Tier 3 Employees. Employees hired on or after January 1, 2013 and who are defined by the Public Employee’s Pension Reform Act (PEPRA) as new CalPERS members. The retirement formula is two percent (2%) at sixty-two (62) years of age. Final compensation is calculated as the average of the three (3) highest years. Employees in Tier 3 pay fifty percent (50%) of the normal cost to PERS, which is currently seven percent (7%) of compensation. A new member is defined in the PEPRA as any of the following:
Tier 3 Employees. Any employee hired after January 1, 2013 and who meets the definition of new member as defined in the Public Employees’ Pension Reform Act of 2013 (“PEPRA”) will fall under the pension provisions of the state mandated provisions of PEPRA. As stated in Section 1.04, Validity of Memorandum of Understanding, of this memorandum of understanding, any provisions of PEPRA which may conflict with any provision contained herein shall supersede this MOU. Employees of the Agency agree that should the City and the Coalition of Santa Monica City Employees enter into an agreement to enhance or modify the PERS retirement formula for non-sworn employees requiring an employee-paid contribution or other financial arrangement affecting employee compensation, employees will be bound by the terms of that agreement.
Tier 3 Employees
