Bill Text: CA SB1251 | 2013-2014 | Regular Session | Amended

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

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Bill Title: California Public Employees' Pension Reform Act of 2013: joint powers authority: employees.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2014-09-28 - Chaptered by Secretary of State. Chapter 757, Statutes of 2014. [SB1251 Detail]

Download: California-2013-SB1251-Amended.html

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BILL NUMBER: SB 1251	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 24, 2014
	AMENDED IN SENATE  APRIL 21, 2014
	AMENDED IN SENATE  APRIL 2, 2014

INTRODUCED BY   Senator Huff

                        FEBRUARY 20, 2014

   An act to amend Section 7522.02 of the Government Code, relating
to public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1251, as amended, Huff. California Public Employees' Pension
Reform Act of 2013: joint power authority: employees.
   The California Public Employees' Pension Reform Act of 2013
(PEPRA) requires a public retirement system, as defined, to modify
its plan or plans to comply with the act and, among other provisions,
establishes new retirement formulas that may not be exceeded by a
public employer offering a defined benefit pension plan for employees
first hired on or after January 1, 2013. PEPRA authorizes
individuals who were employed by any public employer before January
1, 2013, and who became employed by a subsequent public employer for
the first time on or after January 1, 2013, to be subject to the
retirement plan that would have been available to employees of the
subsequent employer who were first employed by the subsequent
employer on or before December 31, 2012, if the individual was
subject to reciprocity, as specified.
   Existing law, the Joint Exercise of Powers Act, generally
authorizes 2 or more public agencies, by agreement, to jointly
exercise any common power, which may include hiring employees and
establishing retirement systems.
   This bill would  authorize   require  a
joint powers authority formed by one or more public employers, on or
after January 1, 2013, to provide employees meeting specified
criteria with the defined benefit plan or formula that was available
to employees of the employer on December 31, 2012. This bill would
prohibit the formation of a joint powers authority on or after
January 1, 2013, in a manner that would exempt a new employee or a
new member from the requirements of PEPRA.
   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 7522.02 of the Government Code is amended to
read:
   7522.02.  (a) (1) Notwithstanding any other law, except as
provided in this article, on and after January 1, 2013, this article
shall apply to all state and local public retirement systems and to
their participating employers, including 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,
independent public retirement systems, and to individual retirement
plans offered by public employers. However, this article shall be
subject to the Internal Revenue Code and Section 17 of Article XVI of
the California Constitution. The administration of the requirements
of this article shall comply with applicable provisions of the
Internal Revenue Code and the Revenue and Taxation Code.
   (2) Notwithstanding paragraph (1), this article shall not apply to
the entities described in Section 9 of Article IX of, and Sections 4
and 5 of Article XI of, the California Constitution, except to the
extent that these entities continue to be participating employers in
any retirement system governed by state statute. Accordingly, any
retirement plan approved before January 1, 2013, by the voters of any
entity excluded from coverage by this section shall not be affected
by this article.
   (3) (A) Notwithstanding paragraph (1), this article shall not
apply to a public employee whose interests are protected under
Section 5333(b) of Title 49 of the United States Code until a federal
district court rules that the United States Secretary of Labor, or
his or her designee, erred in determining that the application of
this article precludes certification under that section, or until
January 1, 2015, whichever is sooner.
   (B) If a federal district court upholds the determination of the
United States Secretary of Labor, or his or her designee, that
application of this article precludes him or her from providing a
certification under Section 5333(b) of Title 49 of the United States
Code, this article shall not apply to a public employee specified in
subparagraph (A).
   (4) Notwithstanding paragraph (1), this article shall not apply to
a multiemployer plan authorized by Section 302(c)(5) of the
Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) if the public employer
began participation in that plan prior to January 1, 2013, and the
plan is regulated by the Employee Retirement Income Security Act of
1974.
   (b) The benefit plan required by this article shall apply to
public employees who are new members as defined in Section 7522.04.
   (c) (1) Individuals who were employed by any public employer
before January 1, 2013, and who became employed by a subsequent
public employer for the first time on or after January 1, 2013, shall
be subject to the retirement plan that would have been available to
employees of the subsequent employer who were first employed by the
subsequent employer on or before December 31, 2012, if the individual
was subject to concurrent membership for which creditable service
