An act to amend Section 7522.20 of, and to add Section 21354.6 to, the Government Code, relating to public employees’ retirement.

The people of the State of California do enact as follows:


SECTION 1.
Section 7522.20 of the Government Code is amended to read:
7522.20.
(a) Except as provided in subdivision (c) or (d), each retirement system that offers a defined benefit plan for nonsafety members of the system shall use the formula prescribed by this section. The defined benefit plan shall provide a pension at retirement for service equal to the percentage of the member’s final compensation set forth opposite the member’s age at retirement, taken to the preceding quarter year, in the following table, multiplied by the number of years of service in the system as a nonsafety member. A member may retire for service under this section after five years of service and upon reaching 52 years of age.
Age of Retirement
Fraction
52  ........................
1.000
52
1/4
........................
1.025
52
1/2
........................
1.050
52
3/4
........................
1.075
53  ........................
1.100
53
1/4
........................
1.125
53
1/2
........................
1.150
53
3/4
........................
1.175
54  ........................
1.200
54
1/4
........................
1.225
54
1/2
........................
1.250
54
3/4
........................
1.275
55  ........................
1.300
55
1/4
........................
1.325
55
1/2
........................
1.350
55
3/4
........................
1.375
56  ........................
1.400
56
1/4
........................
1.425
56
1/2
........................
1.450
56
3/4
........................
1.475
57  ........................
1.500
57
1/4
........................
1.525
57
1/2
........................
1.550
57
3/4
........................
1.575
58  ........................
1.600
58
1/4
........................
1.625
58
1/2
........................
1.650
58
3/4
........................
1.675
59  ........................
1.700
59
1/4
........................
1.725
59
1/2
........................
1.750
59
3/4
........................
1.775
60  ........................
1.800
60
1/4
........................
1.825
60
1/2
........................
1.850
60
3/4
........................
1.875
61  ........................
1.900
61
1/4
........................
1.925
61
1/2
........................
1.950
61
3/4
........................
1.975
62  ........................
2.000
62
1/4
........................
2.025
62
1/2
........................
2.050
62
3/4
........................
2.075
63  ........................
2.100
63
1/4
........................
2.125
63
1/2
........................
2.150
63
3/4
........................
2.175
64  ........................
2.200
64
1/4
........................
2.225
64
1/2
........................
2.250
64
3/4
........................
2.275
65  ........................
2.300
65
1/4
........................
2.325
65
1/2
........................
2.350
65
3/4
........................
2.375
66  ........................
2.400
66
1/4
........................
2.425
66
1/2
........................
2.450
66
3/4
........................
2.475
67  ........................
2.500
(b) Pensionable compensation used to calculate the defined benefit shall be limited as described in Section 7522.10.
(c) A new member of the State Teachers’ Retirement System shall be subject to the formula established pursuant to Section 24202.6 of the Education Code.
(d) With respect to new members, a public agency participating in the Public Employees’ Retirement System pursuant to contract may provide the formula established in Section 21354.6 in lieu of this section and subject to the requirements of Section 21354.6.
SEC. 2.
Section 21354.6 is added to the Government Code, to read:
21354.6.
(a)
Notwithstanding any other law, a contracting agency may make the formula provided in this section applicable to miscellaneous, nonsafety employees hired after January 1, 2017,
and who are otherwise new members as defined in Section 7522.04,
provided that the agency and representative employee organization have agreed to its application in a valid memorandum of understanding, the contracting agency adopts
a resolution or
an ordinance to this effect, and the agency’s contract is amended in the manner prescribed for approval of contracts or, in the case of a new contract, by express provision in the contract. The pension at retirement for service provided by this section shall be equal to the percentage of the member’s final compensation set forth opposite the member’s age at retirement, taken to the preceding quarter year, in the following table, multiplied by the number of years of service in the system as a nonsafety member. A member may retire for service under this section after five years of
state
service and upon reaching 55 years of
age.
age, except as provided in Section 21060.
Age of Retirement
Fraction
55  ........................
1.000
55
1/4
........................
1.025
55
1/2
........................
1.050
55
3/4
........................
1.075
56  ........................
1.100
56
1/4
........................
1.125
56
1/2
........................
1.150
56
3/4
........................
1.175
57  ........................
1.200
57
1/4
........................
1.225
57
1/2
........................
1.250
57
3/4
........................
1.275
58  ........................
1.300
58
1/4
........................
1.325
58
1/2
........................
1.350
58
3/4
........................
1.375
59  ........................
1.400
59
1/4
........................
1.425
59
1/2
........................
1.450
59
3/4
........................
1.475
60  ........................
1.500
60
1/4
........................
1.525
60
1/2
........................
1.550
60
3/4
........................
1.575
61  ........................
1.600
61
1/4
........................
1.625
61
1/2
........................
1.650
61
3/4
........................
1.675
62  ........................
1.700
62
1/4
........................
1.725
62
1/2
........................
1.750
62
3/4
........................
1.775
63  ........................
1.800
63
1/4
........................
1.825
63
1/2
........................
1.850
63
3/4
........................
1.875
64  ........................
1.900
64
1/4
........................
1.925
64
1/2
........................
1.950
64
3/4
........................
1.975
65  ........................
2.000
65
1/4
........................
2.025
65
1/2
........................
2.050
65
3/4
........................
2.075
66  ........................
2.100
66
1/4
........................
2.125
66
1/2
........................
2.150
66
3/4
........................
2.175
67  ........................
2.200
67
1/4
........................
2.225
67
1/2
........................
2.250
67
3/4
........................
2.275
68  ........................
2.300
68
1/4
........................
2.325
68
1/2
........................
2.350
68
3/4
........................
2.375
69  ........................
2.400
69
1/4
........................
2.425
69
1/2
........................
2.450
69
3/4
........................
2.475
70  ........................
2.500
(b) Unless otherwise permitted by law, a miscellaneous, nonsafety employee, who is not a new member as defined in Section 7522.04, shall be subject to the benefit formula in Section 7522.20 if employed by a public employer that did not contract with this system to provide retirement benefits on or before December 31, 2012.
(c) Pensionable compensation used to calculate the defined benefit pursuant to this section shall be limited as described in Section 7522.10.

Summary: The Public Employees’ Retirement Law authorizes a public agency to participate in, and make all or part of its employees members of, the Public Employees’ Retirement System (PERS) by a contract entered into between its governing body and the board of administration of the system. The California Public Employees’ Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas for employees first hired on or after January 1, 2013, as specified.
This bill would authorize a public agency that has contracted with the board of administration of PERS to offer an alternative formula from that required by PEPRA, to be applicable to miscellaneous, nonsafety employees hired after January 1, 2017,
and who are new members, as defined,
if specified contingencies are satisfied, including that the agency and representative employee organization have agreed to its application in a valid memorandum of understanding.
The bill would require that miscellaneous, nonsafety employees who are not new members, as defined, if they are employed by a public employer that did not contract with PERS prior to December 31, 2012, be covered by the default benefit formula under PEPRA. The bill would specify what is pensionable compensation for these purposes.