Legislative Alert – September 2014

Categories: California Developments,Legislative Updates
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A Legislative Session Comes to an End

You didn’t even miss it, did ya? A legislative session has come and gone without much fanfare in the world of pensions. The big issues we were witness to came from the PERS system, local initiatives and court rulings. That certainly doesn’t mean we were left void of any changes to pension or other post employment benefit (OPEB) laws. Below is a list of bills that the Governor has already signed, thus will take effect on January 1, 2015. Not all of the pension and OPEB bills we have been following are included here. They still sit on his desk, as he has until September 30th to act. We will give a report on the rest of them to you next month so you can get up to speed on them prior to 2015.

AB 1163 (Levine) – Education for CalPERS Board Members

(Chaptered and to take effect on January 1, 2015)

AB 1163 is meant to establish a precedent of education for the PERS Board. It requires PERS to adopt a policy for providing education to its Board members, and to create a system of follow-up to ensure its members are adhering to the ever changing nature of our process (our words, not the bill’s). Topics for education may include: fiduciary responsibilities, ethics, actuarial matters, pension funding, pension fund governance, benefits administration, or any-thing else PERS deems important for its senior officials and Board.

Wondering how PERS is going to keep track of all these new educational requirements? The bill provides legislation for that too. AB 1163 requires the Board member education policy to:

  •  Establish a process to determine which programs, training, and educational sessions should qualify as Board member education.
  • Require that all Board members receive 24 hours of education within two years of assuming office, and for every subsequent two-year period of Board service thereafter.
  • Necessitate that the Board provide a record of member compliance with the education requirements and provide an annual report posted on PERS’ website.

AB 2472 (Committee on Public Employees, Retirement and Social Security) County Employees Retirement Law of 1937: Federal Law Compliance

(Chaptered and to take effect on January 1, 2015)

AB 2472 is considered a “housekeeping bill” where the good people of the Capitol go in and clean up various provisions of law that we may have missed in the prior year. The bill deals with a multitude of small changes; many of these changes affect only a very small pool of employees, so we’ll try to cut this one down into the aspects of the bill that might bring about some form of noticeable change. AB 2472 will:

  •  Nullify the requirement that the PERS Board must file a separate annual report with the Governor and the Legislature on anything and everything under its jurisdiction.
  • Provide that an individual is no longer a PERS member if he or she has less than 10 years of service credit and no accumulated contributions in the retirement fund at the time of retirement. (Current law has that number at 5 years).
  • State that if a correction to the amount of compensation received by a member needed to be made, the allowance shall be computed using the employer contribution rate that was effective at the time the compensation needing adjustment was earned.
  • Allow an election, revocation, or change of election to be made within 30 days after the making of the first payment. (Existing law states that these actions must be taken prior to the first payment).

The bill also makes a few technical changes that mostly deal with appointed judges in the retirement system, and a few duties of the PERS Board.

AB 1035 (John Perez) Workers’ compensation: firefighters and peace officers

(Chaptered and to take effect on January 1, 2015)

We know this next one has nothing to do with retirement benefits, but all of you out there need to be aware of it. AB 1035 basically extends the time period to collect death benefits related to workers comp illness including cancer, tuberculosis, a blood-borne infectious disease, or a staph infection. It was co-sponsored by an array of public safety organizations including the Peace Officers Research Association of California (PORAC) and California Professional Firefighters (CPF). The sponsors say the current 4.5 year timeline for filing claims makes an arbitrary cut-off for those who are able to live for a longer period with one of these illnesses. Instead, AB 1035 pro-vides up to 8 years after the date of injury for families to make a claim for death benefits (although the claim must be filed within one year of the date of death). Medical advances are increasing the lifespan of patients with cancer or infectious diseases than was previously the case. The National Cancer Institute says the cancer survival rate is in-creasing and two-thirds of patients diagnosed in 2003 survived five years from diagnosis.


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