1. (a) Class 0 benefit provisions are the service retirement benefit formulas set forth in the Public Employees' Retirement Law (Government Code section 20000 et seq.) and the California Public Employees' Pension Reform Act of 2013 (Government Code section 7522 et seq.). The cost of a service retirement benefit formula shall be incorporated into the base total normal cost of the rate plan.

2. (b) Class 1 benefit provisions may vary by rate plan within each risk pool. Agencies contracting for a Class 1 benefit shall be responsible for the past service liability associated with such benefit and shall be required to pay a surcharge established by the actuary to cover the employer normal cost of the Class 1 benefit. Class 1 benefits shall be the optional benefit provisions, other than Class 0 benefit provisions, meeting either of the following criteria:

   1. (1) Impacts either the total or employer normal cost of any Class 0 benefit provision in the risk pool by more than 0.25% of payroll; or
   2. (2) Is not available to all rate plans in the risk pool.

3. (c) Class 2 benefit provisions may vary by rate plan within each risk pool. Agencies contracting for a Class 2 benefit shall be responsible for the full increase in accrued liability resulting from the benefit, as determined by the actuary. Class 2 benefits shall be the optional benefit provisions, other than Class 0 or Class 1 benefit provisions, meeting the following criteria:

   1. (1) Does not impact either the total or employer normal cost of any Class 0 benefit provision in the risk pool; and
   2. (2) Provides an increase in benefit with an identifiable increase in accrued liabilities.

4. (d) Class 3 benefit provisions may vary by rate plan within each risk pool. However, the employer normal cost and amortization of the unfunded accrued liability shall not vary between rate plans within the risk pool due to the Class 3 benefits. Class 3 benefits shall be the benefit provisions, other than Class 0, Class 1 or Class 2 benefit provisions, meeting either of the following criteria:

   1. (1) Impacts the total and employer normal cost of each of the Class 0 benefit provisions in the risk pool by no more than 0.25% of payroll; or
   2. (2) Is mandatory.

The benefit provisions available to a contracting agency shall be separated into various classifications to establish how their costs shall be allocated among the contracting agencies in a risk pool. These classifications shall be handled as follows:

Note: Authority cited: Sections 20120, 20121 and 20840, Government Code. Reference: Section 20840, Government Code.

History

1. New section filed 9-23-2004; operative 9-23-2004 pursuant to Government Code section 11343.4 (Register 2004, No. 39).

2. Amendment filed 5-12-2026; operative 7-1-2026 (Register 2026, No. 20).