Compensation: Compensation means the cash remuneration for services paid by the employer. It includes base pay and certain differential, incentive, and special pay allowances defined by the Board of Retirement. Overtime is excluded, with the exception of overtime paid under the Fair Labor Standards Act that is regular and recurring.
For members joining the plan on and after January 1, 2013 (Tier 2 members), only pensionable compensation up to the Social Security taxable wage base ($118,775 for 2017) will count for computing plan benefits and employee contributions and employer contributions for those participating in Social Security. For those not participating in Social Security, the compensation cap is 120% of the taxable wage base ($142,530 for 2017.) In addition, it is possible that some sources of compensation, such as any payments deemed to be terminal or special pays, may be excluded from benefit and contribution computations for Tier 2 members.
Credited Service: In general, credited service is earned for the period during which member contributions are paid. Temporary service for which the member was not credited, or service for which the member withdrew his or her member contributions, may be purchased by paying or repaying the member contributions with interest. Credit for up to 12 months of a medical leave of absence and all military leaves of absence may also be purchased.
Public Service (see below) is part of credited service for the computation of benefits only, not for eligibility for benefits or for vesting.
Final Compensation: For Tier 1 members, final compensation means the highest average compensation earned during any 12 consecutive months of the member’s employment. For Tier 2 members, highest average compensation will be based on the highest 36 consecutive months, rather than 12 months.
General Member: Any member who is not a Safety member is a General member.
Public Service: The member may elect to purchase public service for time spent while employed in another recognized public agency. The public agency must have a reciprocal agreement with the plan or be one of several specified municipalities, counties, special districts, or State or Federal agencies. Public service cannot be purchased if it is used for eligibility for another pension. The cost to purchase public service is twice the member contributions and interest applicable for the period of time purchased. Public service is used to compute benefits, but does not count toward eligibility for benefits or vesting.
Safety Member: Any sworn member engaged in law enforcement, probation, or fire suppression is a Safety member.
Eligibility: All full-time, permanent employees of San Joaquin County and other participating special districts become members on their date of appointment. Membership is mandatory; only elected officials and members who are age 60 or older at the time of employment in a position requiring membership in SJCERA may choose not to participate.
Member: A Tier 2 member is any member joining the plan for the first time on or after January 1, 2013. Employees who transfer from and are eligible for reciprocity with another public employer will not be Tier 2 members if their service in the reciprocal system was under a previous tier. Employees who were members of SJCERA prior to January 1, 2013 and experienced a break in service of more than six months and then were reemployed by a different SJCERA-participating employer on or after January 1, 2013 will be considered Tier 2 members for all subsequent service.
Contributions: Each member contributes a percentage of compensation to the plan through payroll deduction. For Tier 1 members, the percentage contributed depends on the member’s age upon joining the plan. Representative rates are shown in Table 1 on the next page. Tier 1 members covered by Social Security have their contributions reduced by one-third on the first $161.54 of biweekly compensation. General members who joined the plan prior to March 7, 1973 and who have earned 30 years of credited service do not contribute; Safety members do not contribute after earning 30 years of credited service.
Table 1: Tier 1 member contribution rates (basic rates) General member rate Safety member rate. Some Tier 1 members also contribute half of the normal cost associated with the post-retirement COLA benefits, also based on entry age. Many bargaining groups have also agreed to have their Tier 1 members pay additional basic rate contributions (14% of the current basic rates for General members, 33% for Safety). Complete rate tables for all groups are in the Appendix.
Tier 2 members contribute half of the normal cost of the plan. Contributions for these members are based on the normal cost associated with their benefits; General and Safety members pay different rates. Tier 2 members pay a single contribution rate, not a rate based on entry age. All Tier 2 members continue contributing after earning 30 years of service.
Table 2: Tier 2 member contribution rates Interest is credited semiannually to each member’s accumulated contributions. The crediting rate is set by the Board; the 2017 effective annual rate is 7.4%.
C. Service Retirement:
Eligibility: Tier 1 General members are eligible to retire at age 50 if they have earned five years of credited service and have passed the tenth anniversary of their membership in the plan. Alternatively, General members are eligible to retire at any age after having earned 30 years of credited service, or upon reaching age 70 with no service requirement.
Tier 1 Safety members are eligible to retire at age 50 if they have earned five years of credited service and have passed the tenth anniversary of their membership in the plan. Alternatively, Safety members are eligible to retire at any age after having earned 20 years of credited service.
Tier 2 General members are eligible to retire upon attaining age 52 and completing five or more years of service. Tier 2 Safety members are eligible to retire upon attaining age 50 and completing five or more years of service. Tier 2 members are eligible to retire, regardless of service, after attaining age 70.
Benefit Amount: The service retirement benefit payable to Tier 1 General members is equal to the percentage in Table 3 on the next page multiplied by the member’s final compensation. The service retirement benefit payable to Tier 1 Safety members is equal to the percentage in Table 4 on page 63 multiplied by the member’s final compensation. The percentage of final compensation may not exceed 100%.