AB 1383: Public employees’ retirement benefits.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

The Public Employees’ Retirement Law (PERL) establishes the Public Employees’ Retirement System (PERS) to provide a defined benefit to members of the system based on final compensation, credited service, and age at retirement, subject to certain variations. Existing law creates the Public Employees’ Retirement Fund, which is continuously appropriated for purposes of PERS, including depositing employer and employee contributions. Under the California Constitution, assets of a public pension or retirement system are trust funds.

The California Public Employees’ Pension Reform Act of 2013 (PEPRA) establishes a variety of requirements and restrictions on public employers offering defined benefit pension plans. In this regard, PEPRA restricts the amount of compensation that may be applied for purposes of calculating a defined pension benefit for a new member, as defined, by restricting it to specified percentages of the contribution and benefit base under a specified federal law with respect to old age, survivors, and disability insurance benefits.

Existing law, the Teachers’ Retirement Law, establishes the State Teachers’ Retirement System (STRS) and creates the Defined Benefit Program of the State Teachers’ Retirement Plan, which provides a defined benefit to members of the program, based on final compensation, creditable service, and age at retirement, subject to certain variations.

This bill, for service performed on and after January 1, 2027, would prohibit the pensionable compensation for calendar year 2027 used to calculate the defined benefit paid to a new member of a retirement system subject to PEPRA who retires from the system from exceeding specified percentages of the contribution and benefit base under the specified federal law with respect to old age, survivors, and disability insurance benefits. The bill would make related, conforming changes to these provisions on pensionable compensation. The bill also would require a new member of STRS to be subject to specified limits of the Teachers’ Retirement Law.

PEPRA requires each retirement system that offers a defined benefit plan for safety members of the system to use one of 3 formulas for safety members, 2% at age 57, 2.5% at age 57, or 2.7% at age 57.

This bill would establish new retirement formulas, for employees first hired on or after January 1, 2027, as 2.5% at age 55, 2.7% at age 55, or 3% at age 55, subject to certain exceptions. For new members hired on or after January 1, 2013, who are safety members, the bill would require employers to adjust the formulas for service performed on or after January 1, 2027, to offer the formula that has the same fraction at age 55 as the fraction at age 57 in the formula the employer offered pursuant to existing law. The bill would authorize a public employer and a recognized employee organization to negotiate a prospective increase to the retirement benefit formulas for safety members and new safety members, consistent with the formulas permitted under PEPRA, including the new formulas described above.

Sponsors

Sponsors by party (alphabetical): Democratic 20 · Republican 6

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. September 20, 2026Vetoed by Governor.
2. September 9, 2026Enrolled and presented to the Governor at 1 p.m.
3. August 30, 2026Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 69. Noes 2. Page 6908.).
4. August 30, 2026In Assembly. Concurrence in Senate amendments pending.
5. August 30, 2026Read third time. Passed. Ordered to the Assembly. (Ayes 33. Noes 0.).
6. August 28, 2026Read second time. Ordered to third reading.
7. August 27, 2026Read third time and amended. Ordered to second reading.
8. August 13, 2026Read second time. Ordered to third reading.
9. August 13, 2026From committee: Do pass. (Ayes 7. Noes 0.) (August 13).
10. August 3, 2026In committee: Referred to APPR. suspense file.
11. July 1, 2026From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR.
12. June 24, 2026From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (June 24). Re-referred to Com. on APPR.