Common use of Tier 3 Employees Clause in Contracts

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: A. A new hire who is brought into CalPERS membership for the first time on or after January 1, 2103, and who has no prior membership in any California public retirement system; B. A new hire show is brought into CalPERS membership for the first time on or after January 1, 2013, and who is not eligible for reciprocity with another California public retirement system; X. A member who first establish CalPERS membership prior to January 1, 2013, and who is rehired by a different CalPERS employer after a break in service of greater than six (6) months. Note: CalPERS refers to all members that do not fit within the definition of a new member as “classic members”.