CalPERS staff flags bills affecting pension and health policy, including AB 1054, AB 1383 and AB 1439
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Summary
CalPERS staff summarized state and federal developments: AB 1054 would create a voluntary DROP for certain safety bargaining units, AB 1383 resets pensionable compensation limits for service after 2027, and AB 1439 was amended to require a study on investment projects' labor standards; SB 939 was noted as a staff-sponsored bill.
CalPERS staff walked the board through bills and federal activity that could affect pensions, health benefits and investment policy.
Danny Brown reported the Legislature reconvened and highlighted three amended bills and a staff-sponsored measure. He said AB 1054 would "create a voluntary drop for patrol members in Bargain Unit 5 and firefighters in State Bargain Unit 8" to be administered by CalPERS but noted it would not become effective until (1) the applicable bargaining unit and CalHR agree via MOU to implement the program, (2) CalPERS certifies the program is cost neutral through an actuarial analysis, and (3) CalPERS adopts regulations to implement the program.
On AB 1383, Brown said the bill makes several changes to PEPRA and would reset the pensionable compensation limit for service credit earned on or after Jan. 1, 2027. He explained today’s PEPRA limit had been based on the Social Security limit as of 2013, increased annually by CPI, and said AB 1383 would set a new baseline (Brown gave illustrative amounts, saying miscellaneous might move from approximately $159,000 to about $184,000 prospectively).
Brown described AB 1439 as amended out of the Appropriations Committee into a study/reporting bill that would assess the impact of prohibiting retirement systems from investing in development projects in California that do not provide specified labor-standard protections.
He also reported staff-sponsored legislation with Sen. John Laird (SB 939) to simplify service-credit purchase payment options and summarized recent federal comment letters CalPERS submitted on human-capital disclosures, California corporate greenhouse gas reporting rules and CMS proposed changes to Medicare Advantage and hospital participation rules.
Brown said staff will provide a more comprehensive bill-tracking report in March and answered board questions about the pensionable compensation changes and their prospective application.
No formal board action on these bills was taken at the meeting; staff described the bills and what conditions would be required before changes take effect.
