SB 341

Bill Subjects

Abstract

(1) Existing law requires the Board of Administration of the Public Employees' Retirement System and the Teachers' Retirement Board to provide annual reports to the Legislature and the Governor with regard to investment returns on assets of the Public Employees' Retirement System and the State Teachers' Retirement System, respectively. As part of these reports, the boards are required to calculate and report on the rate of return on investments based on different assumptions. This bill would require the Board of Administration of the Public Employees' Retirement System to report a calculation of liabilities based on a discount rate equal to the yield on a 10-year United States Treasury note in the year prior to the report. The bill would require the Teachers' Retirement Board to provide a description of the discount rate the board uses for reporting liabilities, a calculation of liabilities based on a discount rate that is 2% below the long-term rate of return assumed by the board, and a calculation of liabilities based on a discount rate equal to the yield on a 10-year United States Treasury note in the year prior to the report. Existing law states the intent of the Legislature that the Regents of the University of California provide written notice to the Legislature of any proposed changes to retirement plan benefits, employer or employee contribution rates, or actuarial assumptions affecting the University of California Retirement System, as specified. This bill would state the intent of the Legislature that the Regents of the University of California provide an annual written report to the Legislature regarding annual return on investments for the University of California Retirement System for the past 20 years and certain information regarding the rate of return of the system by asset type, as specified. (2) Existing law establishes the California Secure Choice Retirement Savings Investment Board and the California Secure Choice Retirement Savings Trust, for the purpose of promoting greater savings for private employees in California. Existing law requires the board to design and implement the CalSavers Retirement Savings Program. After the board opens the program for enrollment, existing law prescribes a schedule for employer participation based on the size of the employer, unless the employer is offering its own employer-sponsored plan, as specified. Existing law requires each eligible employee to be enrolled in the program unless the employee elects not to participate. This bill would remove the requirement that eligible employees participate in the CalSavers Retirement Savings Program and, instead, permit an employee to elect participation. The bill would make various conforming changes in this connection. (3) Existing law, with certain exceptions, requires that employers pay wages to their employees twice per calendar month on days designated in advance as regular paydays. Existing law exempts the payment of wages of employees directly employed by the State of California from that requirement. This bill would repeal that exemption, thereby requiring the State of California to pay wages twice per month to employees that it directly employs. (4) Existing law creates the Defined Benefit Program of the State Teachers' Retirement System for the purpose of providing pension benefits to members of the system. The Defined Benefit Program is funded by employer and employee contributions as well as investment returns and state appropriations. This bill would appropriate $1,000,000,000 from the General Fund for transfer to the Teachers' Retirement Fund to reduce the unfunded liability of the Defined Benefit Program of the State Teachers' Retirement System. The bill would also appropriate another $1,000,000,000 to the Teachers' Retirement Fund if the Legislative Analyst determines in the May Revision of the 2019–20 Budget that the state has collected more than $1,000,000,000 in unanticipated General Fund revenue. The bill would require the Governor to form a working group of specified parties to propose long-term funding solutions for the unfunded liability of the Defined Benefit Program of the State Teachers' Retirement System and to report those solutions to the Legislature by January 1, 2020. The bill would make a statement of legislative findings and declarations.