Bill Text: CA SB867 | 2009-2010 | Regular Session | Chaptered
Bill Title: Public employee benefits: contribution rates: reports.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2010-10-20 - Chaptered by Secretary of State. Chapter 733, Statutes of 2010. [SB867 Detail]
Download: California-2009-SB867-Chaptered.html
BILL NUMBER: SB 867 CHAPTERED
BILL TEXT
CHAPTER 733
FILED WITH SECRETARY OF STATE OCTOBER 20, 2010
APPROVED BY GOVERNOR OCTOBER 20, 2010
PASSED THE SENATE OCTOBER 7, 2010
PASSED THE ASSEMBLY OCTOBER 7, 2010
AMENDED IN ASSEMBLY OCTOBER 7, 2010
INTRODUCED BY Senator Hollingsworth
(Coauthor: Assembly Member Garrick)
JANUARY 11, 2010
An act to add Section 20229 to the Government Code, relating to
public employee benefits, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 867, Hollingsworth. Public employee benefits: contribution
rates: reports.
The Public Employees' Retirement Law (PERL) provides a defined
benefit to members of the Public Employees' Retirement System (PERS)
based on age at retirement, service credit, and final compensation,
as those terms are defined. The management and control of PERL is
vested in the board of administration of PERL, including the
calculation of the contribution rates for specified state employees
and state employers.
Existing law provides that a statute that imposes a requirement
that a state agency submit a periodic report to the Legislature is
inoperative on a date 4 years after the date the first report is due.
This bill would require the board of administration of PERL,
notwithstanding that requirement, to submit a report to the
Legislature, the Governor, and the Treasurer describing the
investment return assumptions, discount rates, and amortization
periods utilized by the board in the calculations of the contribution
rates and to include recalculations of those rates based on
specified adjustments of the investment return assumptions,
amortization periods, and discount rates utilized by the board any
time it calculates the contribution rates. This bill would require
the Treasurer, within 30 days following receipt of the report, to
provide each house of the Legislature, at a publicly noticed floor
session, with an explanation of the role played by the investment
return assumption and amortization period in the calculation of the
contribution rates and the consequences for future state budgets if
the investment return assumptions are not realized, to report whether
the board's amortization period exceeds the estimated average
remaining service periods of employees covered by the contributions,
and to express his or her opinion of the reasonableness of the board'
s calculation of the contribution rates.
This bill would, notwithstanding the 4-year reporting limitations,
also require the board, at any time it forecasts contribution rates,
to submit a report to the Legislature with a revised calculation of
the forecasted contribution rates utilizing a specified investment
rate assumption.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 20229 is added to the Government Code, to read:
20229. (a) The board, notwithstanding Section 10231.5, any time
it adopts the contribution rates described in Chapter 8 (commencing
with Section 20671) and Chapter 9 (commencing with Section 20790),
shall provide the Legislature, the Governor, and the Treasurer with a
report that includes all of the following:
(1) (A) A description of the investment return assumption utilized
by the board when determining the contribution rates.
(B) A calculation of the contribution rates utilizing an
investment return assumption based on the lesser of 6 percent per
annum or one percentage point below the investment return assumption
utilized by the board.
(2) (A) A description of the amortization period for any unfunded
liabilities utilized by the board when determining the contribution
rates.
(B) A calculation of the contribution rates based on an
amortization period equal to the estimated average remaining service
periods of employees covered by the contributions.
(3) (A) A description of the discount rate utilized by the board
for reporting liabilities.
(B) A calculation of those liabilities based upon a discount rate
equal to the rate of the 10-year United States Treasury Note as of 30
days before the date of the report.
(4) The market value of the assets controlled by the board and an
explanation of how the actuarial value assigned to those assets
differs from the market value of those assets.
(b) The board, notwithstanding Section 10231.5, at any time it
forecasts the contribution rates described in Chapter 8 (commencing
with Section 20671) and Chapter 9 (commencing with Section 20790),
shall provide the Legislature with a revised calculation of the
forecasted contribution rates utilizing an investment rate assumption
based on the lesser of 6 percent or one percentage point below the
investment return assumption utilized by the board in the calculation
of the forecasted contribution rates.
(c) The Treasurer within 30 days of receipt of the report required
by subdivision (a) shall, during a publicly noticed floor session of
each house of the Legislature, do all of the following:
(1) Explain the role played by the investment return assumption
and amortization period in the calculation of the contribution rates.
(2) Describe the consequences for future state budgets should the
investment return assumption not be realized.
(3) Report whether the board's amortization period exceeds the
estimated average remaining service periods of employees covered by
the contributions.
(4) Express his or her opinion of the reasonableness of the board'
s selection of the investment return assumption and the amortization
period.
(d) The reports required by subdivisions (a) and (b) shall be
submitted in compliance with Section 9795.
SEC. 2. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to make necessary changes to implement the Budget Act of
2010, it is necessary that this act take effect immediately.
