Public employees' retirement benefits.

The bill's title changed from 'Public employees' retirement benefits: safety members' to 'Public employees' retirement benefits,' broadening the stated scope beyond just safety members.

Senator Cortese was added as a coauthor alongside Senators Gonzalez, Grayson, and Perez.

The pensionable compensation cap for service on or after January 1, 2027 was changed from a requirement that systems 'adjust limits to be consistent with' federal law to a direct prohibition: pensionable compensation shall not exceed 100 percent of the federal contribution and benefit base (Section 430(b) of Title 42 U.S. Code) for members whose service is included in the federal system, or 135 percent for members whose service is not included in the federal system.

The safety formula transition requirement was made more prescriptive. Previously employers had to offer 'one of the 3 formulas...that is closest to' the matching formula; now they must offer 'the formula that has the same fraction at age 55 as the fraction at age 57' in their existing formula, removing the flexibility to choose among multiple options.

Multiple drafting errors were corrected throughout, including removal of duplicated section references (e.g., '7522.20 or 7522.25 7522.20' corrected to '7522.20, 7522.25'), removal of a stray 'The' at the start of Section 7522.10(c)(1), and correction of 'any other law, provision of this article' to 'any other provision of this article' in Section 7522.19(a).

The compensation cap percentage for STRS members whose service is not included in the federal system appears to change from 135 percent to 120 percent (the amended text reads 'One hundred thirty-five twenty percent,' which is likely a markup rendering of replacing 'thirty-five' with 'twenty'). This would reduce the amount of compensation that counts toward pension benefits for affected teachers.

Changed 'pursuant to subdivisions (h) or (i)' to 'pursuant to subdivision (h) or (i)' in two places, a grammatical correction from plural to singular.

Corrected a cross-reference from 'paragraph (1) (1)' to 'paragraph (1)' in the joint powers authority provision for Orange County cities, removing a duplicated reference number.

The bill text is now rendered within a web page layout that includes navigation menus (home, accessibility, FAQ, feedback, sitemap, login), search fields (Bill Number, Bill Keyword), version history links, and tracking features. The formal document formatting with line numbers and page headers has been replaced by this interface.

The effective date for the new safety member retirement formulas (2.5% at age 55, 2.7% at age 55, or 3% at age 55) and the compensation cap adjustment is delayed from January 1, 2026 to January 1, 2027.

The pensionable compensation limit for members whose service is not included in the federal system increases from 120% to 135% of the contribution and benefit base under Section 430(b) of Title 42 U.S. Code, allowing higher salaries to count toward pension calculations.

A new provision requires that a new member of the State Teachers' Retirement System (STRS) be subject to the limit established in subdivision (d) of Section 22119.3 or subdivision (c) of Section 26139.5 of the Education Code, extending the bill's compensation cap framework to teachers.

The collective bargaining provision in new Section 7522.19 is narrowed from allowing negotiation of benefit formula increases for 'members and new members' generally to specifically 'safety members and new safety members.'

Section 7522.30 is removed from the list of sections being amended in the bill's title, narrowing the statutory changes.

The appropriation language is expanded to note that the bill increases both contributions to and expenditures from continuously appropriated funds, not just contributions.

All provisions related to car washing and polishing industry labor law reporting (former Labor Code Section 2068) were removed from the bill.

A new Section 1 adds legislative findings justifying the changes, citing firefighter cancer risks, recruitment and retention challenges for safety personnel, and the need to align the compensation cap with federal limits.

New Government Code Section 7522.26 establishes four safety member pension formulas effective January 1, 2026: Basic Safety Plan (2% at age 55), Safety Option Plan One (2.5% at age 55), Safety Option Plan Two (2.7% at age 55), and a new Safety Option Plan Three (3% at age 55 with a 90% final compensation benefit cap). The retirement age drops from 57 to 55 for all formulas.

New Government Code Section 7522.19 authorizes public employers and recognized employee organizations to negotiate prospective increases to retirement benefit formulas through collective bargaining, consistent with formulas permitted under the act.

Employers and employees may agree via collectively bargained MOU to move to a higher or lower safety plan. Lower plans cannot be imposed through impasse procedures, must apply only to members first employed on or after the effective date, and employers cannot provide different defined benefits to nonrepresented managerial or supervisory employees.

For safety members hired on or after January 1, 2013 but before 2026, service performed before 2026 remains under the old formula while service on or after January 1, 2026 uses the closest new formula. For new members hired on or after January 1, 2026, employers must offer formulas maintaining the same percentage of compensation factor as offered on December 31, 2025.

Government Code Section 7522.30 is amended to allow employers and employees, through collective bargaining on or after January 1, 2026, to agree in a memorandum of understanding where the employer pays a portion of the employee contribution rate. Previously, employers were prohibited from paying any of the required employee contribution.

Existing Section 7522.25 (current safety formulas) is limited to service performed between January 1, 2013, and December 31, 2025, effectively sunsetting it in favor of the new Section 7522.26 formulas.

A new Section 7 adds a savings clause stating the act shall not be construed to affect retirement benefits or pension rights accrued before its effective date.

Entirely new Section 1 amending Government Code 7522.10 to require public retirement systems to adjust pensionable compensation limits on and after January 1, 2026 to be consistent with the defined benefit rate under IRC 415(b)(1)(A), as adjusted annually. This replaces the prior mechanism of using a fixed percentage (100% or 120%) of the 2013 contribution and benefit base adjusted by CPI.

The bill's title and scope expanded from solely relating to private employment (car washing/polishing reporting) to also covering public employees' retirement benefits and making an appropriation.

The bill now makes an appropriation to continuously appropriated funds, changed from 'no' to 'yes' in the legislative digest. This is because increasing contributions to PERS constitutes an appropriation under state law.

New subdivision (c)(2) of Government Code 7522.10 requires annual adjustment of pensionable compensation limits to track the federal defined benefit limit, effective January 1, 2026. This means the cap on salary that counts toward a public employee's pension will now move with federal tax law rather than being tied to a 2013 baseline.