Section 609 Ppra

[Fleur Francour]

TheCalifornia Public Employees' Pension Reform Act (PEPRA), which took effect in January 2013, changes the way CalPERS retirement and health benefits are applied, and places compensation limits on members. The greatest impact is felt by new CalPERS members.

ARP, a retirement savings program that certain state employees were automatically enrolled in for two years from their initial hire date, was eliminated. All new CalPERS members enrolled after June 30, 2013, are not affected, as enrollment in ARP has ended. State employees enrolled in ARP can convert their ARP service credit to CalPERS service credit. Visit Service Credit to learn about your options.

The AB 1222 PEPRA exemption only applies to transit employees who became new members on or after January 1, 2013, and whose interests are protected under Section 13(c) of the Federal Transit Act, regardless of whether they are union or non-represented employees. These new members were eligible to receive their employer's pre-PEPRA level of benefit(s) existing on December 31, 2012. The AB 1222 PEPRA exemption applies to all eligible transit employees in the service area of the federally funded project. The process for handling incorrect membership classifications is the same for all transit employees, regardless of their status.

Due to the court decision State of California v. United States Department of Labor, if a transit employee first became a member of CalPERS or any public retirement system on or after January 1, 2013, to December 29, 2014, they will now be subject to the PEPRA retirement benefit formula effective December 30, 2014. This court decision ended the AB 1222 PEPRA exemption. However, all service credit earned during the time frame between January 1, 2013, and December 29, 2014, will remain in the classic retirement benefit formula. Service credit purchase deductions will not be impacted.

If a public employer continued to maintain a defined contribution plan after December 31, 2012, new members may participate in a defined contribution plan that was in place prior to January 1, 2013. If a public employer adopts a new defined contribution plan on or after January 1, 2013, the new plan must conform to the requirements of PEPRA.

A public employer may provide contributions to a defined contribution plan for compensation above the pensionable compensation limit in 7522.02(c) when combined with the employer's contributions for compensation up to the pensionable compensation limit. These combined contributions may not exceed the employer's contribution (expressed as a percentage of pay) required to fund retirement benefits on compensation up to the pensionable compensation limit.

A defined contribution plan must meet the requirements and applicable limits under federal law. Internal Revenue Code section 401(a)(17) limits compensation that may be taken into account for retirement plan contributions. For 2015, the maximum compensation that may be counted for retirement plan contributions is $265,000. This limit is indexed and may change from year to year.

For public agencies, school employers, California State Universities, and the judicial branch; a new member's initial contribution rate will be at least 50 percent of the total normal cost rate for their defined benefit plan or "the current contribution rate of similarly situated employees, whichever is greater," except where it would cause an existing Memorandum of Understanding (MOU) to be impaired.

Any current or future public official or employee convicted of a felony while carrying out his or her official duties, in seeking an elected office or appointment, and/or in connection with obtaining salary or pension benefits, will be required to forfeit any pension or related benefit earned from the date of the commission of the felony.

The retiree health vesting equity requirement in PEPRA doesn't require vesting schedules that existed prior to January 1, 2013, to be changed for employees who had a contractual agreement with an employer prior to January 1, 2013.

In addition to the current calculation options of the IDR benefit for a member, this provision adds a calculation for a safety member who qualifies for an IDR that may result in a higher benefit than 50 percent of salary. An actuarial reduced retirement formula, as determined by the actuary for each quarter year of service age less than 50, will be used to determine if the IDR benefit is greater for the safety member who qualifies for IDR. These provisions remain in effect only until January 1, 2023. After that date, the new IDR provisions will not apply unless the date is extended by statute.

PEPRA defines pensionable compensation as "the normal monthly rate of pay or base pay of the member paid in cash to similarly situated members of the same group or class of employment for services rendered on a full-time basis during normal working hours, pursuant to publicly available pay schedules."

If you started working for a CalPERS-covered employer on or after January 1, 2013, and you qualify for the classic enrollment level because of reciprocal membership, the formula that was in effect on December 31, 2012 (before PEPRA was implemented) will apply to you.

The data in this section must be verified with the reciprocal retirement system prior to completion of the form. Failure to provide accurate membership information may result in enrollment errors and corrections.

Public employers are prohibited from granting retroactive pension benefit enhancements that would apply to service performed prior to the operative date of the enhancement. An increase to a retiree's annual cost-of-living adjustment within existing statutory limits is not considered to be an enhancement to a retirement benefit.

For retirees interested in working for a public employer in the same retirement system from which they retired (without reinstatement from retirement), PEPRA has certain requirements that need to be met. These requirements include, but are not limited to:

B. The purpose of this chapter is to enunciate the public policies pertaining to governmental procurement from nongovernmental sources, to include governmental procurement that may or may not result in monetary consideration for either party. This chapter shall apply whether the consideration is monetary or nonmonetary and regardless of whether the public body, the contractor, or some third party is providing the consideration.

C. To the end that public bodies in the Commonwealth obtain high quality goods and services at reasonable cost, that all procurement procedures be conducted in a fair and impartial manner with avoidance of any impropriety or appearance of impropriety, that all qualified vendors have access to public business and that no offeror be arbitrarily or capriciously excluded, it is the intent of the General Assembly that competition be sought to the maximum feasible degree, that procurement procedures involve openness and administrative efficiency, that individual public bodies enjoy broad flexibility in fashioning details of such competition, that the rules governing contract awards be made clear in advance of the competition, that specifications reflect the procurement needs of the purchasing body rather than being drawn to favor a particular vendor, and that the purchaser and vendor freely exchange information concerning what is sought to be procured and what is offered. Public bodies may consider best value concepts when procuring goods and nonprofessional services, but not construction or professional services. The criteria, factors, and basis for consideration of best value and the process for the consideration of best value shall be as stated in the procurement solicitation.

"Affiliate" means an individual or business that controls, is controlled by, or is under common control with another individual or business. A person controls an entity if the person owns, directly or indirectly, more than 10 percent of the voting securities of the entity. For the purposes of this definition "voting security" means a security that (i) confers upon the holder the right to vote for the election of members of the board of directors or similar governing body of the business or (ii) is convertible into, or entitles the holder to receive, upon its exercise, a security that confers such a right to vote. A general partnership interest shall be deemed to be a voting security.

"Best value," as predetermined in the solicitation, means the overall combination of quality, price, and various elements of required services that in total are optimal relative to a public body's needs.

"Employment services organization" means an organization that provides employment services to individuals with disabilities that is an approved Commission on the Accreditation of Rehabilitation Facilities (CARF) accredited vendor of the Department for Aging and Rehabilitative Services.

"Informality" means a minor defect or variation of a bid or proposal from the exact requirements of the Invitation to Bid, or the Request for Proposal, which does not affect the price, quality, quantity or delivery schedule for the goods, services or construction being procured.

"Job order contracting" means a method of procuring construction by establishing a book of unit prices and then obtaining a contractor to perform work as needed using the prices, quantities, and specifications in the book as the basis of its pricing. The contractor may be selected through either competitive sealed bidding or competitive negotiation depending on the needs of the public body procuring the construction services. A minimum amount of work may be specified in the contract. The contract term and the project amount shall not exceed the limitations specified in 2.2-4303.2.

"Multiphase professional services contract" means a contract for the providing of professional services where the total scope of work of the second or subsequent phase of the contract cannot be specified without the results of the first or prior phase of the contract.

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