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ARTICLE 11
RETIREMENT
11.1 First Tier Eligibility for Employees in Second Tier
An
employee in the Second Tier may exercise the Tier 1 right of
election at any time. An employee who makes this election would then be eligible
to purchase past Second Tier service. The parties will work with CalPERS to
establish more flexible purchase provisions for employees. These include, but
are not limited to, increasing the installment period from 96 months (8 years)
to 144 months (12 years) or up to 180 months (15 years), and allowing employees
to purchase partial amounts of service.
New employees who meet the criteria for CalPERS membership would be enrolled in
the First Tier plan and have the right to be covered under the Second Tier plan
within 180 days of the date of their appointment. If a new employee does not
make an election for Second Tier coverage during this period, he or she would
remain in the First Tier plan.
Employees who purchase their past service would be required to pay the amount of
contributions they would have paid had they been First Tier members during the
period of service that they are purchasing.
If required by CalPERS law, the amount will include interest.
11.2 401(k) Deferred Compensation Program
Employees in Unit 9 may participate in the State of California, Department of
Personnel Administration, existing 401(k) Deferred Compensation Program.
11.3 457 Deferred Compensation Program
Employees in Unit 9 may participate in the current State of California,
Department of Personnel Administration, 457 Deferred
Compensation Program.
11.4 Tax Deferral of Lump Sum Leave Cash
Out Upon
Separation
A. Effective October 31, 2002, to the extent
permitted by federal and state law, employees who separate from State service
who are otherwise eligible to cash out their vacation and/or annual leave
balance, may ask the State to tax defer and transfer a designated monthly amount
from their cash payment into their existing 457 and/or 401k plan offered through
the State’s Savings Plus Program (SPP).
B. If an employee does not have an
existing 457 and/or 401k plan account, he/she must enroll in the SPP and become
a participant in one or both plans no less than 60 days prior to his/her date of
separation.
C. Such transfers are subject to and
contingent upon all statutes, laws, rules and regulations authorizing such
transfers including those governing the amount of annual deferrals.
D. Employees electing to make such a transfer
shall bear full tax liability, if any, for the leave transferred (e.g.,
“over-defers” exceeding the limitation on annual deferrals).
E. Implementation, continuation and
administration of this section is expressly subject to and contingent upon
compliance with the SPP’s governing Plan document (which may at the State’s
discretion be amended from time to time), and applicable federal and state laws,
rules and regulations.
F. Disputes arising under this section
of the MOU shall not be subject to the grievance and arbitration provision of
this agreement.
11.5 Determination of Safety Retirement Eligibility
The
provisions of Government Code sections 19816.20 and 20405.1 shall apply to Unit
9.
11.6 State
Safety Retirement Formula and Employee Contributions
A.
PECG and the State agree to legislation that provides the following changes to
the retirement formulas and employee retirement contributions.
Effective January 15, 2011, State Safety members and Miscellaneous/Industrial
First Tier members first employed by the state on or after January 15, 2011,
shall be subject to the “New 2010 State Safety Retirement Formulas.” The New
2010 State Safety retirement formula would not apply to:
·
Former state employees who
return to state employment on or after January 15, 2011.
·
State employees hired prior
to January 15, 2011 who were subject to the Alternate
Retirement Program (ARP).
·
State employees on approved
leave of absence who return to active employment on or after January 15, 2011.
·
Persons who are already
members or annuitants of the California Public Employees Retirement System as
state employees.
B.
The table below lists the current and New 2010 State Safety age/benefit factors.
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AGE AT RETIREMENT
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CURRENT FACTORS
(2.5% AT AGE 55)
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NEW 2010 STATE SAFETY FACTORS (2% AT AGE
55)
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50
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1.700
|
1.426
|
|
51
|
1.800
|
1.522
|
|
52
|
1.900
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1.628
|
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53
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2.000
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1.742
|
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54
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2.250
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1.866
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55 and over
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2.500
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2.000
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State Safety members shall contribute an additional three percent (3%)
retirement contribution. Effective upon legislative ratification, State Safety
members shall contribute nine percent (9%) of monthly compensation in excess of
$317 for retirement. The additional three percent (3%) employee contribution
shall offset the State’s contribution following ratification of the agreement by
the Legislature.
New employees hired on or after January 15, 2011, will be subject to the 2% at
age 55 retirement formula with retirement benefits based on the highest average
monthly pay rate during thirty-six (36) consecutive months of employment.
Employees in employment prior to January 15, 2011, will be subject to the 2.5%
at age 55 retirement formula with benefits based on the highest average monthly
pay rate during twelve (12) consecutive months of employment.
The State and PECG agree to support legislation that changes the employee
retirement contributions for State Safety Members effective upon ratification by
the Legislature. The State and PECG also agree to support legislation that
changes the retirement formula and method of computing the average annual
compensation earnable for new State Safety Members hired on or after January 15,
2011.
C.
First Tier Retirement Formula (2% @ 55) and New 2010 First Tier Retirement
Formula (2% at age 60)
The table below lists the current and New 2010 First Tier age/benefit factors.
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AGE AT RETIREMENT
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CURRENT FACTORS
(2% AT AGE 55)
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NEW 2010 FACTORS
(2% AT AGE 60)
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50
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1.100
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1.092
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51
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1.280
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1.156
|
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52
|
1.460
|
1.224
|
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53
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1.640
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1.296
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54
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1.820
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1.376
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55
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2.000
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1.460
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56
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2.063
|
1.552
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57
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2.125
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1.650
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58
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2.188
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1.758
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59
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2.250
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1.874
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60
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2.313
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2.000
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61
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2.375
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2.134
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62
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2.438
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2.272
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63 and over
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2.500
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2.418
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Miscellaneous and industrial members shall contribute an additional three
percent (3%) retirement contribution. Effective upon legislative ratification,
miscellaneous and industrial members in the First Tier retirement or the
Alternate Retirement Plan (ARP) subject to social security shall contribute
eight percent (8%) of monthly compensation in excess of $513 for retirement.
Miscellaneous and Industrial members in the First Tier retirement or ARP not
subject to social security shall contribute nine percent (9%) of monthly
compensation in excess of $317 for retirement. The additional three percent (3%)
employee contribution shall offset the State’s contribution following
legislative ratification of the agreement by the Legislature.
F.
New employees hired on or after the pay period following legislative
ratification, will, after completion of participation in the ARP,
be subject to the 2% at age 60 retirement formula with benefits based on
the highest average monthly pay rate during thirty-six (36) consecutive months
of employment.
Employees in employment prior to January 15, 2011 will remain subject to the 2%
at age 55 retirement formula with retirement benefits based on the highest
average monthly pay rate during twelve (12) consecutive months of employment.
The State and PECG agree to support legislation that changes the employee
retirement contributions for First Tier members effective upon ratification by
the Legislature. The State and PECG also agree to support legislation that
changes the retirement formula and method of computing the average annual
compensation earnable for the new First Tier Members hired on or after January
15, 2011, including ARP members.
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