Today's Law As Amended

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ACA-23 Public employee retirement plan.(2005-2006)



First—

 That Section 8 is added to Article XX thereof, to read:

SEC. 8.
 (a) The California Public Employee Retirement Plan is hereby established and shall be offered by all public agencies to their employees as provided in this section. The plan shall consist of a required defined benefit plan and a voluntary defined contribution plan.
(b) Notwithstanding any other provision of law or this Constitution, on and after July 1, 2007, any person hired as a new employee by a public agency shall enroll in the California Public Employee Retirement Plan offered by his or her employer.
(c) The plan shall be administered by the Public Employees’ Retirement System, the State Teachers’ Retirement System, a county or district retirement system subject to the County Employees’ Retirement Law of 1937, a charter city, or the University of California Retirement System.
(d) 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.
(e) As used in this section, the following terms apply:
(1) “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.
(2) “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.
(3) “Normal retirement age” means 55 years of age for public safety employees and 65 years of age or the applicable retirement age under Social Security for all other employees. An employee may retire before the normal retirement age at an actuarially reduced rate.
(4) “Public agency” means the State of California or a local public agency including, but not limited to, a city, city and county, or county, including a charter city or charter county, district, school district, the Regents of the University of California, California State University and each other political subdivision or public entity of, or organized under the laws of, this State, or any department, instrumentality, board, commission, authority, or agency thereof.
(5) “Public safety employee” means a sworn peace officer or firefighter.
(6) “Salary” means an employee’s base salary excluding overtime pay, shift differential, vacation pay, and all other additional payments or allowances.
(f) (1) The defined benefit component of the California Public Employee Retirement Plan shall provide the following benefit formula for an employee who reaches his or her normal retirement age:
(A) 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.
(B) 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.
(C) Two percent of the highest average salary for each year of service for a public safety employee.
(2) With respect to the defined benefit component of the plan:
(A) The actuarial normal cost shall be paid in equal amounts by the employer and employee.
(B) The defined benefit shall be calculated based upon the employee’s highest average salary over a period of three consecutive years.
(C) 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.
(g) The defined contribution component of the California Public Employee Retirement Plan shall provide the following benefit formula that meets the following requirements:
(1) 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.
(2) An employer’s contribution to the plan may exceed the rate prescribed in paragraph (1) for any one or more employee groups only in the following circumstances:
(A) With respect to employees of the State, if the increased employer contribution rate is approved by a majority of the voters voting on the proposition at a statewide election.
(B) 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.
(3) The University of California may exceed the contribution limits established by this subdivision for employees in classifications and positions that the Regents of the University of California find are competitive and need additional contributions to recruit and retain employees.
(h) An employee of a public agency who is hired on or after July 1, 2007, shall not be eligible for employer‑paid retiree health benefits until he or she attains normal retirement age and retires. An employee who retires prior to his or her normal retirement age may receive health care benefits available through his or her public agency by paying the entire cost of these health care benefits. This subdivision shall not apply to an employee who retires for disability. This subdivision applies only to employees of public agencies who provide health care benefits to retirees.
(i) After this section becomes effective, the Legislature may enact a statute that implements this section or that amends any statute that implements this section only by a bill passed in each house of the Legislature by rollcall vote entered in the journal, two-thirds of the membership concurring.
Second—
 That if this measure and any other measure relating to retirement plans of public employees appear on the same statewide election ballot, the provisions of that other measure shall be deemed to be in conflict with this measure. If this measure shall receive a greater number of affirmative votes than that other measure, the provisions of this measure shall prevail in their entirety, and the provisions of the other measure shall be null and void.
Third—
 That the provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.