AB 1311

Bill Subjects

Abstract

The Public Employees' Retirement Law (PERL) establishes the Public Employees' Retirement System (PERS) , which provides a defined benefit to members of the system, based on final compensation, credited service, and age at retirement, subject to certain variations. Existing law creates the Board of Administration of PERS for the purpose of governing the system and prescribes the composition of the board. Existing law requires that one member of the board be a member of the public chosen jointly by the Speaker of the Assembly and the Senate Committee on Rules. Existing law further requires that an official of a life insurer be appointed to the board by the Governor. The California Constitution prohibits changing the composition of the retirement board of certain public pension systems, including the numbers, terms, and method of selection and removal of members, unless the change is ratified by a majority vote of the electors in the jurisdiction in which the participants of the pension system are or were employed. This bill would revise the composition of the board. The bill would add to the board 2 persons, appointed at the pleasure of the Governor, who represent the public, have financial expertise, and are not interested in the system, as specified. The bill would replace the official of a life insurer, whom the Governor is currently authorized to appoint, with a gubernatorial appointee who has expertise in health insurance and is not interested in the system. The bill also would require the board member representing the public, appointed by the Speaker of the Assembly and Senate Committee on Rules, to have financial expertise and not be interested in the system. Under PERL, members of the board serve without compensation but are entitled to reimbursement for actual and necessary expenses incurred through service on the board. Existing law also requires each agency that employs an elected member of the board to be reimbursed by the retirement fund in an amount equal to the salary and benefits paid to the elected member by the employing agency for the percentage of the elected board member's regular work schedule during which the elected board member is on leave from the employing agency to attend meetings or activities of the board, or otherwise carrying out board activities. This bill would prohibit the system from providing members of the board with payments, reimbursements, or benefits for travel in excess of $10,000 per year. The bill also would require a summary of all payments, reimbursements, or benefits for travel of board members provided to be compiled and provided to the full board semiannually, and also to be posted on the board's Internet Web site. Additionally, the bill would prohibit any reimbursement to an agency that employs an elected member of the board from exceeding 35% of the annual salary and benefits paid to the elected board member by the employing agency. Existing law requires the board to arrange for ballots to be distributed to each active and retired member of the system before each election, and to provide for the return of the voted ballots to the board without cost to the member. This bill would require the election procedures developed by the board to include a process for candidates to provide campaign materials to the system, for mailing by the system to the members eligible to vote for the candidate. The bill would require the candidate to pay the actual expenses incurred by the system to mail the campaign materials and would prohibit the system from releasing contact information for members directly to a candidate. The bill would make the operation of its provisions that change the composition of the PERS board contingent on voter approval of an unspecified Assembly Constitutional Amendment by voters at the June 5, 2018, statewide primary election.