Bill Text: CA AB739 | 2023-2024 | Regular Session | Introduced
Bill Title: Public retirement systems: defined benefit plans: funding.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2024-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB739 Detail]
Download: California-2023-AB739-Introduced.html
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 739
| Introduced by Assembly Member Lackey |
February 13, 2023 |
An act to amend Section 7522.52 of the Government Code, relating to public employees’ retirement.
LEGISLATIVE COUNSEL'S DIGEST
AB 739, as introduced, Lackey.
Public retirement systems: defined benefit plans: funding.
Existing law, the California Public Employees’ Pension Reform Act of 2013 (PEPRA), generally requires a public retirement system, as defined, to modify its plan or plans to comply with the act. PEPRA prohibits a public employer’s contribution to a defined benefit plan, in combination with employee contributions to the plan, from being less than the normal cost rate, as defined, for the plan in a fiscal year. Existing law authorizes a public retirement system to suspend contributions if certain conditions are satisfied, one of which is that the plan be funded by more than 120%, based on a computation by the retirement system actuary in accordance with specified standards, that is included in the annual valuation.
This bill would revise the conditions for suspending contributions to a public retirement system defined benefit plan to increase the
threshold percentage amount of plan funding to more than 130%.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 7522.52 of the Government Code is amended to read:7522.52.
(a) In any fiscal year, a public employer’s contribution to a defined benefit plan, in combination with employee contributions to that defined benefit plan, shall not be less than the normal cost rate, as defined in Section 7522.30, for that defined benefit plan for that fiscal year.(b) The board of a public retirement system may suspend contributions when all of the following apply:
(1) The plan is funded by more than 120 130 percent, based on a computation by the retirement system actuary in accordance with
the Governmental Accounting Standards Board requirements that is included in the annual valuation.
(2) The retirement system actuary, based on the annual valuation, determines that continuing to accrue excess earnings could result in disqualification of the plan’s tax-exempt status under the provisions of the federal Internal Revenue Code.
(3) The board determines that the receipt of any additional contributions required under this section would conflict with its fiduciary responsibility set forth in Section 17 of Article XVI of the California Constitution.
