Existing law, the Public Employees Retirement Law (PERL), creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. PERS provides defined benefits to members based on final compensation, credited service, and age at retirement, subject to certain variations. PERL requires a person who has retired under PERS following an involuntary termination of his or her employment to be reinstated to membership in that system, effective as of the date from which salary is awarded, if the person is reinstated to employment pursuant to an administrative or judicial proceeding and certain other conditions are met, as specified. PERL also requires the assets of the system, including, but not limited to, employee contributions, employer contributions, and investment income, to be deposited into the Public Employees Retirement Fund, a continuously appropriated fund.

This bill would additionally require the reinstatement in PERS of a member, without regard to retirement status, who is involuntarily terminated on or after January 1, 2017, and subsequently reinstated to that employment pursuant to an administrative, arbitral, or judicial proceeding. The bill would require contributions to be made to the system for any period for which salary is awarded in the proceeding and would provide the member with service credit for that period and reinstatement of benefits effective as of the date from which salary is awarded, as specified. The bill would require an employer of the involuntarily terminated employee to notify the board of the final decision ordering the members reinstatement, as specified. By increasing contributions to be deposited into the Public Employees Retirement Fund, a continuously appropriated fund, the bill would make an appropriation. By requiring local government employers to provide this notification and information, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law, the Public Employees Retirement Law (PERL), creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. PERS provides defined benefits to members based on final compensation, credited service, and age at retirement, subject to certain variations. PERL requires a person who has retired under PERS following an involuntary termination of his or her employment to be reinstated to membership in that system, effective as of the date from which salary is awarded, if the person is reinstated to employment pursuant to an administrative or judicial proceeding and certain other conditions are met, as specified. PERL also requires the assets of the system, including, but not limited to, employee contributions, employer contributions, and investment income, to be deposited into the Public Employees Retirement Fund, a continuously appropriated fund.

This bill would additionally require the reinstatement in PERS of a member, without regard to retirement status, who is involuntarily terminated on or after January 1, 2017, and subsequently reinstated to that employment pursuant to an administrative, arbitral, or judicial proceeding. The bill would require contributions to be made to the system for any period for which salary is awarded in the proceeding and would provide the member with service credit for that period and reinstatement of benefits effective as of the date from which salary is awarded, as specified. The bill would require an employer of the involuntarily terminated employee to notify the board of the final decision ordering the members reinstatement, as specified. By increasing contributions to be deposited into the Public Employees Retirement Fund, a continuously appropriated fund, the bill would make an appropriation. By requiring local government employers to provide this notification and information, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law, the Public Employees Retirement Law (PERL), creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. PERS provides defined benefits to members based on final compensation, credited service, and age at retirement, subject to certain variations. PERL requires a person who has retired under PERS following an involuntary termination of his or her employment to be reinstated to membership in that system, effective as of the date from which salary is awarded, if the person is reinstated to employment pursuant to an administrative or judicial proceeding and certain other conditions are met, as specified. PERL also requires the assets of the system, including, but not limited to, employee contributions, employer contributions, and investment income, to be deposited into the Public Employees Retirement Fund, a continuously appropriated fund.

This bill, for an employee specified above who is wrongfully terminated, as defined, would require the employees credit for service and compensation earnable to include the amount of service that would have been credited and the compensation earnable that would have been reported had the employee not been wrongfully terminated. bill would additionally require the reinstatement in PERS of a member, without regard to retirement status, who is involuntarily terminated on or after January 1, 2017, and subsequently reinstated to that employment pursuant to an administrative, arbitral, or judicial proceeding. The bill would require contributions to be made to the system for any period for which salary is awarded in the proceeding and would provide the member with service credit for that period and reinstatement of benefits effective as of the date from which salary is awarded, as specified. The bill would require the an employer of the wrongfully involuntarily terminated employee to notify the board of the final decision ordering reinstatement of the employee and would further require the employer to provide the board with any additional information as the board may require, the members reinstatement, as specified. By increasing contributions to be deposited into the Public Employees Retirement Fund, a continuously appropriated fund, the bill would make an appropriation. By requiring local government employers to provide this notification and information, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law, the Public Employees Retirement Law (PERL), creates the Public Employees Retirement System (PERS) for the purpose of providing pension benefits to state employees and employees of contracting agencies and prescribes the rights and duties of members of the system and their beneficiaries. PERS provides defined benefits to members based on final compensation, credited service, and age at retirement, subject to certain variations.

