Employee Relations update 4/11/2014
CalPERS Board to Approve Draft Regulations Defining Pensionable Comp Under PEPRA
The California Public Employees’ Retirement System (CalPERS) Board of Administration will next week vote to approve draft regulations that will define what is considered pensionable compensation and should be reported to CalPERS’ for a new member under the Public Employees’ Pension Reform Act of 2013 (PEPRA).
Counties will recall that Governor Brown signed Assembly Bill 340, part of PEPRA-implementing statute, into law, which, among other things, made 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. PEPRA also excluded specified payments from being reportable compensation. CalPERS was directed to draft regulations that would effectively implement and administer these provisions in PEPRA.
The draft regulations reflects staff’s decisions on:
Normal Monthly Rate of Pay vs. Base Pay: for the purposes of these regulations, “pensionable compensation” is limited to base pay.
State Inclusion: the regulations will apply to ALL new members (public agencies and state).
Temporary Upgrade Pay Compensation: the draft regulations allow temporary upgrade pay, since it alings with normal monthly rate of pay for services rendered, can be included as pensionable compensation.
Click here for the full regulations