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Home My WebLink AboutAgenda Report - August 7, 2019 C-17AGENDA ITEM C-17 Crrv or Lonr C ouNcIr C ovtMUNICATIoN TM AGENDA TITLE: MEETING DATE: PREPARED BY: Receive Report Regarding Communication Pertaining to Senate Bill 266 (Leyva) Public Employees' Retirement System: Disallowed Compensation: Benefit Adjustments August 7,2019 City Clerk RECOMMENDED AGTION: Receive report regarding communication pertaining to Senate Bill 266 (Leyva) Public Employees' Retirement System: Disallowed Compensation : Benefit Adjustments. BACKGROUND INFORMATION: The City received a request for communication from the League of California Cities regarding SB 266 (Leyva) Public Employees' Retirement System: Disallowed Compensation: Benefit Adjustments. There was a need to send a letter of opposition immediately in light of a pending hearing. SB 266 would require public agencies to directly pay retirees and/or their beneficiaries disallowed retirement benefits using generalfund dollars. Objections to this measure are rooted in policy, operational cost, and legal concerns that will inevitably face virtually every local government agency should this measure be signed into law. Areas of concern include, double payment, CaIPERS has no incentive to properly calculate benefit payments, requirements under SB 266 will create compliance and implementation issues, and gift of public funds is a violation of the California Constitution. The attached letter, electronically signed by the Mayor, was sent on July 12,2019. A copy of the initial request, along with the text of the bill, is also attached. This report is provided for informational purposes only, pursuant to policy. FISCAL IMPACT Not applicable FUNDING AVAILABLE: Not applicable M City Clerk APPROVED , City Manager lrh olo \\cvcfilvOl \adm inistration$\Administration\CLERK\Co .doc CITY COUNCIL MARK CHANDLER, Mayor DOUG KUEHNE, Mayor Pro Tempore BOB JOHNSON JOANNE MOUNCE ALAN NAKANISHI CITY OF LODI 2015 “Wine Region of the Year” CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 (209) 333-6702 / FAX (209) 333-6807 www.lodi.gov cityclerk@lodi.gov STEPHEN SCHWABAUER City Manager JENNIFER M. FERRAIOLO City Clerk JANICE D. MAGDICH City Attorney July 11, 2019 The Honorable Lorena Gonzalez Chair, Assembly Appropriations Committee State Capitol Building, Room 2114 Sacramento, CA 95814 RE: SB 266 (Leyva) Public Employees’ Retirement System: Disallowed Compensation: Benefit Adjustments. Notice of Opposition The City of Lodi must respectfully oppose SB 266, which would require public agencies to directly pay retirees and/or their beneficiaries disallowed retirement benefits using general fund dollars. Our objections to this measure are rooted in policy, operational cost, and legal concerns that will inevitably face virtually every local government agency should this measure be signed into law. Double Payment: Under current law, once a benefit is determined to be disallowed, both the employer and the employee cease making future payments on that benefit, past contributions from the employee are returned to the employee, while past contributions from the employer are applied towards future payment. We the employer have already made our contributions, we should not be double paying for the benefit. As Amended CalPERS has no Incentive to Properly Calculate Benefit Payments: Recent amendments to the measure remove all responsibility by CalPERS to ensure benefits are reviewed, calculated, and administered correctly. Instead, SB 266 places sole responsibility on the employer – even if the employer exercises their right to have CalPERS review their compensation proposal. While we understand that CalPERS has asserted that it faces IRS plan qualification concerns for paying out an unlawful benefit, the fact that there is zero accountability or assurances afforded to the state or local agency when CalPERS reviews a compensation agreement is irrational. Requirements under SB 266 will Create Compliance and Implementation Issues: Under SB 266, we would be issuing direct General Fund payments to retirees, which would trigger GASB 68 reporting requirements. Given the unique circumstances surrounding these overpayments, we would have to track and report these liabilities. Such additional responsibilities will require us to hire costly outside actuarial and legal experts to ensure that they follow federal reporting laws. SB 266 is a de facto and retroactive benefit enhancement bill that would further strain our budget at a time where retirement obligations are making it financially difficult to provide critical services for the public. Lodi is already struggling to pay for the crushing cost of the pension programs it contractually agreed to. Safety costs are headed to nearly 100 cents on the salary dollar and miscellaneous to nearly half that. In the last three years over 3 million dollars