The County Employees Retirement Law of 1937 provides a comprehensive set of benefits for county and district employees who are members of a retirement system subject to that law and establishes county retirement boards for the administration of benefits authorized under that law. That law authorizes a county retirement system in Los Angeles County to adjust retirement payments due to errors or omissions, as specified. That law also permits a member permanently incapacitated for duty to retire for disability only if specified criteria are met and requires the board to determine the effective date of retirement in those cases, as specified.

This bill would authorize a county retirement system in Los Angeles County to correct a prior board decision determining the effective date of retirement for a member permanently incapacitated for disability that was made between January 1, 2013, and December 31, 2015, and was based upon an error of law existing at the time of the decision, as specified. The bill would authorize a member seeking correction under these provisions to file an application with the board no later than one year from the date these provisions become operative.

The County Employees Retirement Law of 1937 provides a comprehensive set of benefits for county and district employees who are members of a retirement system subject to that law and establishes county retirement boards for the administration of benefits authorized under that law. That law authorizes a county retirement system in Los Angeles County to adjust retirement payments due to errors or omissions, as specified. That law also permits a member permanently incapacitated for duty to retire for disability only if specified criteria are met and requires the board to determine the effective date of retirement in those cases, as specified.

This bill would authorize a county retirement system in Los Angeles County to correct a prior board decision determining the effective date of retirement for a member permanently incapacitated for disability that was made between January 1, 2013, and December 31, 2015, and was based upon an error of law existing at the time of the decision, as specified. The bill would authorize a member seeking correction under these provisions to file an application with the board no later than one year from the date these provisions become operative.

The County Employees Retirement Law of 1937 provides a comprehensive set of benefits for county and district employees who are members of a retirement system subject to that law and establishes county retirement boards for the administration of benefits authorized under that law. That law authorizes a county retirement system in Los Angeles County to adjust retirement payments due to errors or omissions, as specified. That law also permits a member permanently incapacitated for duty to retire for disability only if specified criteria are met and requires the board to determine the effective date of retirement in those cases, as specified.

This bill would authorize a county retirement system in Los Angeles County to correct a prior board decision determining the effective date of retirement for a member permanently incapacitated for disability that was made between January 1, 2013, and December 31, 2015, and was based upon an error of law existing at the time of the decision, as specified. The bill would authorize a member seeking correction under these provisions to file an application with the board no later than one year from the date these provision, become operative.

The County Employees Retirement Law of 1937 provides a comprehensive set of benefits for county and district employees who are members of a retirement system subject to that law and establishes county retirement boards for the administration of benefits authorized under that law. That law authorizes a county retirement system in Los Angeles County to adjust retirement payments due to errors or omissions, as specified. That law also permits a member permanently incapacitated for duty to retire for disability only if specified criteria are met and requires the board to determine the date of retirement in those cases, as specified.

This bill would authorize a county retirement system in Los Angeles County to correct a prior board decision determining the date of retirement for a member permanently incapacitated for disability that was made between January 1, 2013, and December 31, 2015, and was based upon an error of law existing at the time of the decision, as specified. The bill would authorize a member seeking correction under these provisions to file an application with the board no later than one year from the date these provision, become operative.

 CONSENT  

Bill No: AB 2076

Author:

:

Vote:

SENATE PUBLIC EMP. & RET. COMMITTEE: 5-0, 6/25/18

AYES: Pan, Morrell, Leyva, Moorlach, Portantino

ASSEMBLY FLOOR: 69-0, 3/22/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Los Angeles County Employees Retirement Association

DIGEST:

This bill authorizes the Los Angeles County Employees Retirement System (LACERA) to correct prior decisions regarding the effective date of specified disability retirement determinations between January 1, 2013, and December 31, 2015, which were based on errors of law but for which existing statute provides no remedy to adjust. This bill gives affected members one year from the bill’s effective date to apply for correction of their retirement calculation.

ANALYSIS:

Existing law:

1) Establishes the County Employees’ Retirement Law of 1937 (’37 Act), which governs 20 independent county retirement associations, and provides for retirement systems for county and district employees in those counties adopting its provisions. Currently, 20 counties operate retirement systems under the ’37 Act.

2) Requires the retirement board to retire a member for disability, as specified, if the board receives proof that the member is permanently physically or mentally incapacitated for the performance of the member’s job duties but for members with sick leave the retirement is not effective until after the sick leave is exhausted, unless the member agrees to an earlier retirement date.

3) Provides that a member’s application for disability retirement must be made while the member is in service, within four months after his or her discontinuance of service; within four months after the expiration of any period during which a presumption is extended beyond his or her discontinuance of services; or while, from the date of discontinuance of service to the time of the application, the member is continuously physically or mentally incapacitated for the for the performance of duties.

