Transit Unions Seek Exemption from PEPRA

California public transit unions are supporting Assembly Bill 160 which would exempt their members from the recently-adopted Public Employees’ Pension Reform Act (PEPRA). Under the bill, introduced by Assemblyman Luis Alejo on January 22^nd,  thousands of transit employees would be exempt from the PEPRA.  PEPRA became law in September 2012.  It requires increased cost-sharing of pension contributions and reduced pension benefit formulas for new members hired on or after January 1, 2013 (and provides for some changes for existing members, which are not scheduled to take effect  until 2018).

Transit unions object to PEPRA arguing that federal law protects the rights of transit employees to bargain for retirement benefits, and that those rights may not be reduced or inhibited through state regulation.  The unions have filed numerous objections with the U.S. Department of Labor, alleging transit agencies that adhere to PEPRA by requiring increased pension contributions and providing reduced retirement benefits are in violation of DOL requirements for receiving federal grant money—a risky position as reduced federal funding for transit agencies could mean fewer transit union jobs.  DOL has taken no definitive action on these objections beyond directing the parties to bargain over any changes. 

Check back for updates on AB 160’s progress as it moves through the Legislature.