By Daniel Borenstein, staff columnist
Posted: 01/11/2013 02:00:00 PM PST
Updated: 01/12/2013 05:17:14 PM PST

By administrative fiat, the California Public Employees’ Retirement System has undermined a key anti-spiking provision of the new state pension law that Gov. Jerry Brown signed last summer.

The agency’s absurd interpretation of the new law will fatten pensions for new public employees, drive up government costs and erode untold billions of dollars of savings that the governor and CalPERS previously claimed the new law would produce.

The key provision is pretty simple: New employees will receive pensions based only on their “normal monthly rate of pay or base pay.”

But CalPERS, an agency run by a labor-dominated board, quietly issued notice between Christmas and New Year’s Day that it intends to interpret that language broadly, effectively gutting a provision that seemed designed to rationally reduce the size and cost of future public employee pensions.

If new workers receive one of nearly 100 different pay premiums for everything from marksmanship and longevity to being a notary or working on a library reference desk, CalPERS has decided, the extra compensation will be counted as income when their pensions are calculated.

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