California Public Employee Retirement Benefits—Assessing Compensation Changes

In 2013, the California legislature passed and Governor Jerry Brown signed the Public Employees’ Pension Reform Act of 2013 (PEPRA). PEPRA lowers pension benefits for new members of most public retirement systems and requires some public employees to contribute more toward funding their defined benefit (DB) pension plans. DB plans have been, and continue to be, an important component of public employee compensation. PEPRA changes California public employees’ overall compensation by reducing benefits, which should lower employer DB plan contributions. This paper: Explains components of public employee compensation and retirement benefits. Compares California state and local government salaries and retirement expenditures to other states. Uses hypothetical scenarios to estimate: » The monetary value of DB plans and Social Security » PEPRA benefit formula impacts Compensation and retirement benefits To attract and retain quality employees, government employers balance salaries, pensions and other benefits. While salaries provide immediate compensation, retirement benefits provide deferred compensation. The deferred nature of retirement benefits allows employers to offset present-day salaries by leveraging long-term investment returns for compensation in retirement.

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The Content Advisory

Content is everything the business creates in order to communicate. In today’s world, the way we communicate is the only thing that separates us from the next: The next click, the next competitor, the next answer. TCA – The Content Advisory is a consulting and training company; blending the art and science of intelligent content to help today’s modern business communication’s strategy.

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