CA SB1124

Requires CalPERS to discontinue reporting compensation that conflicts with PEPRA, Section 20636, or system regulations, effective January 1, 2019 (or January 1, 2017 if an appeal is pending).

For active members, contributions made on disallowed compensation must be credited against the employer's future contributions, and any member-paid contributions must be returned to the member.

For retired members whose pensions included disallowed compensation, CalPERS must permanently adjust benefits to exclude that compensation, and employer contributions must be credited against future employer payments.

If compensation was included in a memorandum of understanding, reported while employed, and disallowed after retirement without member knowledge, the employer must pay CalPERS the full overpayment cost and compensate the retiree for the benefit reduction as a lump sum or annuity.

Permits employers to submit compensation proposals to CalPERS for compliance review before finalizing any memoranda of understanding entered into on or after January 1, 2019.