has been pushed from our budget to cover pension costs with another 3 and a half million projected in the next five years. Cities will not long survive if we are also expected to pay benefits that Cal-PERS ultimately determines were not contractually earned. This measure also fails to consider the common practice of employees moving from jurisdiction to jurisdiction throughout their careers. Under normal circumstances, CalPERS pays out the benefit if an employee works for multiple agencies who enjoy reciprocity; however, under SB 266 it is unclear. Such confusion will lead to compliance, legal and implementation challenges. This measure would also require the City of Lodi to track and maintain current records of all retirees and their beneficiaries in order to deliver the direct payment. SB 266 would present us with a costly logistical challenge. Gift of Public Funds is a Violation of the California Constitution: Under SB 266, City of Lodi would be issuing monthly, unlawful payments to former employees and/or their beneficiaries in perpetuity. Continued payment of a disallowed benefit to a retiree would constitute a gift of public funds, in violation of Section 6, Article 16 of the California Constitution. Such violation would leave a public agency left to defend itself from costly litigation lawsuits filed by members of the public. For these reasons, the City of Lodi opposes SB 266 (Leyva). Sincerely, /s/ Mark Chandler Mark Chandler Mayor, City of Lodi cc: The Honorable Connie Leyva (sent via portal) Senator Cathleen Galgiani, Fax: (916) 651-4905 Assemblymember Jim Cooper, Fax: (916) 319-2109 Che Salinas, Chief Deputy Legislative Secretary for Operations, Fax: (916) 558-3160 Office of Governor Newsom, Leg.unit@gov.ca.gov) Stephen Qualls, League of California Cities, squalls@cacities.org Meg Desmond, League of California Cities, cityletters@cacities.org 1 Jennifer Ferraiolo From:Steve Schwabauer Sent:Tuesday, July 9, 2019 3:39 PM To:Jennifer Ferraiolo Cc:Adele Post; Andrew Keys Subject:FW: City Opposition Urged for SB 266 (Leyva) Requiring Payments from Local General Funds for "Disallowed Compensation." Attachments:SB 266 Oppose.PLACER COUNTY.pdf; SB 266 (Leyva) Sample Oppose ASM Approps Letter.docx; SB 266 (Leyva) - OPPOSE_ASM_Approps 7-9.docx; ATT00001.txt We definitely need to send this letter of opposition! From: City_managers <city_managers‐bounces@lists.cacities.org> On Behalf Of Meghan McKelvey Sent: Tuesday, July 9, 2019 12:59 PM To: city_managers@lists.cacities.org; 'Fiscalofficers@lists.cacities.org' (Fiscalofficers@lists.cacities.org) <Fiscalofficers@lists.cacities.org> Cc: Dan Carrigg <CarriggD@cacities.org> Subject: [City_managers] City Opposition Urged for SB 266 (Leyva) Requiring Payments from Local General Funds for "Disallowed Compensation." To: City Managers City Fiscal Officers From: Dan Carrigg, League Deputy Executive Director/Legislative Director Re: SB 266 (Leyva) Required Payments from Local General Funds for “Disallowed Compensation.” We could use your help in our efforts to battle SB 266 (Leyva), which has to be one of the most ill- conceived labor overreach bills in recent memory. Under this bill, cities would be required to track and pay individual retirees (and their beneficiaries) for decades out of their general funds to cover any amounts of a retiree’s PER-determined benefit that PERS later determines is “disallowed compensation.” This proposal not only raises serious legal and nightmarish implementation issues for local government, it will compound the pension-related issues cities face. Moreover, these perceived-giveaways of public funds will further undermine the public’s perception of local governments. This bill has been moving rapidly through the Legislature with little resistance from legislators. On June 25, 2019, SB 266 was heard in the Assembly Public Employment and Retirement. The League was there to testify in opposition and expressed our concerns to the Committee. Unfortunately, our concerns were not well received and the bill was passed out of the Committee on a 7-0 vote. The testimony from the League and a representative from Placer County are both excellent. You can view the Committee Hearing by clicking this link: Video. League and Placer County’s testimony begins at 4:30 of the linked video. The California Professional Firefighters, sponsors of this bill and earlier endorser of Governor Newsom, seem confident that they may be able to get the Governor to sign this bill. Our best 2 defense is to increase the public spotlight on this measure, and that includes building a stack of opposition letters -- including in the Governor’s office. The bill is headed to the Assembly Appropriations Committee, and won’t be scheduled to be heard until after August 12th when the Legislature returns from its summer break. If your city has not yet weighed in on this bill, please do. For your assistance we have attached: 1) The League’s most recent action alert on the bill (updated below). 