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7.1.F. - Page 24 <br /> • There will be greater transparency about the timing and impact of future employer <br /> contribution rate changes. <br /> • The new policy eliminates the need for an actuarial value of assets. As a result, <br /> there will be only one funded status and unfunded liability in actuarial reports. <br /> • There will be less confusion when the new accounting standards are implemented <br /> since there will be no need for extra liability calculations. <br /> Pension Reform Act of 2013 (Assembly Bill 340). On September 12, 2012, Governor <br /> Brown signed AB 340, a bill that will enact the California Public Employees' Pension Reform Act <br /> of 2013 ("PEPRA") and that will also amend various sections of the California Education and <br /> Government Codes, including the County Employees Retirement Law of 1937. AB 340 (i) <br /> increases the retirement age for new State, school, and city and local agency employees <br /> depending on job function, (ii) caps the annual CaIPERS pension benefit payout, (iii) addresses <br /> numerous abuses of the system, and (iv) requires State, school, and certain city and local agency <br /> employees to pay at least half of the costs of their CaIPERS pension benefits. PEPRA will apply <br /> to all public employers except the University of California, charter cities and charter counties <br /> (except to the extent they contract with CaIPERS). <br /> The provisions of AB 340 went into effect on January 1, 2013 with respect to State <br /> employees hired on that date and after; local government employee associations, including <br /> employee associations of the City, will have a five-year window to negotiate compliance with AB <br /> 340 through collective bargaining. If no deal is reached by January 1, 2018, a city, public agency <br /> or school district could force employees to pay their half of the costs of CaIPERS pension <br /> benefits, up to 8 percent of pay for civil workers and 11 percent or 12 percent for public safety <br /> workers. <br /> CaIPERS predicts that the impact of AB 340 on employers, including the City, and <br /> employees will vary, based on each employer's current level of benefits. To the extent that the <br /> new formulas lower retirement benefits, employer contribution rates could decrease over time as <br /> current employees retire and employees subject to the new formulas make up a larger percentage <br /> of the workforce. This change would, in some circumstances, result in a lower retirement benefit <br /> for employees than they currently earn. Additionally, CaIPERS notes that changes arising from <br /> AB 340 could ultimately have an adverse impact on public sector recruitment in areas that have <br /> historically experienced recruitment challenges due to higher pay for similar jobs in the private <br /> sector. <br /> More information about AB 340 can be accessed through PERS's website at <br /> www.calpers.ca.gov/index.jsp?bc=/member/retirement/pension-reform- <br /> impacts.xml&pst=ACT&pca=ST. The reference to this internet website is shown for reference and <br /> convenience only; the information contained within the website may not be current and has not <br /> been reviewed by the City and is not incorporated in this Official Statement by reference. <br /> Other Post Employment Benefits. Three-year trend information for the City's OPEB plan <br /> is set forth below: <br /> A-16 <br />