Assembly Bill 1383 is awaiting Gov. Gavin Newsom’s decision after clearing the California Legislature. Newsom faces a Sept. 30 sign-or-veto deadline, according to CBS Sacramento.
What the bill would change
The measure would allow certain newer CalPERS-covered public-safety employees to qualify for a 3% at 55 retirement formula instead of waiting until age 57. The change would apply prospectively and would require local collective bargaining; it would not automatically impose the formula on every participating agency.
AB 1383 is listed on the website of its sponsor, Assemblymember Tina McKinnor, according to her website.
The fiscal question for agencies
CalPERS actuarial figures cited by the California Special Districts Association estimate that the bill would increase the present value of future benefits by $4.8 billion for CalPERS members in state and contracted local agencies. If all participating local employers negotiated to adopt the 3% at 55 formula, the estimate would increase by another $3.4 billion. Those are statewide projections, not estimates of what any individual Sacramento-area agency would pay.
The California Department of Finance, part of Newsom’s administration, opposes the bill. In its formal analysis, the department said AB 1383 would weaken existing statutory cost controls and create continuing, unbudgeted increases in state safety, peace-officer and firefighter retirement plans. The analysis is available from the California Department of Finance.
What Sacramento’s records show
Sacramento’s FY2024/25 approved budget is available in the city budget.
Sacramento’s proposed FY2026/27 budget is described in the proposed budget.
Classic and PEPRA CalPERS membership categories are discussed generally.
How this differs from PEPRA
A 2012 CalPERS summary said new members could be subject to 50/50 normal-cost sharing. The summary addresses contribution rules; AB 1383 is described above as addressing retirement formulas.
CalPERS separately says about 60% of public-agency safety members will see higher contribution rates beginning with their July 2027 paycheck. The agency reports the change in contribution rates, according to CalPERS.
Supporters, opponents and the unresolved decision
Public-safety unions, including the Peace Officers Research Association of California, California Professional Firefighters, the National Fraternal Order of Police and the International Association of Fire Fighters, support the measure. They argue that improved retirement benefits could aid recruitment and retention and recognize the physical demands of police and fire work.
Local-government opposition to AB 1383 includes the City of Beverly Hills, according to the City of Beverly Hills.
Newsom has not announced whether he will sign the bill. The available Sacramento budget records establish the city’s existing pension liabilities, but they do not establish how many local employees would be affected by AB 1383 or what any negotiated benefit change would cost a particular agency. Those questions will remain unresolved unless the governor signs the measure and local employers and unions begin implementing it.
