BILL NUMBER: SB 1231 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 1, 2012
INTRODUCED BY Senator Walters
FEBRUARY 23, 2012
An act to amend Section 31874.3 of add
Section 31874.7 to the Government Code, relating to county
employees retirement.
LEGISLATIVE COUNSEL'S DIGEST
SB 1231, as amended, Walters. County employees retirement:
cost-of-living adjustments.
The County Employees Retirement Law of 1937 authorizes counties to
establish retirement systems for county employees, authorizes
counties to establish a board of retirement, and authorizes the board
of retirement to provide cost-of-living adjustments and certain
supplemental cost-of-living allowances.
This bill would provide that in regard to those
supplemental cost-of-living increases, if the retirement system is
not fully funded, or if the granting of this benefit will require
additional county contributions or create an unfunded liability, the
board of supervisors may adopt a resolution precluding the board of
retirement from granting this benefit to new members, and limiting
the benefit to the amount members would be eligible to receive at the
date of the resolution. authorize the board of
supervisors of Orange County, by resolution adopted by majority vote,
to preclude the board of retirement from providing excess percentage
increases or supplemental cost-of-living increases, as specified, as
of the date of the resolution.
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 31874.7 is added to the
Government Code , to read:
31874.7. (a) Notwithstanding any other provision of this chapter,
the Board of Supervisors of Orange County may, by resolution adopted
by majority vote, do the following:
(1) Preclude the board of retirement from providing any excess
percentage increase or supplemental cost-of-living increase under
Section 31874.3 to any member who has not been eligible to receive
the excess percentage increase or supplemental cost-of-living
increase under Section 31874.3 as of the date of the resolution.
(2) Preclude the board of retirement from granting any excess
percentage increase or supplemental cost-of-living increase under
Section 31874.3 greater than the excess percentage increase or
supplemental cost-of-living increase that the member was eligible to
receive as of the date of the resolution.
(b) Paragraphs (1) and (2) of subdivision (a) shall apply only to
members who have been employees or officers of Orange County, with
respect to the portion of their allowance attributable to that
service, and do not apply to any portion of an allowance attributable
to a member's service as an employee or officer of any other
district or entity, regardless of whether that district or entity is
independent of, or within, the Orange County Employees Retirement
System.
SECTION 1. Section 31874.3 of the Government
Code is amended to read:
31874.3. (a) (1) Whenever the percentage of annual increase in
the cost of living as of January 1 of each year as shown by the
Bureau of Labor Statistics Consumer Price Index for All Urban
Consumers exceeds the maximum benefit increase provided in Section
31870, 31870.1, 31870.2, or 31870.3, whichever is applicable, the
board of retirement may provide that all or part of the excess
percentage increase shall be applied to the retirement allowances,
optional death allowances, or annual death allowances increased in
Section 31870, 31870.1, 31870.2, or 31870.3. The board shall
determine the amount of the excess to be applied, which amount shall
not exceed an amount that can be paid from earnings of the retirement
fund that are in excess of the total interest credited to
contributions and reserves plus 1 percent of the total assets of the
retirement fund. If the retirement system is not fully funded, or if
the granting of this benefit will require additional county
contributions or create an unfunded liability, the board of
supervisors may adopt a resolution precluding the board of retirement
from granting this benefit to new members, and limiting the benefit
to the amount members would be eligible to receive at the date of the
resolution.
(2) The supplemental increases in excess of the increases applied
to the retirement allowances, optional death allowances, or annual
death allowances pursuant to Section 31870, 31870.1, 31870.2, or
31870.3 shall not become a part of the retirement allowances,
optional death allowances, or annual death allowances to be increased
by subsequent increases under Section 31870, 31870.1, 31870.2, or
31870.3.
(3) This subdivision shall be operative in any county that has
elected by a majority vote of the board of supervisors to make either
Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that
county.
(b) (1) The board of retirement may, instead of taking action
pursuant to subdivision (a), provide supplemental cost-of-living
increases, effective on a date to be determined by the board, to the
retirement allowances, optional death allowances, or annual death
allowances increased in Section 31870, 31870.1, 31870.2, or 31870.3;
provided however, that only those members shall be eligible for this
increase whose accumulations established by Section 31870, 31870.1,
31870.2, or 31870.3 shall equal or exceed 20 percent as of January 1
of the year in which the board of retirement adopts an increase under
this subdivision. If the retirement system is not fully funded, or
if the granting of this benefit will require additional county
contributions or create an unfunded liability, the board of
supervisors may adopt a resolution precluding the board of retirement
from granting this benefit to new members, and limiting the benefit
to the amount members would be eligible to receive at the date of the
resolution.
(2) The supplemental increases to the retirement allowances,
optional death allowances or annual death allowances increased in
Section 31870, 31870.1, 31870.2, or 31870.3 shall not become a part
of the retirement allowances, optional death allowances or annual
death allowances to be increased by subsequent increases under
Section 31870, 31870.1, 31870.2, or 31870.3.
(3) This subdivision shall be operative in any county that has
elected by a majority vote of the board of supervisors to make either
Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that
county.
(c) (1) The board of retirement may, instead of taking action
pursuant to subdivision (a) or (b), provide supplemental
cost-of-living increases, on a prefunded basis and effective on a
date to be determined by the board, to the retirement allowances,
optional death allowances, or annual death allowances increased in
Section 31870, 31870.1, 31870.2, or 31870.3; provided however, only
those members shall be eligible for this increase whose accumulations
established by Section 31870, 31870.1, 31870.2, or 31870.3 equal or
exceed 20 percent as of January 1 of the year in which the board of
retirement takes action pursuant to this subdivision. If the
retirement system is not fully funded, or if the granting of this
benefit will require additional county contributions or create an
unfunded liability, the board of supervisors may adopt a resolution
precluding the board of retirement from granting this benefit to new
members, and limiting the benefit to the amount members would be
eligible to receive at the date of the resolution.
(2) The supplemental increases to the retirement allowances,
optional death allowances, or annual death allowances increased in
Section 31870, 31870.1, 31870.2, or 31870.3 shall become a part of
the retirement allowances, optional death allowances, or annual death
allowances and shall serve to reduce the accumulations established
by Section 31870, 31870.1, 31870.2, or 31870.3, as applicable, by the
same percentage as the payment that is made pursuant to this
section.
(3) Before the board of retirement provides benefits pursuant to
this subdivision, the costs of the benefits shall be determined by a
qualified actuary and the board of retirement shall, with the advice
of the actuary, provide for the full funding of the benefits
utilizing funds in the reserve against deficiencies established
pursuant to Section 31592.2, using surplus earnings that exceed 1
percent of the total assets of the retirement system.
(4) This subdivision shall be operative in any county that has
elected by a majority vote of the board of supervisors to make either
Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that
county.
(d) Upon adoption by any county providing benefits pursuant to
this section, of Article 5.5 (commencing with Section 31610) of this
chapter, the board of retirement shall, instead, pay those benefits
from the Supplemental Retiree Benefit Reserve established pursuant to
Section 31618.