Equable Institute has issued Retirement Security Policy Scorecards for California Assembly Bill 1383 (AB1383). As amended on April 11th, 2025, the bill would the proposed bill would increase the benefit multiplier and lower the normal retirement age for public safety employees enrolled in the California Public Employees Retirement System (CalPERS). The bill would also modify the cost-sharing agreement to allow collective bargaining agreements to shift some required member contributions onto employers. Equable’s assessment finds that retirement benefits would be slightly better overall for workers under the current proposal.

Currently, there are three levels of benefits offered to CalPERS public safety employees depending on the collective bargaining agreements struck with each local municipality. Multipliers would shift from 2.0% to 2.5%, 2.5% to 2.7%, and 2.7% to 3.0%, depending on the employer contract. The retirement age would shift from 57 to 55 for all workers enrolled in these plans. Most members are enrolled in the plan that currently offers a 2% multiplier at normal retirement.

According to the assessment, the proposed benefit changes would provide slightly more valuable benefits to workers who serve more than 10 years. Most full-career employees (those with more than 20 years of service) would see their lifetime benefits grow by more than $300,000. Medium-term workers (10 – 20 years of service) would see their benefits increase by more than $100,000 in value. Short-term workers would see no change in benefit values.

To illuminate the impact on different workers across each of the three benefit levels, Equable has produced three scorecards for this bill.

DOWNLOAD THE 2% MULTIPLIER SCORECARD


DOWNLOAD THE 2.5% MULTIPLIER SCORECARD


DOWNLOAD THE 2.7% MULTIPLIER SCORECARD

EQUABLE INSTITUTE’S ANALYSIS OF CALIFORNIA ASSEMBLY BILL 1383 

 

Positive Elements of California Assembly Bill 1383:

  • The proposed pension reforms would result in an increase in the estimated total benefits for most public safety workers. While Short-Term Workers (who work 10 years or less) would not see a change in their total benefits, Medium-Term Workers (who work 10 to 20 years) would see benefits raised by over $100,000, and Full-Career Workers (who work 20+ years) would have their benefits grow by more than $300,000.
  • The relaxing of PEPRA’s strict cost-sharing between members and their employers means that some employers could end up covering a share of the required employee contributions, reducing the cost of these benefits to their members.
  • Employers would be set to automatically shift their contracts to the nearest new multiplier group but technically retain the ability to choose a new contract for their employee benefits, such that they can adopt a different benefit rate if they can reach a new agreement via collective bargaining. For instance, those employers at the 2.7% @ 57 group are not locked into the 3% @ 55 group if they negotiate to a different rate.

 

Negative Elements of California Assembly Bill 1383:

  • Short-Term Workers do not see any notable improvement from the reforms proposed in AB 1383. In both the existing plan and proposed enhanced plan, these members still stand to maximize their benefit by taking a refund of their contributions plus interest.
  • This enhancement of benefits is intended to improve recruiting and retention for California’s public safety employees. However, there is limited evidence to suggest that such an enhancement will achieve the stated policy goal.
  • As of June 30, 2024, CalPERS reported a net pension liability of $47.77 billion. This means that the plan has almost $50 billion less than it needs to pay the benefits already earned. There currently is not an actuarial analysis or estimate for the cost of AB 1383, raising the question of how much it will cost for CalPERS to offer these benefit enhancements.