California Legislature—2015–16 Regular Session

Assembly BillNo. 2468


Introduced by Assembly Member Hadley

February 19, 2016


An act to amend Section 7522.20 of, and to add Section 21354.6 to, the Government Code, relating to public employees’ retirement.

LEGISLATIVE COUNSEL’S DIGEST

AB 2468, as introduced, Hadley. Public Employees’ Retirement System: contracting agencies: benefit formulas.

The Public Employees’ Retirement Law authorizes a public agency to participate in, and make all or part of its employees members of, the Public Employees’ Retirement System (PERS) by a contract entered into between its governing body and the board of administration of the system. The California Public Employees’ Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas for employees first hired on or after January 1, 2013, as specified.

This bill would authorize a public agency that has contracted with the board of administration of PERS to offer an alternative formula from that required by PEPRA, to be applicable to miscellaneous, nonsafety employees hired after January 1, 2017, if specified contingencies are satisfied, including that the agency and representative employee organization have agreed to its application in a valid memorandum of understanding.

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 1.  

Section 7522.20 of the Government Code is
2amended to read:

3

7522.20.  

(a) begin deleteEach end deletebegin insertExcept as provided in subdivision (c) or
4(d), each end insert
retirement system that offers a defined benefit plan for
5nonsafety members of the system shall use the formula prescribed
6by this section. The defined benefit plan shall provide a pension
7at retirement for service equal to the percentage of the member’s
8final compensation set forth opposite the member’s age at
9retirement, taken to the preceding quarter year, in the following
10table, multiplied by the number of years of service in the system
11as a nonsafety member. A member may retire for service under
12this section after five years of service and upon reaching 52 years
13of age.


14

 

Age of RetirementFraction

52   

1.000

5214   

1.025

5212   

1.050

5234   

1.075

53   ......

1.100

5314   

1.125

5312   

1.150

5334   

1.175

54   

1.200

5414   

1.225

5412   

1.250

5434   

1.275

55   

1.300

5514   

1.325

5512   

1.350

5534   

1.375

56   

1.400

5614   

1.425

5612   

1.450

5634   

1.475

57   

1.500

5714   

1.525

5712   

1.550

5734   

1.575

58   

1.600

5814   

1.625

5812   

1.650

5834   

1.675

59   

1.700

5914   

1.725

5912   

1.750

5934   

1.775

60   

1.800

6014   

1.825

6012   

1.850

6034   

1.875

61   

1.900

6114   

1.925

6112   

1.950

6134   

1.975

62   

2.000

6214   

2.025

6212   

2.050

6234   

2.075

63   

2.100

6314   

2.125

6312   

2.150

6334   

2.175

64   

2.200

6414   

2.225

6412   

2.250

6434   

2.275

65   

2.300

6514   

2.325

6512   

2.350

6534   

2.375

66   

2.400

6614   

2.425

6612   

2.450

6634   

2.475

67   

2.500

 

P4    1(b) Pensionable compensation used to calculate the defined
2benefit shall be limited as described in Section 7522.10.

3(c) A new member of the State Teachers’ Retirement System
4shall be subject to the formula established pursuant to Section
524202.6 of the Education Code.

begin insert

6(d) With respect to new members, a public agency participating
7in the Public Employees’ Retirement System pursuant to contract
8may provide the formula established in Section 21354.6 in lieu of
9this section and subject to the requirements of Section 21354.6.

end insert
10

SEC. 2.  

Section 21354.6 is added to the Government Code, to
11read:

12

21354.6.  

Notwithstanding any other law, a contracting agency
13may make the formula provided in this section applicable to
14miscellaneous, nonsafety employees hired after January 1, 2017,
15provided that the agency and representative employee organization
16have agreed to its application in a valid memorandum of
17understanding, the contracting agency adopts an ordinance to this
18effect, and the agency’s contract is amended in the manner
19prescribed for approval of contracts or, in the case of a new
20contract, by express provision in the contract. The pension at
21retirement for service provided by this section shall be equal to
22the percentage of the member’s final compensation set forth
23opposite the member’s age at retirement, taken to the preceding
24quarter year, in the following table, multiplied by the number of
25years of service in the system as a nonsafety member. A member
26may retire for service under this section after five years of service
27and upon reaching 55 years of age.


28

 

Age of RetirementFraction

55   

1.000

5514   

1.025

5512   

1.050

5534   

1.075

56   ......

1.100

5614   

1.125

5612   

1.150

5634   

1.175

57   

1.200

5714   

1.225

5712   

1.250

5734   

1.275

58   

1.300

5814   

1.325

5812   

1.350

5834   

1.375

59   

1.400

5914   

1.425

5912   

1.450

5934   

1.475

60   

1.500

6014   

1.525

6012   

1.550

6034   

1.575

61   

1.600

6114   

1.625

6112   

1.650

6134   

1.675

62   

1.700

6214   

1.725

6212   

1.750

6234   

1.775

63   

1.800

6314   

1.825

6312   

1.850

6334   

1.875

64   

1.900

6414   

1.925

6412   

1.950

6434   

1.975

65   

2.000

6514   

2.025

6512   

2.050

6534   

2.075

66   

2.100

6614   

2.125

6612   

2.150

6634   

2.175

67   

2.200

6714   

2.225

6712   

2.250

6734   

2.275

68   

2.300

6814   

2.325

6812   

2.350

6834   

2.375

69   

2.400

6914   

2.425

6912   

2.450

6934   

2.475

70   

2.500

 



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