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California Senate committee kills bill allowing employees to opt out of CalPERS

Three California state bills, including one that would have allowed new state workers to opt out of CalPERS and divert the employee and employer contributions to a new defined contribution plan, failed to pass the California Senate Public Employment and Retirement Committee.

The committee also rejected a bill that would have eliminated a process for a California state agency to terminate its contract with the $351.5 billion California Public Employees' Retirement System, Sacramento. The bill would have allowed the employer to be able to reduce its employees' and retirees' benefits, terminate its CalPERS contract without paying the amount necessary to ensure payment of pension obligations for its employees and retirees, or transfer the money to an outside pension provider.

The third rejected bill would have barred state pension plans from providing retirees cost-of-living adjustments for employees hired on or after Jan. 1, 2019, or to a survivor or beneficiary of any retiree for any year in which the unfunded actuarial liability of the pension fund is more than 20%.

CalPERS did not take a position on the bills.