CA Public Pensions Law Blog

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 ...

On May 28, in one of his final articles after 33 years and 9,000 columns at the Sacramento Bee, state political columnist Dan Walters opined in “Growing Retirement Costs Are Hitting New State Budget Hard” that although the 2017-18 budget proposed by Governor Jerry Brown references the large impact of pension liabilities, it still minimizes this impact.

Walters summarized how the proposed budget ...

Last week, CalPERS issued Circular Letters informing school and state employers of their expected contribution rates for the 2017-18 fiscal year. These rates go into effect with the first payroll period that ends in July 2017.

School Employers

School employers will contribute 15.531% of compensation, an increase from the current 13.888%. Total contributions will rise from nearly $1.7 billion to $2 ...

As reported by the Sacramento Bee, last week the California Senate’s Public Employment and Retirement Committee voted down by a three-two margin Senate Bill 32, which had been aimed at reducing public pensions’ unfunded liabilities. Republican Senator John Moorlach from Costa Mesa brought the bill; many union representatives testified against it.

SB 32 was modeled after last year’s climate change ...