BILL NUMBER: SB 292 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 21, 2015
INTRODUCED BY Senator Pan
FEBRUARY 23, 2015
An act to amend Section 20300 7522.30
of the Government Code, relating to public employees'
retirement.
LEGISLATIVE COUNSEL'S DIGEST
SB 292, as amended, Pan. Public Employees' Retirement
System: membership: exclusions. Public employee
retirement: contributions.
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. On and after January 1,
2013, PEPRA requires new employees of specified public employers, the
Legislature, the California State University, and the judicial
branch who participate in a defined benefit plan to have an initial
contribution rate of at least 50% of the normal cost rate for that
defined benefit plan, rounded to the nearest 1/4 of 1%, or the
current contribution rate of similarly situated employees, whichever
is greater.
The California Constitution generally limits ad valorem taxes on
real property to 1% of the full cash value of that property. The
California Constitution exempts from that limit an additional ad
valorem property tax rate for, among other things, indebtedness
approved by the voters of the local entity prior to July 1, 1978,
including pension programs.
This bill would exempt a city or county that pays its pension
costs with revenues from a property tax rate, approved by the voters
of a city or county to make payments in support of pension programs
and levied in addition to the general property tax rate, and that
city's or county's employees from the above-described 50%
contribution rate provision under PEPRA.
The Public Employees' Retirement Law (PERL) creates the Public
Employees' Retirement System (PERS), which provides a defined benefit
to its members based on age at retirement, service credit, and final
compensation. Existing law defines "member" for purposes of PERL and
excludes certain people from membership in PERS.
This bill would make technical, nonsubstantive changes to these
provisions.
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 7522.30 of t he
Government Code is amended to read:
7522.30. (a) This section shall apply to all public employers and
to all new members. Equal sharing of normal costs between public
employers and public employees shall be the standard. The standard
shall be that employees pay at least 50 percent of normal costs and
that employers not pay any of the required employee contribution.
(b) The "normal cost rate" shall mean the annual actuarially
determined normal cost for the plan of retirement benefits provided
to the new member and shall be established based on the actuarial
assumptions used to determine the liabilities and costs as part of
the annual actuarial valuation. The plan of retirement benefits shall
include any elements that would impact the actuarial determination
of the normal cost, including, but not limited to, the retirement
formula, eligibility and vesting criteria, ancillary benefit
provisions, and any automatic cost-of-living adjustments as
determined by the public retirement system.
(c) New members employed by those public employers defined in
paragraphs (2) and (3) of subdivision (i) of Section 7522.04, the
Legislature, the California State University, and the judicial branch
who participate in a defined benefit plan shall have an initial
contribution rate of at least 50 percent of the normal cost rate for
that defined benefit plan, rounded to the nearest quarter of 1
percent, unless a greater contribution rate has been agreed to
pursuant to the requirements in subdivision (e). This contribution
shall not be paid by the employer on the employee's behalf.
(d) Notwithstanding subdivision (c), once established, the
employee contribution rate described in subdivision (c) shall not be
adjusted on account of a change to the normal cost rate unless the
normal cost rate increases or decreases by more than 1 percent of
payroll above or below the normal cost rate in effect at the time the
employee contribution rate is first established or, if later, the
normal cost rate in effect at the time of the last adjustment to the
employee contribution rate under this section.
(e) Notwithstanding subdivision (c), employee contributions may be
more than one-half of the normal cost rate if the increase has been
agreed to through the collective bargaining process, subject to the
following conditions:
(1) The employer shall not contribute at a greater rate to the
plan for nonrepresented, managerial, or supervisory employees than
the employer contributes for other public employees, including
represented employees, of the same employer who are in related
retirement membership classifications.
(2) The employer shall not increase an employee contribution rate
in the absence of a memorandum of understanding that has been
collectively bargained in accordance with applicable laws.
(3) The employer shall not use impasse procedures to increase an
employee contribution rate above the rate required by this section.
(f) If the terms of a contract, including a memorandum of
understanding, between a public employer and its public employees,
that is in effect on January 1, 2013, would be impaired by any
provision of this section, that provision shall not apply to the
public employer and public employees subject to that contract until
the expiration of that contract. A renewal, amendment, or any other
extension of that contract shall be subject to the requirements of
this section.
(g) This section does not apply to a public employer and its
public employees if the public employer is a city or county that pays
its pension program costs with revenues derived from a property tax
rate, approved by the voters of a city or county to make payments in
support of pension programs and levied in addition to the property
tax rate limited by subdivision (a) of Section 1 of Article XIII A of
the California Constitution.
SECTION 1. Section 20300 of the Government Code
is amended to read:
20300. The following persons are excluded from membership in this
system:
(a) Inmates of state or public agency institutions who are allowed
compensation for the service they are able to perform.
(b) Independent contractors who are not employees.
(c) Persons employed as student assistants in the state colleges
and persons employed as student aides in the special schools of the
State Department of Education and in the public schools of the state.
(d) Persons employed as teacher assistants pursuant to Section
44926 of the Education Code.
(e) Participants, other than staff officers and employees, in the
California Conservation Corps.
(f) Persons employed as participants in a program of, and whose
wages are paid in whole or in part by federal funds in accordance
with, Section 1501 et seq. of Title 29 of the United States Code.
This subdivision does not apply with respect to persons employed in
job classes that provide eligibility for patrol or safety membership
or to the career staff employees of an employer.
(g) All persons who are members in a teachers' retirement system,
as to the service in which they are members of a teachers' retirement
system.
(h) Except as otherwise provided in this part, persons rendering
professional legal services to a city, other than the person holding
the office of city attorney, the office of assistant city attorney,
or an established position of deputy city attorney.
(i) A person serving the university as a teacher in university
extension, whose compensation for that service is established on the
basis of class enrollment, either actual or estimated, with respect
to that service.
(j) A person serving a California State University as a teacher in
extension service, whose compensation for that service is
established on the basis of class enrollment, either actual or
estimated, with respect to that service.
(k) A teacher or academic employee of the university or any
California State University who is otherwise fully employed and who
serves as a teacher or in an academic capacity in a summer session or
intersession, for which he or she receives compensation specifically
attributable to that service in summer session or intersession, with
respect to that service.
( l ) A person who is employed under the
California Senate Fellows, the Assembly Fellowship, the Judicial
Administration Fellowship, or the Executive Fellowship programs.
(m) Board members of the State Compensation Insurance Fund,
including those appointed by the Governor.