Bill Text: CA SB1031 | 2017-2018 | Regular Session | Introduced

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

---

Bill Title: Public employees’ retirement: cost-of-living adjustments: prohibitions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2018-04-24 - April 23 set for first hearing. Failed passage in committee. (Ayes 1. Noes 3. Page 4788.) Reconsideration granted. [SB1031 Detail]

Download: California-2017-SB1031-Introduced.html

---

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 1031

---

Introduced by Senator Moorlach

February 08, 2018

---

An act to add Section 7522.45 to the Government Code, relating to public employees’ retirement.

LEGISLATIVE COUNSEL'S DIGEST

SB 1031, as introduced, Moorlach. Public employees’ retirement: cost-of-living adjustments: prohibitions.

The Public Employees’ Retirement Law establishes the Public Employees’ Retirement System and the Teachers’ Retirement Law establishes the State Teachers’ Retirement System for the purpose of providing pension benefits to specified public employees and teachers. Existing law establishes the Judges’ Retirement System II, which provides pension benefits to elected judges, and the Legislators’ Retirement System, which provides pension benefits to elective officers of the state other than judges and to legislative statutory officers. The County Employees Retirement Law of 1937 authorizes counties to establish retirement systems pursuant to its provisions in order to provide pension benefits to county, city, and district employees. Existing law provides for the application of cost-of-living adjustments to allowances paid to persons retired under, or survivors or beneficiaries of persons retired under, various public retirement systems. The California Public Employees’ Pension Reform Act of 2013, on and after January 1, 2013, requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, for its purposes, defines pensionable compensation, establishes limits on benefits, and requires the sharing of normal costs between members and employers for the pension systems to which it applies.

The bill would prohibit a public retirement system, as defined, from making a cost-of-living adjustment to any allowance payable to, or on behalf of, a person retired under the system, or to any survivor or beneficiary of a member or person retired under the system, for any year beginning on or after January 1, 2019, in which the unfunded actuarial liability of that system is greater than 20%. The bill would require that the determination of unfunded actuarial liability be based on a specified financial report and would apply the prohibition on cost-of-living adjustments, if any, to the calendar year following the fiscal year upon which the report is based.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

---

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 7522.45 is added to the Government Code, to read:

7522.45.

 (a) For purposes of this section:

(1) “Public retirement system” means the Public Employees’ Retirement System, the State Teachers’ Retirement System, the Legislators’ Retirement System, the Judges’ Retirement System, the Judges’ Retirement System II, county and district retirement systems created pursuant to the County Employees Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3), independent public retirement systems, and individual retirement plans offered by public employers.

(2) Notwithstanding paragraph (1), “public retirement system” does not include a retirement system created by an entity described in Section 9 of Article IX of, or Section 4 or 5 of Article XI of, the California Constitution, except to the extent that the entity elects to make this section applicable to the entity.

(b) (1) Notwithstanding any other law, except as otherwise required by Section 9 of Article I of the California Constitution, a public retirement system shall not make a cost-of-living adjustment to any allowance payable to, or on behalf of, a person retired under the system, or to any survivor or beneficiary of a member or person retired under the system, for any year beginning on or after January 1, 2019, in which the unfunded actuarial liability of the system is greater than 20 percent. If a system is found to have an unfunded liability of greater than 20 percent pursuant to the comprehensive annual financial report described in paragraph (2), the prohibition on cost-of-living adjustments shall apply to the calendar year following the fiscal year upon which the report is based.

(2) For purposes of paragraph (1), the determination of unfunded actuarial liability shall be based upon the comprehensive annual financial report that Section 7503 requires each state or local public retirement system to create.