SB 548: Public employees’ retirement: joint county and trial court contracts.

Existing law, the Public Employees Retirement Law (PERL), establishes the Public Employees Retirement System (PERS), which provides a defined benefit to members of the system, based on final compensation, credited service, and age at retirement, subject to certain variations, and is administered by the Board of Administration (board) of the Public Employees Retirement System. PERL authorizes a public agency to contract to make its employees members of PERS and prescribes a process for this. Existing law requires, for counties that contract for retirement benefits through PERS for eligible employees as of the implementation date of the Trial Court Employment Protection and Governance Act, that a trial court and a county in which the trial court is located jointly participate in the system by joint contract. Existing law requires the board to do one-time, separate computations of the assets and liabilities of 2 counties and the trial courts in the counties. Existing law, the California Public Employees Pension Reform Act of 2013 (PEPRA), establishes a variety of requirements and restrictions on public employers offering defined benefit pension plans, including limiting the benefits that may be provided to new members.

This bill would authorize a county and the trial court located within the county to elect to separate their joint PERS contract into individual contracts, if the county and the trial court make that election jointly and voluntarily, and would prescribe a process for this. The bill would make the separation of a joint contract irrevocable and would make a county and trial court ineligible to reestablish a joint contract. The bill would prohibit the separation from being a cause for modification of employee retirement benefits, as specified. The bill would require the board, within its existing resources, to do a specified computation of assets and liabilities, within a prescribed time, for a county and trial court seeking to separate their joint contract after receiving specified information. For purposes of PEPRA, the bill would authorize a county and a trial court to provide employees the defined benefit plan or formula that those employees received from their respective employers prior to the exercise of the option to separate, as specified.

This bill would also make nonsubstantive and conforming changes to these provisions.