Public Pension Reform

PENSION REFORM IN ANAHEIM – Full Time Personnel

In order to deal with potential long-term budget impacts as a result of retirement pension liabilities, the City embarked on a comprehensive plan to work with all of the City’s bargaining units to address this important issue. Prior to the Public Employee Pension Reform Act of 2013 (PEPRA), the City already had an escalating cost-sharing formula in place with all non-safety employees and had already reduced the pension benefit formula for one of the two public safety groups. With the passage of PEPRA, the City not only implemented all the required pension reform measures, including lowering of pension formulas for all new employees, but also implemented additional pension reform for existing employees. Pension reform for existing employees included the elimination of “PERs on PERs”, a practice of reporting employer paid member contributions as employees’ salary, and increased the employee paid contributions to 12%. The implementation of the increased cost sharing by the majority of all full-time employees is well in advance of the 1/1/2018 date where such cost increases may be imposed by an employer under state law. Further, the amount of cost sharing implemented by the City for non-public safety employees exceeds the amount that may be imposed under state law effective 1/1/2018. All of these proactive steps will ultimately benefit the City’s long term outlook for meeting these important commitments. Anaheim is also one of the very few cities that has eliminated lifetime medical benefits for retirees and set up an irrevocable trust to fund the past incurred liability.

Recommended By: City Staff
Council Actions:
  • POLICE MANAGEMENT
    Reduced the pension formula from 3 @ 50 to 2.7 @ 57 or 2.0 @ 50 depending on age of retirement
    Approved by City Council by a vote of 3-1, 1 Absent

  • FIRE
    Reduced the pension formula from 3 @ 50 to 2.7 @ 57 or 2.0 @ 50 depending on age of retirement for both new hires and lateral hires
    Approved by City Council by a vote of 4-1

  • POLICE
    Reduced the pension formula from 3 @ 50 to 2.7 @ 57 or 2.0 @ 50 depending on age of retirement, increased employees contribution to 12% and eliminated PERs on PERs
    Approved by City Council by a vote of 4-1

  • AMEA (City’s largest bargaining unit)
    Reduced the pension formula from 2.7 @ 55 to 2.0 @ 62, increased employee contribution to 12% and eliminated PERs on PERs
    Approved by City Council by a vote of 5-0

  • IBEW
    Reduced the pension formula from 2.7 @ 55 to 2.0 @ 62, increased employee contribution to 12% and eliminated PERs on PERs
    Approved by City Council by a vote of 5-0

  • POLICE MANAGEMENT
    Increased employee contribution to 12% and eliminated PERs on PERs
    Approved by a City Council vote of 5-0