2) A sample city letter (Make sure you include the cc to the Governor’s office) 3) A copy of the League’s most recent letter. 4) A copy of an excellent opposition letter from Placer County (they testified in committee the bill may cost them $16 million annually.) ACTION ALERT!! SB 266 (Leyva) Public Employees’ Retirement System: Disallowed compensation: benefit adjustments OPPOSE Summary: SB 266 will require public agencies to directly pay retirees and/or their beneficiaries, disallowed retirement benefits using general fund dollars. As amended, SB 266 places 100 percent of the total liability for such overpayments on public agencies—abdicating all responsibility previously held by CalPERS to ensure that retirement benefits are calculated and administered correctly. As such, SB 266 is a de facto and retroactive benefit enhancement measure that will further strain local agency budgets at a time where retirement obligations are effectively eliminating agencies ability to provide critical services for the public. Our objections to this measure are rooted in policy, operational, cost, and legal concerns that will inevitably face virtually every state and local government agency should this measure be signed into law. League’s recent testimony: On June 25, 2019, SB 266 was heard in the Assembly Public Employment and Retirement. The League was there to testify in opposition and expressed our concerns to the Committee. Unfortunately, our concerns were not well received and the bill was passed out of the Committee on a 7-0 vote. You can view the Committee Hearing by clicking this link: Video. League testimony begins at 4:30 of the linked video. Background: In 2012 the California State Legislature passed significant public pension reform legislation known as the Public Employees' Pension Reform Act (PEPRA,) which took effect January 1, 2013. While the reforms were significant, they led to some confusion as to what may lawfully be offered as employee pension benefits. As a result, some public agencies and their represented employee organizations came to agreements on benefit packages and submitted to CalPERS for approval. Only after these agreements were approved and administered did CalPERS determine that these forms of compensation were unlawful. Those future retirement benefits, which were being paid for by employers and employees into pension systems such as the California Public Employees Retirement System (CalPERS), were at some point determined to violate the law and were terminated. Terminated benefits that violate PEPRA are considered “disallowed benefits.” Under current law, once a benefit is determined to be disallowed, both the employer and the employee cease making future payments on that benefit, past contributions from the employee are returned to the employee, while past contributions from the employer are applied towards future payment. Unfortunately, in the case of a retiree that received 3 the disallowed benefit, the pension system must recoup the overpaid benefit from the retiree. The pension system must recoup that overpayment from the retiree because it is unlawful to pay out a benefit that is not legally allowable or earned. ACTION: SB 266 (Leyva) has not yet been calendared but will be heard in the Assembly Appropriations Committee (roster below) either August 14th, August 21st, or 28th. Given its cost implications, it is likely the bill will be placed on the “Suspense File” and will not face a final hearing until late August. There is a good chance the bill will be heading to the Assembly Floor after the Appropriations Committee hearing, therefore, it is critical that ALL Assembly Members hear from their cities on this bill. Please send in a letter of city OPPOSITION as soon as possible. Sample letter attached. Assembly Appropriations Committee Member District Party Room Phone Bigelow, Franklin (Vice-Chair) 5 R 4158 916 319 2005 Bloom, Richard 50 D 2003 916 319 2050 Bonta, Rob 18 D 2148 916 319 2018 Brough, William 73 R 3141 916 319 2073 Calderon, Ian 57 D 319 916 319 2057 Carrillo, Wendy 51 D 4167 916 319 2051 Chau, Ed 49 D 5016 916 319 2049 Diep, Tyler 72 R 4153 916 319 2072 Eggman, Susan 13 D 4117 916 319 2013 Fong, Vince 34 R 2002 916 319 2034 Gabriel, Jesse 45 D 4139 916 319 2045 Garcia, Eduardo 56 D 4140 916 319 2056 Gonzalez, Lorena (Chair) 80 D 2114 916 319 2080 Maienschein, Brian 77 D 2170 916 319 2077 Obernolte, Jay 33 R 4116 916 319 2033 Petrie-Norris, Cottie 74 D 4144 916 319 2074 Quirk, Bill 20 D 2163 916 319 2020 Rivas, Robert 30 D 5158 916 319 2030 You can find your Legislator’s contact information here: http://findyourrep.legislature.ca.gov/. Talking Points:  SB 266 is a de facto and retroactive benefit enhancement measure that will further strain local agency budgets at a time where retirement obligations are effectively eliminating agencies ability to provide critical services for the public.  