PARS
Legislate Alerts are
an e-distribution service powered by
|
9/28/2007
…2007 SESSION ENDS, SPECIAL SESSIONS ORDERED Lawmakers accomplished much in consumer protection, public safety, and, especially, environmental protection. Other prominent bills passed by lawmakers and sent to Governor Schwarzenegger include measures to legalize gay marriage, restrict long-term development on Central Valley floodplains that are not adequately protected, and increase vehicle fees to generate million of dollars for clean-air projects. The Legislature was also, unfortunately, unable to come to an agreement on two of California's highest priorities, healthcare and water storage. But because of the gravity of these issues, Governor Schwarzenegger called a special session to focus exclusively on those two concerns. Besides focusing lawmakers on specific issues, special sessions suspend some legislative rules and allow measures approved with a majority vote to take effect 90 days after the session closes. The Republican governor and Democratic lawmakers remain at odds over how to pay for a healthcare solution for uninsured Californians. Schwarzenegger wants the Legislature to approve everything but the funding for a healthcare agreement and plans to ask voters next year to approve various funding sources to pay for the plan. The governor has already stated publicly that he will veto Assembly Bill 8 by Assembly Speaker Fabian Núñez, D-Los Angeles, which would pay for health coverage by requiring that employers to spend 7.5 percent of payroll on care for their workers. As suspected, the legislative session ended with a relatively quiet year for retirement-related reform. We anticipate a much busier session next year, following the report and recommendations of the Governor’s Public Employee Post-Employment Benefits Commission. There were, however, some significant bills that did make their way through the legislature this session to the Governor. Those bills are listed in the retirement-related bill update below. The Governor has until October 14th to sign or veto these bills. …CALSTRS RECEIVES $500 MILLION FROM STATE The California State Teachers' Retirement System (CalSTRS) recently received a $500 million “purchase power” payment from the State of California for a skipped payment to its inflation protection program, the Supplemental Benefit Maintenance Account (SBMA). Governor Gray Davis signed Senate Bill 20 in 2003 which withheld a $500 million payment to the SBMA that year. The SBMA makes payments to CalSTRS retired educators and their survivors when inflation erodes their monthly benefit below 80 percent of its original purchasing power. The state transferred the funds following an August 30 appeals court decision, which held that the state had violated its obligation to California's retired educators when it withheld the $500 million payment during the 2003-2004 fiscal year. The appeals court decision also called for the payment of interest, which CalSTRS estimates could exceed $200 million. A legislative appropriation will be required for the payment of interest. …UPDATE ON RETIREMENT-RELATED BILLS AT THE GOVERNOR’S DESK Bills that have passed both houses and are awaiting action by the Governor by the October 14 deadline include the following: AB 221 (Anderson) Divestment from Iran This bill would prohibit PERS and STRS from investing public employee retirement funds in a company with business operations in Iran. The bill would also require PERS and STRS to sell or transfer any investments in a company with business operations in Iran. This bill was enrolled and sent to the Governor on September 24th. AB 246 (Torrico) County Retirement Board Assets This bill would prohibit a member or employee of a county retirement board or board of investments from selling or providing any investment product that would be considered an asset of the retirement fund. This bill was enrolled and sent to the Governor on September 6th. AB 554 (Hernandez) PERS: Pre-funding Retiree Healthcare Benefits This bill would allow PERS to offer its retiree healthcare pre-funding program to all public entities, including those that do not participate in PEMHCA. This bill was enrolled and sent to the Governor on September 18th. The Governor vetoed a similar bill last year. AB 757 (Comm. on Public Emp., Retirement, & Social Security) STRS Housekeeping Bill This bill would make technical changes to the Teachers’ Retirement Law, including clarifying: (1) maternity leave service credit; (2) Option 3 under the Family and Survivor Benefits; (3) ad hoc increases; (4) conversion from disability to service retirement; (5) option beneficiary election; and (6) administration of the Deferred Compensation Fund. This bill was enrolled and sent to the Governor on September 14th. AB 1124 (Karnette) County Post-Employment Benefits This bill fine-tunes ‘37 Act County retirement systems’ ability to establish post-employment benefits trust accounts, which they were given authority to establish in 2006. This bill was enrolled and sent to the Governor on September 11th. AB 1296 (Torrico) PERS PEMHCA Housekeeping Bill This bill would require a health benefit plan or contract to disclose to the PERS Board the cost, utilization, and actual provider claim payments on behalf of each member for all healthcare services rendered. The bill would deem this information confidential and exempt from the California Public Records Act. This bill was enrolled and sent to the Governor on September 11th. AB 1307 (Krekorian) PERS Supplemental Contribution Program This bill allows PERS to significantly expand its supplemental defined contribution program. The bill was amended in early July to remove language allowing employer “pick-up” contributions and any pre-tax contributions to the plans. The bill was enrolled and sent to the Governor on September 11th. AB 1316 (Bass) State Teachers' Retirement: Disability This bill would allow STRS members who are eligible to retire for service and who apply for a disability benefit, to receive a retirement allowance pending determination of their disability claim. Upon approval of the disability application, the member’s service retirement application will be cancelled, the disability benefit will begin, and any service retirement benefit overpayment will be recovered. This bill was enrolled and sent to the Governor on September 13th. AB 1432 (Soto) State Teachers' Retirement: Credit for Teaching Abroad This bill would allow non-retired members of STRS to purchase service credit for time spent teaching in U.S. State Department schools and in foreign public K-12 schools that received a portion of their funding from public revenues. The bill also deletes current prohibitions of domestic partners from rolling over a benefit distribution. This bill was enrolled and sent to the Governor on September 20th. SB 14 (Negrete McLeod) California National Guard Retirement This bill provides "optional" PERS membership rights to members of the California National Guard who do not otherwise qualify for PERS. The bill also creates a member classification of "National Guard Member" for such persons, who generally receive the same benefits as state miscellaneous members. National Guard members would pay both the employee and employer share of contributions for membership and previous service and would be excluded from certain provisions under the law, to minimize potential costs to the state. This bill was enrolled and sent to the Governor on September 12th. SB 134 (Cedillo) Mandatory Retirement for Los Angeles County The bill would exclude the County of Los Angeles, upon approval by the Board of Supervisors, from the County Employees Retirement Law that permits a county to require sheriffs, under-sheriffs, and marshals who are safety members to be retired at 60 or 70 years of age. This bill was enrolled and sent to the Governor on September 12th. SB 901 (Padilla) STRS Post-retirement Earnings This bill would extend the STRS post-retirement earnings requirements and exemptions that were scheduled to sunset at the end of the year. The bill was enrolled and sent to the Governor on September 11th. Feel free to contact PARS with any question or requests for further information. Additional news and an archive of past Legislative Alerts are available on the PARS website at www.pars.org. Thank you, Maureen Toal (800) 540-6369 ext. 135 PARS HAS ESTABLISHED TWO INNOVATIVE MULTIPLE-EMPLOYER TRUSTS TO ASSIST PUBLIC AGENCIES WITH PRE-FUNDING THEIR OPEB (POST-RETIREMENT HEALTHCARE) OBLIGATIONS UNDER GASB 45. FOR MORE INFORMATION, CONTACT: Maureen Toal The contents of this
publication reflect PARS’ understanding of the facts. |
|
PARS
Legislate Alerts are
an e-distribution service powered by |
|
|
|
If you have problems viewing this in your mail
client, |
|
|