Public employees’ retirement: contracting agencies.
Impact
The passage of AB 592 would empower contracting agencies to make informed decisions about their participation in the PERS by understanding the financial obligations tied to termination. As it stands, agencies terminating their contracts are liable for deficits, including unpaid benefits and related costs. Allowing them to request a cost calculation could lead to more strategic planning and potentially encourage agencies to reconsider their engagements with PERS based on financial viability.
Summary
Assembly Bill No. 592, introduced by Assembly Member Dahle on February 14, 2017, proposes amendments to the Government Code regarding public employees' retirement plans and the contracting agencies involved. Specifically, it adds Section 20570.5, which allows contracting agencies to request a calculation of the costs necessary for terminating their contracts with the Public Employees Retirement System (PERS). This change aims to provide more transparency and clarity regarding the financial implications of contract termination for public agencies.
Contention
Notably, while the bill seems to streamline the process for requesting cost evaluations, there may be concerns among public employees regarding the stability of their retirement benefits. Allowing agencies to explore options for contract termination could lead to increased scrutiny of public pensions, raising concerns that some agencies might opt to withdraw from PERS if faced with perceived financial burdens. This potential for increased instability in public sector retirement plans is a point of contention among stakeholders and may spark debates around adequate retirement security for public employees.
Public employees and officers: compensation and benefits; severance pay for executive and legislative branch employees and officers; limit, and require reporting if greater than a certain amount. Creates new act.