Last week, CalPERS did something unusual: It wrote a retort to its critics. In an article titled “Critics Pick Their Facts but Ignore the Truth,” CalPERS responded to two editorials in two different newspapers. CalPERS called the editorial writers “serial critics of defined benefit plans” who “selectively mine the facts so they can advance their anti-pension platforms.”
An editorial ...
California Senate Bill 525, concerning public pensions, was signed into law in September and will take effect on January 1, 2018. The bill changes many provisions of the Government Code. Most of these revisions are minor “housekeeping” changes.
One substantial change affecting many public agencies is the amendment to Government Code section 20636, requiring public employers to report special ...
On October 2nd, Stanford University’s Institute for Economic Policy Research published a 193-page article summarizing “case studies” of 14 public entities—the State of California, three counties, six cities, three school districts, and one Special District (Bay Area Rapid Transit). The article, charting the entities’ past and predicted pension costs from fiscal years 2002-2003 to ...
On September 23rd, Governor Brown signed Assembly Bill No. 1309, which provides for assessments on employers that fail to report the hiring and payroll information of California Public Employees’ Retirement System (CalPERS) members working in retirement. The fine is 200 dollars per month for each annuitant employee the employer fails to report. The law will go into effect on January 1, 2018.
Details of ...
A new California appellate court decision affirmed the denial of retiree medical benefits and reinforced a 2011 California Supreme Court ruling that absent clear contractual language or convincing extrinsic evidence of intent, the presumption is that a Memorandum of Understanding (“MOU”) does not create rights that survive the term of the contract.
Specifically, the California Court of Appeal ...
In a case successfully litigated by this firm, an administrative law judge for the Public Employment Relations Board (“PERB”) determined a school employer was within its rights to enforce long-standing, but previously unenforced collective bargaining language that limited the community college district’s (“District”) contributions for post-retirement health benefits for retirees in ...
A recent Wall Street Journal article, “Ill-Funded Police Pensions Put Cities in a Bind,” discusses problems cities have experienced after cutting police pensions and other benefits.
According to the article, police and firefighter pensions are among the worst funded in the country, with a median of 71 cents for every dollar needed for future liabilities. In comparison, median funding for general ...
Today CalPERS reported a preliminary 11.2% net return on investments for the fiscal year ending June 30, 2017. This new figure brings CalPERS’ Total Fund performance to 8.8% for the past five years, 4.4% for the past ten years, and 6.6% for the past 20 years.
Applying a seven percent discount rate (also known as the assumed rate of return), CalPERS estimates it is now 68% funded, a three percent increase from the ...
On June 5, 2017, the California Court of Appeal published DiCarlo v. County of Monterey, holding that employees’ stipends that depended on both longevity and performance were properly excluded from the calculation of public pension benefits. The Court of Appeal ruled that although the California Code of Regulations separately lists bonus pay and longevity pay as special compensation to be included in pension calculations, it does not list incentive pay that combines bonus pay and longevity pay. Therefore, the stipends at issue did not need to be reported to CalPERS or included in CalPERS’ calculation of retirement benefit. For a more detailed analysis of this case.
In response to CalPERS’ recent and unprecedented decisions to reduce benefits for retirees from several public agencies that failed to make their required contributions to CalPERS, California Assembly member Freddie Rodriguez (D) and California Senator Richard Pan (D) have scheduled an informational hearing on the subject of “CalPERS Contracting with Participating Employers (Cities, Towns ...
Other AALRR Blogs
- CalPERS Health Plan Premiums Announced for 2021
- CalPERS Misses Annual Investment Target with a 4.7 Percent Net Return
- “California Rule” Survives (For Now) — But “Airtime” Does Not
- Be Cautious About “DROP” Programs
- California Supreme Court Hears Cal Fire Oral Argument
- Amortization Period for New Debt Shortened to 20 Years
- New CalPERS Compensation Limits, Effective Immediately
- CalPERS Responds to Its Critics
- Senate Bill 525 Amends California Public Pension Laws
- New Stanford University Study Predicts Public Pensions Costs in California to Consume 14-17.5% of Operating Expenses by the Year 2030