By Jon Ortiz
Published: Tuesday, Aug. 19, 2014 – 12:00 am
More than a year after Gov. Jerry Brown signed a law he said would tamp down pension spiking, the state’s biggest public pension fund is on the verge of adopting rules critics say would undermine its intent.
Staff at the California Public Employees’ Retirement System has suggested that the fund’s board authorize 99 types of special payments as counting toward pension calculations for employees hired since Brown’s pension law took effect on Jan. 1, 2013. Among them: longevity pay, police marksmanship certification pay, physical fitness pay, smog inspector license pay, notary pay, cement finisher pay and holiday pay.
Public pension-change advocates, including Democratic San Jose Mayor Chuck Reed, say the proposal is another sign that the union-dominated CalPERS board “is doing what they can to resist reforms. … They’re in favor of anything that expands benefits.”
But CalPERS says the proposal is consistent with the law and gives much-needed clarity to the 3,100 school districts and state and local governments in the retirement system who need to know what to report to the fund.
The proposal up for discussion Tuesday and a vote by the CalPERS board on Wednesday isn’t political, fund spokesman Brad Pacheco said in an emailed statement to The Bee.
“We administer the pension system based on what was written in the law and not on what others wish had been written,” Pacheco said.
When Brown signed the public pension law in 2012, he said it would limit pension spiking and chip away at the soaring cost of government retirement benefits, in part by ending the practice of boosting “pensionable” income with supplements to base pay.
To date, Brown has publicly objected to only one item on the additional pay list, a category allowing “temporary upgrade pay” to count toward pensions. Temporary upgrades occur, for example, when an employee fills in for a superior who has to take sudden leave. The promoted employee receives the absent boss’s level of pay while in the acting role. CalPERS is proposing to count that extra income toward pensions.
After CalPERS announced it would take up the proposal this week after giving the public several weeks to write support and opposition letters, the governor sent a brief letter of his own to CalPERS President Rob Feckner on Friday. Brown urged the board to reconsider including temporary-promotion income in pension calculations.
“This disregards the rule that pensions will be based on normal monthly pay and not on short-term, ad hoc pay increases,” Brown wrote.
CalPERS does not have a cost estimate of how much employers’ pensions cost might rise from adding the various pay categories to newer employees’ pensionable income, or how much more workers or their employers would have to contribute to the fund.
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