3 New Laws Protecting CalPERS Employees Take Effect Jan 1
The California Public Employees Retirement System (CalPERS) was designed to provide retirement and health security for state workers. However, last year nearly 200 Southern California retirees lost a portion of their pensions last year, and didn’t know they were at risk until it was too late to do anything about it. Their benefits were reduced because their former employers stopped paying an amount due to CalPERS that covered a portion of CalPERS’ deficit. By the time the retirees heard from CalPERS, the inevitable decision for the pension fund to cut their benefits had already been made and was irreversible.
Reacting to this crisis, Governor Jerry Brown signed a number of laws relating to CalPERS in his final legislative session to help protect CalPERS members. While these new laws don’t entirely solve California’s public pension crisis, at least they provide some protection for retirees and a new way for local governments to manage their long-term CalPERS costs.
How Assembly Bill 1912 Affects CalPERS Members
AB 1912 keeps local governments from dissolving so-called joint powers authorities unless they commit to funding their full pension obligations. It was the result of a March, 2017 CalPERS decision to reduce the pensions owed to nearly 200 former East San Gabriel Valley Human Services Consortium employees. The consortium was initially established in 1979 to provide job training services; however, in 2014, it lost its contract with Los Angeles County, and folded shortly thereafter.
Generally, when an agency makes the decision to leave CalPERS, it makes a separation payment that is used to pay the full benefits promised to former workers. The East San Gabriel consortium, however, simply stopped making payments, without advising its former employees that it had done so. As a result, after eighteen months of non-payment, CalPERS reduced the value of the former employees’ pensions.
The bill signed by Governor Brown requires that workers in a similar situation be notified so that they would have time to pressure their employer to pay its obligations to CalPERS. The bill was backed by a number of cities, counties, school districts and the California Special Districts Association.
How Senate Bill 1022 Affects CalPERS Members
Gov. Brown signed SB 1022 into law in October. This law will at least ensure that public workers and retirees would have some time to protest if their former employer moves to break from CalPERS in a way that would jeopardize their incomes. SB 1022 requires government agencies to notify their workers and retirees within 30 days of adopting a resolution if they’re taking steps to quit CalPERS.
SB 1022 gives workers and retirees time to contact their employer and pressure them to remain in the fund or to make a separation payment that would guarantee that they receive full pensions.
How Senate Bill 1413 Affects CalPERS Members
SB 1413 allows government agencies to create “pre-funding” accounts for pensions that would enable them to weather sudden increases in CalPERS bills, as well as cope with a decrease in their own revenue. The new law allows an employer to set money aside in a separate trust managed by CalPERS. When CalPERS bills become due, money can be taken from this trust to satisfy the obligations the employer owes to CalPERS for its former employees’ retirement benefits.
CalPERs Disability Retirement Lawyers
The disability lawyers at Cantrell Green are among the few attorneys who understand and specialize in CalPERS disability benefits. If you are unsure if qualify for CalPERs disability retirement benefits, call our experienced lawyers today. We would be happy to help you determine your eligibility for disability retirement under the CalPERs system.
Free Consultation with a CalPERs Lawyer: 562-622-4800
This article applies to members of California Public Employees’ Retirement System (CalPERS); and does not reflect the rules, laws or regulations governing how other public retirement systems are administered. If you have question about another public employee retirement system, find your system, below – or call our attorneys at: 562-622-4800