- Pension Reform Update -
Public Employees' Pension Reform Act (PEPRA)
(to take effect January 1, 2013)
At the conclusion of this year’s State legislative session, the California Legislature passed, and Governor Brown signed, legislation implementing the California Public Employees’ Pension Reform Act of 2013, otherwise known as PEPRA. This legislation, AB 340 (Furutani) and AB 197 (Buchanan), two bills to enact the California Public Employees’ Pension Reform Act of 2013 (PEPRA), was passed on the final day of the legislative session, without much time for legislative review.
Key components of the legislation are as follows:
· Establishes PEPRA which will apply to all public employers and public pension plans on and after January 1, 2013 (Except specific exemptions);
· Establishes new retirement tiers/benefits for new public employees;
· Prohibits certain cash payments from being counted as compensation;
· Increases retirement age for all new public employees.
With the final language only having been available for a short period of time, full analysis of the provisions of AB 340 and AB 197 is presently underway - this will be a key issue for local government in the coming months.
Mendocino County established its retirement system under the provisions of the County Employees’ Retirement Law of 1937, and is commonly referred to as a “37 Act” county, along with 19 other fellow California counties. The Mendocino County Employees' Retirement Association (MCERA) is managed by a nine member Board of Directors and administered by the Retirement Administrator. The County of Mendocino, governed by the five member Board of Supervisors, is the plan sponsor.
Locally, a project team has been assembled including representatives from the Executive Office, County Counsel, Human Resources, Auditor/Controller, and the Retirement Association, to begin implementation planning. The first meeting of County officials was held on October 2. With the late passage of the legislation, and the impending implementation date of January 1, counties throughout the state are scurrying to develop local structures to implement the new tiers. Issues range from implementation of mandated General and Safety benefit formulas for new employees hired on or after January 1, 2013, as well as increased contributions for existing employees (on or before 2018). From both a policy perspective, and an operational view, the County has considerable work ahead to meet the January 1, implementation date.
Employee informational bulletins will be shared as developments unfold. An informational presentation, including an update on the previously agreed to study on a new retirement tier is scheduled before the Board on November 13.
Regular updates on local implementation measures will be included in the published CEO Reports, available online at:
Various resources pertaining to PEPRA implementation are listed below:
League of California Cities Pension Information Center
Institute for Local Government (ILG) - A Local Official's Guide to Pension Terminology
October 17, 2012, Employees' Retirement Association PowerPoint Presentation
November 7, 2012, Board of Retirement Meeting (Agenda Packet)
November 13, 2012, Board of Supervisors Presentation (Agenda Packet)
November 13, 2012, PowerPoint Presentation to the Board of Supervisors
December 11, 2012, Board Presentation Public Employees Pension Reform Action of 2013 (PEPRA):
- Choosing the New Tier - PowerPoint Presentation
- Draft Resolution Adopting New Tier
- Illustrative Comparisons
- CalPEPRA New Tier of Benefit - The Segal Company, Inc
- Implementation of Pension Reform in Mendocino County (November 13, 2012 Board Presentation by PEPRA Work Group)
- November 13, 2012 PEPRA Report to Board
- November 7, 2012 Mendocino County Retirement Board Material
Dates of Interest:
December 12, 2012 - Board of Retirement Meeting
December 2012 - Employee Informational Sessions (TBA)
(Created 10/11/12; Last Updated 11/15/12)