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League Releases Results of 2012 Statewide Pension Survey

Results Show Recent Trends among Cities with CalPERS

February 2, 2012
A remarkable 71 percent of cities that contract with CalPERS responded to the League's recent comprehensive pension survey. This is the second year in what has become an annual survey conducted by the League. Designed to help ascertain how cities are managing employee pensions, the survey focused on those cities that contract with CalPERS. Of California's 482 cities, the majority, 449 contract with CalPERS. The survey was sent to city managers in late December with all data collected by late January.

The survey results are posted on the League's online Pension Information Center. The Pension Information Center also includes resources on best practices, reform efforts, links to research papers, conference presentations, articles and recent news reports.

The pension survey queried city managers of cities contracting with CalPERS with responses from cities in all of the League's 16 regional divisions. The survey focused on three major areas:

  • Tiering;
  • Cost sharing; and
  • Final compensation calculation.

The results indicate that substantial changes continue to happen at the local bargaining table. There is movement among cities to adopt new tier systems and cities are asking employees to shoulder more of the costs of their defined benefits. In addition, many cities are addressing final compensation calculation formulas. The survey found that cities that have not yet adopted changes to their pension systems are interested in making adjustments.

Highlights from the 2012 survey include:

  • A new tier system has been adopted by 47 percent of responding cities;
  • Most new tiers were adopted since 2010;
  • For public safety employees, most responding cities have adopted a lower benefit of 3 percent at 55 than the previous 3 percent at 50;
  • For all other employees (miscellaneous), the most common newly offered plan is 2 percent at 60, which is also lower than the previously offered standard of 2.7 percent at 55;
  • Changes in cost sharing was a major trend with 64 percent of responding cities indicating that they have adopted new employee contribution requirements;
  • Among responding cities, 32 percent say they have changed final compensation calculation formulas with the most common formula being an average of the last three years instead of the pervious highest one year; and
  • 47 percent of responding cities indicated that they are considering negotiating changes to their pension benefits.

For more information about pensions, please visit the League's Pension Information Center.

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