4) Provides that the disability retirement allowance is effective as of the date that the application for disability retirement is filed with the board, but not earlier than the day following the last day for which the member received regular compensation.

5) Provides that when it has been demonstrated to the satisfaction of the board that the member’s application for disability retirement was delayed by administrative oversight, or by an inability to ascertain the permanence of the member’s incapacity until after the date following the day of which the member last received regular compensation, that date is considered to be the date that the application was filed.

6) Provides for corrections of errors or omissions related to adjustment of retirement payments to LACERA in which the board may, in its discretion and upon any terms it deems just, correct the errors or omissions of any active or retired member, or their beneficiaries, provided that certain specified conditions are satisfied.

This bill:

1) Provides statutory authority for the LACERA board, upon any terms it deems just, to correct prior board decisions made between January 1, 2013, and December 31, 2015, that were based upon an error of law existing at the time of the decision in the determination of the effective date of disability retirements as specified.

2) Permits a member seeking correction of errors and omissions pursuant to this section to file an application for correction to the board no later than one year from the date the bill becomes operative.

Background

Under existing law, a LACERA member’s disability retirement effective date generally coincides with the member’s disability retirement application date. However, the effective date may predate the member’s disability retirement application if the permanent disability arose prior to the application date and the member applied after they last received regular compensation.

From 2013-2015, LACERA’s then-counsel advised the board to use a different interpretation of law and begin disability retirements no sooner than the member’s application date. This approach was counter to interpretations by LACERA counsel both before and after the 2013-2015 period, and thereby may have denied earlier effective dates to members whose disability applications were considered during this period.

Although existing law authorizes the board to adjust for errors and omission related to erroneous compensation calculations, as specified, the misinterpretation and subsequent misapplication of the law relating to the effective dates of a disability retirement is beyond the scope of the existing authorization.

This bill provides the board with the sought for authority to rectify its previous error with respect to effective dates for the 2013-2015 period upon application from the affected members no later than one year after the bill becomes operative, i.e., by December 31, 2019.

Related/Prior Legislation

AB 2664 (Assembly Committee on Public Employees, Retirement and Social Security, Chapter 59, Statutes of 2012), among other things authorized LACERA to adjust retirement payments due to errors or omissions in the same manner as the California Public Employees’ Retirement System.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 6/2/718)

Los Angeles County Employees Retirement Association (source)

California Professional Firefighters

Los Angeles County Professional Peace Officers Association

Retired Employees of Los Angeles County

OPPOSITION: (Verified 6/27/18)

None received

ARGUMENTS IN SUPPORT: According to LACERA,

Assembly Bill 2076 would provide the necessary statutory authority to LACERA’s Board of Retirement to correct its board decisions regarding the effective date of disability retirement during the two-year period beginning in 2013. The statutory authority would be limited in scope and duration and targeted only to the specific issue of the effective date of disability retirement.

ASSEMBLY FLOOR: 69-0, 3/22/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rubio, Salas, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Chau, Cristina Garcia, Levine, Limón, Mullin, Nazarian, Rodriguez, Santiago

Prepared by:

6/27/18 15:42:59

**** END ****

SENATE COMMITTEE ON

PUBLIC EMPLOYMENT AND RETIREMENT

Dr. Richard Pan, Chair

2017 - 2018 Regular

Bill No: AB 2076 Hearing Date: 6/25/18

Subject: County employees’ retirement: disability: date of retirement

SOURCE: Los Angeles County Employees Retirement Association

ASSEMBLY VOTES:

DIGEST: This bill authorizes the Los Angeles County Employees Retirement System (LACERA) to correct prior decisions regarding the effective date of specified disability retirement determinations between January 1, 2013, and December 31, 2015, which were based on errors of law but for which existing statute provides no remedy to adjust. The bill gives affected members one year from the bill’s effective date to apply for correction of their retirement calculation.

ANALYSIS:

Existing law:

1. Establishes the County Employees’ Retirement Law of 1937 (’37 Act), which governs 20 independent county retirement associations, and provides for retirement systems for county and district employees in those counties adopting its provisions. Currently, 20 counties operate retirement systems under the ’37 Act.
2. Requires the retirement board to retire a member for disability, as specified, if the board receives proof that the member is permanently physically or mentally incapacitated for the performance of the member’s job duties but for members with sick leave the retirement is not effective until after the sick leave is exhausted, unless the member agrees to an earlier retirement date.
3. Provides that a member’s application for disability retirement must be made while the member is in service, within four months after his or her discontinuance of service; within four months after the expiration of any period during which a presumption is extended beyond his or her discontinuance of services; or while, from the date of discontinuance of service to the time of the application, the member is continuously physically or mentally incapacitated for the for the performance of duties.
4. Provides that the disability retirement allowance is effective as of the date that the application for disability retirement is filed with the board, but not earlier than the day following the last day for which the member received regular compensation.
5. Provides that when it has been demonstrated to the satisfaction of the board that the member’s application for disability retirement was delayed by administrative oversight, or by an inability to ascertain the permanence of the member’s incapacity until after the date following the day of which the member last received regular compensation, that date is considered to be the date that the application was filed.
6. Provides for corrections of errors or omissions related to adjustment of retirement payments to LACERA in which the board may, in its discretion and upon any terms it deems just, correct the errors or omissions of any active or retired member, or their beneficiaries, provided that certain specified conditions are satisfied.

This bill:

1. Provides statutory authority for the LACERA board, upon any terms it deems just, to correct prior board decisions made between January 1, 2013, and December 31, 2015, that were based upon an error of law existing at the time of the decision in the determination of the effective date of disability retirements as specified.
2. Permits a member seeking correction of errors and omissions pursuant to this section to file an application for correction to the board no later than one year from the date the bill becomes operative.

Background

Under existing law, a LACERA member’s disability retirement effective date generally coincides with the member’s disability retirement application date. However, the effective date may predate the member’s disability retirement application if the permanent disability arose prior to the application date and the member applied after they last received regular compensation.

From 2013 -2015, LACERA’s then-counsel advised the board to use a different interpretation of law and begin disability retirements no sooner than the member’s application date. This approach was counter to interpretations by LACERA counsel both before and after the 2013-2015 period, and thereby may have denied earlier effective dates to members whose disability applications were considered during this period.

Although existing law authorizes the board to adjust for errors and omission related to erroneous compensation calculations, as specified, the misinterpretation and subsequent misapplication of the law relating to the effective dates of a disability retirement is beyond the scope of the existing authorization.

This bill would provide the board with the sought for authority to rectify its previous error with respect to effective dates for the 2013-2015 period upon application from the affected members no later than one year after the bill becomes operative, i.e., by December 31, 2019.

Related/Prior Legislation

AB 2664 (Assembly Public Employees, Retirement and Social

Security Committee, Chapter 59, Statutes of 2012), among other things authorized LACERA to adjust retirement payments due to errors or omissions in the same manner as the California Public Employees’ Retirement System.

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

SUPPORT:

Los Angeles County Employees Retirement Association (source)

Los Angeles County Professional Peace Officers Association

California Professional Firefighters

Retired Employees of Los Angeles County

OPPOSITION:

None received.

ARGUMENTS IN SUPPORT: According to LACERA,

Assembly Bill 2076 would provide the necessary statutory authority to LACERA’s Board of Retirement to correct its board decisions regarding the effective date of disability retirement during the two-year period beginning in 2013. The statutory authority would be limited in scope and duration and targeted only to the specific issue of the effective date of disability retirement.

Date of Hearing: March 14, 2018

ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT, AND SOCIAL SECURITY

Freddie Rodriguez, Chair

ABPCA Bill Id:AB 2076 (

Author:Rodriguez) – As Amended Ver:February 27, 2018

SUBJECT: County employees’ retirement: disability: date of retirement

SUMMARY: Provides statutory authority to the Board of Retirement of the Los Angeles County Employees Retirement Association (LACERA) to correct decisions made in the determination of the effective date of disability retirement. Specifically, this bill:

1) Provides, subject to certain specified provisions in existing law, LACERA with statutory authority to reconsider its decisions regarding the effective date of disability retirement that were based on an error of law, and limits this authority to those decisions that were made between January 1, 2013, and December 31, 2015.

2) Provides a one-year period after the operative date of this measure for a member to file an application with the board seeking reconsideration of its decision.

3) Authorizes the board to reconsider its decisions and make corrections on any terms that it deems just to ensure that its members are equitably treated.

4) Specifies that this measure only applies to LACERA.

EXISTING LAW:

1. Establishes the County Employees’ Retirement Law of 1937 (’37 Act), which governs 20 independent county retirement associations, and provides for retirement systems for county and district employees in those counties adopting its provisions. Currently, 20 counties operate retirement systems under the ’37 Act.

2) As to disability retirement, provides that if the proof received, including any medical examination, shows to the satisfaction of the board that the member is permanently physically or mentally incapacitated for the performance of service duties, the board must retire the member effective on the expiration date of any leave of absence with compensation, or effective upon the member’s consent to retirement prior to the expiration of a leave of absence with compensation.

For a member who is either granted or entitled to sick leave, his or her retirement is not effective until the expiration of sick leave with pay, unless the member consents to retirement at an earlier date.

