Public Employees’ Retirement System: board.
If enacted, AB 1311 would alter the governance structure of PERS, emphasizing the need for financial expertise among board members. This legal change is significant, as the California Constitution requires that any adjustments to the composition of such retirement boards must be ratified by a majority vote of the electorate. Thus, the implementation of these changes would hinge on the outcome of a future statewide election, potentially influencing local governance over public employee pensions.
Assembly Bill No. 1311, introduced by Assembly Member Travis Allen, seeks to amend the Public Employees Retirement Law (PERL) in California by revising the composition of the Board of Administration of the Public Employees Retirement System (PERS). The bill proposes to include two new public representatives, appointed by the Governor, who must have financial expertise and must not be interested in the retirement system. Additionally, it would replace a current board member position held by an official from a life insurance company with a gubernatorial appointee who has health insurance expertise.
Among the points of contention is the issue of public versus private interest on the board. Critics of the bill may express concern that the proposed changes could dilute the representation of employees' interests on the board by prioritizing financial expertise over direct representation. Additionally, the bill would impose caps on travel expenses for board members and limit reimbursements to their employing agencies, which could be contentious among active board members and their affiliates, particularly if they believe such restrictions could impact their ability to serve effectively.