BILL NUMBER: AB 1974	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 22, 2002
	AMENDED IN SENATE  AUGUST 8, 2002
	AMENDED IN SENATE  AUGUST 6, 2002
	AMENDED IN SENATE  AUGUST 5, 2002
	AMENDED IN SENATE  JUNE 19, 2002
	AMENDED IN ASSEMBLY  APRIL 29, 2002

INTRODUCED BY   Assembly Member Pescetti

                        FEBRUARY 14, 2002

   An act to amend Sections 20022, 20063, 20370, and 20383 of, to add
Sections 20062.5, 20840, 20841, and 20842 to, and to repeal Sections
20225.5 and 20815.5 of, the Government Code, relating to public
employees' retirement.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1974, as amended, Pescetti.  Public employees' retirement:
risk pools.
   The Public Employees' Retirement Law authorizes the creation of
separate risk pools for local and school miscellaneous, local safety,
and school safety members, as specified, and permits the assets and
liabilities of contracting agencies to be combined for purposes of
setting employer rates.
   This bill would revise and recast these provisions.  The bill
would require the Board of Administration of the Public Employees'
Retirement System to establish the criteria under which contracting
agencies shall participate in a risk pool and the criteria under
which contracting agencies, county offices of education, school
districts, and community college districts may participate in a risk
pool.  The bill would prohibit requiring contracting agencies with
more than 100 active members in a member classification to
participate in a risk pool.  The bill would provide that specified
provisions regarding service credit and benefit payments are
applicable to local members of a contracting agency participating in
a risk pool without election by the contracting agency.  The bill
would establish the method of determining employer contribution
rates, and would require that these rates take into account assets
and liabilities brought into the pool, as specified.  The bill would
specify that the contribution rate made to the Public Employees'
Retirement System by a county office of education, school district,
or community college district participating in a risk pool, as
specified, is equal to the rate that the county office of education
or the district would have paid had the county office of education or
the district participated in a single account under a specified
provision.  The bill would make definitional changes to conform with
and further these provisions.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 20022 of the Government Code is amended to
read:
   20022.  "Contracting agency" means any public agency that has
elected to have all or any part of its employees become members of
this system and that has contracted with the board for that purpose.
"Contracting agency" also means any county office of education,
school district, or community college district that has elected to
have all or part of its employees participate in a risk pool and that
has contracted with the board for that purpose.
  SEC. 2.  Section 20062.5 is added to the Government Code, to read:

   20062.5.  "Risk pool" means the combination of assets and
liabilities with respect to one or more contracting agencies for the
purpose of pooling actuarial experience and setting the employer
contribution rates pursuant to Section 20840.
  SEC. 3.  Section 20063 of the Government Code is amended to read:
   20063.  (a) "School employer" means a county superintendent of
schools, other than the Los Angeles County Superintendent of Schools
and the San Diego County Superintendent of Schools, that has entered
into a contract with the board pursuant to Chapter 6 (commencing with
Section 20610) and any school district or community college district
that was a contracting agency on July 1, 1983, excluding that
portion of a contract with the Los Angeles City Unified School
District and the Los Angeles Community College District that pertains
to local police officers, as defined in Section 20430, on July 1,
1983, and excluding a school district or a community college
district, as defined in subdivision (i) of Section 20057, that
entered into a contract with the board on or after January 1, 1990,
and whose employees are school safety members, as defined in Section
20444.
   (b) Notwithstanding subdivision (a), "school employer" may not
include any county office of education, school district, or community
college district that participates in a risk pool.
  SEC. 4.  Section 20225.5 of the Government Code is repealed.
  SEC. 5.  Section 20370 of the Government Code is amended to read:
   20370.  (a) "Member" means an employee who has qualified for
membership in this system and on whose behalf an employer has become
obligated to pay contributions.
   (b) "State member" includes:
   (1) State miscellaneous members.
   (2) University members.
   (3) Patrol members.
   (4) State safety members.
   (5) State industrial members.
   (6) State peace officer/firefighter members.
   (c) "Local member" includes:
   (1) Local miscellaneous members.
   (2) Local safety members.
   (d) "School member" includes all employees within the jurisdiction
of a school employer, other than local policemen, school safety
members and members included in a risk pool.
  SEC. 6.  Section 20383 of the Government Code is amended to read:
   20383.  "Local miscellaneous member" includes all employees of a
county office of education, school district, or community college
district who are included in a risk pool and all employees of a
contracting agency who have by contract been included within this
system, except local safety members.
  SEC. 7.  Section 20815.5 of the Government Code is repealed.
  SEC. 8.  Section 20840 is added to the Government Code, to read:
   20840.  (a) Notwithstanding Sections 20616, 20618, and 20815, the
board may create, combine or eliminate risk pools for local
miscellaneous members and local safety members.
   (b) The board shall establish, by regulation, the criteria under
which contracting agencies shall participate in a risk pool and the
criteria under which contracting agencies, county offices of
education, school districts, and community college districts may
participate in a risk pool.   The criteria shall specify that
county offices of education, school districts, and community college
districts may only participate in a risk pool if the retirement
formula of the risk pool is higher than the retirement formula
applicable to school members.   In determining the criteria, the
board shall consider the expected variability of the employer
contribution rate due to demographic events.  In no event shall
contracting agencies with more than 100 active members in a member
classification be required to commence participation in a risk pool
for members in that member classification.  For the purpose of this
subdivision an active member is a member who is an employee of the
contracting agency.
   (c) If a contracting agency, county office of education, school
district, or community college district participates in a risk pool,
the assets and liabilities with respect to the affected member
classification shall be combined with those of the risk pool.
   (d) The board shall establish, by regulation, the circumstances
under which a contracting agency may cease participation in a risk
pool for a member classification.
   (e) All of the following provisions shall apply, without election
by the contracting agency participating in a risk pool, to local
members included in a risk pool:
   (1) Sections 20965, 21022, 21026, 21037, 21536, and 21548.
   (2) Provisions to elect to receive credit for public service
pursuant to Article 5 (commencing with Section 21020) of Chapter 11
that require the member to make the contributions as specified in
Sections 21050 and 21052.
  SEC. 9.  Section 20841 is added to the Government Code, to read:
   20841.  (a) The employer contribution rate for a contracting
agency, county office of education, school district, or community
college district participating in a risk pool shall be determined by
the actuary  ,  taking into account the difference between
the assets and liabilities that were brought into the risk pool with
respect to the affected member classifications.
   (b) The employer contribution rate for a contracting agency,
county office of education, school district, or community college
district participating in a risk pool may take into account the
differences in the benefits provided by each employer to its members
in the classification included in the risk pool.
   (c) If a county office of education, school district, or community
college district participates in a risk pool pursuant to this
section and pays a contribution rate that differs from the rate
established for school employers participating in a single account
with respect to school members pursuant to subdivision (b) of Section
20225, the actual rate of employer contributions made to the Public
Employees' Retirement System, for purposes of Section 42238.12 of the
Education Code, shall be deemed to be the contributions that the
county office of education or the district would have paid had the
county office of education or the district participated in a single
account for school members pursuant to subdivision (b) of Section
20225.
  SEC. 10.  Section 20842 is added to the Government Code, to read:
   20842.  Within six months after the effective date of any new
option available to contracting agencies, the board shall (a) notify
all contracting agencies participating in risk pools of the
availability and approximate cost of the new option, (b) include the
new option in at least one of the risk pools applicable to each
member category to which the new option may apply, and (c) notify the
contracting agencies of their options if they are participating in a
risk pool to which the new option is added and choose not to offer
the new option to their employees.