BILL ANALYSIS Ó AB 2028 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2028 (Cooper) As Amended June 13, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |76-0 |(April 28, |SENATE: | 37-0 |(August 11, | | | |2016) | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: P.E.,R., & S.S. SUMMARY: Requires that a member of the California Public Employees' Retirement System (CalPERS) who is involuntarily terminated and is subsequently reinstated to employment pursuant to an administrative, arbitral, or judicial proceeding receive all retirement benefits that they otherwise would have accrued had they not been terminated. Specifically, this bill: 1)Requires that a CalPERS member who was involuntarily terminated from employment and is later reinstated to the position pursuant to an administrative, arbitral, or judicial proceeding be reinstated with all retirement benefits that the member otherwise would have accrued. 2)Specifies that administrative proceedings also include proceedings before the governing board of a school district, a charter school, a county office of education, or a community AB 2028 Page 2 college district. 3)Specifies that the reinstatement of benefits is effective as of the date from which salary is awarded in the administrative, arbitral, or judicial proceedings. Additionally, this bill requires that contributions be made for any period for which salary is awarded in the proceedings in the amount that the member would have contributed had his or her employment not been terminated. 4)Specifies that the provisions of this measure apply to members who are subject to an involuntary termination effective on or after January 1, 2017. 5)Requires the employer of the employee who has been involuntarily terminated to notify CalPERS of the final decision ordering the member's reinstatement to employment within five days of the date the decision becomes final. 6)Requires the notice of reinstatement to include the date of involuntary termination and the date on which the member was reinstated to employment after the decision. 7)Provides that if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Government Code Title 2 Division 4 Part 7 (commencing with Section 17500). The Senate amendments revised and recast the provisions of the bill to apply to all active CalPERS school and local agency members and to make the provisions consistent with provisions in existing law that apply to CalPERS members who retired after an involuntary termination and were subsequently reinstated to their employment. AB 2028 Page 3 FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: According to CalPERS, under existing law, there are two code sections that permit service credit to be granted retroactively to employees that have been subjected to an involuntary termination which has been subsequently reversed. One section "applies only to state employees and requires the State Personnel Board, when revoking or modifying an "adverse action" and ordering the employee to be returned to his or her position, to direct payment of salary and interest, as well as reinstatement of retirement and other benefits that otherwise would have accrued." The other section "applies to all CalPERS members that retired after an involuntary termination and were subsequently reinstated to their employment." Thus, according to CalPERS, "school members and contracting agency members who do not retire after an involuntary termination do not have any eligibility to have service credit granted regardless of whether or not the termination is reversed." However, CalPERS has apparently applied this interpretation of statute inconsistently in the past and both approved and rejected requests to credit reinstated school employees with service credit for periods corresponding to a wrongful termination. According to the sponsor, "AB 2028 would codify past practice at CalPERS into statute to restore retirement credits for school, safety, and local agency employees and retirees, when it is found that they were wrongfully terminated." Despite past practices, the sponsor states that "CalPERS believes that existing statutes could be deemed insufficient to provide service credit restoration for school, safety, and some local agency employees, as statutorily provided to state employees." AB 2028 Page 4 Analysis Prepared by: Karon Green / P.E.,R., & S.S. / (916) 319-3957 FN: 0003702