Asm. Allan Mansoor

Existing law authorizes certain members of the Public Employees' Retirement System, the State Teachers' Retirement System, and county, city, and district retirement systems that have adopted specified provisions, to make additional contributions to the retirement system and receive up to 5 years of additional retirement service credit for time that does not qualify for public service, as specified. The bill would repeal the provisions that authorize these additional contributions and service credit, and would make related technical changes.

The Meyers-Milias-Brown Act, the Ralph C. Dills Act, the provisions commonly referred to as the Educational Employment Relations Act, and the Higher Education Employer-Employee Relations Act each provide for the representation of state or local public employees by recognized employee organizations, and provide that the scope of this representation includes negotiations concerning wages, hours, and other terms and conditions of employment between the state or local public employer and representatives of those employee organizations. This bill would exclude matters relating to pension benefits from the scope of representation of public employees by recognized employee organizations, and would thereby prohibit these employee organizations from negotiating pension benefits with public employers, except for the amount of employee contributions to the pension plans.

The Public Employees' Medical and Hospital Care Act (PEMHCA) permits a public employer authorized by the Board of Administration of the Public Employees' Retirement System to elect to participate in the prefunding of postemployment health care benefits and other postemployment benefits for annuitants. Under PEMHCA, the governing body of a participating employer is required to contract with the board regarding the terms and conditions of that employer's participation in the prefunding plan. PEMHCA establishes the Annuitants' Health Care Coverage Fund in the State Treasury, as a trust fund and a retirement fund, which is continuously appropriated to the board for expenditure for the prefunding of health care coverage for annuitants. This bill would require the board to determine the actuarially required contributions necessary to ensure that postemployment health care benefits provided under PEMHCA are fully funded. The bill would require an employee first hired on or after January 1, 2012, and his or her employer, to each pay 50% of those actuarially required contributions, to be deposited into the Annuitants' Health Care Coverage Fund. By creating a new source of revenue for deposit into a continuously appropriated fund, the bill would make an appropriation.

Existing law creates the Public Employees' Retirement System which provides a defined benefit to its members based on age at retirement, service credit, and final compensation. This bill would require the Board of Administration of the Public Employees' Retirement System to create a hybrid retirement plan for public employees who become members on or after January 1, 2012, that offers a defined contribution plan and defined benefit plan for retirement for service and a defined benefit plan for retirement for disability or for death. The bill would prohibit those plans from creating a vested property right for the member with respect to any employer contributions before retirement, as specified. The bill would prohibit those members from being eligible to enroll in the defined benefit plan for retirement for service that existed before January 1, 2012.

(1) 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, provides that the membership of the Board of Administration shall include 6 elected 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. This bill instead would provide for the appointment of those 6 board members by the Governor based on their demonstrated expertise in the financial and actuarial fields. (2) The California Constitution prohibits the number, terms, and method of selection or removal of members of the retirement board of a public pension or retirement system, which includes in its composition elected employee members, from being changed, amended, or modified by the Legislature from those that were required by law or otherwise in effect on July 1, 1991, 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. This bill would call a special election to be consolidated with a statewide election to be held in 2011. The bill would condition the provisions of the bill upon voter approval, and would require the Secretary of State to submit the provisions of the bill to the voters for approval at the consolidated statewide election. Because local election officials would be required to undertake additional duties to place this bill on the ballot at the consolidated election, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. This bill would declare that it is to take effect immediately as an act calling an election.

The Meyers-Milias-Brown Act, the Ralph C. Dills Act, provisions commonly referred to as the Educational Employment Relations Act, the Higher Education Employer-Employee Relations Act, the Trial Court Employment Protection and Governance Act, the Trial Court Interpreter Employment and Labor Relations Act, and the Los Angeles County Metropolitan Transportation Authority Transit Employer-Employee Relations Act each provide for the representation of state or local public employees by recognized employee organizations, and provide that the scope of this representation includes negotiations concerning wages, hours, and other terms and conditions of employment between the state or local public employer and representatives of those employee organizations. This bill would exclude matters relating to the retroactive effect of pension benefit increases from the scope of representation of public employees by recognized employee organizations, and would thereby prohibit these employee organizations from negotiating for a retroactive effect of pension benefit increases with public employers. The Public Employees' Retirement Law creates the Public Employees' Retirement System, which provides a defined benefit to its members based on age at retirement, service credit, and final compensation. The State Teachers' Retirement Law, the Judges' Retirement System II Law, and the County Employees Retirement Law of 1937 also provide for a defined benefit based on age at retirement, service credit, and final compensation. This bill would require that any adjustment to the formula used to calculate the retirement benefits of a member of a public retirement system that would yield an increase in the member's retirement benefits apply only to service performed after the operative date of the adjustment, and would prohibit the retroactive application of that adjustment, except as provided.

