California should reject Assembly Bill 1383 to protect pension reform progress

A version of the following public comment was submitted to the California State Senate on May 12, 2026.

Assembly Bill 1383 reverses course on several prudent reforms established by the Legislature in the Public Employees’ Pension Reform Act (PEPRA), which was designed to limit exploding taxpayer costs and chip away at the state’s over $265 billion pension debt. The bill now before the Senate would expand the definition of pensionable compensation for all PEPRA members, remove critical cost-sharing requirements, and again subject what are currently agreed-upon contributions to collective bargaining. Additionally, it would create a new, higher-cost benefit for public safety employees and reduce the retirement age requirements back to their pre-2012 PEPRA levels.

All these changes thwart the prudent and necessary reforms lawmakers adopted and built coalitions around in 2012. Passing PEPRA required sacrifice from government employees and employers alike, but the result of this landmark legislation was that California’s pensions would remain secure and eventually become fully funded.

CalPERS estimates that PEPRA has saved the state more than $5 billion since its inception. Another $25 billion in savings is estimated over the next 10 years, but only if members reject AB1383 and guard the shared PEPRA commitments.

Recent data underscores both the progress made and risks that remain. CalPERS currently carries over $179 billion in unfunded liabilities, up from approximately $114 billion in 2015. While funded ratios have improved in recent years, reflecting progress towards long-term stability, the system remains significantly exposed to long-term fiscal pressures. In 2025 alone, public employers contributed approximately $23.4 billion to CalPERS, with a substantial share of those payments going towards existing unfunded liabilities

AB1383 essentially repeals the most important parts of PEPRA and would add more unfunded mandates to the state’s already underfunded pensions. According to CalPERS, AB1383 would immediately increase the annual cost to public employers (and therefore taxpayers) by $343 million and cost nearly $9 billion over the next 20 years. More recent actuarial modeling by Reason Foundation’s Pension Integrity Project indicates that the benefit enhancements under consideration would increase long-term costs by approximately $12.1 billion over 30 years, raising total projected system costs to over $497 billion.

Support of AB1383 is based on questionable logic and is unlikely to achieve the stated goal of improving the recruitment and retention of public workers, especially safety personnel. According to California’s 2023 Total Compensation Survey, the turnover rate for police and patrol officers was 7.5%, nearly identical to the state’s overall public employee turnover rate of 7.4%—and far below the 2023 national average of 18.5% for non-education state and local government workers, as reported by the Bureau of Labor Statistics. There is no empirical basis to support the claim that California’s public safety workforce is in crisis under its current retirement structure.

It is up to lawmakers to protect and defend the 2012 PEPRA reform to its intended end. Much progress has been made, but CalPERS is still 15 to 20 years away from achieving full funding and remains very vulnerable to market volatility. Reversing several crucial reforms at this time would come at a significant cost, and it would repeat the same mistake made by past lawmakers by granting government employee benefits improvements and passing the cost of perpetually growing pension debt on to future taxpayers.

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