Under PERL, time during which a member is absent from service without compensation is generally not considered in computing service for the purposes of those benefits. However, as an exception to this general rule, PERL provides that, for all retirement purposes of local safety members or employees of specified local educational entities, if the employee is subject to a mandatory furlough, the employees credit for service and compensation earnable includes the amount of service that would have been credited and the compensation earnable that would have been reported had the employee not been subject to the mandatory furlough, as specified.

This bill, for an employee specified above who is wrongfully terminated, as defined, would require the employees credit for service and compensation earnable to include the amount of service that would have been credited and the compensation earnable that would have been reported had the employee not been wrongfully terminated. The bill would require the employer of the wrongfully terminated employee to notify the board of the final decision ordering reinstatement of the employee and would further require the employer to provide the board with any additional information as the board may require, as specified. By requiring local government employers to provide this notification and information, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2028

Author:(Cooper)

As Amended Ver:June 13, 2016

Majority vote

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 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.

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."

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

 CONSENT  

Bill No: AB 2028

Author:

:

Vote:

SENATE PUBLIC EMP. & RET. COMMITTEE: 5-0, 6/27/16

AYES: Pan, Morrell, Beall, Hall, Moorlach

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 76-0, 4/28/16 (Consent) - See last page for vote

SUBJECT:

SOURCE: California Professional Firefighters

California School Employees Association

DIGEST: This bill requires that a member of the California Public Employees' Retirement System (CalPERS) who was involuntarily terminated from employment and is later reinstated to the position pursuant to an administrative, arbitral, or judicial proceeding shall be reinstated with all retirement benefits that the member otherwise would have accrued.

ANALYSIS:

Existing law:

1. Requires the State Personnel Board to direct the payment of salary and all interest accrued thereto, and the reinstatement of all benefits, including retirement benefits, that otherwise would have normally accrued whenever the board revokes or modifies an adverse action and orders that a state employee be returned to his or her position.
2. In addition, Government Code Section 21198 provides the authority to restore service credit for all CalPERS members, who retired after being wrongfully terminated, but before the termination was reversed, pursuant to an administrative or judicial proceeding.

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 shall be reinstated with all retirement benefits that the member otherwise would have accrued.
2. Provides that the reinstatement of benefits shall be effective as of the date from which salary is awarded in the administrative, arbitral, or judicial proceedings. Additionally, the bill requires that contributions shall 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.
3. Provides that the member shall receive credit as state service, as defined in Section 20069, for the period for which salary is awarded and contributions are received.
4. Applies to members who are subject to an involuntary termination effective on or after January 1, 2017.
5. Requires the member’s employer to notify the CalPERS board of the final decision ordering the member’s reinstatement to employment within five days of the date the decision becomes final. The notification shall include the date of involuntary termination and the date on which the member was reinstated to employment after the decision.
6. 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 Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

Background

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.”

Related/Prior Legislation

AB 2009 (Papan, Chapter 1195, Statutes of 1985) required the State to reinstate benefits that would have accrued to a state employee who had been subject to adverse action which was subsequently reversed, including retirement, medical, dental, and seniority benefits.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/2/16)

California Professional Firefighters (co-source)

California School Employees Association, AFL-CIO (co-source)

California Federation of Teachers

California Labor Federation

California Public Employees’ Retirement System

Laborers’ International Union of North America, Locals 777

Laborers’ International Union of North America, Locals 792

Los Angeles County Professional Peace Officers Association

Orange County Professional Firefighters Association, Local 3631

Organization of SMUD Employees

Peace Officers Research Association of California

San Diego County Court Employees Association

San Luis Obispo County Employees Association

OPPOSITION: (Verified 8/2/16)

None received

ARGUMENTS IN SUPPORT: According to the sponsor:

This bill codifies past practice at CalPERS. This bill would continue to ensure parity for school and safety workers with state workers.

Without this fix, an employee could lose the service credit that he/she otherwise was entitled to, if the wrongful termination never occurred.

