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Resource Center
Bills at a Glance
... Final Disposition of Retirement-Related Bills for 2011
Following is the summary of action on all the public
employee retirement-related bills for the first year of the
2011-2012 Legislative Session. As mentioned previously, many of
the pension/compensation bills were held this session in
anticipation of comprehensive proposals from the Governor and
the Pension Reform Committee. Bills not passed/vetoed can be
taken up again starting in January and must be acted upon by
January 31. We will update the status of those bills and any
newly introduced bills again starting in February, when the next
Legislative Alert will go out.
Bills Enacted Into Law
AB 89
(Hill) Public Retirement Benefits Limit
This
bill specifies that for a person who first becomes a member of a
public retirement system on or after January 1, 2012, the
maximum salary upon which retirement benefits shall be based
shall not exceed an amount set forth in IRC Title 26 section
401(a)(17) - $200,000. The bill also prohibits public employers
from making contributions to any qualified public retirement
plan based on compensation exceeding that amount. AB 89 was
enacted into law on October 2, on which date it went into effect
via an urgency clause, as Chapter 390 of 2011.
AB 873
(Furutani) PERS and STRS Retiree Employment
This
bill prohibits a retired STRS or PERS board member and certain
officers from representing another person before PERS or STRS
for 4 years and from assisting in a business activity for 2
years, if they participated in obtaining the award of, or in
negotiating, a contract or contract amendment with PERS or STRS.
It also prohibits them from working as a placement agent in
connection with PERS and STRS for 10 years. This bill was
enacted into law on October 7 as Chapter 551. Like all other
bills not including an urgency clause (or otherwise specified in
the bill language), AB 873 will go into effect on January 1,
2012.
AB 340
(Furutani) County Employee Post-Retirement Service
This bill was gutted and amended
(along with SB 827, Simitian) at the end of session to create
the “conference committee” detailed previously. Below is the
original bill language which will likely make its way back into
any reform package proposed by the committee.
This bill,
after January 1, 2012, would prohibit a person who has been
retired for service from a ’37 Act County retirement system from
being re-employed in any capacity without re-instatement into
the system for 6 months. This bill was amended to also prohibit
a variety of payments including unscheduled overtime, payments
for unused vacation, sick leave, or compensatory time off, and
housing and vehicle allowances from being included in final
compensation calculations. This bill passed both houses but the
Assembly refused to concur in amendments made in the Senate, so
the bill has gone to Conference Committee to resolve differences
in the bill text.
AB 1028
(Committee on Public Employees, Retirement and Social Security)
PERS Housekeeping Bill
Along with
modifying the definition of "payrate" for school members to
include amounts deducted for participation in a deferred
compensation, retirement, money purchase pension, or flexible
benefits plan, the PERS housekeeping bill requires that
emergency/special skills appointments of a retired member
without reinstatement be interim appointments to a vacant
position during recruitment for a permanent appointment, and
would prohibit an agency from appointing a retired person under
this provision more than once. This bill was enacted into law on
October 3 as Chapter 440.
AB 1247
(Fletcher) Retirement System Annual Reports
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AB
1247 requires the PERS board to submit an annual report
to the Legislature, Governor, and Treasurer, limiting
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. This bill was enacted into law on
October 9 as Chapter 733.
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SB 322
(Mcleod) PERS Benefit Limit
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This
bill was enacted into law as Chapter 47 and prohibits a
PERS member who receives benefits based on credited
service with multiple employers from receiving annual
retirement benefits exceeding the federal dollar
limitations set forth in IRC Section 415(b)(1)(A) of
Title 26 - $195,000, even for service under multiple
employers.
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SB 349
(Negrete McLeod) STRS Housekeeping Bill
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The
STRS housekeeping bill makes various technical and minor
(and sometimes not so minor) policy changes to increase
the efficiency of the teachers’ pension plan and its
programs. The bill makes conforming changes to reconcile
differences between the defined benefit pension plan and
the Cash Balance plan, removing the $500 late reporting
penalty for the pension and Cash Balance plans and
specifying that retired pension members are not allowed
to make contributions to the Cash balance plan. The bill
also specifies that the zero-dollar earnings limit for
members who retire under the normal retirement age of 60
apply to a member's age at the most recent retirement
and reconciles the differences between the pension and
Cash Balance plans’ post-retirement employment
limitations by: reducing the time Cash Balance plan
retirees must wait to return to work to the earlier of
180 days or age 60, allowing retirees over 60 to perform
service without limitation, and requiring
post-retirement earnings limit exemption paperwork to be
filed within 60 days. This bill was enacted into law on
October 9 as Chapter 703.
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Vetoed Bills
SB 350 (Negrete
McLeod) PERS School Member Survivor Allowance
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This
bill would merge the first, second, and third levels of
the 1959 Survivor Benefit for contracting local agencies
of PERS that currently provide one of those levels of
benefits to employees, and allow PERS to suspend
employee premiums of $2 monthly when the funding pool is
determined to contain surplus funds. This bill was
vetoed by the Governor on September 6. According to the
Governor’s message, he vetoed the bill because he wants
the provisions to be part of a more comprehensive
pension reforms package.
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2012
Legislative Calendar
Following are
important dates/deadlines for the upcoming legislative year:
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January 1 |
"Trigger 1" budget cuts are
implemented, if activated by below-projections revenue
forecast.
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January 4 |
Legislature reconvenes.
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January 10 |
Governor releases 2012-13 State
Budget proposal.
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January 31 |
Last day for each house to pass
bills introduced in 2011.
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February 1 |
"Trigger 2" cuts implemented, if
activated by below-projections revenue forecast.
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February 24 |
Last day for legislators to
introduce new bills.
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March 29 |
Spring recess for Legislature.
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April 9 |
Legislators return from spring
recess.
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May 15 |
Governor's May Revision for the
budget.
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June 15 |
The California Constitution
requires Budget Bill passed by midnight (if not,
Legislators receive no pay until it is - due to
Proposition 25).
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June 30 |
The Constitution requires the Budget Bill be enacted by
the Governor. |
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July 6 |
The last day for policy
committees to meet, legislative summer recess begins if
Budget Bill has been enacted.
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August 6 |
Legislature returns from summer
recess
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August 31 |
Last day for Legislature to pass
bills and send to Governor.
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September 30 |
Last day for Governor to sign or
veto bills.
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Updated:
December 16, 2011
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