Bill Text: CA AB2416 | 2011-2012 | Regular Session | Introduced


Bill Title: Public employees' retirement systems: reserve funds.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2012-03-29 - Referred to Com. on P.E., R. & S.S. [AB2416 Detail]

Download: California-2011-AB2416-Introduced.html
BILL NUMBER: AB 2416	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Mansoor

                        FEBRUARY 24, 2012

   An act to add Section 7504.1 to the Government Code, relating to
public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2416, as introduced, Mansoor. Public employees' retirement
systems: reserve funds.
   Existing law establishes the Public Employees' Retirement Fund as
a trust fund solely for the benefit of its members and retired
members and their survivors and beneficiaries. Existing law requires
income earned on the Public Employees' Retirement Fund during any
fiscal year that exceeds the interest credited to contributions
during that year to be retained in the Public Employees' Retirement
Fund as a reserve against deficiencies in interest earned in other
years, investment losses, and other specified losses. Existing law
requires the amount in the reserve that exceeds 0.20% to be annually
credited to other accounts. Existing law governing other retirement
systems, including the State Teachers' Retirement System, contains
provisions requiring the maintenance of reserve funds.
   This bill would require every public retirement system that does
not maintain a reserve fund to create such a fund. The bill would
require any excess funds, after payment of unfunded liabilities each
fiscal year, to be placed in the reserve fund to be used against
deficiencies in other fiscal years, as specified. The bill would
prohibit funds in the reserve fund from being used for the payment of
benefits.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 7504.1 is added to the Government Code, to
read:
   7504.1.  (a) Notwithstanding any other law, every public
retirement system that, as of January 1, 2013, does not maintain a
reserve fund shall create a reserve fund in accordance with this
section.
   (b) After payment of unfunded liabilities each fiscal year, any
excess funds shall be placed in the reserve fund, to be used against
deficiencies in other fiscal years, including investment losses,
unforeseen costs, and actuarial losses. Funds in the reserve fund
shall not be used for the payment of benefits.
   (c) This section shall apply to all state and local public
retirement systems, including, but not limited to, the Public
Employees' Retirement System, the State Teachers' Retirement System,
the Judges' Retirement System II, the Legislators' Retirement System,
the University of California Retirement System, and county and
district retirement systems created pursuant to the County Employees
Retirement Law of 1937.
  SEC. 2.  (a) To ensure the integrity and security of the University
of California retirement system and its funds, it is necessary for
this act to apply to the University of California.
   (b) The statewide integrity and security of local government
pension systems is a matter of statewide concern and not a municipal
affair, as that term is used in Section 5 of Article XI of the
California Constitution. Therefore, this act shall apply to all
cities, including charter cities.                         
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