Pocket Guide to the Public Employees'
Pension Reform Act
By Kerianne Steele
2nd edition, 2015
The far-reaching Public Employees' Pension Reform Act radically transformed the legal landscape regarding public employee pensions.
CPER's new, second edition of our PEPRA guide covers the latest developments since the Act took effect in 2013.
New legislation helps to clarify and reconcile vague and conflicting provisions in the law, better aligns existing law with the provisions of the Act, and in some respects substantially amends PEPRA's terms.
In addition to summarizing these changes, CPER's second edition covers recent court decisions and new guidance memoranda from some of the public retirement systems. The PEPRA guide also includes the statutory language of the Act, pertinent Government Code and Education Code sections, a glossary of terms, and an index.
CPER's new edition is a must for all those who advise public employees and employers.
The guide explains these important areas:
|II. PEPRA Coverage||3|
|A. Retirement Systems That Are Included||3|
|B. Retirement Systems That Are Excluded||3|
|III. Two Main Categories of Employees:
'New Members' and 'Classic Members'
|A. “New Members”||5|
|2. CalPERS-participating employers, independent retirement systems, and ’37 Act systems||7|
|B. “Classic Members”||8|
|IV. Retirement Formula: 'New Members'/CalSTRS '2% at 62 Members' Only||11|
|B. State Employees||13|
|1. Miscellaneous and Industrial||13|
|C. CalPERS-Participating Employers, Independent Retirement Systems, and ’37 Act Systems||14|
|D. Judges’ Retirement Systems I and II||15|
|F. “Defined Benefit Plans That Are Lower Cost Than PEPRA Plans, and Defined Contribution Plans”||15|
|V. Employee Contributions Toward Retirement||17|
|A. CalPERS-Participating Local Agencies and School Employers||17|
|1. “New members”||17|
|2. “Classic members”||20|
|B. State Employees||22|
|1. “New members”||22|
|2. “Classic members”||22||California State University||22|
|1. "2% at 62 members"||25|
|2. "2% at 60 members"||26|
|D. Independent Retirement Systems||27|
|1. “New members”||27|
|2. “Classic members”||27|
|E. ’37 Act Systems||28|
|1. “New members”||28|
|2. “Classic members”||28||3. Generally applicable provision||30|
|VI. Pensionable Compensation: 'New Members' Only||31|
|VII. Creditable Compensation||36||A. CalSTRS "2% at 62 Members"||36||B. CalSTRS "2% at 60 Members"||39|
|VIII. Caps on Pensionable Compensation:'New Members'/CalSTRS '2% at 62 Members' Only||40|
|IX. 36-Month Final Compensation Period: 'New Members'/CalSTRS '2% at 62 Members' Only||43|
|X. Compensation Earnable: 'Classic Members' of ’37 Act Systems Only||45|
|XI. Ban on Purchase of 'Airtime': Applies to All||48|
|XII. No More 'Pension Holidays': Applies to All||50|
|XIII. 'Sit Out' Period Before Post-Retirement Employment||51|
|XIV. Forfeiture of Pension Benefits for Certain Felony Convictions: Applies to All||56|
|XV. Retiree Health Plan Vesting: Likely 'New Members'/CalSTRS '2% at 62 Members' Only||58|
|XVI. Industrial Disability Benefits: Applies to All CalPERS Safety Members||60|
|XVII. Retroactive Benefit Enhancement: Applies To All||61|
|XVIII. Legislative Retirement System (LRS): 'New Members' Only||63|
|XIX. Threat to Transit District Funding||64|
|A. The California Public Employees’ Pension Reform Act of 2013||68|
|B. Other Pertinent Government Code Sections||103|
|C. Pertinent Education Code Sections||121|
|XXII. Index of Terms||140|