BILL NUMBER: AB 125 AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 24, 2013 INTRODUCED BY Assembly Member Wieckowski JANUARY 14, 2013 An act to amend Section 22212.5 of the Education Code, relating to state teachers' retirement. LEGISLATIVE COUNSEL'S DIGEST AB 125, as amended, Wieckowski. State teachers' retirement: executive and managerial positions. The State Teachers' Retirement Law, which is administered by the Teachers' Retirement Board, prescribes a comprehensive system of rights and benefits for its members, including disability benefits, retirement benefits, and death benefits. Existing law requires the Teachers' Retirement Board to fix the compensation of specified executive and managerial positions, including that of the chief executive officer, system actuary, general counsel, chief investment officer, and other investment officers and portfolio managers whose positions are designated as managerial, and to whom specified procedures and conflict-of-interest provisions apply. This bill would add the positions of chief operating officer and chief financial officer to those positions for which the board is required to fix the compensation and would make the individuals holding those positions subject to those conflict-of-interest provisions. The bill wouldalsoprohibit the salaries of the chief operating officer and the chief financial officer from exceeding 110% of the maximum salary payable to an investment director of the system, as specified. The bill wouldadditionallyremove the positions of chief of staff and chief financial officer from those positions that are subject to conflict-of-interest provisions that limit postemployment appearances before, or communication to, the board. The bill would also require the board to report to the fiscal committees of the Legislature, as specified, on the cost savings realized because of these new positions. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 22212.5 of the Education Code is amended to read: 22212.5. (a) Except as otherwise provided in subdivision (d), this section shall apply to the following positions in the system: chief executive officer, chief operating officer, chief financial officer, system actuary, general counsel, chief investment officer, and other investment officers and portfolio managers whose positions are designated managerial pursuant to Section 18801.1 of the Government Code. (b) (1) Notwithstanding Sections 19816, 19825, 19826, 19829, and 19832 of the Government Code, the board shall fix the compensation for the positions specified in subdivision (a). In so doing, the board shall be guided by the principles contained in Sections 19826 and 19829 of the Government Code, consistent with its fiduciary responsibility to its members to recruit and retain highly qualified and effective employees for these positions. (2) The salary for the chief operating officer and the chief financial officer fixed pursuant to paragraph (1) shall not exceed 110 percent of the maximum salary payable to an investment director of the system. (c) When a position specified in subdivision (a) is filled through a general civil service appointment, it shall be filled from an eligible list based on an examination that was held on an open basis, and tenure in those positions shall be subject to the provisions of Article 2 (commencing with Section 19590) of Chapter 7 of Part 2 of Division 5 of Title 2 of the Government Code. In addition to the causes for action specified in that article, the board may take action under the article for causes related to its fiduciary responsibility to its members, including the employee's failure to meet specified performance objectives. (d) An individual who held a position designated in subdivision (a), or was a member of the board, a deputy chief executive officer, or was in an equivalent senior management position, shall not, for a period of two years after leaving that position, for compensation, act as agent or attorney for, or otherwise represent, any other person, except the state, by making any formal or informal appearance before or by making any oral or written communication to the board, or any officer or employee thereof, if the appearance or communication is made for the purpose of influencing administrative or legislative action or any action or proceeding involving the issuance, amendment, awarding, or revocation of a permit, license, grant, contract, or sale or purchase of goods or property. (e) Twelve months after filling the chief operating officer position or chief financial officer position, the board shall report to the fiscal committees of the Legislature, in compliance with Section 9795 of the Government Code, on the improvements and cost savings realized because of these new positions. In particular, the board shall report on savings resulting from reduced contracting and greater use of internal resources. The board shall continue to report annually thereafter.