SB 1033 requires entities with contract with the California Public Employees' Retirement System (CalPERS) to bear full financial responsibility for actions that would increase actuarial liability for a member’s pension contributions.
This bill SB 1033 simply repositions financial responsibility upon appropriate agencies which increase compensation and benefits to bear all actuarial liability resulting from such action. Currently, when an employee’s compensation is increased, the actuarial liability related to their pension is increased, as well; and all previous employers share the increase in actuarial liability with the current employer of an employee’s compensation is increased.
An example of the current system: A small city trains and hires a police officer. He or she then is hired by a bigger city and is given a large raise. The current amounts paid into CalPERS are based on current salary, so the small city is hammered for the higher cost, even though the officer no longer patrols there.
Previous employer agencies therefore may have to increase their contributions to former employees beyond projections they made when they were directly responsible for the employee. SB 1033 simply repositions financial responsibility upon appropriate agencies which increase compensation and benefits to bear all actuarial liability resulting from such action.
- Portability of pension benefits among jobs, Monthly Labor Review, July 1994
Spencer Street, (916) 651-4037