Download
pepra california public pension reform act n.
Skip this Video
Loading SlideShow in 5 Seconds..
“PEPRA” California Public Pension Reform Act PowerPoint Presentation
Download Presentation
“PEPRA” California Public Pension Reform Act

“PEPRA” California Public Pension Reform Act

209 Views Download Presentation
Download Presentation

“PEPRA” California Public Pension Reform Act

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. “PEPRA”California Public Pension Reform Act Public Employees’ Pensions: Sliced, Diced, Chopped & Cropped Bill Sokol Weinberg,Roger,& Rosenfeld

  2. Who Is Covered • 1. Does NOT include University of California or Charter City/County Plans • 2. Does cover CalPERS, CalSTRS, and ‘37 Act County Pension Plans • So – most public employees affected • 1.6 million CalPERS; 850,000 CalSTRS

  3. The Good, the Bad, the Uglyin No Particular Order • Compensation used for benefits calculation CAPPED • $110,100 if you receive Social Security • 120% of this if no Social Security ($132,120) • Adjusted each year by ConsumerPriceIndex(CPI) • But Legislature can override CPI • So even if you earn more, it will not be used to determine your pension • No contributing employer can have Plan w/ higher caps • This caps public pension totals • (Judges Retirement Systems I & II excluded from caps!)

  4. “New” Members • Most changes affect “new” employees only • 1. never in System before Jan 1, 2013 • 2. moves between Systems w/ 6 mon break in service • 3. moves between public employers in same system w/more than 6 mon break • Lower benefit plans already in existence can be offered to new employees • All DC’s already in existence can be offered to new employees

  5. DB Formulas for New Employees • Non-Safety, Non-Teachers (so mostly Miscellaneous Employees, the big category) • 1% at early retirement age of 52 • 2% at normal retirement age of 62 • 2.5% maximum at retirement age of 67 • CalSTRS • 2% at 62 • Early retirement at 55 • 2.4% maximum at retirement age of 67

  6. DB Formulas for New Ee’s (cont.) • Safety Employees (Fire, Police, DA’s, etc.) • 3 new plans for 2%, or 2.5%, or 2.7% @ 57

  7. Employee Contributions • Big “Hit”: • Employees must pay one-half of the normal cost of the DB Plan each year • Five years for Union to negotiate; after that, it locks in

  8. Employer Contributions • No suspension of contributions because Plan is full-funded or over-funded • In other words, No more pension contribution “holidays”

  9. Benefit Calculation • Final Compensation to be defined as “highest average compensation” over a three-year period • Excluded: • “spiking” to increase pensions • “in kind” comp converted to cash at end of work • One-time payments • Termination Pay • Unused Leave Pay • Pay for Work Outside Normal Hours • Uniform/Housing/Vehicle Allowances • Overtime (except “planned overtime”) • Bonuses

  10. Benefits (cont.) • Cannot provide better retiree health plan vesting for exempt than for represented ee’s • No “retroactive” benefit increases • No purchases of “air time” after Jan 1, 2013 • Officials elected after Jan 1, 2013 cannot base elected pension on prior public service • New employees in misc. Second Tier from 1.25% at 65 to 1.25% at 67

  11. Post-Retirement • No pension payments if retiree works more than 960 hours in any 12 consecutive months • If retiree receives unemployment benefits, cannot work for 12 months thereafter as retiree for public employer • Retiree appointed to salaried public Board after Jan 1, 2013 gets pension or salary, not both (exempt – Parole Board)

  12. Post-Retirement • Pension forfeited if convicted of felony connected to: • Carrying out official duties • Seeking public office • In connection with obtaining salary or benefits • (The “Bell, California” Clause)

  13. More on Benefits • Safety members who get Industrial Disability Retirement (IDR) under age 50 may get actuarially reduced benefit (sunsets in 2018) • Newly elected officials can be in CalPERS, but not in Legislators’ Retirement System • (ending the boondoggle “let’s take care of ourselves” System)