Serving Orange County Employees
For more than 70 years, the Orange County
Employees Retirement System (OCERS) has been providing
retirement, death, disability, and cost-of-living benefits to
employees of the County and certain districts. During that
time, OCERS' membership has increased from less than 1,000
members in 1945 to approximately 26,500 active and deferred
members and 16,000 payees (retired members and beneficiaries) as of December 2015.
OCERS' origins actually date back to the fall of 1944 when the
Orange County Board of Supervisors called for the submission of
a proposition to the people of Orange County. This Proposition
requested that the County accept the provisions of the
County Employees Retirement Act of 1937.
This proposition was
approved by a majority of voters at the November 7, 1944 General
Election, and as a result, OCERS was officially established on
January 1, 1945.
Upon OCERS' creation, a Retirement Board consisting of five
members (the County Treasurer, two active elected members, and
two qualified electors of the County) was established to govern
the plan. Today, there are nine Retirement Board members
and an alternate.
Relationship to the County
During its more than 70 year history, OCERS has worked to define its
changing relationship with Orange County. The Retirement
System employees were considered part of the County Treasurer's
Office from 1945 until 1973, when provisions were added to the
Government Code to charge administrative costs for the
Retirement System to the Retirement System's earnings.
Employees of the Retirement Office continued to be considered
Treasurer's Office employees, however, until February 1, 1989,
when the Retirement System was established as a department
separate from the Treasurer's Office. Since that time, the
Administrator has reported only to the Retirement Board.
The next step was for OCERS to work toward complete separation
from Orange County. The stage was set for this separation
in 1992 when the California Pension Protection Act (Proposition
162) was passed. This act established that the Retirement
Board has "plenary authority". Complete separation was
finally declared by a Retirement Board Resolution in February
1995. In addition, the passage of AB1992 on June 27, 2002 made
OCERS an independent district.
Membership requirements for OCERS have experienced significant
change over the years. Existing officers and County
employees became members of OCERS on the date the Retirement
System began. After that, employees became members on the
first day of the month following the date they became regular
employees. In 1967, the date of membership changed to the
date the employee was hired in an eligible position.
Part-time employees, who had been excluded from membership
initially, were allowed to join the Retirement System provided
they work half-time or more. Outside public districts
located within the county were allowed to join the Retirement
System with the approval of the Retirement Board.
Benefits and Contributions
The benefits offered to OCERS' members have changed over time as
well. Generally, benefits are set by the Board of
Supervisors in accordance with the California Government Code.
In 1945, the benefit in effect was a "money purchase plan,"
which provided a benefit determined by the member's age at
retirement and the total amount contributed, plus accumulated
interest. The benefit changed to a "defined benefit plan"
on June 1, 1962, and the benefit payable was determined by the
member's age and one-sixtieth of his or her highest three-year
average salary for each year of service. It also allowed a
continuance to a spouse under the most valuable option. The
benefit increased on July 3, 1973, to one-fiftieth of the
member's highest one-year average salary, then was reduced on
September 21, 1979, to one-sixtieth of the member's highest
three-year average salary for those hired on or after that date
(called Tier II members.) In June 2002, Assembly Bill 1992 was
signed into law giving the County and other public agencies the
ability to negotiate different benefit formulas with their
employees. Currently, OCERS' various plan sponsors
have adopted a number of different plan types. Members with an entry date prior to September 21, 1979
will have their highest one-year average salary used to
determine their retirement allowance while members hired after
September 21, 1979 will have their highest three-year average salary
used to determine their retirement allowance. For a new
member hired on or after January 1, 2013 who was not a member
of a public retirement system prior to that date, could not
establish reciprocity from public employment prior to January 1,
2013 or had a break in active OCERS’ membership of more than six
months and returned to a different employer covered by OCERS are
subject to a reduced retirement benefit formula, reduced
compensation rules and new retirement eligibility criteria as
determined by Assembly Bill 340 (signed into law in September
retire in 1945, members needed to be age 55 or older and have 10
or more years of service (service before January 1, 1945,
counted). Members could retire after 30 years of service
at any age or at 70 with no minimum service requirement.
After 1962, Safety Members could retire at or after age 55 with
10 or more years of service or after 30 years of service
regardless of age. For General Members, mandatory
retirement age was 70, while for Safety Members, it was age 60.
The mandatory retirement age for General Members was lowered to
67 in the 1970s, then raised to 70, and finally repealed in
1983. Effective July 7, 1971, the minimum age to retire
was lowered to age 50 and the average salary was changed to a
one-year average for both General and Safety members. As
of January 1, 1975, Safety Members were able to retire after 20
years of service regardless of age. The retirement
eligibility requirements for those hired on or after January 1,
2013 is age 52 with five years of service for general members
and age 50 with five years of service for safety members.
1945 member contributions were determined by the member's age
when they joined the Retirement System. Different rates
were set by the actuary based on age and sex. Female members
paid slightly higher rates; however women's slightly higher age
factors resulted in slightly higher benefits. Effective
December 30, 1976, rates were standardized to equal rates for
men and women. Contribution rates for Tier I, Tier II,
General and Safety Members differ and are set by the Board of
Retirement based upon provisions of the 1937 Act and actuarial
data. For members hired on or after January 1, 2013,
employers and employees must equally share normal cost and
employees must pay at least 50% unless it is collectively
bargained for the employee to pay more.
California Public Employees’ Pension Reform Act of 2013 (PEPRA)
Other Government Code sections applicable to CERL Systems
Throughout all these changes over the more than 70 years, OCERS has
remained committed to fulfilling its fiduciary responsibility
for the assets and administration of the System in a manner that
assures prompt delivery of benefits and related services to the
participants and their beneficiaries.