Bill Text: CA AB1949 | 2011-2012 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Public employees: annuities and mutual fund custodial

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-05-02 - In committee: Set first hearing. Failed passage. Reconsideration granted. [AB1949 Detail]

Download: California-2011-AB1949-Introduced.html

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BILL NUMBER: AB 1949	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Cedillo

                        FEBRUARY 23, 2012

   An act to add Section 770.4 to the Insurance Code, relating to
public employees.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1949, as introduced, Cedillo. Public employees: annuities and
mutual fund custodial accounts.
   Existing law prohibits state and local agencies from negotiating
life and disability insurance or requiring the placing of that
insurance through particular agents, brokers, or companies, except to
the extent that the state has a direct financial interest in the
subject of the insurance, as specified. Existing law excepts from
these provisions a tax-sheltered annuity under an annuity plan that
meets the requirements of Section 403(b) of the Internal Revenue Code
to be placed or purchased for an employee, as specified. Existing
law requires an annuity contract and custodial account as described
in Section 403(b) of the Internal Revenue Code to be offered to all
employees of any state agency who are members of the State Teachers'
Retirement Plan, any employee of a local public agency or political
subdivision of the state that employs persons to perform creditable
service subject to coverage by the plan, and eligible state employees
of a state employer under the uniform state payroll system,
excluding the California State University System. The Teachers'
Retirement Law provides a registration process for information
relating to tax-deferred retirement investment products.
   This bill would authorize a school district, a county office of
education, or a charter school to select 4 or more vendors of
tax-deferred retirement investment products described in Section 403
(b) of the Internal Revenue Code, including fixed annuities, variable
annuities, and mutual fund custodial accounts, through salary
reduction agreements and, if elected by the school district, county
office of education, or charter school, through additional employer
or employee contributions, as specified.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 770.4 is added to the Insurance Code, to read:
   770.4.  (a) For the purposes of this section, "403(b) product or
403(b) products" means tax-deferred retirement investment products as
described in Section 403(b) of the Internal Revenue Code, and
complying with applicable California insurance laws, and federal and
California securities laws and rules as applied by appropriate
regulatory entities.
   (b) Notwithstanding Section 770.3 and any other law, a school
district, a county office of education, or a charter school may
select four or more vendors of 403(b) products through salary
reduction agreements and, if elected by the school district, county
office of education, or charter school, through additional employer
or employee contributions. The selected vendors shall offer access to
both of the following: (1) the three broad classifications of 403(b)
products, including fixed annuities, variable annuities, and mutual
fund custodial accounts, and (2) a range of bundled service models,
including, but not limited to, direct purchase and services of local
representatives. The school district, county office of education, or
charter school may designate one of the selected vendors or a third
party to provide or facilitate plan compliance coordination
consistent with the requirements of Section 403(b) of the Internal
Revenue Code. If a vendor is designated to provide that service, the
vendor shall agree not to use information obtained in the course of
providing the service for any other purpose, except as expressly
authorized by the school district, county office of education, or
charter school and communicated to each of the other 403(b) product
vendors.
   (c) (1) A school district, a county office of education, or a
charter school electing to limit the number of 403(b) product vendors
available to its employees pursuant to subdivision (b) may do so by
either of the following processes:
   (A) Utilizing an objective and competitive bidding and procurement
process for the school district, county office of education, or
charter school, or as part of a joint bidding and procurement
process, consistent with the public procurement guidelines applicable
to each school district, county office of education, or charter
school participating in the process.
   (B) Adopting the vendor selection of another school district,
county office of education, or charter school, if that selection was
subject to, or otherwise met, the requirements of subparagraph (A)
and occurred within the current or preceding three calendar years.
   (2) The school district, county office of education, or charter
school may equitably apportion the costs associated with the
procurement process to each vendor selected pursuant to the
requirements of this section.
   (3) A school district, a county office of education, or a charter
school that includes represented employees shall include those
employees in the vendor selection process.