California Code of Regulations › Title 2 - Administration › Division 1 - Administrative Personnel › Chapter 2 - Board of Administration of Public Employees' Retirement System › Subchapter 1 - Employees' Retirement System Regulations › Article 4 - Contracts › Section 571 - Definition of Special Compensation

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The following list exclusively identifies
					 and defines special compensation items for members employed by contracting
					 agency and school employers that must be reported to CalPERS if they are
					 contained in a written labor policy or agreement:
(1) INCENTIVE PAY
Bonus -- Compensation to employees for superior
						performance such as "annual performance bonus" and "merit pay". If provided
						only during a member's final compensation period, it shall be excluded from
						final compensation as "final settlement" pay. A program or system must be in
						place to plan and identify performance goals and objectives.
Dictation/Shorthand/Typing Premium -- Compensation to
						clerical employees for shorthand, dictation or typing at a specified
						speed.
Longevity Pay -- Additional compensation to employees who
						have been with an employer, or in a specified job classification, for a certain
						minimum period of time exceeding five years.
Management Incentive Pay -- Compensation granted to
						management employees in the form of additional time off or extra pay due to the
						unique nature of their job. Employees within the group cannot have the option
						to take time off or receive extra pay. This compensation must be reported
						periodically as earned and must be for duties performed during normal work
						hours. This compensation cannot be for overtime, nor in lieu of other benefits
						excluded under the statutes, nor for special compensation not otherwise listed
						in this Section
						571.
Marksmanship Pay -- Compensation to local police
						officers, county peace officers and school police or security officers who meet
						an established criterion such as "certification" as a marksperson.
Master Police Officer -- Compensation to local police
						officers, county peace officers and school police or security officers who meet
						specified requirements, years of employment, performance standards, education,
						Peace Officer Standard Training (POST), and perform a specialty
						assignment.
Physical Fitness Program -- Compensation to local safety
						members and school security officers who meet an established physical fitness
						criterion.
Value of Employer-Paid Member Contributions (EPMC) -- The
						full monetary value of employer-paid member contributions (EPMC) paid to
						CalPERS and reported as an item of special compensation on behalf of all
						members in a group or class.
The value of EPMC is calculated on all "compensation
						earnable" excluding the special compensation of the monetary value of EPMC paid
						to CalPERS by the employer under Government Code section
						20636(c)(4),
						thus eliminating a perpetual calculation.
(A) A resolution or ordinance of the
					 governing body must be provided to CalPERS indicating the group or class,
					 effective date, and the percent or amount of EPMC being paid and reported as an
					 item of special compensation. The resolution or ordinance must be formally
					 adopted by the employer's governing body, and submitted to CalPERS for review
					 and approval.
(B) The resolution or
					 ordinance must specify that the value of EPMC will be reported as an item of
					 special compensation consistently, for all members in the affected group or
					 class of employment--except that the employer's governing body may elect a
					 "time-in-grade exception" which shall only apply to persons newly-hired into
					 the pertinent group or class of employment.
(C) To be classified as "newly-hired," a
					 member of the group or class must not have been previously hired or retained by
					 the employer in any capacity whatsoever.
(D) The time-in-grade exception must be
					 elected in the same resolution or ordinance, or by amendment thereto, as
					 adopted by the employer's governing body for the purpose of paying and
					 reporting the value of EPMC, pursuant to this Section
					 571. The exception can only be used
					 for the value of EPMC, and not for any other item of special compensation.
1. The time-in-grade exception must be
					 applied consistently to all newly-hired employees in the pertinent group or
					 class.
2. The time-in-grade
					 requirement may be incremental, not to exceed a total of five (5) years. For
					 example, the initial requirement may be three years for paying fifty percent
					 (50%) with increases of twenty-five percent (25%) for each additional year of
					 time-in-grade.
3. Once the initial
					 time-in-grade requirement has been met by a newly-hired employee, the employer
					 shall begin paying and reporting the value of EPMC for him or her to the same
					 extent as for all others in the pertinent group or class.
(E) To implement the time-in-grade exception,
					 the employer's governing body must acknowledge that it may experience an upward
					 adjustment to its employer contribution rate. The acknowledgment must be
					 included in the resolution or ordinance by which the employer's governing body
					 elected to pay and report EPMC as an item of special compensation, by adoption
					 or amendment thereto.
(F) The full
					 terms of the resolution or ordinance by which the employer's governing body
					 elects to pay and report the value of EPMC as an item of special
					 compensation--along with any time-in-grade exception for newly-hired
					 employees--must be incorporated into the written labor agreement that pertains
					 to the affected group or class of employment.
The time-in-grade exception from paying and reporting the
						value of EPMC as an item of special compensation pursuant to this Section
						571, is separate and apart from the
						time-in-grade exception from paying EPMC pursuant to Section
						569 of these regulations. Both of
						these exceptions are separate and apart from, nor do they apply to, the process
						for converting EPMC to payrate during the period of final compensation,
						pursuant to Section
						20692 of
						the Government Code.
Off-Salary-Schedule Pay -- Compensation in addition to
						base salary paid in similar lump-sum amounts to a group or class of employees.
						These payments are routinely negotiated through collective bargaining in lieu
						of increases to the salary schedule. These payments are based on a similar
						percent of scheduled salary not to exceed six percent (6%) per fiscal year. The
						contracting agency or school employer may adopt similar action for
						non-represented groups or classes of employment as were negotiated through
						collective bargaining.