On September 30, 2000, Governor Davis signed Assembly Bill 2177 into law, effective January 1, 2001. As a CalPERS member employed by a school district, this bill may affect you in the following two ways:

Item I -- This change affects only those school members who contribute to Social Security. If you do not contribute to Social Security, Item I will not affect you.

1. For service credit earned before January 1, 2001, your CalPERS contribution is 7 percent of your monthly earnings in excess of $133.33. When your retirement allowance is calculated using service credit earned before January 1, 2001, your final compensation is reduced by the same amount, $133.33.
    

2. For service credit earned January 1, 2001 and after, your CalPERS contribution will be 7 percent of your total monthly earnings (no $133.33 reduction). Your PERS contribution will increase by $9.33 per month. When your retirement allowance is calculated using service credit earned January 1, 2001 and after, your final compensation will not be reduced, and your retirement allowance will be based on your full final compensation.

Item II -- The full-time work schedule for school employees is now established as 40 hours per week. This provision requires your employer to report all earnings for full-time and part-time employees, up to 40 hours per week. It is important to note that the California Public Employees’ Retirement Law allows a member to receive one year of service credit upon completing 1720 hours of service.

Attached is a sample retirement calculation to demonstrate the potential impact this change may have on your retirement contributions and allowance.

If you have any questions regarding these changes, please contact Barbara Villegas, Fiscal Control, at (619) 725-7674 or CalPERS at (800) 352-2238.