Leyva Bill Protecting Retirement Security for California’s Public Servants Signed Into Law

SB 278 Protects Firefighters, Police Officers, and Other Public Servants from Unfair Benefit Cuts

Monday, September 27, 2021

SACRAMENTO – After receiving strong bipartisan support in the Legislature, Governor Gavin Newsom signed legislation earlier today authored by Senator Connie M. Leyva (D-Chino) that will protect a retiree’s promised and paid for collectively bargained benefits in cases where the benefit is reduced during retirement because of incorrectly reported information by the California Public Employees’ Retirement System (CalPERS) employer.

Specifically, SB 278 responds to instances when employers incorrectly calculate and report an employee’s pensionable compensation for retirement purposes. When this occurs, the retired employee is ultimately required to pay back the overpaid amount and suffers a permanent reduction in future payments.

“SB 278 protects our public servants such as retired firefighters and police officers from unfair benefit cuts when—through no fault of their own—mistakes were previously made in determining their retirement benefits,” Senator Leyva said.  “This measure gives retirees the peace of mind that they will not be forced to pay money back because of accounting or reporting errors. Oftentimes relying on fixed incomes, these retirees should not be forced to take unexpected and even devastating cuts to their benefits, which can hurt them and their families. I appreciate Governor Newsom’s signature of SB 278 that will honor pension commitments made to our retirees who served California residents and communities during their career.”

For example, after serving the public for nearly 30 years, a firefighter employed by a CalPERS contracting agency decided to retire in 2012. Prior to retiring, the firefighter requested an official retirement estimate from CalPERS. This estimate provided the retiree with a projection of retirement benefits based on the firefighter’s estimated retirement date. Nearly five years after retirement, CalPERS sought to collect an overpayment reimbursement from the retired firefighter, which included a lump sum amount of $42,000 and a sizeable future reduction in the retired firefighter’s monthly retirement allowance. This situation occurred because her employer had incorrectly reported her pension compensation. This is one of several examples that demonstrate how important SB 278 will be when fully implemented.

Sponsored by the California Professional Firefighters and supported by the American Federation of State, County and Municipal Employees, Association of California State Supervisors, California Association of Professional Scientists, California Labor Federation / AFL-CIO, California State Retirees, Organization of SMUD Employees, Peace Officers Research Association of California, Professional Engineers in California Government and Riverside Sheriffs' Association, SB 278 will take effect on January 1, 2022.