SB 266 would present cities with costly operational challenges. Not only would SB 266 require CITY/TOWN of __________ to track and maintain current records of all retirees and their beneficiaries in order to deliver direct payments, the city would be issuing direct General Fund payments to retirees which would trigger GASB 68 reporting requirements. Given the unique circumstances surrounding these overpayments, we would have to track and report these liabilities. Such additional responsibilities will require us to hire costly outside actuarial and legal experts to ensure that they follow federal reporting laws. 4  Continued payment of a disallowed benefit to a retiree would constitute a gift of public funds, in violation of Section 6, Article 16 of the California Constitution.  It is unfortunate that after an agency and their bargaining unit came to an agreement on benefits and those benefits had been paid for any amount of time for the benefit to be taken from the retiree.  Public agencies simply cannot continue to make payments directly to a retiree for an unlawful benefit.  SB 266 will lead to compliance, legal, and implantation challenges. This measure fails to consider the common practice of employees moving from jurisdiction to jurisdiction throughout their careers. Under normal circumstances, CalPERS pays out the benefit if the employee works for multiple agencies who enjoy reciprocity. Are multiple agencies now responsible for directly paying a retiree or beneficiary? What happens in the case where an employee’s bargaining unit at one agency agreed to a disallowed benefit but the majority of their career was spent working for another agency? Under SB 266 it is unclear. Dan Carrigg Deputy Executive Director/Legislative Director League of California Cities p. 916 658‐8222 dcarrigg@cacities.org | www.cacities.org Strengthening California Cities Through Education & Advocacy AMENDED IN ASSEMBLY JUNE 17, 2019 AMENDED IN SENATE MAY 17, 2019 SENATE BILL No. 266 Introduced by Senator Leyva February 12, 2019 An act to add Section 20164.5 to the Government Code, relating to public employees’ retirement. legislative counsel’s digest SB 266, as amended, Leyva. Public Employees’ Retirement System: disallowed compensation: benefit adjustments. Existing (1) 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. PERL authorizes a public agency to contract to make its employees members of PERS and prescribes a process for this. PERS is administered by its board of administration, which is responsible for correcting errors and omissions in the administration of the system and the payment of benefits. Existing law requires the board to correct all actions taken as a result of errors or omissions of the state or a contracting agency, in accordance with certain procedures. 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, among other things, establishes new defined benefit formulas and caps on pensionable compensation. 97 This bill would establish new procedures under PERL for cases in which PERS determines that the benefits of a member or annuitant are, or would be, based on disallowed compensation that conflicts with PEPRA and other specified laws and thus impermissible under PERL. The bill would also apply these procedures retroactively to determinations made on or after January 1, 2017, if an appeal has been filed and the employee member, survivor, or beneficiary has not exhausted their administrative or legal remedies. At the threshold, after determining that compensation for an employee member reported by the state, school employer, or a contracting agency is disallowed, the bill would require the applicable employer to discontinue the reporting of the disallowed compensation. The bill would require that contributions made on the disallowed compensation, for active members, be credited against future contributions on behalf of the state, school employer, or contracting agency that reported the disallowed compensation and would require that the state, school employer, or contracting agency return to the member any contributions paid by the member or on the member’s behalf. With respect to retired members, survivors, or beneficiaries whose benefits are based on disallowed final compensation, the bill would require PERS to adjust the benefit to reflect the exclusion of the disallowed compensation, and provide that contributions made on the disallowed compensation be credited against future contributions on behalf of the employer entity that reported the disallowed compensation. Additionally, if specified conditions are met, the bill would require the employing entity to refund overpayment costs to the system and to pay members, survivors, and beneficiaries whose benefits have been reduced a lump sum or an annuity reflecting the difference between the monthly