National Association of State Retirement Administrators

California

The state of California features over 60 public retirement systems, from smaller city and county employee and teacher retirement plans to University of California Retirement System as well as the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS), the largest and second-largest public retirement systems in the nation, respectively. CalPERS held more than $280 billion in assets as of January 1, 2014, and CalSTRS assets exceeded $175 billion. CalPERS administers pension benefits for employees of the state, 26 counties, and more than 1,500 other political subdivisions including school districts. CalSTRS provides pension benefits for certificated public school teachers and employees of community colleges.

Other large public retirement systems in California include the Orange County Employee Retirement System (OCERS), the San Diego County Employees' Retirement Association (SDCERA), the Los Angeles County Employees Retirement Association (LACERA), the San Francisco City & County Retirement System (SFERS), and the Los Angeles City Employees Retirement System (LACERS).


In addition to the defined benefit offerings, eligible state employees may participate in the California Savings Plus Program. The Savings Plus Program provides employees with a 401(k) Plan and a 457 Plan to supplement their pension benefits.

Authorizing Statutes

State level

Article XVI of the California State Constitution covers public finance. Section 17 of this article provides for the provision of pensions by a retirement board, who is vested with the responsibility of administering pension funds.

Proposition 162 (The California Pension Protection Act of 1992) amended Section 17 of Article XVI of the California State Constitution and made several changes to California's public retirement systems. Proposition 162 states:

  • Provided the authority for the board of each public pension system to administer the system's assets and actuarial function
  • Established that each public pension board is to make providing benefits to members and beneficiaries its' highest priority
  • Set forth the conditions under which the terms and conditions for board membership may change; no changes may be made unless a majority of voters in the jurisdiction of the retirement system in question approve.

A July 2011 report by the California Public Employees' Retirement System address the issue of vested pension rights for its members.

The California State Teachers' Retirement System was established by law in 1913 to provide benefits to the state's public school teachers. Part 13 of the California Education Code establishes CalSTRS.

Local level

The County Employees Retirement Act of 1937 provided for retirement systems for California counties. Today 20 California counties operate separate retirement systems under the provisions of this act. These counties include Alameda, Contra Costa, Fresno, Imperial, Kern, Los Angeles, Marin, Mendocino, Merced, Orange, Sacramento, San Bernardino, San Diego, San Joaquin, San Mateo, Santa Barbara, Sonoma, Stanislaus, Tulare, and Ventura.

Chapter 16 of the San Francisco Municipal Code defines pension benefits and covers eligibility, method of payment, and forfeiture/waiver of benefits for the San Francisco City and County Retirement System.

Board Composition

Plan Board Size Appointed Elected Plan Members Ex Officio
California Public Employees Retirement System 13 3 6 6 4
LA County Employees Retirement Association 9 4 4 4 1
San Diego County Employees Retirement Association 9 4 4 4 1
San Fran. City & County Retirement System 7 4 3 3 0
California State Teachers Retirement System 12 5 3 4 4


Contributions

Per the U.S. Census, in FY 2011, employer contributions to California state and local government pension plans were 5.27 percent of all state and local government direct general spending.

Constitutional Protections

California caselaw now recognizes that public pension rights are governed by statute and not contract principles. Gutierrez v. Board of Retirement, 72 Cal.Rptr.2d 837 (1998); Betts v. Board of Admin., 582 P.2d 614 (Cal. 1978)("A public employee's pension constitutes an element of compensation, and a vested contractual right to pension benefits accrues upon acceptance of employment. Such a pension right may not be destroyed, once vested, without impairing a contractual obligation of the employing public entity."); California Ass'n of Professional Scientists v. Schwarzenegger, 40 Cai.Rptr.3d 354, 137 Cai.App.4th 371 (App. 3 Dist. 2006)(public employment gives rise to certain obligations, including pension rights, which are protected by the contract clause of the CA Constitution); County of Orange v. Association of Orange County Deputy Sheriffs, 121 Cai.Rptr.3d 151, 92 Cai.App.4th 21 (App. 2 Dist. 2011)(pension rights are obligations protected by the contract clause of the federal and state constitutions, unlike other terms of public employment which are wholly a matter of statute); but see Teachers' Retirement Bd. v. Genest, 65 Cai.Rptr.3d 326, 154 Cai.App.4th 1012 {App. 3 Dist. 2007)(public employees have vested contractual rights to pension benefits, but not every change in a retirement law constitutes an impairment of the obligations of contracts); but see San Diego City Firefighters, Local 145, AFL-CIO v. Board of Admin. of San Diego City Employees' Retirement System, 141 Cal. Rptr. 3d 860 (Cal. App. 4th Dist. 2012)(pension benefits adopted by resolution rather than ordinance were void). (CA CONST., Article 1, §9) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits

Flag of California(February 3, 1911)

Population (2015) 39,144,818

California public pension statistics, per U.S. Census Bureau as of FY 2015 ($ in 000s)

Assets

$770,146,756

Active Members

1,787,313

Annuitants

1,241,700

Benefits Paid

$44,861,838

Employee Contributions

$9,455,671

Employer Contributions

$24,673,623

Systems

88

More Data

Other  Resources