Public employee retirement: contributions.

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 that may not be exceeded by a public employer offering a defined benefit pension plan for employees first hired on or after January 1, 2013. PEPRA requires new employees of public employers, as specified, who participate in a defined benefit plan to have an initial contribution rate of at least 50% of the normal cost rate for that defined benefit plan, rounded to the nearest 14 of 1%, or the current contribution rate of similarly situated employees, whichever is greater. PEPRA prohibits an employer from paying the employee contribution. The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. The California Constitution exempts from that limit an additional ad valorem property tax rate for, among other things, indebtedness approved by the voters of the local entity prior to July 1, 1978, including pension programs. This bill would exempt a city or county that pays its pension costs with revenues from a property tax rate approved by its voters to make payments in support of pension programs and levied in addition to the general property tax rate, and that city's or county's employees, from the above-described prohibition on employer payment of employee contribution, with respect to an employee whose pension is funded by these revenues.