allowance that was based on the disallowed compensation and the adjusted monthly allowance calculated without the disallowed compensation, as provided. The bill would require the system to provide certain notices in this regard. This bill would require the system to provide confidential contact information of retired members, and their survivors and beneficiaries, who are affected by these provisions to the relevant employing entities, the confidentiality of which the entities would be required to maintain. The bill would authorize the state, a school employer, or a contracting agency, as applicable, to submit to the system an additional compensation item proposed for inclusion to be included or contained in a memorandum of understanding or collective bargaining agreement 97 — 2 — SB 266 on and after January 1, 2020, that is intended to form the basis of a pension benefit calculation for determination of compliance with PEPRA and other laws, as specified, and would require PERS to respond within 90 days, as specified. The bill would require PERS to publish notices identifying items of allowable compensation derived from language submitted to the system for review. The bill would make related legislative findings and declarations. (2) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. The people of the State of California do enact as follows: line 1 SECTION 1. (a) The California Public Employees’ Retirement line 2 System (CalPERS) is the largest public pension fund in the United line 3 States, administering defined benefit retirement plans for line 4 California’s public employees, including state and local line 5 government firefighters, law enforcement personnel, and school line 6 employees. line 7 (b) Of the numerous positions maintained by the state, schools, line 8 and local governments, each is unique and each is vital to ensuring line 9 quality public services that help keep our state strong, a critical line 10 component to promoting our state’s continued economic recovery line 11 and future growth. line 12 (c) Fire service, law enforcement, school personnel, and other line 13 public employees exhibit varying demographic features and career line 14 patterns. Each requires a different skill set and knowledge base, line 15 as well as unique requirements for recruitment, training, retention, line 16 and compensation. line 17 (d) Generations of hard-working members of California’s middle line 18 class have dedicated their careers to public service, often earning line 19 less over the course of their careers when compared to their private line 20 industry counterparts, to earn and pay for the promise of a secure line 21 retirement. 97 SB 266 — 3 — line 1 (e) A public employee’s pension is based on collectively line 2 bargained compensation that takes the form of base pay and special line 3 compensation for additional skills, extraordinary assignments, or line 4 education. line 5 (f) For CalPERS, it is the employer’s responsibility to ensure line 6 that employee information is reported to CalPERS accurately and line 7 on a timely basis in order to correctly calculate an employee’s line 8 service credit and final compensation for retirement purposes. line 9 (g) In 2012, after serving the public for nearly 30 years, a line 10 firefighter employed by a CalPERS contracting agency, which line 11 provided an official projection of retirement benefits based on the line 12 firefighter’s estimated retirement date, made the decision to retire line 13 based on that projection. line 14 (h) In 2017, five years after officially retiring, CalPERS notified line 15 the firefighter retiree that the retiree’s former employer had line 16 erroneously reported and remitted contributions on certain line 17 compensation, which CalPERS later determined in an audit was line 18 not pensionable compensation. CalPERS sought repayment of the line 19 purported overpayment directly from the retired firefighter totaling line 20 thousands of dollars, as well as imposed a substantial future line 21 reduction to the retiree’s monthly allowance. Unfortunately, this line 22 scenario is not isolated to just this one retiree. A handful of other line 23 firefighter, law enforcement, and school retirees have reported line 24 similar stories across multiple CalPERS employers. line 25 (i) For over eight decades, CalPERS has proven its ability to line 26 fairly administer the retirement system to uphold the promises line 27 made by its employers for those members who invest their life’s line 28 work in public service. However, this kind of clawback has the line 29 potential to take a major toll on the finances of retirees, including line 30 firefighters and law enforcement officers who, unlike private sector line 31 employees, do not receive social security benefits and instead rely line 32 on their fixed monthly pension as their sole source of retirement line 33 income. line 