AB 2468, as amended, 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,begin insert and who are new members, as defined,end insert if specified contingencies are satisfied, including that the agency and representative employee organization have agreed to its application in a valid memorandum of understanding.begin insert The bill would require that miscellaneous, nonsafety employees who are not new members, as defined, if they are employed by a public employer that did not contract with PERS prior to December 31, 2012, be covered by the default benefit formula under PEPRA. The bill would specify what is pensionable compensation for these purposes.end insert
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 7522.20 of the Government Code is
2amended to read:
(a) Except as provided in subdivision (c) or (d), each
4retirement system that offers a defined benefit plan for nonsafety
5members of the system shall use the formula prescribed by this
6section. The defined benefit plan shall provide a pension at
7retirement 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.
Age of Retirement | Fraction |
52 | 1.000 |
521⁄4 |
1.025 |
521⁄2 |
1.050 |
523⁄4 |
1.075 |
53 |
1.100 |
531⁄4 |
1.125 |
531⁄2 |
1.150 |
533⁄4 |
1.175 |
54 |
1.200 |
541⁄4 |
1.225 |
541⁄2 |
1.250 |
543⁄4 |
1.275 |
55 |
1.300 |
551⁄4 |
1.325 |
551⁄2 |
1.350 |
553⁄4 |
1.375 |
56 |
1.400 |
561⁄4 |
1.425 |
561⁄2 |
1.450 |
563⁄4 |
1.475 |
57 |
1.500 |
571⁄4 |
1.525 |
571⁄2 |
1.550 |
573⁄4 |
1.575 |
58 |
1.600 |
581⁄4 |
1.625 |
581⁄2 |
1.650 |
583⁄4 |
1.675 |
59 |
1.700 |
591⁄4 |
1.725 |
591⁄2 |
1.750 |
593⁄4 |
1.775 |
60 |
1.800 |
601⁄4 |
1.825 |
601⁄2 |
1.850 |
603⁄4 |
1.875 |
61 |
1.900 |
611⁄4 |
1.925 |
611⁄2 |
1.950 |
613⁄4 |
1.975 |
62 |
2.000 |
621⁄4 |
2.025 |
621⁄2 |
2.050 |
623⁄4 |
2.075 |
63 |
2.100 |
631⁄4 |
2.125 |
631⁄2 |
2.150 |
633⁄4 |
2.175 |
64 |
2.200 |
641⁄4 |
2.225 |
641⁄2 |
2.250 |
643⁄4 |
2.275 |
65 |
2.300 |
651⁄4 |
2.325 |
651⁄2 |
2.350 |
653⁄4 |
2.375 |
66 |
2.400 |
661⁄4 |
2.425 |
661⁄2 |
2.450 |
663⁄4 |
2.475 |
67 |
2.500 |
P4 6(b) Pensionable compensation used to calculate the defined
7benefit shall be limited as described in Section 7522.10.
8(c) A new member of the State Teachers’ Retirement System
9shall be subject to the formula established pursuant to Section
1024202.6 of the Education Code.
11(d) With respect to new members, a public agency participating
12in the Public Employees’ Retirement System pursuant to contract
13may provide the formula established in Section 21354.6 in lieu of
14this section and subject to the requirements of Section 21354.6.
Section 21354.6 is added to the Government Code, to
16read:
begin insert(a)end insertbegin insert end insertNotwithstanding any other law, a contracting
18agency may make the formula provided in this section applicable
19to miscellaneous, nonsafety employees hired after January 1, 2017,
20begin insert and who are otherwise new members as defined in Section 7522.04,end insert
21 provided that the agency and representative employee organization
22have agreed to its application in a valid memorandum of
23understanding, the contracting agency adoptsbegin insert
a resolution orend insert an
24ordinance to this effect, and the agency’s contract is amended in
25the manner prescribed for approval of contracts or, in the case of
26a new contract, by express provision in the contract. The pension
27at retirement for service provided by this section shall be equal to
28the percentage of the member’s final compensation set forth
29opposite the member’s age at retirement, taken to the preceding
30quarter year, in the following table, multiplied by the number of
31years of service in the system as a nonsafety member. A member
32may retire for service under this section after five years ofbegin insert stateend insert
33 service and upon reaching 55 years ofbegin delete age.end deletebegin insert
age, except as provided
34in Section 21060.end insert
Age of Retirement | Fraction |
55 | 1.000 |
551⁄4 |
1.025 |
551⁄2 |
1.050 |
553⁄4 |
1.075 |
56 |
1.100 |
561⁄4 |
1.125 |
561⁄2 |
1.150 |
563⁄4 |
1.175 |
57 |
1.200 |
571⁄4 |
1.225 |
571⁄2 |
1.250 |
573⁄4 |
1.275 |
58 |
1.300 |
581⁄4 |
1.325 |
581⁄2 |
1.350 |
583⁄4 |
1.375 |
59 |
1.400 |
591⁄4 |
1.425 |
591⁄2 |
1.450 |
593⁄4 |
1.475 |
60 |
1.500 |
601⁄4 |
1.525 |
601⁄2 |
1.550 |
603⁄4 |
1.575 |
61 |
1.600 |
611⁄4 |
1.625 |
611⁄2 |
1.650 |
613⁄4 |
1.675 |
62 |
1.700 |
621⁄4 |
1.725 |
621⁄2 |
1.750 |
623⁄4 |
1.775 |
63 |
1.800 |
631⁄4 |
1.825 |
631⁄2 |
1.850 |
633⁄4 |
1.875 |
64 |
1.900 |
641⁄4 |
1.925 |
641⁄2 |
1.950 |
643⁄4 |
1.975 |
65 |
2.000 |
651⁄4 |
2.025 |
651⁄2 |
2.050 |
653⁄4 |
2.075 |
66 |
2.100 |
661⁄4 |
2.125 |
661⁄2 |
2.150 |
663⁄4 |
2.175 |
67 |
2.200 |
671⁄4 |
2.225 |
671⁄2 |
2.250 |
673⁄4 |
2.275 |
68 |
2.300 |
681⁄4 |
2.325 |
681⁄2 |
2.350 |
683⁄4 |
2.375 |
69 |
2.400 |
691⁄4 |
2.425 |
691⁄2 |
2.450 |
693⁄4 |
2.475 |
70 |
2.500 |
P6 19
(b) Unless otherwise permitted by law, a miscellaneous,
20nonsafety employee, who is not a new member as defined in Section
217522.04, shall be subject to the benefit formula in Section 7522.20
22if employed by a public employer that did not
contract with this
23system to provide retirement benefits on or before December 31,
242012.
25
(c) Pensionable compensation used to calculate the defined
26benefit pursuant to this section shall be limited as described in
27Section 7522.10.
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