1. ACCCA Town Hall Meeting

2.  Does the need for pension reform exist?  Myths about pension reform  Legislative proposals  Working for public agencies after retirement  ACCCA position on pension reform 2

3.  Baby boomer impact on the retirement system  Retirement systems not actuarially sound  Decrease in future working population  Perceived fraud in the system (spiking etc.)  Retirees life expectancy increasing  Who pays what toward retirement systems  Management of retirement systems 3

4.  Retirees receive excessive retirements  The system cannot be changed (vesting)  Hybrid pensions are not the answer  All public retirement systems are the same  Everyone who retires double dips  The retirement system never changes 4

5.  Initiative Process (6 proposals out 2 still seeking signatures)  Brown Proposal and Republican support  Exemptions for STRS end July 2012 (AB 758)  SB 450 Independent Contractor status  Legislative Pension Reform Committee  When can changes be expected? 5

6.  Equal Sharing of Pension Costs: All Employees and Employers *  “Hybrid” Risk-Sharing Pension Plan: New Employees *  Increase Retirement Ages: New Employees *  Require Three-Year Final Compensation to Stop Spiking: New Employees *  Calculate Benefits Based on Regular, Recurring Pay to Stop Spiking: New Employees * 6

7.  Limit Post-Retirement Employment: All Employees  Felons Forfeit Pension Benefits: All Employees  Prohibit Retroactive Pension Increases: All Employees  Prohibit Pension Holidays: All Employees and Employers 7

8.  Prohibit Purchases of Service Credit: All Employees  Increase Pension Board Independence and Expertise *  Reduce Retiree Health Care Costs: State Employees  * Included in Republican Proposal 8

9.  Cal PERS  Basic 960 Hrs per fiscal year in PERS qualified position  Exemptions  Can work in a STRS position  Consultant, independent contractor  Cal STRS  Earning limit of $31,020 in STRS qualified position  Cannot work in a PERS position  Exemptions  12 month out rule  Waivers  Emergency Admin Service  (All exemptions end 7/12) 9

10.  Employee Shares in Pension Cost  ACCCA can support the employee contribution toward their pension benefits of at least 50% provided other employee contributions such as Social Security payments are factored into the employee share. 10

11.  Hybrid “Risk Sharing Pension”  ACCCA can support maintaining a defined benefit program, changes to eliminate spiking, and a three year average computation on Base Salary. ACCCA will consider support of the hybrid plan provided:  Social Security payments in the PERS Plan do not change Social Security rights at the federal level; and  Any cap on earnings for high income retirees would apply to the defined benefits program only and be based on the earning restriction of IRS 415. 11

12.  Pension Caps (R)  ACCCA will consider support of a pension cap if pension computations are:  based on Base Salary;  if other creditable compensation is removed as part of the calculation;  if there is retention credit for unused sick leave;  if the cap on earnings for high income retirees is applied to defined benefits program only and based on the earning restriction of IRS 415. 12

13.  Increase retirement age  ACCCA can support a change in retirement age consistent with changes in the federal social security rules.  Prohibit purchase of service credits  ACCCA can support the elimination of service credit purchase in both STRS and PERS. 13

14.  Prohibit Pension Holidays  With clarification of the Governor’s intent, ACCCA can support the prohibition of “Pension Holidays.”  Prohibit retroactive pension increases  ACCCA takes a “Watch” position on this aspect of the Governor’s proposal. 14

15.  Prohibit pension spiking  ACCCA can support the prevention of spiking and the elimination of Creditable Compensation as currently defined.  Require 3 year final compensation average  ACCCA can support the three year calculation of base pay but opposes a five year computation. 15

16.  Limit post-retirement employment  ACCCA will oppose any legislation that prohibits working within STRS after retirement, however ACCCA can support maintaining the current earning limits provided:  No earning cap once a retiree has been out of the system for 12 months with no sunset date;  They allow retirees to work as part-time faculty and other support positions as part of an early retirement plan; and  There is a continuation of emergency waivers to accommodate management needs when a vacancy occurs.  A prohibition on any retirement benefits for anyone who serves on public boards and commissions. 16

17.  Felony convictions  ACCCA can support this position  Prohibit employers from making employee retirement contributions  ACCCA can support this provision within the proposal  All other proposals relate to pension system management 17