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Legislative News

Articles for tag retirement


May Revision of the Budget: Continue Saving for the Future as Surplus Grows

Posted: 5/16/2018 Tags: benefits budget legislation pension policy retirement salary Tags Views: 340

Governor Jerry Brown released his May Revise of the Budget on May 11th, 2018. ACSS Legislative Advocate Ted Toppin provides relevant analysis and insight of the May Revise that may be of interest to managers, supervisors and other excluded state employees:

“The state continues to generate revenue at unprecedented levels and now it is coming in faster. In January, the surplus was predicted to be $6 billion. The surplus now is expected to be $9 billion.

The May Revise proposes saving for the future. In January, the Governor proposed to put an additional $4.4 billion into the state rainy day fund, topping it out at $13.8 billion – the constitutional limit. In the May Revise, he socks another $3.3 billion into a different reserve account.

Budget negotiations between the Administration and the Legislature will now heat up. The Governor will urge restraint. Legislators of both parties will push for billions of dollars in additional spending. Ultimately, you can expect the Governor to agree to modest increased spending while keeping his rainy day reserves. Regardless, the Legislature will pass a budget by June 15 and the Governor will sign it by June 30.

Here’s what the May Revise says about issues important to ACSS members:

State Employee Compensation

The January budget proposal included $1.2 billion ($589.5 million General Fund) for:

  • increased employee compensation
  • health care costs for active state employees
  • retiree health care prefunding for active employees

The May Revise decreases this amount by $8.1 million to reflect:

  • corrections to 2019 health rates
  • natural changes to enrollment in health and dental plan
  • updated employment information for salary increases
  • updated employment information for salary increases
  • revised pay increases for judges
  • updated costs related to the salary survey estimates for the California Highway Patrol (Bargaining Unit 5)

State CalPERS Contribution

The state’s contribution – $6.2 billion – to CalPERS is down slightly ($18 million) from the January estimate. The decline in the revise is mainly driven by:

  • CalPERS’ higher than expected investment return in 2016-17
  • the benefit of the state’s additional $6 billion pension payment in 2017-18
  • higher than projected enrollment of members under the Public Employees' Pension Reform Act of 2013, who have lower benefit formulas

Overall, pension reforms are beginning to reduce costs. The May Revise proposes no additional pension reforms.

State Health Care/Retiree Health Care

The May Revise makes no changes to the expected costs of providing state employees and state retirees health care.

State Employee Position Increases

The May Revise also reports that there is expected to be an additional 3,878 position in state government next year for a total of 210,767 in FY 2018-19.”

The Governor’s complete budget summary and draft budget can be found here: www.ebudget.ca.gov.


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California Supreme Court to Review a Trio of Pension Cases

Posted: 4/26/2018 Tags: benefits legislation legislature pension policy retirement Tags Views: 471

Protecting your pension and retirement benefits is a core principle for ACSS. Three cases pending before the State Supreme Court raise questions regarding the validity of the long standing “California Rule.” Since 1955, the courts have held under the California Rule that once pension benefits are granted to a public employee, they are vested and cannot be modified for the duration of an employee’s career.

>> Read more...


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CalPERS Lowers Investment Funds Discount Rate

Posted: 12/21/2016 Tags: benefits policy retirement salary Tags Views: 870

On December 21, 2016, the CalPERS Board of Directors Investment Committee approved a reduction in the discount rate from 7.5% to 7.0% over a three-year phase. CalPERS financial consultants have been concerned about the current state of negative cash flow over the next 10 years. Lower returns in early years will diminish the compounding interest of later years. According to Reuters, “State and local governments could see their pension contributions rise by as much as $2 billion in five years. But for employees, the hit could be another percentage point or more in payroll deductions.” CalPERS views this reduction in the discount rate as a necessary way to improve its current situation.

This means that state employees will be paying more towards their retirement benefits in the long run as a direct result of the discounted rate. The state needs to protect the pensions. To cover that, state employees will end up having to pay more from their current paychecks towards their retirement benefits. At this point, we do not know exactly how much will come out of employee paychecks.

"This was a very difficult decision to make, but it is an important step to ensure the long-term sustainability of the Fund," said Rob Feckner, president of the CalPERS Board of Administration.

The new discount rate for the state will go into effect on July 1, 2017 at 7.375% and then be phased down incrementally to 7.25% for Fiscal Year (FY) 2018-19 and the again phased down to 7.0% for FY 2019-20.

ACSS will continue to follow this issue closely and provide you with updates that affect excluded state employees.

>>Click here to read the full article from CalPERS.


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Rank and File reach a Tentative Agreement and Pay Raise – How this Affects Excluded Employees

Posted: 12/5/2016 Tags: bargaining policy retirement salary Tags Views: 4062

Over the past month, ACSS has followed the bargaining between California’s largest union of state employees (SEIU Local 1000) and the State of California over a new contract. We have also been following the reports on the possibility of a strike and how the State of California sought to halt the potentially disruptive strike by seeking an injunction against SEIU Local 1000 employees. The Brown administration has been arguing that the potential strike would be illegal because of the no-strike clause. On Friday December 2nd, 2016, SEIU Local 1000 announced that the strike, set for December 5th, had been called off.

Over the weekend, a tentative agreement had been reportedly reached between L1000 and the state. As reported by SEIU Local 1000, the new tentative agreement includes:

  • A $2,500 one-time signing bonus
  • 11.5% GSI total spread over 3 years: 4% effective 7/1/2017, 4% GSI effective 7/1/2018 and 3.5% GSI effective 7/1/2019.
  • Only 2.3% total in prefunding contributions for retirement health benefits over those 3 years
  • Special salary adjustments in over 30 classifications

ACSS will review and analyze the tentative agreement. We plan to reach out to CalHR to discuss the impact of this potential agreement on excluded employees related to SEIU Bargaining Units. ACSS is following this issue closely and will continue to bring updates to managers and supervisors who may be affected by it.


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Pensions in the News

Posted: 11/4/2016 Tags: benefits pension retirement Tags Views: 1372

ACSS fights to protect your pension and to provide members with relevant news for excluded state employees in regards to pension protection. Below are some informative and insightful recent publications that report on the current pension protection issue in California:

Jerry Brown touted his pension reforms as a game-changer. But they’ve done little to rein in costs
(October 28, 2016 - LA Times)

Generous pensions: Will the courts give government a way out?
(October 30, 2016 - San Jose Mercury News)

Marin ‘pension spiking’ appeal draws national attention
(October 30, 2016 - Marin Independent Journal)


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