3) Provides that a member’s application for disability retirement must be made while the member is in service, within four months after his or her discontinuance of service; within four months after the expiration of any period during which a presumption is extended beyond his or her discontinuance of services; or while, from the date of discontinuance of service to the time of the application, the member is continuously physically or mentally incapacitated for the for the performance of duties.

4) Provides that the disability retirement allowance is effective as of the date that the application for disability retirement is filed with the board, but not earlier than the day following the last day for which the member received regular compensation.

5) Provides that when it has been demonstrated to the satisfaction of the board that the member’s application for disability retirement was delayed by administrative oversight, or by an inability to ascertain the permanence of the member’s incapacity until after the date following the day of which the member last received regular compensation, that date is considered to be the date that the application was filed.

6) Provides for corrections of errors or omissions related to adjustment of retirement payments to LACERA in which the board may, in its discretion and upon any terms it deems just, correct the errors or omissions of any active or retired member, or their beneficiaries, provided that certain specified conditions are satisfied.

FISCAL EFFECT: None. This bill has been keyed nonfiscal by Legislative Counsel.

COMMENTS: According to the author, “[t]his bill would provide LACERA with statutory authority to reconsider its decisions regarding the effective date of disability retirement that were based on a misinterpretation, and subsequent misapplication of the law.

“Its authority would be limited to decisions regarding the effective date of disability retirement that were made between January 1, 2013, and December 31, 2015, and the bill would provide a one-year period after the operative date of this statute for a LACERA member to file an application seeking reconsideration of the Board’s decision.

“The Board would have authority to reconsider its decisions and make corrections upon any terms it deems just to ensure that members are treated in an equitable manner, towards LACERA fulfilling its fiduciary obligation. The bill would only apply to LACERA and no other systems operating under the County Employees Retirement Law of 1937.”

1) Comments by the Sponsor

According to LACERA, “[d]uring a two-year period beginning in 2013, LACERA’s Board of Retirement, based on the advice of prior counsel, used a different approach than recommended by counsel both before and after this period in applying Section 31724 of the Government Code in the determination of a member’s effective date of disability retirement. Thus, the members whose disability applications were considered during this period were treated differently compared to members whose disability applications were considered at all other times. These members and their beneficiaries may have been denied an effective date that would have been granted had the proper approach been used.

“Assembly Bill 2076 would provide the necessary statutory authority to LACERA’s Board of Retirement to corrects its board decisions…” as specified, and “…would be limited in scope and duration and targeted only to the specific issue of the effective date of disability retirement. “

LACERA further states that it does not intend to revisit whether a member is permanently incapacitated, and the members in question would continue to be retired for disability.

2) Existing Law and Lack of Authority for Purposes of Correcting Errors or Omissions Related to Disability Retirement

Although Section 31541 of the Government Code provides LACERA with authority regarding corrections of errors or omissions, the board’s authority thereunder is limited in its scope and purpose.

Pursuant to Chapter 59, Statutes of 2012 (Assembly Bill 2664, Assembly Public Employees, Retirement, and Social Security Committee) which granted LACERA the authority for corrections or omissions, the specific scope and purpose of this authority is limited to the adjustment of retirement payments – the same as those provided for in the Public Employees’ Retirement Law (Government Code Section 20160).

On occasion, there may be an inaccurate report of compensation or earnings that result in an increase in a retirement allowance that may need to be reduced. In instances such as this, LACERA has the authority to adjust (or correct) a retirement allowance or payment in accordance to existing law.

However, existing law does not provide LACERA with authority for correction of errors or omissions as it relates to a misinterpretation and subsequent misapplication of the law relating to disability retirement.

This measure would provide LACERA with that authority.

3) Responsibility of the LACERA Board of Retirement

The board is responsible for the administration of the retirement system, its retiree healthcare program, and the review and processing of disability retirement applications. As fiduciaries of the system, the board is entrusted to produce, protect and provide the promised benefits to the employees of Los Angeles County and their beneficiaries. Its fiduciary responsibility is to promote, enhance and efficiently administer a financially sound retirement. Inherently included among these duties and responsibilities is the equitable treatment of its members.

In seeking authority to correct an error that would afford an opportunity to LACERA members who might want to seek reconsideration of a determination related to the effective date of disability retirement, and in consideration of equitable treatment of its members, this bill would assist LACERA in carrying out its fiduciary duties and responsibilities.

REGISTERED SUPPORT / OPPOSITION:

Support

Los Angeles County Employees Retirement Association Board of Retirement (Sponsor)

Opposition

None on file.

Analysis Prepared by: Michael Bolden / P.E.,R., & S.S. / (916) 319-3957