California Enacts AB 1912 to Protect the Pensions of Employees of Joint Power Authorities

On September 29, 2018, Governor Jerry Brown signed AB 1912, which aims to protect the pensions of employees of Joint Power Authorities.  Joint Power Authorities (“JPAs”) are formed when multiple public entities join together to exercise a common power, for example, in order to acquire land, engage in construction or for maintenance purposes. 

Prior to AB 1912, a JPA could terminate without the member public entities assuming the retirement liabilities of its employees and retirees, putting their pensions in serious question.  AB 1912 provides multiple ways to ensure that employees of JPAs are able to maintain their pensions by doing the following:

  • When a JPA contracts with a public retirement system, such as CalPERS, the debts and liabilities with respect to retirement liabilities with be the debts and liabilities of the JPA’s member public entities;
  • Prior to the termination of a JPA, the member public entities must mutually agree with the public retirement system on how to apportion the retirement liability of the JPA so that the apportionment equals 100% of the retirement liability.  If there is no mutual agreement, the public retirement system apportions the retirement liability to each member public entity; and
  • The public retirement system has a lien on assets of the public entities of a terminated JPA.

This legislation shows that California is committed protecting employee rights, including the right to their earned pensions.  Weinberg, Roger and Rosenfeld assisted in drafting AB 1912.

Please contact your labor law counsel with any questions.

By Anthony Tucci | October 25, 2018

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