State employees: benefits: retirement.

(1) The Public Employees' Retirement Law (PERL) provides a comprehensive set of rights and benefits based upon age, service credit, and final compensation. Existing law defines final compensation variously for different member classifications and bargaining units and, in this regard, defines final compensation for a state member for the purpose of calculating retirement benefits as the highest annual average compensation earnable by the member during a designated 12-month or 36-month period, depending upon the bargaining unit and classification of that employee. Currently the final compensation for members hired on or after July 1, 2006, who are represented by State Bargaining Units 12, 16, 18, and 19, and for members hired on and after October 31, 2010, who are represented by State Bargaining Units 5 and 8 means the final compensation earnable by the member during a designated 36-month period. This bill would provide that final compensation for a person who becomes a state member, as specified, on or after January 15, 2011, and who is represented by State Bargaining Unit 6, 7, or 9, or who is an excluded employee, legislative employee, judicial branch employee, or an employee of California State University, means the highest annual average compensation earnable by the member during a designated 36-month period. (2) PERL establishes various retirement formulas that apply to specified membership categories. Under PERL, state miscellaneous members are generally subject to a retirement formula commonly known as 2% at 55, which, if the member retires at 55 years of age, yields a benefit equal to 2% of the member's final compensation multiplied by the member's years of service credit, as specified. Under PERL, state miscellaneous members represented by specified bargaining units who are first employed on and after September 1, 2010, are subject to a 2% at 60 retirement formula. Under PERL, patrol members and specified state peace officer/firefighter members are subject to a 3% at 50 retirement formula, with the exception of patrol members and firefighters who are members of State Bargaining Units 5 and 8, first employed on and after October 31, 2010, who are subject to a 3% at 55 retirement formula. Under PERL, safety members employed by the state and the California State University are generally subject to a 2.5% at age 55 retirement formula. This bill would provide that all state miscellaneous members, who are first employed on and after January 15, 2011, are subject to a 2% at 60 retirement formula, but would provide that the change would not apply if there is a current memorandum of understanding that provides a different formula only for the period that the memorandum of understanding is in effect. The bill would provide that peace officer/firefighter members of State Bargaining Units 6 and 7 and state, legislative, judicial branch, and California State University peace officers who are first employed on and after January 15, 2011, are subject to a 2.5% at 55 retirement formula, but would provide that the change would not apply if there is a current memorandum of understanding that provides a different formula only for the period that the memorandum of understanding is in effect. This bill would provide that safety members who are first employed by the state and the California State University on and after January 15, 2011, are subject to a 2% at age 55 retirement formula, but would provide that the change would not apply if there is a current memorandum of understanding that provides a different formula only for the period that the memorandum of understanding is in effect.