BILL ANALYSIS Ó AB 1291 Page 1 Date of Hearing: May 6, 2015 ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT, AND SOCIAL SECURITY Rob Bonta, Chair AB 1291 (Williams) - As Introduced February 27, 2015 SUBJECT: The County Employees Retirement Law of 1937 SUMMARY: Makes the Ventura County retirement system (System) an independent, public employer district within the Ventura County Employees' Retirement Association (VCERA) and authorizes the System to appoint specified positions as "at will" employees, exempt from the county civil service system, as specified. Specifically, this bill: 1)Includes the System in the definition of "district" for purposes of the County Employees' Retirement Law of 1937 ('37 Act). 2)Authorizes the System, upon adoption of a resolution of the retirement board, to appoint an administrator, assistant and subordinate administrators, investment officers, and legal counsel who will be classified as "at will" employees, exempt from the county civil service system. These appointed employees will be employees of the retirement system, not the county, and will be subject to the terms and conditions of employment established by the board of retirement. AB 1291 Page 2 3)Provides that the compensation for these appointed employees will be treated as an expense of the administration of the retirement system, as specified. EXISTING LAW: 1)Establishes the '37 Act which governs 20 independent county retirement associations, including VCERA. 2)Defines specified districts formed under the law of the state, located wholly or partially within a county and states that these districts are public employers whose employees are eligible to participate in their respective '37 Act county retirement associations. 3)Provides Orange, San Bernardino, and Contra Costa county retirement systems authority to be independent districts within their respective retirement associations and the statutory employer for purposes of determining their employees' compensation and benefits, as specified. 4)Establishes the Public Employees' Pension Reform Act of 2013 (PEPRA), which requires, as of January 1, 2013, comprehensive and statewide reform for the state's public pension systems and plans and public employers and employees. AB 1291 Page 3 5)Provides, under the provisions of PEPRA, '37 Act retirement boards with more independence to perform audits and assess penalties relating to pension spiking. FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS: According to the author, "There are many benefits to becoming an independent district, but most applicable to Ventura County is the ability to recruit and retain specially trained staff with compensation that's competitive with the private sector. Further, by allowing the retirement system a degree of separation from the County, this bill enhances the ability of the retirement system to implement and enforce the 2012 Public Employee Pension Reform Act (PEPRA), including enforcement of the new anti-spiking statutes by making it less uncomfortable to report spiking. In other words, it better equips them to carry out their fiduciary responsibility of managing employee retirement funds." Supporters state, "PORAC, as well as our member association, the Ventura County Deputy Sheriffs' Association (VCDSA), supports the fair and equitable administration of the county retirement system in accordance with the law. AB 1291 will provide assurance that the Ventura County Board of Retirement has the means at its disposal to accomplish that goal." REGISTERED SUPPORT / OPPOSITION: AB 1291 Page 4 Support Ventura County Employee Retirement Association (Sponsor) California Nurses Association California Professional Firefighters Ventura County Deputy Sheriffs' Association Peace Officers Research Association of California Opposition None on file Analysis Prepared by:Karon Green / P.E.,R., & S.S. / (916) 319-3957 AB 1291 Page 5