AB 340 Summary

• Establishes the California Public Employees' Pension Reform Act of 2013, setting maximum retirement benefit formulas for public employees hired on or after January 1, 2013: 2.5% at age 67 for non-safety members and 2% to 2.7% at age 57 for safety members.

• Caps pensionable compensation used to calculate defined benefits at $110,100 (2012 amount, adjusted annually) for employees covered by Social Security and 120% of that amount for others; prohibits employers from contributing to retirement plans on compensation exceeding federal limits of $250,000 annually.

• Requires new employees to contribute at least 50% of normal retirement plan costs, with equal cost-sharing between employers and employees as the standard; prohibits use of impasse procedures to impose higher employee contribution rates.

• Redefines final compensation for new members as the highest average annual compensation earned during at least 36 consecutive months (or 3 school years), and restricts what payments qualify as pensionable compensation (excludes overtime, unused leave, bonuses, and severance).

• Modifies post-retirement employment rules, allows retired employees to serve on state boards without reinstatement under specified conditions, and expands felony forfeiture provisions for public employees convicted of crimes related to their official duties.