California Legislation that Impacts Many of our Members will Become Law in 2019
Discontinuing Installment Payments into Retirement
AB 2196 (Cooper) requires a member who elects to purchase or convert service credit on or after January 1, 2020, to pay any remaining balance by his or her retirement date or elect to have his or her monthly allowance reduced by the actuarial equivalent of the unpaid balance, in lieu of making installment payments into retirement. The same payment choices will also apply to the survivor or beneficiary of a member who makes a service credit purchase or conversion in the future and passes away prior to retirement.
CalPERS Terminating Agency Process
SB 1022 (Pan) shortens the time frame in which a contracting agency can voluntarily terminate its participation in CalPERS and requires the agency to notify past and present employees of its intention to terminate within 30 days of its governing body providing notice of intent to CalPERS. SB 1022 also clarifies the confidentiality protections governing member data and extends them to CalPERS health plan participants.
Retirement Contracting Requirements for Joint Powers Authorities
AB 1912 (Rodriguez) makes the member agencies of a Joint Powers Authority (JPA) that participates in a public retirement system responsible for its retirement liabilities when the JPA acts to dissolve or its CalPERS contract terminates. AB 1912 also establishes a process to apportion a JPA’s retirement liabilities among its member agencies prior to its dissolution or termination of its contract and requires CalPERS to consider and exhaust all options and necessary actions prior to reducing retirement benefits paid to former employees of JPAs from the Terminated Agency Pool.
Contracting Agency Cost Sharing
AB 2310 (Aguiar-Curry) streamlines the procedures that allow contracting agencies to negotiate with their employees’ exclusive representative for cost-sharing of the employer’s required retirement contributions through collective bargaining.
Reporting of Climate-Related Financial Risk of Pension Investments
SB 964 (Allen) requires CalPERS and CalSTRS to analyze the climate-related financial risk of investments in their respective retirement funds, as specified, and publicly report on their analysis every three years, until 2035.
Leaves of Absence to Perform Union Duties
SB 1085 (Skinner) requires public employers to grant leaves of absence to employees serving as stewards or officers of an employee organization, or of any affiliated statewide or national employee organization, without loss of compensation, benefits, seniority, rank, or classification. SB 1085 also requires the employee organization to reimburse the public employer for all compensation paid to the employee on leave.
Association Health Plans
SB 1195 (Portantino) allows the Peace Officers Research Association of California (PORAC) to expand the types of health plans offered to its members and their dependents receiving health benefits through CalPERS. It also allows the health plans developed by PORAC and the California Correctional Peace Officers Association to have varying premiums in different areas of the state, so long as those regions do not differ from those established by CalPERS for contracting agencies’ regional premiums, or only provide for a north and south geographic region.
California Employers’ Pension Prefunding Trust Program
SB 1413 (Nielsen) establishes the California Employers’ Pension Prefunding Trust (CEPPT) program to allow state and local public agency employers that participate in a defined benefit pension plan to prefund their required pension contributions.
CalPERS monitors legislation at the state and federal levels to protect the best interests of our members and employers. To view summaries and reports about legislation that may affect you, visit the CalPERS Legislation page.