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California Public Employee Relations...since 1969
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Pocket Guide to the Public Employees’ Pension Reform Act

By Kerianne Steele
3rd edition, 2017

$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, third edition of our PEPRA guide covers the latest developments since the Act took effect in 2013.

The guide summarizes the Act and all amendments to date, clarifying terms and provisions; explains how PEPRA has changed California public employee retirement plans; and 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
  • Industrial disability retirement
  • Pensionable compensation
  • Creditable compensation
  • Retroactive benefit enhancement
  • Compensation earnable
  • Forfeiture for felony conviction
  • Purchase of service credit
  • And more

 

Contents

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’

5
    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
    E. Defined Benefit Plans That Are Lower Cost Than PEPRA Plans, and Defined Contribution Plans 16
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
            Non-California State University employees 23
    C. CalSTRS 25
        1. “2% at 62 members” 25
        2. “2% at 60 members” 26
    D. Independent Retirement Systems 28
        1. “New members” 28
        2. “Classic members” 28
    E. ’37 Act Systems     28
        1. “New members” 28
        2. “Classic members” 28
        3. Generally applicable provision 30
VI. Pensionable Compensation: ‘New Members’ Only 32
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 49
XII. No More ‘Pension Holidays’: Applies to All 51
XIII. ‘Sit Out’ Period Before Post-Retirement Employment 52
XIV. Forfeiture of Pension Benefits for Certain Felony Convictions: Applies to All 57
XV. Retiree Health Plan Vesting: Likely ‘New Members’/CalSTRS ‘2% at 62 Members’ Only 59
XVI. Industrial Disability Benefits: Applies to All CalPERS Safety Members 61
XVII. Retroactive Benefit Enhancement: Applies to All 62
XVIII. Legislative Retirement System (LRS): ‘New Members’ Only 62
XIX. Threat to Transit District Funding 65
XX. Statutes 69
    A. The California Public Employees’ Pension Reform Act of 2013 69
    B. Other Pertinent Government Code Sections 105
    C. Pertinent Education Code Sections 125
XXI. Glossary 141
XXII. Table of Cases 144
XXII. Index of Terms 146