34 (j) In enacting this bill, it is the intent of the Legislature to ensure line 35 that a retired CalPERS member is protected when alleged line 36 misapplication or calculation of compensation occurs as a result line 37 of an employer’s error, and that this protection be provided to line 38 retirees whose appeal of CalPERS’ determination, and subsequent line 39 reduction of the retiree’s allowance, is not final. It is further the line 40 intent of the Legislature that errors made on the part of the 97 — 4 — SB 266 line 1 employer, with respect to a promise to a retiree, be borne by the line 2 employer rather than through a retroactive clawback and permanent line 3 reduction in the retired member’s pension. line 4 SEC. 2. Section 20164.5 is added to the Government Code, to line 5 read: line 6 20164.5. (a) For purposes of this section, “disallowed line 7 compensation” means compensation reported for a member by the line 8 state, school employer, or a contracting agency that the system line 9 subsequently determines is not in compliance with the California line 10 Public Employees’ Pension Reform Act of 2013 (Article 4 line 11 (commencing with Section 7522) of Chapter 21 of Division 7 of line 12 Title 1), Section 20636 or 20636.1, or the administrative regulations line 13 of the system. line 14 (b) If the system determines that the compensation reported for line 15 a member by the state, school employer, or a contracting agency line 16 is disallowed compensation, the system shall require the state, line 17 school employer, or contracting agency to discontinue reporting line 18 the disallowed compensation. This section shall also apply to line 19 determinations made on or after January 1, 2017, if an appeal has line 20 been filed and the member, survivor, or beneficiary has not line 21 exhausted their administrative or legal remedies. line 22 (1) In the case of an active member, all contributions made on line 23 the disallowed compensation shall be credited against future line 24 contributions to the benefit of the state, school employer, or line 25 contracting agency that reported the disallowed compensation, and line 26 any contribution paid by, or on behalf of, the member, including line 27 contributions under Section 20691, shall be returned to the member line 28 by the state, school employer, or contracting agency that reported line 29 the disallowed compensation. line 30 (2) In the case of a retired member, survivor, or beneficiary line 31 whose final compensation at the time of retirement was predicated line 32 upon the disallowed compensation, the contributions made on the line 33 disallowed compensation shall be credited against future line 34 contributions, to the benefit of the state, school employer, or line 35 contracting agency that reported the disallowed compensation and line 36 the system shall permanently adjust the benefit of the affected line 37 retired member, survivor, or beneficiary to reflect the exclusion line 38 of the disallowed compensation. line 39 (3) (A) In the case of a retired member, survivor, or beneficiary line 40 whose final compensation at the time of retirement was predicated 97 SB 266 — 5 — line 1 upon the disallowed compensation as described in paragraph (2), line 2 the repayment and notice requirements described in this paragraph line 3 and paragraph (4) shall apply only if all of the following conditions line 4 are met: line 5 (i) The compensation was reported to the system and line 6 contributions were made on that compensation while the member line 7 was actively employed. line 8 (ii) The compensation was provided for in a memorandum of line 9 understanding or collective bargaining agreement as compensation line 10 for pension purposes. line 11 (iii) The determination by the system that compensation was line 12 disallowed was made after the date of retirement. line 13 (iv) The member was not aware that the compensation was line 14 disallowed at the time it was reported. line 15 (B) If the conditions of subparagraph (A) are met, the state, line 16 school employer, or contracting agency that reported contributions line 17 on the disallowed compensation shall do both of the following: line 18 (i) Pay to the system, as a direct payment, the full cost of any line 19 overpayment of the prior paid benefit made to an effected affected line 20 retired member, survivor, or beneficiary resulting from the line 21 disallowed compensation. line 22 (ii) Pay to the retired member, survivor, or beneficiary, as a line 23 lump sum or as an annuity based on that amount, the actuarial line 24 equivalent present value representing the difference between the line 25 monthly allowance that was based on the disallowed compensation line 26 and the adjusted monthly allowance calculated pursuant to line 27 paragraph (2) for the duration that allowance is projected to be line 28 paid by the system to the retired