Bill 340

The Public Employees’ Retirement Law (PERL) establishes the Public Employees’ Retirement System (PERS) and the Teachers’ Retirement Law establishes the State Teachers’ Retirement System (STRS) for the purpose of providing pension benefits to specified public employees. Existing law also establishes the Judges’ Retirement System II which provides pension benefits to elected judges and the Legislators’ Retirement System which provides pension benefits to elective officers of the state other than judges and to legislative statutory officers. The County Employees Retirement Law of 1937 authorizes counties to establish retirement systems pursuant to its provisions in order to provide pension benefits to county, city, and district employees.

This bill would require a public retirement system, as defined, to modify its plan or plans to comply with this act. The bill would establish new retirement formulas that could not be exceeded by a public employer offering a defined benefit pension plan, setting the maximum benefit allowable for employees first hired on or after January 1, 2013, as a formula commonly known as 2.5% at age 67 for nonsafety members, one of 3 formulas for safety members, 2% at age 57, 2.5% at age 57, or 2.7% at age 57, and 1.25% at age 67 for new state miscellaneous or industrial members who elect to be in Tier 2. The amount of pensionable compensation upon which a defined benefit for new members, as defined, could be based would be limited to an amount determined under a specified provision of federal law for an employee whose service is included in the federal system, which is $110,100 for 2012, and 120% of that amount for an employee whose service is not included in the federal system. Those amounts would be adjusted annually, as specified. The bill would authorize an employer to contribute to a defined contribution plan, as specified.