Changed Final Salary Calculation

California — Increased Employee Contribution, Changed Final Salary Calculation, Eliminated Spiking

Posted by Leila Walsh in - -View All States - - on May 22, 2014 with No Comments


AB 340 and trailer AB 197 enacting California Public Employees’ Pension Reform Act of 2013 (PEPRA) (January 2013)

Type of reform: 

PEPRA amended Government Code section 31461, a provision of the County Employees Retirement Law to fundamentally change the manner in which public pensions are calculated. PEPRA reduced employer contributions, increased employee contributions, and restricted final pay to wages—excluding in-kind payments, accrued unused vacation, and overtime. Specifically, the legislation prohibited the use of standby pay, administrative response pay, callback pay, cash payments for waiving health insurance, vacation, and other pay items from the calculation of members’ final compensation for the purposes of calculating pensions.
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