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Pocket Guide to the Public Employees' Pension Reform Act

By Kerianne Steele
2nd edition, 2015

$27 each

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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:

  • New members and classic members
  • New retirement formulas for defined contribution plans
  • Employer and member contributions toward retirement
  • Health plan vesting
  • ndustrial disability retirement
  • ensionable compensation
  • Creditable compensation
  • Retroactive benefit enhancement
  • Compensation earnable
  • Forfeiture for felony conviction
  • Purchase of service credit
  • And more



I. Introduction1
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
          1. CalSTRS 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
    A. CalSTRS 12
    B. State Employees 13
          1. Miscellaneous and Industrial 13
          2. Safety 14
    C. CalPERS-Participating Employers, Independent Retirement Systems, and ’37 Act Systems 14
          1. Non-safety 14
          2. Safety 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
    C. CalSTRS 25
          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
XX. Statutes 68
    A. The California Public Employees’ Pension Reform Act of 2013 68
    B. Other Pertinent Government Code Sections 103
    C. Pertinent Education Code Sections 121
XXI. Glossary 137
XXII. Index of Terms 140