Governor Newsom signs AB 3025 (Valencia) to guard the pensions of employees under the 1937 Act

SACRAMENTO, CA – Governor Newsom signed AB 3025 (Valencia) into law, guarding the pensions of employees under the County Employees Retirement Law of 1937 (1937 Act).

The 1937 Act governs retirement systems for county and district employees, including some of California’s 20 largest counties. Previously, discrepancies led to retirement systems collecting disbursed funds from retirees and active employees. For example, in 2020, a retired Orange County Fire Authority captain’s monthly retirement distributions were significantly reduced because he was mandated to repay thousands of dollars.

AB 3025 requires that employers stop reporting disallowed compensation. For active employees, the retirement system must credit the contributions made on the disallowed compensation to the employer against future contributions. Additionally, an employer is required to refund the employee contributions made on the disallowed compensation to the active employee.

“The Governor's signature on AB 3025 establishes important protections for retirees in 1937 Act retirement systems,” said Brian K. Rice, President of the California Professional Firefighters. “This measure ensures parity with CalPERS by protecting those who have dedicated their careers to public service from being subjected to disallowed compensation for mistakes that were not their fault. Thank you to Assemblymember Valencia for protecting the promised retirement of California's hardworking public servants.”

“Peace officers, firefighters and other California public employees who serve our communities and risk their lives for our safety, can rest assured their pensions won’t be pulled from underneath them long after retirement,” said Juan Viramontes, President of the Association of Orange County Deputy Sheriffs. “We’re pleased that Governor Newsom signed this bill and are thankful to Assemblymember Valencia for championing this issue for our retirees."

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Assemblymember Avelino Valencia proudly represents the 68th Assembly district which includes the cities of Anaheim, Orange and Santa Ana. Valencia chairs the Assembly Budget Subcommittee #7 on Accountability and Oversight.