member, survivor, or beneficiary. line 29 The payment, or payments, shall be made by the state, school line 30 employer, or contracting agency that reported contributions on the line 31 disallowed compensation in the option selected by the retired line 32 member, survivor, or beneficiary pursuant to a settlement or line 33 agreement between the parties. line 34 (4) The system shall provide a notice to the state, school line 35 employer, or contracting agency that reported contributions on the line 36 disallowed compensation and to the effected affected retired line 37 member, survivor, or beneficiary, including, at a minimum, all of line 38 the following: 97 — 6 — SB 266 line 1 (A) The amount of the overpayment to be paid by the state, line 2 school employer, or contracting agency to the system as described line 3 in subparagraph (B) of paragraph (3). line 4 (B) The actuarial equivalent present value owed to the retired line 5 member, survivor, or beneficiary as described in subparagraph (B) line 6 of paragraph (3), if applicable. line 7 (C) Written disclosure of the state, school employer, or line 8 contracting agency’s obligations to the retired member pursuant line 9 to this section. line 10 (5) The system shall, upon request, provide the state, a school line 11 employer, or a contracting agency with contact information data line 12 in its possession of a relevant retired member, survivor, or line 13 beneficiary in order for the state, a school employer, or a line 14 contracting agency to fulfill their obligations to that retired line 15 member, survivor, or beneficiary pursuant to this section. The line 16 recipient of this contact information data shall keep it confidential. line 17 (c) (1) The state, a school employer, or a contracting agency, line 18 as applicable, may submit to the system for review an additional line 19 compensation item that is proposed for inclusion in to be included, line 20 or is contained, in a memorandum of understanding, understanding line 21 adopted, or a collective bargaining agreement entered into, on line 22 and after January 1, 2020, that is intended to form the basis of a line 23 pension benefit calculation, in order for the system to determine line 24 compliance with the California Public Employees’ Pension Reform line 25 Act of 2013 (Article 4 (commencing with Section 7522) of Chapter line 26 21 of Division 7 of Title 1), Section 20636, 20636 or 20636.1, and line 27 the administrative regulations of the system. line 28 (2) A submission to the system for review under paragraph (1) line 29 shall include only the proposed compensation item language and line 30 a description of how it meets the criteria listed in subdivision (a) line 31 of Section 571 or subdivision (b) of Section 571.1 of Title 2 of the line 32 California Code of Regulations, along with any other supporting line 33 documents or requirements the system deems necessary to evaluate line 34 compliance with the California Public Employees’ Pension Reform line 35 Act of 2013 (Article 4 (commencing with Section 7522) of Chapter line 36 21 of Division 7 of Title 1), Section 20636 or 20636.1, and the line 37 administrative regulations of the system. line 38 (3) The system shall respond to the submission within 90 days line 39 of the receipt of all information required to make a determination. 97 SB 266 — 7 — line 1 (d) The system shall periodically publish a notice of the line 2 proposed compensation language submitted to the system pursuant line 3 to paragraph (c) for review and the system’s determination of line 4 compliance. line 5 (e) This section does not alter or abrogate any responsibility of line 6 the state, a school employer, or a contracting agency to meet and line 7 confer in good faith with the employee organization regarding the line 8 impact of the disallowed compensation or the effect of any line 9 disallowed compensation on the rights of the employees and the line 10 obligations of the employer to its employees, including any line 11 employees who, due to the passage of time and promotion, may line 12 have become exempt from inclusion in a bargaining unit, but whose line 13 benefit was the product of collective bargaining. line 14 SEC. 3. The Legislature finds and declares that Section 2 of line 15 this act, which adds Section 20164.5 of the Government Code, line 16 imposes a limitation on the public’s right of access to the meetings line 17 of public bodies or the writings of public officials and agencies line 18 within the meaning of Section 3 of Article I of the California line 19 Constitution. Pursuant to that constitutional provision, the line 20 Legislature makes the following findings to demonstrate the interest line 21 protected by this limitation and the need for protecting that line 22 interest: line 23 In order to appropriately maintain the current confidentiality line 24 of personal contact information held by