Employee Relations 09/14/2012
Governor Signs Pension Reform Bills
Governor Brown on Wednesday signed two bills into
law aimed at reforming public pension systems.
AB 340 makes several changes to the pension benefits that may be offered to employees hired on or after January 1, 2013, including setting a new maximum benefit, a lower-cost pension formula for safety and non-safety employees with requirements to work longer in order to reach full retirement age and a cap on the amount used to calculate a pension. Among other things, AB 340 also enacts pension spiking reform for new and existing employees, requires three-year averaging of final compensation for new employees, and provides counties with new authority to negotiate cost-sharing agreements with current employees. AB 340 also contains limitations on the use of retired annuitants, requiring that an annuitant have a six-month break in service prior to returning to work. Public safety officers and firefighters are exempted from the annuitant restrictions and a retiree can return to work for the county prior to the six month break, if approved by the Board of Supervisors in a public meeting. AB 197 contains corrections to two drafting errors discovered in AB 340.
For a more detailed analysis of the bills, please click here.