Today's Law As Amended


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AB-1184 Public employees’ retirement benefits.(2011-2012)



As Amends the Law Today


SECTION 1.
 It is the intent of the Legislature, by adding Section 20791 to the Government Code pursuant to Section 2 of this act, that a contracting agency shall not experience a significant increase in actuarial liability due to increased compensation paid by another contracting agency to a nonrepresented employee subject to the Public Employees’ Retirement Law (Part 3 (commencing with Section 20000) of Division 5 of Title 2 of the Government Code).

SEC. 2.

 Section 20791 is added to the Government Code, to read:

20791.
 (a) The board shall develop requirements for defining a significant increase in actuarial liability due to increased compensation paid to a nonrepresented employee and to implement program changes to ensure that a contracting agency that creates a significant increase in actuarial liability due to increased compensation paid to a nonrepresented employee that would also apply to another contracting agency or agencies shall instead bear that liability.
(b) The system actuary, in accordance with the requirements established pursuant to subdivision (a), shall assess the increase in liability to the employer that created it at the time the increase is determined and shall make adjustments to that employer’s rates as needed to comply with the requirements.
(c) This section shall not apply to compensation paid to an employee for service performed while covered by a memorandum of understanding or to compensation paid for service performed while a member of a recognized employee organization as that term is defined in Section 3501.
(d) This section shall apply to any significant increase in actuarial liability, due to increased compensation paid to a nonrepresented employee, that is determined after January 1, 2012, regardless of when the increase in compensation occurred.
(e) (1) No later than June 30, 2012, in compliance with Section 9795, the board shall report to the Legislature on the implementation of this section. The report shall include an explanation of the guidelines developed by the board pursuant to this section and an assessment of the implementation and effectiveness of the guidelines.
(2) The requirement for submitting a report imposed under this subdivision is inoperative on June 30, 2016, pursuant to Section 10231.5.

SEC. 2.SEC. 3.

 Section 21757 of the Government Code is amended to read:

21757.
 (a) If the retirement benefits of any member or his or her survivors or beneficiaries payable pursuant to Part 3 (commencing with Section 20000) would be limited by Section 415 of Title 26 of the United States Code, the board shall adjust the payment of those benefits, including, but not limited to, cost-of-living adjustments, cost-of-living banks, temporary annuities, survivor continuance benefits, or any combinations thereof, in order to maximize benefits within the limits of Section 415.
(b) The board shall establish a plan of replacement benefits for members and any survivors or beneficiaries whose retirement benefits are limited by Section 415 and cannot be fully maximized pursuant to Part 3 (commencing with Section 20000). The benefits provided by that plan may consist of deferred compensation, cash payments, health benefits, or supplemental disability benefits, as shall be determined by the board to give effect to the purpose of this part. The factors the board may take into consideration in making its determination shall include, but not be limited to, the following: legal constraints, administrative feasibility, and cost effectiveness. The board may periodically modify the replacement benefits plan and may add or eliminate any type of replacement benefits, as necessary, to carry out the purpose of this part. The administrative costs of the replacement benefits plan shall be satisfied out of funds credited to the accounts of the participant members, and shall not be paid from the retirement fund or the retirement trust fund of a participating agency.
(c) The application of Section 415 to benefits provided under Part 3 (commencing with Section 20000) and this part shall not be taken into account for purposes of determining employers’ or employees’ contribution rates, until replacement benefits are implemented pursuant to Section 21758.
(d) Under no circumstances shall the replacement benefit plan result in increased benefit costs to an employer, member, or annuitant.
(e) The board shall not administer a plan of replacement benefits for a person who first becomes a member on or after January 1, 2013.