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AB-826 County Employees Retirement Law of 1937: compensation and compensation earnable.(2021-2022)

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Date Published: 09/02/2022 09:00 PM
AB826:v92#DOCUMENT

Enrolled  September 02, 2022
Passed  IN  Senate  August 22, 2022
Passed  IN  Assembly  August 31, 2022
Amended  IN  Senate  August 03, 2022
Amended  IN  Senate  August 31, 2021
Amended  IN  Senate  July 14, 2021
Amended  IN  Senate  June 22, 2021
Amended  IN  Senate  June 21, 2021
Amended  IN  Assembly  April 19, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 826

Introduced by Assembly Member Irwin

February 16, 2021

An act to add Section 31461.7 to the Government Code, relating to county employees’ retirement.


LEGISLATIVE COUNSEL'S DIGEST


AB 826, Irwin. County Employees Retirement Law of 1937: compensation and compensation earnable.
The County Employees Retirement Law of 1937 (CERL) authorizes counties to establish retirement systems pursuant to its provisions for the purpose of providing pension, disability, and other benefits to county and district employees. CERL defines compensation earnable for purposes of its provisions, with particular application to the calculation of final compensation and the determination of pension amounts and other benefits. Existing law, the Public Employees’ Pension Reform Act of 2013, prescribes various limitations on public employees, employers, and retirement systems concerning, among other things, the types of remuneration that may be included in compensation that is applied to pensions.
This bill, which would apply only in Ventura County, would provide that compensation and compensation earnable include flexible benefits plan allowances paid by a county or a district on behalf of its employees as part of a cafeteria plan, as specified, if certain conditions are met. Among these conditions, the bill would require that the retirement system included the flexible benefit plan allowance as part of compensation earnable as of July 30, 2020, that the employer and employee paid contributions to the retirement system based on the flexible benefit plan allowance, and that the employer and employee continue to pay those contributions as the employee earns this allowance. The bill would apply these provisions to eligible members who retire on or before December 31, 2025. For members who retire after December 31, 2025, to the extent the retirement system excludes any remuneration, as described above, from the definition of compensation or compensation earnable, the bill would require the retirement system to refund contributions to the member, and to credit contributions to the employer, that were made based on the excluded remuneration in accordance with requirements under the Internal Revenue Code.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Ventura.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 31461.7 is added to the Government Code, to read:

31461.7.
 (a) This section applies only to a county of the thirteenth class, as defined by Section 28020, as amended by Chapter 1204 of the Statutes of 1971, and Section 28034, as amended by Chapter 1204 of the Statutes of 1971.
(b) (1) Compensation, as defined in Section 31460, and compensation earnable, as defined in Section 31461, include flexible benefits plan allowances paid by a county or a district on behalf of its employees as part of a cafeteria plan offered pursuant to Section 125 of the Internal Revenue Code if all of the following requirements are met:
(A) The flexible benefit plan allowance is made available to any person in the same grade or class of positions. For purposes of this subdivision, “grade or class of positions” means a number of employees considered together because they share similarities in job duties, work location, collective bargaining unit, or other logical, work-related grouping. A single employee shall not be considered a grade or class of positions.
(B) The flexible benefit plan allowance is not expressly excluded from “compensation earnable” pursuant to paragraphs (2) to (4), inclusive, of subdivision (b) of Section 31461.
(C) The retirement system included the flexible benefit plan allowance as part of compensation earnable as of July 30, 2020, and the employer and employee paid contributions to the retirement system based on the flexible benefit plan allowance as of that date.
(D) The employer and employee pay the required contributions to the retirement system as the employee continues to earn the flexible benefit plan allowance.
(2) For employee groups in which the monetary amount of the flexible benefits plan allowance is the same for all employees, regardless of the number of dependents, the entire amount shall be included in compensation earnable. For employee groups in which the monetary amount of the flexible benefits plan allowance varies among employees depending on the number of dependents, the amount included in compensation earnable shall be the amount provided to an employee with no dependents.
(c) This section shall not apply to employees who are new members, as defined in Section 7522.04.
(d) This section shall apply to eligible members who retire on or before December 31, 2025.
(e) For members who retire after December 31, 2025, to the extent the retirement system excludes any remuneration described in subdivision (b) from the definition of “compensation” or “compensation earnable,” the retirement system shall refund contributions to the member, and shall credit contributions to the employer, that were made based on the excluded remuneration in accordance with requirements under the Internal Revenue Code.

SEC. 2.

 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances confronting county employees who are members of the retirement system in the County of Ventura.