BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 340
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 340 (Furutani)
          As Amended September 7, 2011
          Majority vote
           
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          |ASSEMBLY:  |73-0 |(May 12, 2011)  |SENATE: |25-15|(September 8,  |
          |           |     |                |        |     |2011)          |
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           Original Committee Reference:   P.E.,R . & S.S.  

           SUMMARY  :  States legislative intent to convene a conference 
          committee to craft responsible and comprehensive pension reform 
          legislation that reflects both the needs of public employees and 
          the fiscal situations of state and local governments.    
           
          The Senate amendments  delete the Assembly version of this bill, 
          and instead state that it is the intent of the Legislature to 
          convene a conference committee to craft responsible and 
          comprehensive pension reform legislation that reflects both the 
          needs of public employees and the fiscal situations of state and 
          local governments.  

          EXISTING LAW  :

          1)Creates California's public retirement systems, which, in 
            general, provide defined benefit retirement allowances based 
            on members' ages at retirement, years of service, and highest 
            average compensation, as specified by the retirement system.

          2)Specifies that a defined benefit is paid as a retirement 
            allowance for the member-retiree's lifetime and, as an option 
            to the member, the lifetime of his or her survivor at a 
            reduced actuarial amount.

           AS PASSED BY THE ASSEMBLY  , this bill prohibited certain cash 
          payments from being counted as compensation earnable for 
          retirement purposes in counties operating retirement systems 
          pursuant to the County Employees' Retirement Law of 1937 ('37 
          Act) and prohibits a retiree in those counties from immediately 
          returning to employment with the public employer on a part-time 
          or contract basis.

           FISCAL EFFECT  :  Unknown








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           COMMENTS  :  In California, most public employees are covered by a 
          defined benefit retirement plan which provides participants with 
          a guaranteed annual pension based upon age at retirement, years 
          of service, and highest average compensation.  The California 
          Public Employees' Retirement System (CalPERS) administers the 
          retirement plans for state employees and classified school 
          employees, while the California State Teachers' Retirement 
          System administers the plans for teachers.  Many local 
          government entities also contract with CalPERS to administer 
          their retirement plans.  Additionally, twenty counties have 
          chosen to establish their own retirement systems under the '37 
          Act.  Finally, some cities and counties have established 
          independent retirement systems to provide benefits to their 
          employees.

          Funding for defined benefit retirement systems generally comes 
          from three sources - employee contributions, employer 
          contributions, and interest earnings.  Employee contributions 
          are generally a fixed percentage amount, while employer 
          contributions generally vary from year to year.

          This bill states legislative intent to convene a conference 
          committee to craft responsible, comprehensive legislation to 
          reform state and local pension systems; a conference committee 
          would be in a position to examine issues related to state and 
          local pension system reform, so as to support the development of 
          legislation to implement such reform.

          This bill is similar to SB 827 (Simitian) of this year which 
          would also state that it is the intent of the Legislature to 
          convene a conference committee to craft responsible and 
          comprehensive pension reform legislation that reflects both the 
          needs of public employees and the fiscal situations of state and 
          local governments.


           Analysis Prepared by  :    Karon Green / P.E., R. & S.S. / (916) 
          319-3957 


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