California Legislature—2013–14 Regular Session

Assembly BillNo. 160

Introduced by Assembly Member Alejo

January 22, 2013

An act to amend Section 7522.04 of the Government Code, relating to public employees’ retirement.


AB 160, as introduced, Alejo. California Public Employees’ Pension Reform Act of 2013: exceptions.

The California Public Employees’ Pension Reform Act of 2013 (PEPRA), on and after January 1, 2013, requires a public retirement system, as defined, to modify its plan or plans to comply with the act, as specified. Among other things, PEPRA prohibits a public employer from offering a defined benefit pension plan exceeding specified retirement formulas, requires new members of public retirement systems to contribute at least a specified amount of the normal cost, as defined, for their defined benefit plans, and prohibits an enhancement of a public employee’s retirement formula or benefit adopted after January 1, 2013, from applying to service performed prior to the operative date of the enhancement.

This bill would except from PEPRA, by excepting from the definition of public retirement system, certain multiemployer plans authorized under federal law and retirement plans for public employees whose collective bargaining rights are protected by a specified provision of federal law.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1


Section 7522.04 of the Government Code is
2amended to read:



For the purposes of this article:

4(a) “Defined benefit formula” means a formula used by the
5retirement system to determine a retirement benefit based on age,
6years of service, and pensionable compensation earned by an
7employee up to the limit defined in Section 7522.10.

8(b) “Employee contributions” means the contributions to a public
9retirement system required to be paid by a member of the system,
10as fixed by law, regulation, administrative action, contract, contract
11amendment, or other written agreement recognized by the
12retirement system as establishing an employee contribution.

13(c) “Federal system” means the old age, survivors, disability,
14and health insurance provisions of the federal Social Security Act
15(42 U.S.C. Sec. 301 et seq.).

16(d) “Member” means a public employee who is a member of
17any type of a public retirement system or plan.

18(e) “New employee” means either of the following:

19(1) An employee, including one who is elected or appointed, of
20a public employer who is employed for the first time by any public
21employer on or after January 1, 2013, and who was not employed
22by any other public employer prior to that date.

23(2) An employee, including one who is elected or appointed, of
24a public employer who is employed for the first time by any public
25employer on or after January 1, 2013, and who was employed by
26another public employer prior to that date, but who was not subject
27to reciprocity under subdivision (c) of Section 7522.02.

28(f) “New member” means any of the following:

29(1) An individual who becomes a member of any public
30retirement system for the first time on or after January 1, 2013,
31and who was not a member of any other public retirement system
32prior to that date.

33(2) An individual who becomes a member of a public retirement
34system for the first time on or after January 1, 2013, and who was
35a member of another public retirement system prior to that date,
36but who was not subject to reciprocity under subdivision (c) of
37Section 7522.02.

P3    1(3) An individual who was an active member in a retirement
2system and who, after a break in service of more than six months,
3returned to active membership in that system with a new employer.
4For purposes of this subdivision, a change in employment between
5state entities or from one school employer to another shall not be
6considered as service with a new employer.

7(g) “Normal cost” means the portion of the present value of
8projected benefits under the defined benefit that is attributable to
9the current year of service, as determined by the public retirement
10system’s actuary according to the most recently completed

12(h) “Public employee” means an officer, including one who is
13elected or appointed, or an employee of a public employer.

14(i) “Public employer” means:

15(1) The state and every state entity, including, but not limited
16to, the Legislature, the judicial branch, including judicial officers,
17and the California State University.

18(2) Any political subdivision of the state, or agency or
19instrumentality of the state or subdivision of the state, including,
20but not limited to, a city, county, city and county, a charter city, a
21charter county, school district, community college district, joint
22powers authority, joint powers agency, and any public agency,
23authority, board, commission, or district.

24(3) Any charter school that elects or is required to participate
25in a public retirement system.

26(j) begin insert(1)end insertbegin insertend insert “Public retirement system” means any pension or
27retirement system of a public employer, including, but not limited
28to, an independent retirement plan offered by a public employer
29that the public employer participates in or offers to its employees
30for the purpose of providing retirement benefits, or a system of
31benefits for public employees that is governed by Section 401(a)
32of Title 26 of the United States Code.

begin insert

33(2) “Public retirement system” does not include:

end insert
begin insert

34(A) A multiemployer plan authorized by Section 302(c)(5) of
35the Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) if the public
36employer began participation in that plan prior to January 1, 2013,
37and that plan is regulated by the Employee Retirement Income
38Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.).

end insert
begin insert

39(B) A retirement plan for public employees whose collective
40bargaining rights are protected by Section 5333(b) of Title 49 of
P4    1the United States Code and the agreements entered pursuant to
2that provision.

end insert