Blog

Contact Us for More Information

New Law Mandates Additional Disclosure by California Public Pension Plans

Posted by Jennifer V. Gateb | Nov 23, 2016 | 0 Comments

The State of California recently enacted Assembly Bill No. 2833 (the “Act”), a new law that mandates additional public disclosure of information concerning fees and expenses paid by California Public Pension Plans (“PPPs”) with regard to their investments in private equity funds, venture funds, hedge funds or absolute return funds (collectively, “Private Funds”).

Effective January 1, 2017, the Act will require California public pensions or retirement systems to “undertake reasonable efforts” to obtain (from each Private Fund in which they invest) and disclose the following information to the public at least annually:

  • The fees and expenses that the PPP pays directly to the Private Fund, the Private Fund manager or related parties;
  • The PPP's pro rata share of fees and expenses not included in paragraph (1) that are paid from the Private Fund to its manager or related parties;
  • The PPP's pro rata share of carried interest distributed to the Private Fund manager or related parties;
  • The PPP's pro rata share of aggregate fees and expenses paid by all of the Private Fund portfolio companies to the Private Fund manager or related parties; and
  • California Public Records Act (“CPRA”) Information.

Intended to encourage the transparency behind the fees paid by PPPs to the managers of Private Funds, the impact the Act will have on investments by PPPs is unclear. California is the first state to enact such legislation, although similar initiatives have appeared in some states (with differing standards).  

Certainly, the Act will affect the information available to many individuals with interests in state, county and city-level California PPPs such as CalPERS, CalSTRS, SDCERS and the Regents of the University of California Retirement System. Contact Butterfield Schechter LLP for more details about the Act, including how to obtain the additional public disclosures, their expected effect on PPPs' investments with Private Funds and the potential effects on your interest in a California PPP.

About the Author

Jennifer V. Gateb

Jennifer V. Gateb practices in the areas of general tax and estate planning, ERISA (Employee Retirement Income Security Act of 1974) and related benefit matters.

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Retirement Plans

We help establish a customized plan that meets regulatory requirements as a tax qualified plan. Following implementation, our attorneys can assist clients and their plan administrator with regular reviews and updates to help with regulatory compliance for the plan's operation, and continued effectiveness in meeting the client's specific goals.

ESOPs

We are dedicated to employee ownership. When you come to us for ESOP services, you receive influential legal counsel who stand beside you to help you stay informed, in compliance, and abreast of the latest developments-all to help you realize your plan goals as fully and effectively as possible.

QDROs

A QDRO is a specially designed court order that is required for the division of retirement benefits in a family law case. Many family law attorneys do not possess the expertise necessary to divide retirement benefits or stock options upon divorce. We have extensive experience in dividing qualified plans, government plans, IRAs and stock options between the employee spouse and non-employee spouse.

Butterfield Schechter LLP provides the information in this website as a service to its clients and visitors to the site. This website is for information purposes only and is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The information in this website is provided "as is," and while the information in this website is updated periodically, additional facts or future developments may affect subjects contained herein, and no guarantee is given that the information provided is correct, complete, or up-to-date. Seek the advice of professional counsel before acting or relying upon any article, form, or information in this web site. To ensure compliance with the requirements imposed by the United States Treasury and the Internal Revenue Service, we inform you that any federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of: (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another person any transaction or matter addressed herein. Butterfield Schechter LLP has endeavored to comply with all known legal and ethical requirements in compiling this website. In the event that this communication does not conform with any laws or regulations of any state or country in which it may be received, Butterfield Schechter LLP will not accept legal representation based on this communication from a person in such a state or country. Electronic mail is provided as a convenience in communicating with the attorneys at Butterfield Schechter LLP. Contact by e-mail does not alone create an attorney-client relationship. Please remember Internet e-mail is not secure and messages sent to the firm or any of its employees or attorneys should not contain sensitive or confidential information. Thank you for visiting our site.

Menu