 fiscal year to develop the program.