Public Employees' Retirement System: contracting agencies: benefit formulas.

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.