ASSEMBLY FLOOR: 76-0, 4/28/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Chávez, Daly, Mathis, Olsen

Prepared by:

8/3/16 18:23:06

**** END ****

SENATE COMMITTEE ON

PUBLIC EMPLOYMENT AND RETIREMENT

Dr. Richard Pan, Chair

2015 - 2016 Regular

Bill No: AB 2028 Hearing Date: 6/27/16

Subject: School and safety employees: wrongful termination: service credit

SOURCE: California Professional Firefighters

California School Employees Association

ASSEMBLY VOTES:

DIGEST: This bill requires that a member of the California Public Employees' Retirement System (CalPERS) who was involuntarily terminated from employment and is later reinstated to the position pursuant to an administrative, arbitral, or judicial proceeding shall be reinstated with all retirement benefits that the member otherwise would have accrued.

ANALYSIS:

Existing law:

1. Requires the State Personnel Board to direct the payment of salary and all interest accrued thereto, and the reinstatement of all benefits, including retirement benefits, that otherwise would have normally accrued whenever the board revokes or modifies an adverse action and orders that a state employee be returned to his or her position.
2. In addition, GC Section 21198 provides the authority to restore service credit for all CalPERS members, who retired after being wrongfully terminated, but before the termination was reversed, pursuant to an administrative or judicial proceeding.

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 shall be reinstated with all retirement benefits that the member otherwise would have accrued.
2. Provides that the reinstatement of benefits shall be effective as of the date from which salary is awarded in the administrative, arbitral, or judicial proceedings. Additionally, the bill requires that contributions shall 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.
3. Provides that the member shall receive credit as state service, as defined in Section 20069, for the period for which salary is awarded and contributions are received.
4. Applies to members who are subject to an involuntary termination effective on or after January 1, 2017.
5. Requires the member’s employer to notify the CalPERS board of the final decision ordering the member’s reinstatement to employment within five days of the date the decision becomes final. The notification shall include the date of involuntary termination and the date on which the member was reinstated to employment after the decision.
6. 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 Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

Background

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.”

Related/Prior Legislation

AB 2009 (Papan, Chapter 1195, Statutes of 1985) required the State to reinstate benefits that would have accrued to a state employee who had been subject to adverse action which was subsequently reversed, including retirement, medical, dental, and seniority benefits.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT:

California Professional Firefighters (co-source)

California School Employees Association (co-source)

California Federation of Teachers

California Labor Federation

Laborers’ International Union of North America, Locals 777

Laborers’ International Union of North America, Locals 792

Los Angeles County Professional Peace Officers Association

Orange County Professional Firefighters Association, Local 3631

Organization of SMUD Employees

Peace Officers Research Association of California

San Diego County Court Employees Association

San Luis Obispo County Employees Association

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the sponsor,

This bill codifies past practice at CalPERS. This bill would continue to ensure parity for school and safety workers with state workers.

Without this fix, an employee could lose the service credit that he/she otherwise was entitled to, if the wrongful termination never occurred.

Date of Hearing: April 20, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2028

Author:(Cooper) – As Introduced Ver:February 16, 2016

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill clarifies that “wrongfully” terminated school and local safety employees are entitled to have their service credit restored in the California Public Employees’ Retirement System (CalPERS). Specifically, this bill:

1. Defines “wrongful termination” as any termination action by an employer that has been reversed or modified by a final decision ordering reinstatement.
2. Defines “final decision ordering reinstatement” as a final decision of the employer, court, an administrative agency, a personnel commission, or an arbitrator, that orders the reinstatement of the employee’s employment.
3. Requires that the service credit and compensation earnable for a wrongfully terminated school classified or local safety member of CalPERS be restored, as specified.
4. Requires the employer of a wrongfully terminated employee to notify CalPERS of a final decision ordering reinstatement of the employee, as specified.

FISCAL EFFECT:

Minor and absorbable administrative costs.

COMMENTS:

Purpose and background. According to the author, existing statutes to restore service credit for wrongfully terminated employees apply only to state employees. Two sections in the Government Code have provisions related to the restoration of service credit of a wrongfully terminated employee: 1) Government Code (GC) Section 19584 provides the authority to restore service credit for state workers whenever the State Personnel Board revokes or modifies a disciplinary action; and 2) GC Section 21198 provides the authority to restore service credit for all CalPERS members who retired after being wrongfully terminated, but before the termination reversed, pursuant to an administrative or judicial proceeding.

The author states that “A strict reading of these code sections could be deemed not to provide the same treatment for wrongfully terminated school, safety, and some local agency employees, as provided to state employees.”

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081