Calpers Section 218 Agreement

CalPERS Section 218 Agreement: What You Need to Know

If you`re a public employee in California, you may have heard of the CalPERS Section 218 Agreement. This agreement between the state and local governments allows them to participate in CalPERS, the California Public Employees` Retirement System.

But what exactly is the CalPERS Section 218 Agreement, and what are its implications for you as a public employee? Here`s what you need to know.

What is the CalPERS Section 218 Agreement?

The CalPERS Section 218 Agreement is a legal agreement between the State of California and local government agencies that allows them to participate in CalPERS. CalPERS is a pension system that provides retirement and other benefits to public employees in the state.

The agreement is named after Section 218 of the federal Social Security Act. This section allows states to set up their own retirement and other benefit plans for public employees, as long as those plans meet certain requirements.

Through the CalPERS Section 218 Agreement, local government agencies in California are able to enroll their employees in CalPERS and provide them with retirement benefits. This includes pension benefits as well as health and dental coverage.

Why do local government agencies participate in CalPERS?

There are several reasons why local government agencies in California choose to participate in CalPERS.

Firstly, CalPERS provides retirement benefits to public employees that are generally more generous than those offered by private sector companies. This can help to attract and retain high-quality employees.

Secondly, participating in CalPERS can help local governments to manage their budget and cash flow. Instead of having to make annual contributions to a separate retirement plan, they can make regular contributions to CalPERS and have the system manage the funds on their behalf.

Finally, participating in CalPERS can help local governments to comply with state and federal regulations regarding retirement and other benefits for public employees.

What are the implications of the CalPERS Section 218 Agreement for public employees?

If you`re a public employee in California who is covered by the CalPERS Section 218 Agreement, there are several implications you should be aware of.

Firstly, you`ll be eligible for retirement benefits through CalPERS. These benefits are based on a formula that takes into account your years of service, age at retirement, and highest average salary.

Secondly, you`ll have access to health and dental coverage through CalPERS. This can be particularly valuable for retirees who may no longer be eligible for health insurance through their employer.

Finally, it`s important to be aware that the CalPERS Section 218 Agreement may affect your Social Security benefits. Public employees who are covered by a state or local retirement plan, such as CalPERS, may be subject to the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) when they apply for Social Security benefits.

In conclusion, the CalPERS Section 218 Agreement is an important legal agreement that allows local government agencies in California to participate in CalPERS and provide retirement and other benefits to public employees. If you`re a public employee in California who is covered by the CalPERS Section 218 Agreement, it`s important to understand your eligibility for retirement and other benefits, as well as the potential implications for your Social Security benefits.