the Public Employees’ line 25 Retirement System regarding retired members of the system, and line 26 their survivors and beneficiaries, it is necessary to limit access to line 27 this information if it is provided to other public entities for line 28 purposes of Section 20164.5 of the Government Code. O 97 — 8 — SB 266 (/Advocates/faces/profi le.xhtm l) Jennifer Ferraiolo City Clerk P.O. Box 3006 Lodi, CA 95241 jferraiolo@lodi.gov Phone: 209-333-6702 CITY OF LODI Activity Submit a Letter (/Advocates/faces/uploadfilel.xhtml) lnbox (/Advocates/faces/inbox.xhtml) Manage my account (/Advocates/faces/accountmanagement.xhtml) Recent Document Submissions (../getExtDoc? docld=75048) \Mthdraw lSB266.doc (../getExtDoc?docld=75048) - SB 266 (Leyva) - Notice of Opposition 2O19lO7 112 10:30:1 I AM PDT Stance : Oppose for SB 266 Public Employees' Retirement System: disallowed comoensation: benefit adjustments. (ver. 97) Organization : CITY OF LODI Received by: " Assembly Appropriations Committee . Nycole Baruch (Author Staff - Leyva) FACSIMILE COVER SHEET CITY CLERK'S OFFICE 221 WEST PINE STREET - P.O. BOX 3006 LODI, CALIFORM A 9524T-1910 PHONE Q09)333-6702 FAX (209) 333-6807 cifyclrk@lodi.gov or jfenaiolo@lodi.gov DATE: July 12,2019 FROM Jennifer M. Ferraiolo City Clerk TO:Senator Cathleen Galgiani- (916) 651-4905 Assemblymember Jim Cooper - (916) 319-2109 Che Salinas, Chief Deputy Legislative Secretary for Operations - (916) 558-3160 GOMMENTS:SB 266 (Leyva) Public Employees' Retirement System: Disallowed Compensation: Benefit Adjustment - Notice of Opposition THIS TRANSMTTTAL CONTATNS 3 PAGE(S), |NCLUD|NG TH|S COVER SHEET. forms\aafaxjen.doc Jennifer Ferraiolo From: Sent: lo: Cc: Subject: Attachments: Jennifer Ferraiolo Friday, July 12,2019 10:37 AM ' Leg.unit@ gov.ca.gov' 'Stephen R. Qualls';'cityletters@cacities.org' SB 266 (Leyva) Public Employees' Retirement System: Disallowed Compensation: Benefit Adjustments - NOTICE OF OPPOSITION lSB266.doc Attached please find City of Lodi's notice of opposition to SB 266 (Leyva). This letter was uploaded to the California Legislature Position Letter Portal and faxed to our local representatives. Crrv or gennifer M. femaiolo, â{MC Clty Clerk F.û. 3rx 30ü6 Lodi, CA 35241-181CI {2üe}333-ñ7CI? I {20e}333-58ü7 rAX Lüebsite: www.lodi.sov o t C¡r.rFoRHrÅ 1 07/L2/20]-9 FRI l0¡39 FAX Øoor ********************* *** F.¡Ð( rx REPORI *** ********************* rR.AÀ¡SMISSION OK JOB NO. DEPT. TD DESTINAfÏON ADDRESS SUBADDRESS DESTINASTON ID ST. TIME TXlRX fI¡{E PGS. RESULT 0080 101 9191665r.4905 07/L2 LQz38 01' 23 J OK FACSIMILE COVBR SHEET CITY CLERK'S OFFICE 221 WEST PINE STREET - P.O. BOX 3006 LODI, CALIFORNIA 9524I. 19 IO PHONE (2()9) 333-6702 FAX (209) 333-6807 s1yç.[ß@ladj.sfry or jtbrraiolo@locli.gov DATE: July 12,2019 FROM:Jennifer M. Ferraiolo City Clerk TO:Senator Cathleen Galgiani - (916) 651-4905 Assemblymember Jim Cooper - (916) 319-2109 Che Salinas, Chief Deputy Legislative Secretary for Operations - (e16) 558-3160 COMMENTS:SB 266 (Leyva) Public Employees' Retirement System: Disallowed Compensat¡on: Benefit Adjustment - Notice of Opposition TH|S TRANSMTTTAL CONTATNS 3 PAGE(S), |NCLUOTNG TH|S COVER SHEET. 07/L2/20L9 FRI 10:41 FAX ø 001 ********************* *** F,¡Ð( TX REPORI *** ********************* TRANSMISSION OK JOB NO. DEPT. ID DESTINASION ADDRESS SUBADDRESS DESTINATTON ID ST. TIME TXIRX TIME PGS. RESULf 0081 t_ 01 919L63r.92109 07 /L2 L0:40 01' 1t tJ OK FACSIMILE COVER SHEBT CITY CLERK'S OFFICE 22I WEST PINE STREET . P.O. BOX 3006 LODI, CALIFORNIA 9524I. I9 IO Pr-roNË (209) 333-6702 FAX (20e) 333-6807 oityclrk@locli,grrv or jferraiolo@lgS!i.qpv DATE: July 12,2019 FROM:Jennifer M. Ferraiolo City Clerk TO:Senator Cathleen Galgiani- (916) 651-4905 Assemblymember Jim Cooper - (916) 319-2109 Che Salinas, Chief Deputy Legislative Secretary for Operations - (916) 558-3160 COMMENTS:SB 266 (Leyva) Public Employees' Retirement System: Disallowed Compensation: Benefit Adjustment - Notice of Opposition TH¡S TRANSMTTTAL CONTATNS 3 PAGE(S), tNCLUD|NG THtS COVER SHEET. 07/L2/20L9 FRt 10:43 FAX Øoot ********************* *** FAX TX RÍ:PORT *** ********************* TRANSMISSION OK JOB NO. DEPT. ID DESTINATION ADDRESS SUBADDRESS DESÍTNAT]ON ID ST. TIME TX/RX TIME PGS. RESULT 0082 L0L 91916s583160 07 /L2 L0:42 0r.'07 3 OK TO E COVER S CITY CLERK'S OFFICE 221 WEST PINE STREET - P.O. BOX 3006 LODI, CALIFORNTA 95241. 1 9 10 pr-roNE (209) 333-6702 FAX (209) 333-6807 cityclrkGD,Lcsli,gov or jfenn-iolo@lodi.gov DATE: July 12,2019 FROM:Jennifer M. Ferraiolo City Clerk Senator Cathleen Galgiani - (916) 651-4905 Assemblymember Jim Cooper - (916) 319-2109 Che Salinas, Chief Deputy Legislative Secretary for Operations - (916) 558-3160 COMMENTS:SB 266 (Leyva) Public Employees' Retirement System: Disallowed Compensat¡on: Benefit Adjustment - Notice of Opposition TH|S TRANSMTTTAL CONTAINS 3 PAGE(S), INCLUDING THIS COVER SHEET.