was performed in the previous six months or reciprocity established
under any of the following provisions:
   (A) Article 5 (commencing with Section 20350) of Chapter 3 of Part
3 of Division 5 of Title 2.
   (B) Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3.
   (C) Any agreement between public retirement systems to provide
reciprocity to members of the systems.
   (D) Section 22115.2 of the Education Code.
   (2) An individual who was employed before January 1, 2013, and
who, without a separation from employment, changed employment
positions and became subject to a different defined benefit plan in a
different public retirement system offered by his or her employer
shall be subject to that defined benefit plan as it would have been
available to employees who were first employed on or before December
31, 2012.
   (d) If a public employer, before January 1, 2013, offers a defined
benefit pension plan that provides a defined benefit formula with a
lower benefit factor at normal retirement age and results in a lower
normal cost than the defined benefit formula required by this
article, that employer may continue to offer that defined benefit
formula instead of the defined benefit formula required by this
article, and shall not be subject to the requirements of Section
7522.10 for pensionable compensation subject to that formula.
However, if the employer adopts a new defined benefit formula on or
after January 1, 2013, that formula must conform to the requirements
of this article or must be determined and certified by the retirement
system's chief actuary and the retirement board to have no greater
risk and no greater cost to the employer than the defined benefit
formula required by this article and must be approved by the
Legislature. New members of the defined benefit plan may only
participate in the lower cost defined benefit formula that was in
place before January 1, 2013, or a defined benefit formula that
conforms to the requirements of this article or is approved by the
Legislature as provided in this subdivision.
   (e) If a public employer, before January 1, 2013, offers a
retirement benefit plan that consists solely of a defined
contribution plan, that employer may continue to offer that plan
instead of the defined benefit pension plan required by this article.
However, if the employer adopts a new defined benefit pension plan
or defined benefit formula on or after January 1, 2013, that plan or
formula must conform to the requirements of this article or must be
determined and certified by the retirement system's chief actuary and
the system's board to have no greater risk and no greater cost to
the employer than the defined benefit formula required by this
article and must be approved by the Legislature. New members of the
employer's plan may only participate in the defined contribution plan
that was in place before January 1, 2013, or a defined contribution
plan or defined benefit formula that conforms to the requirements of
this article. This subdivision shall not be construed to prohibit an
employer from offering a defined contribution plan on or after
January 1, 2013, either with or without a defined benefit plan,
whether or not the employer offered a defined contribution plan prior
to that date.
   (f) (1) If one or more public employers, on or after January 1,
2013, form a joint powers authority pursuant to the provisions of the
Joint Exercise of Powers Act (Article 1 (commencing with Section
6500) of Chapter 5), that joint powers authority  may
  shall  provide the following employees with the
defined benefit plan or formula that would have been available to
employees of the employer on December 31, 2012:
   (A) An employee of that public employer or employers that was
hired prior to January 1, 2013, and was not subject to the provisions
of this article, and was subsequently employed by the joint powers
authority without a break in service of more than 180 days.
   (B) An employee of that public employer or employers that was
hired on or after January 1, 2013, but would otherwise be exempt from
this article pursuant to subdivision (c), and was subsequently
employed by the joint powers authority without a break in service of
more than 180 days.
   (2) If there was more than one retirement plan or formula in place
on December 31, 2012, due to there being more than one employer,
then the joint powers authority shall indicate which defined benefit
plan or formula shall apply to employees of the authority who are
exempt from this article pursuant to this subdivision.
   (3) The formation of a joint powers authority on or after January
1, 2013, shall not act in a manner as to exempt a new employee or a
new member, as defined by Section 7522.04, from the requirements of
this article. New members may only participate in a defined benefit
plan or formula that conforms to the requirements of this article.
   (g) The Judges' Retirement System and the Judges' Retirement
System II shall not be required to adopt the defined benefit formula
required by Section 7522.20 or 7522.25 or the compensation
limitations defined in Section 7522.10.
   (h) This article shall not be construed to provide membership in
any public retirement system for an individual who would not
otherwise be eligible for membership under that system's applicable
rules or laws.
   (i) On and after January 1, 2013, each public retirement system
shall modify its plan or plans to comply with the requirements of
this article and may adopt regulations or resolutions for this
purpose.