california PUBLIC EMPLOYEES’ PENSION REFORM ACT of 2013
Pension reform law takes effect january 1, 2013
On September 12, 2012, Governor Brown signed the California Public Employees' Pension Reform Act of 2013 (PEPRA) into law. PEPRA takes effect January 1, 2013. As you may know, LACERA is currently governed by the County Employees Retirement Law of 1937 (CERL). As of January 1st, we will also be governed by PEPRA.
The 60-page law, which can be found in the California Government Code, is complex and broad-reaching. Basically, PEPRA affects new LACERA members on or after January 1, 2013 through provisions affecting benefit formulas, the definition of what comprises pensionable earnings, limits on pensionable earnings, and other matters. The new law also calls for new members to pay 50 percent of the normal cost of benefits and strengthens the rules involving pension forfeiture for public employees and elected officials who commit job-related felonies.
Although most PEPRA provisions affect new LACERA members, a few sections do apply to current members - Elimination of ARC, New Rules for Retirees Returning to Temporary County Work, and Pension Forfeiture for Felons.
ATTENTION: According to PEPRA, as of 1-1-13, LACERA members are prohibited from transferring from non-contributory Plan E to a contributory plan through applying for an Open Window Transfer.
Since the majority of the provisions in PEPRA affect new members on or after January 1, 2013, it’s important to understand what factors constitute a “new member” under this new law.
PEPRA defines a new member as an individual who becomes a LACERA member for the first time on January 1, 2013 or later. The LACERA membership date is the first of the month following the date of hire (e.g., December 1st hire date > January 1st LACERA membership date). An individual who is a member of a reciprocal retirement system but ineligible for reciprocity prior to January 1, 2013 would also be considered a new member.
Current Member (LACERA Member prior to 1-1-13)
Individuals meeting any of the following conditions are considered to be current members:
- Active member of LACERA prior to January 1, 2013
- Deferred member of LACERA prior to January 1, 2013, who returns to active membership
- An individual who becomes a member on or after January 1, 2013 who is eligible for reciprocity based on membership in a reciprocal system on or before December 31, 2012*
- Former member of LACERA who terminated membership and withdrew his or her accumulated contributions prior to January 1, 2013 and later returns to County service and is eligible to redeposit
*To be eligible for reciprocity, you must meet the requirements, one of which is that, within six months of terminating from a public agency, you must become a member of another public agency covered by a reciprocal retirement system within California. For additional information, check lacera.com.
Message from County CEO 10-2-12
PEPRA Newsletter 11-1 12
Letter Eliminating ARC 10-12-12
|PEPRA Pay Codes||
PEPRA Pay Codes for New Members 11-29-12