Bill Text: CA SB292 | 2015-2016 | Regular Session | Enrolled
Bill Title: Public employee retirement: contributions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2016-04-25 - Last day to consider Governors veto pursuant to Joint Rule 58.5. [SB292 Detail]
Download: California-2015-SB292-Enrolled.html
BILL NUMBER: SB 292 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 11, 2015
PASSED THE ASSEMBLY SEPTEMBER 11, 2015
AMENDED IN ASSEMBLY JUNE 25, 2015
AMENDED IN SENATE APRIL 21, 2015
INTRODUCED BY Senator Pan
FEBRUARY 23, 2015
An act to amend Section 7522.30 of the Government Code, relating
to public employees' retirement.
LEGISLATIVE COUNSEL'S DIGEST
SB 292, Pan. Public employee retirement: contributions.
The California Public Employees' Pension Reform Act of 2013
(PEPRA) requires a public retirement system, as defined, to modify
its plan or plans to comply with the act and, among other provisions,
establishes new retirement formulas that may not be exceeded by a
public employer offering a defined benefit pension plan for employees
first hired on or after January 1, 2013. PEPRA requires new
employees of public employers, as specified, who participate in a
defined benefit plan to have an initial contribution rate of at least
50% of the normal cost rate for that defined benefit plan, rounded
to the nearest 1/4 of 1%, or the current contribution rate of
similarly situated employees, whichever is greater. PEPRA prohibits
an employer from paying the employee contribution.
The California Constitution generally limits ad valorem taxes on
real property to 1% of the full cash value of that property. The
California Constitution exempts from that limit an additional ad
valorem property tax rate for, among other things, indebtedness
approved by the voters of the local entity prior to July 1, 1978,
including pension programs.
This bill would exempt a city or county that pays its pension
costs with revenues from a property tax rate approved by its voters
to make payments in support of pension programs and levied in
addition to the general property tax rate, and that city's or county'
s employees, from the above-described prohibition on employer payment
of employee contribution, with respect to an employee whose pension
is funded by these revenues.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7522.30 of the Government Code is amended to
read:
7522.30. (a) This section shall apply to all public employers and
to all new members. Equal sharing of normal costs between public
employers and public employees shall be the standard. The standard
shall be that employees pay at least 50 percent of normal costs and
that employers not pay any of the required employee contribution.
(b) The "normal cost rate" shall mean the annual actuarially
determined normal cost for the plan of retirement benefits provided
to the new member and shall be established based on the actuarial
assumptions used to determine the liabilities and costs as part of
the annual actuarial valuation. The plan of retirement benefits shall
include any elements that would impact the actuarial determination
of the normal cost, including, but not limited to, the retirement
formula, eligibility and vesting criteria, ancillary benefit
provisions, and any automatic cost-of-living adjustments as
determined by the public retirement system.
(c) (1) New members employed by those public employers defined in
paragraphs (2) and (3) of subdivision (i) of Section 7522.04, the
Legislature, the California State University, and the judicial branch
who participate in a defined benefit plan shall have an initial
contribution rate of at least 50 percent of the normal cost rate for
that defined benefit plan, rounded to the nearest1/4of 1 percent,
unless a greater contribution rate has been agreed to pursuant to the
requirements in subdivision (e). Except as provided in paragraph
(2), this contribution shall not be paid by the employer on the
employee's behalf.
(2) With respect to an employee whose pension is funded as
described in this subdivision, the prohibition against an employer
paying an employee's contribution does not apply to a city or county
that pays its pension program costs with revenues derived from a
property tax rate approved by the voters of the city or county to
make payments in support of pension programs and levied in addition
to the property tax rate limited by subdivision (a) of Section 1 of
Article XIII A of the California Constitution.
(d) Notwithstanding subdivision (c), once established, the
employee contribution rate described in subdivision (c) shall not be
adjusted on account of a change to the normal cost rate unless the
normal cost rate increases or decreases by more than 1 percent of
payroll above or below the normal cost rate in effect at the time the
employee contribution rate is first established or, if later, the
normal cost rate in effect at the time of the last adjustment to the
employee contribution rate under this section.
(e) Notwithstanding subdivision (c), employee contributions may be
more than one-half of the normal cost rate if the increase has been
agreed to through the collective bargaining process, subject to the
following conditions:
(1) The employer shall not contribute at a greater rate to the
plan for nonrepresented, managerial, or supervisory employees than
the employer contributes for other public employees, including
represented employees, of the same employer who are in related
retirement membership classifications.
(2) The employer shall not increase an employee contribution rate
in the absence of a memorandum of understanding that has been
collectively bargained in accordance with applicable laws.
(3) The employer shall not use impasse procedures to increase an
employee contribution rate above the rate required by this section.
(f) If the terms of a contract, including a memorandum of
understanding, between a public employer and its public employees,
that is in effect on January 1, 2013, would be impaired by any
provision of this section, that provision shall not apply to the
public employer and public employees subject to that contract until
the expiration of that contract. A renewal, amendment, or any other
extension of that contract shall be subject to the requirements of
this section.
