By Wes Venteicher
September 29, 2020 12:43 PM - The Sacramento Bee
A Southern California city’s attempt to offer 401(k)-style retirement plans to firefighters has led to a new law prohibiting similar efforts to exclude public workers from CalPERS pensions.
Gov. Gavin Newsom this week signed legislation preventing cities and counties from excluding groups of employees from CalPERS pensions when they offer them for other groups.
In the last year, the City of Placentia withdrew from a contract with a shared regional firefighting authority in Orange County, according to an analysis of the legislation, Assembly Bill 2967.
Part of what the city had been paying the authority went toward its firefighters’ pensions. When the city withdrew from the authority, it moved to create its own fire department.
To save money, the city sought to exclude firefighters from its contract with CalPERS, through which the city’s police officers and other employees earn pensions, according to the analysis.
Groups representing cities, counties and special districts said the law prevents those governments from “exploring novel and innovative operational structures in the future” to try to address rising costs and declining revenue. In 2018, the League of California Cities released a survey that warned pension costs were becoming “unsustainable” for many of its members.
Assemblyman Patrick O’Donnell, D-Long Beach, the bill’s sponsor, called the law a clarification of existing law that limits cities’ ability to selectively exclude employees from pensions.
The law “ensures that no class of workers can be excluded and deprived of retirement security when other classes of workers in that local agency enjoy the security of a defined benefit retirement plan,” O’Donnell said in a written statement.