Senate BillChaptered/SignedGovernment
SB 1038: The Public Employees’ Retirement System.
What SB 1038 does, verified September 7, 2026
The bill aims to amend the public employees' retirement system to increase transparency and accountability during audits. Before initiating an audit, the board must list specific information about the audit on its internet website and provide written notice to the affected parties. The notice will include the estimated time required for the audit completion, and the final audit report will be shared with the affected parties. The board will also provide a list of members affected by the final audit report, along with the affected parties, to their exclusive representatives.
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Last action: Chaptered by Secretary of State. Chapter 152, Statutes of 2026. (2026-08-13)Alert me
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| Aug. 27, 2026 | Chaptered by Secretary of State. Chapter 152, Statutes of 2026. |
| Aug. 27, 2026 | Approved by the Governor. |
| Aug. 18, 2026 | Enrolled and presented to the Governor at 3 p.m. |
| Aug. 13, 2026 | Read third time. Passed. (Ayes 73. Noes 0. Page 6146.) Ordered to the Senate. |
| Aug. 13, 2026 | In Senate. Ordered to engrossing and enrolling. |
Latest bill textChaptered version, August 27, 2026 · 946 words
Senate Bill No. 1038
CHAPTER 152
An act to amend Section 20222.5 of, and to add Section 20222.6 to, the Government Code, relating to public employees’ retirement.
[ Approved by Governor August 27, 2026. Filed with Secretary of State August 27, 2026. ]
LEGISLATIVE COUNSEL'S DIGEST
SB 1038, Laird. The Public Employees’ Retirement System.
The Public Employees’ Retirement Law (PERL) creates the Public Employees’ Retirement System (PERS) for the purpose of providing pension benefits to specified public employees and prescribes the rights and duties of members and annuitants of the system. PERL vests management and control of PERS in the Board of Administration. PERL authorizes the board, during the course of an audit, to require each state employer, school employer, including each school district represented by a school employer, and contracting agency to provide information as deemed necessary by the board to determine eligibility for, and the correctness of, retirement benefits, reportable compensation, enrollment in, and reinstatement to this system. PERL requires the board, before initiating an audit, to notify the subject of the audit of the estimated time required to completion.
This bill would require the board, before initiating an audit, to list specific information about the audit on its internet website and provide written notice to the affected state employer, school employer, including each school district represented by a school employer, or contracting agency. The bill would specify the distribution of the notice, the final audit report, and a list of members affected by the final audit report, between the board, a state employer, school employer, or contracting agency, and any exclusive representative.
The people of the State of California do enact as follows:
SECTION 1.
Section 20222.5 of the Government Code is amended to read:20222.5.
(a) The board may, during the course of an audit, require each state employer, school employer, including each school district represented by a school employer, and contracting agency, to provide information or make available for examination or copying at a specified time and place, or both, books, papers, any data, or any records, including, but not limited to, personnel and payroll records, as deemed necessary by the board to determine eligibility for, and the correctness of, retirement benefits, reportable compensation, enrollment in, and reinstatement to this system.(b) Before initiating an audit, the board shall, in writing, notify the subject of the audit of the purpose, scope, and estimated time required to complete the audit. The estimate shall be based upon various factors, including, but not limited to, the following:
(1) The number of employees.
(2) Employment classifications.
(3) Benefits.
(4) Contract provisions.
(5) Geographical location.
(6) Time required for audits of comparable entities.
(7) Additional time factors raised by the subject of the audit.
(c) If an audit requires an excess of the time estimated, the board may assess a reasonable charge upon the employer to recover additional costs incurred for the excess time to complete the audit. A contracting agency shall not be assessed for delays during the course of an audit that are reasonably outside of the agency’s control.
(d) The information obtained from an employer under this section shall remain confidential pursuant to Section 20230.
SEC. 2.
Section 20222.6 is added to the Government Code, to read:20222.6.
(a) After providing the subject of an audit notice pursuant to Section 20222.5, the board shall list on the system’s internet website the state employer, school employer, including each school district represented by a school employer, or contracting agency subject to the audit and the purpose and scope of the intended audit.(b) As soon as practicable, but no later than 10 working days after receiving notice of the intended audit pursuant to Section 20222.5, the affected state employer, school employer, or contracting agency shall forward written notice of the intended audit, including the purpose and scope of the intended audit, to the exclusive representative or representatives, if any, of members that may be affected by the audit. The state agency, school employer, or contracting agency shall communicate to the board that they have provided notice of the intended audit to the exclusive representative or representatives, if any, in compliance with this subdivision.
(c) Within 60 days of receiving the final audit report, the audited state agency, school employer, or contracting agency shall provide the board and the exclusive representative a list of the names of any members affected by the final audit report. The list of names provided to the exclusive representative shall only include the names of members in positions or classifications represented by the exclusive representative. Any information about members that would otherwise be confidential under Section 20222.5, Section 20230, or other state or federal law that is obtained from an employer under this subdivision shall be treated as confidential by the exclusive representative.
(d) The board shall, upon issuance of the final audit report, provide to the audited state agency, school employer, or contracting agency a copy of the final audit report. As soon as practicable, but no later than 10 working days after receiving a copy of the final audit report, the affected state employer, school employer, or contracting agency shall forward a copy of the final audit report to the exclusive representative or representatives, if any, of members that may be affected by the audit. The state agency, school employer, or contracting agency shall communicate to the board that they have provided the final audit report to the exclusive representative or representatives, if any, in compliance with this subdivision.
(e) Except as provided in this section, this section does not confer additional rights upon the exclusive representative, including, but not limited to, due process rights.
Text of SB 1038 as chaptered, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions