Key Senate committee approves pension expansion bill

Jun 24, 2026

By Johnnie Pina, legislative advocate, and Brian Hendershot, Cal Cities Advocate managing editor 

The Senate Labor, Public Employment and Retirement Committee voted 5-0 to approve a measure that would grant additional pension benefits to public safety workers but erode the Public Employees’ Pension Reform Act (PEPRA). Cal Cities and other local government associations are opposing the bill.

The Legislature passed PEPPRA in 2012 to address a range of issues involving public employee pensions and prevent CalPERS from sliding into insolvency. According to a 2024 CalPERS estimate, PEPRA had already led to $5.8 billion in savings, with an additional $26.5 billion in savings over the next ten years. This was a major step in helping public agencies better manage future pension costs. 

AB 1383 (McKinnor) would erode those savings. CalPERS projects it would increase the value of current benefits by $4.8 billion and accrued liability by $233 million. Specifically, the bill:

  • Increases the pensionable compensation cap.
  • Reduces the retirement age for public safety employees from 57 to 55 going forward.
  • Adds a new tier for public safety employees that is prospective and subject to bargaining.
  • Allows local agencies to adjust their local formula in a prospective manner.

These changes would increase mandated costs for cities. Much like the state, cities are contending with major budget challenges, as revenues have not kept pace with the costs of services or new mandates. Many cities are also facing significant loss of resources and heightened fiscal responsibilities due to lost federal funding.

Proponents of the bill, which includes police and firefighting unions, say AB 1383 would help increase retention and recruitment. However, Cal Cities is concerned that AB 1383 could result in less money for salary increases and increased pension contributions for all PEPRA employees. This would threaten not just critical public services but recruitment and retention across the board.

The bill next heads to Senate Appropriations. To learn how your city can get involved, contact your regional public affairs manager.