Compensation & Limits

Overview

Compensation and Compensation Limits

Compensation

Both your retirement contributions and your retirement benefits depend on your compensation. However, not all of the compensation you earn is included in compensation for retirement purposes. Determining what portion to include depends on whether you are a legacy member (General Tiers 1 and 3, and Safety Tier A and C) or a PEPRA member (PEPRA General Tiers 4 and 5, and PEPRA Safety Tiers D and E).

Legacy Members

General Tiers 1 and 3, and Safety Tiers A and C

For legacy members, compensation for retirement purposes is defined in CERL as “compensation earnable” (Gov. Code Section 31461).

Based on Board policy, “compensation earnable” ordinarily includes:

  • Regular base salary
  • FLSA premium pay for regularly scheduled work assignment (fire and law enforcement)
  • Longevity pay
  • Cash payments for special skills and qualifications and unique services, such as:
    • Bilingual pay
    • Shift differential
    • Special assignment differential
    • Holiday pay
  • Educational incentive pay (e.g. POST, CPA)
  • In-service leave cash outs (earned and payable each year, regardless of when actually paid)
  • Allowances (e.g. uniform, automobile)
  • Standby or on-call pay (for work during normal working hours, required by the employer and not voluntary, and ordinarily worked by all others in the same grade or classification at the same rate of pay during the FAS period)

“Compensation earnable” ordinarily excludes:

  • Overtime pay
  • Expense reimbursements
  • The monetary value of advantages received in kind, such as:
    • Uniforms
    • Employer payments to third-party insurers
    • Lodging
    • Transportation
    • The use of an automobile.
    • Employer contributions to deferred compensation plans
  • Lump sum at termination for accrued unused leave that could not be cashed out annually during service
  • Severance pay

Compensation Policy for Legacy Members

PEPRA Members

PEPRA General Tiers 4 and 5, and PEPRA Safety Tiers D and E

For PEPRA members, compensation for retirement purposes is defined in PEPRA as “pensionable compensation” (Gov. Code Section 7522.34).

Based on Board policy, pensionable compensation includes only “base pay.” Pensionable compensation does not include any other pay, in accordance with Govt. Code Sections 7522.34(c)(11) and (12).

Furthermore, pensionable compensation is limited to the amount listed on publicly available pay schedules.

Compensation Policy for PEPRA Members

Compensation Limits

Federal and state laws place annual limits on the compensation that can be used to determine contributions and benefits for CCCERA plan members. These limits are different for legacy and PEPRA members.

Both member and employer contributions to CCCERA stop when the compensation limit is met. The employer resumes the required contributions with the first payroll check dated in the next calendar year.

Legacy Members

General Tiers 1 and 3, and Safety Tiers A and C

Legacy members who began participation in CCCERA on or after January 1, 1996 are subject to the annual federal Internal Revenue Code Section 401(a)(17) compensation limit. Members who began participation in CCCERA prior to January 1, 1996 are not subject to the Internal Revenue Code annual compensation limit.

The 2015 calendar year compensation limit for legacy members is $265,000.

PEPRA Members

PEPRA General Tiers 4 and 5, and PEPRA Safety D and E

The annual compensation limit for PEPRA member depends on whether you are enrolled in Social Security.

The 2015 calendar year compensation limits for PEPRA members is:

  • $117,020 for employees enrolled in Social Security
  • $140,424 for employees not enrolled in Social Security

Historical Compensation Limits

Year Legacy* PEPRA
in
Social Security
PEPRA
Not in
Social Security
2015 $265,000 $117,020 $140,424
2014 $260,000 $115,064 $138,077
2013 $255,000 $113,700 $136,440
2012 $250,000    
2011 $245,000    
2010 $245,000    
2009 $245,000    
2008 $230,000    
2007 $225,000    
2006 $220,000    

*Limit not applicable if you were a CCCERA member prior to January 1, 1996. 

Commands