The Public Employees' Retirement Law (PERL) provides a defined benefit to members of the Public Employees' Retirement System based on age at retirement, service credit, and final compensation, as those terms are defined. The management and control of PERL is vested in the board of administration of PERL, including the calculation of the contribution rates for public employers. Existing law requires the board, any time it adopts or forecasts the contribution rates, 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 calculation of the contribution rates for all public employees and employers. Existing law also requires that this report include recalculations of those rates based on specified adjustments of the investment return assumptions, amortization periods, and discount rates utilized by the board, and specifically requires the board to calculate the liabilities of the fund using a discount rate equal to the rate of the 10-year United States Treasury Bond. 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 instead require an annual report and would limit the scope of this report to include only contribution rates for the state employer. The bill would delete the reference to the 10-year United States Treasury Bond, and would instead require the board to include a calculation of the liabilities of the fund using discount rates equal to (1) the average rate of investment return since the establishment of the fund, and (2) the average rate of investment return since January 1, 1984. The bill would require the Treasurer, within 30 days of receipt of the report, to present the above-described information to a publicly noticed, joint meeting of the budget and retirement committees of both houses of the Legislature.

The Public Employees' Retirement Law provides a comprehensive set of rights and benefits based upon age, service credit, and final compensation to members of the Public Employees' Retirement System. Existing law prescribes different retirement formulas for different membership classifications in the Public Employees' Retirement System, including for state patrol members, state safety members, state peace officer/firefighter members, state industrial members, and state miscellaneous members. These retirement formulas permit a member to retire at 50 years of age with reduced benefits in comparison to a later retirement. This bill would prohibit a state employee who becomes a member of the Public Employees' Retirement System on and after January 1, 2012, and who is not a state patrol member, a state safety member, or state peace officer/firefighter member, from retiring for service prior to reaching 55 years of age.

Existing law authorizes public agencies, as defined, to hold liable any person who is under the influence of an alcoholic beverage, any drug, or the combination of an alcoholic beverage and any drug, whose negligent operation of a motor vehicle, a boat or vessel, or a civil aircraft caused by that influence proximately causes any incident resulting in an appropriate emergency response, and any person whose intentionally wrongful conduct proximately causes an incident resulting in an appropriate emergency response, for the expense of that emergency response. This bill would prohibit a city, including a charter city, county, district, municipal corporation, or public authority from charging a fee to any person, regardless of residency, for the expense of an emergency response, as specified, except where a fee is otherwise authorized. This bill would provide that its provisions do not apply to a special district unless that special district receives revenue from transaction and use taxes, as specified. The bill would also express a legislative finding and declaration that the availability and use of emergency response resources throughout the state is an issue of statewide concern and not a municipal affair and that, therefore, all cities, including charter cities, would be subject to the provisions of the bill.

The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System, which provides a defined benefit to its members based on age at retirement, service credit, and final compensation. PERL defines "final compensation" for purposes of calculating a member's retirement allowance. The State Teachers' Retirement Law (STRL) , the Judges' Retirement System II Law, and the County Employees Retirement Law of 1937 also provide for a defined benefit based on age at retirement, service credit, and final compensation. This bill, for persons first hired on and after January 1, 2012, for the purpose of determining any pension or benefit with respect to a public entity defined benefit retirement system, would require that final compensation means the highest annual average compensation earnable by the person during a consecutive 36-month period of membership, as specified. The bill would prohibit the inclusion of credit for accrued leave of any form or credit for overtime work in the calculation of final compensation, as specified.