ACA 23
(As amended January 30, 2006)
INTRODUCED BY Assembly Member Keith Richman
In his never ending quest to dismantle California’s public employee retirement system, Assembly Member Keith Richman has amended ACA 23; his “pension reform” legislation. It is still a “hybrid” plan, he just changes the name and makes some minor modifications. It is still unacceptable and won’t go anywhere. The amendments include:
Renames proposal from “The California Public Employee Defined Contribution and Hybrid Plans” to “The California Public EmployeeRetirement Plan”
Requires the plan to consist of a required defined benefit plan and a voluntary defined contribution plan.
Requires any new public employee hired on or after 1/1/2007 to enroll
The plan is administered by CalPERS, STRS, ’37 Act systems, a charter city and UCRS
States that a public agency that provides disability benefits for its employees shall continue to provide disability benefits for its employees, including persons employed after June 30, 2007. A public agency that provides death benefits for families of its employees shall continue to provide death benefits for its employees, including persons employed after June 30, 2007.
State’s that it is an employee’s right vested benefits, but is lacking in detail (is it 5, 10 years?)
Defined benefit plan" means a plan providing a pension benefit determined by a formula based on factors such as age, service credit, and salary. An employee's right to vested benefits under the plan shall be established by law.
"Defined contribution plan" means a plan providing a pension benefit that is equal to the combined employer and employee contributions plus interest and net investment
earnings, less administrative expenses and other costs. An employee's vested right to receive employer contributions made to the plan on his or her behalf shall be established by law.
The DB component of the CPERP provides the following benefit formula for an employee who reaches his or her normal retirement age:
One percent of the highest average salary for each year of service for an employee who is eligible for Social Security, except public safety employees. One and 3/4 percent of the highest average salary for each year of service for an employee who is not eligible for Social Security, except public safety employees.
Two percent of the highest average salary for each year of service for a public safety employee.
With respect to the defined benefit component of the plan:
The actuarial normal cost shall be paid in equal amounts by the employer and employee.
And the defined benefit shall be calculated based upon the employee's highest average salary over a period of three consecutive years.
Surplus assets shall be retained in the plan solely for the payment of the defined benefit, disability and death benefits, and administrative costs of the plan.
The defined contribution component of the California Public Employee Retirement Plan is as follows (similar to what currently existed prior to amends:
The public agency may contribute up to one dollar ($1) of matching funds for each dollar contributed by an employee, not to exceed 4 percent of the employee's salary.
An employer's contribution to the plan may exceed the rate prescribed for any one or more employee groups only if the increased employer contribution rate is approved by a majority of the voters voting on the proposition at a statewide election. With respect to employees of local agencies and districts, if the increased employer contribution rate is approved by two-thirds of the voters voting on the proposition at an election within the jurisdiction of the local agency or district. |