BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2028


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          2028 (Cooper)


          As Amended  June 13, 2016


          Majority vote


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          |ASSEMBLY:  |76-0  |(April 28,     |SENATE: | 37-0 |(August 11,      |
          |           |      |2016)          |        |      |2016)            |
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          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  








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            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.









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          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."









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          Analysis Prepared by:                                             
                          Karon Green / P.E.,R., & S.S. / (916) 319-3957    
                                                                    FN:  
          0003702