AB 2696: Public Employees’ Retirement System: limited term appointments.

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. PERL authorizes a public agency and a school employer to contract to make their employees members of PERS. PERL establishes the compensation earnable by members of the system, defined as the members payrate and special compensation, including out-of-class pay. Existing law requires fees and other amounts received by the Board of Administration of PERS pursuant to PERL to be credited to the Public Employees Retirement Fund, a continuously appropriated fund.

PERL prohibits an out-of-class appointment by a contracting agency employer or a school employer from exceeding 960 hours in each fiscal year. PERL requires an employer who violates this provision to pay penalties to the system based on, among other factors, an amount of money equal to 3 times the employee and employer contributions that would otherwise be paid to the system for the difference between the compensation paid for an out-of-class appointment and the compensation paid and reported to the system for the members permanent position, for the entire period or periods the member serves in an out-of-class appointment.

This bill would instead require that the amount of money for this penalty equal 3 times the employee and employer contributions that otherwise would have been paid and reported to the system for the difference between the compensation paid for the out-of-class appointment and the compensation that would have been paid and reported to the system, but for the vacancy, for the position in accordance with a publicly available pay schedule applicable to the vacant position, for the entire period or periods the member serves in an out-of-class appointment. By increasing the amount of moneys deposited in a continuously appropriated fund, this bill would make an appropriation.