California pension law causes DOL to cease federal transit assistance - Pensions & Investments
Elected officials in California are calling on the Department of Labor to reverse a decision that a state pension reform law violates a federal law related to mass transit funding.
The California Public Employees' Pension Reform Act of 2013, or PEPRA, constitutes an "impermissible interference" with the collective bargaining rights protected under the federal Urban Mass Transportation Act of 1964, the Labor Department's Office of Labor-Management Standards said in an Oct. 28 letter to Ray Tellis, regional administrator at the Federal Transit Administration.
The 1964 law stipulates that in order for state and local transportation agencies to receive certain federal mass transit funding assistance, the Labor Department must certify that "fair and equitable" arrangements are in place to protect the interests of affected employees.
California's pension law made a number of changes that included lowering pension benefits of state workers hired after Jan. 1, 2013, and raising employees' contributions.
So far, DOL's current interpretation does not impact the California Public Employees' Retirement System, Megan White, spokeswoman for the $489.9 billion Sacramento-based pension plan, said in an email.
State law provides that a Labor Department determination does not apply to CalPERS members unless either a federal district court has ruled in the agency's favor or the state legislature changes the law, Ms. White said. "PEPRA's impact on transit workers' collective bargaining rights is material and significant even if it does not eliminate collective bargaining over pension benefits altogether or alter collective bargaining procedures," the Labor Department said in its letter.
CalPERS estimates that PEPRA will save the plan $29 to $38 billion over 30 years.
Gov. Gavin Newsom and California's Democratic Sens. Dianne Feinstein and Alex Padilla wrote letters to Labor Secretary Marty Walsh on Wednesday to restore the state's access to federal transit grants.
Mr. Newsom said the Labor Department's decision would deprive the state's public transit agencies funds allocated in the American Rescue Plan Act, which Congress passed in March, and the bipartisan infrastructure bill, which President Joe Biden is scheduled to sign into law Nov. 15.
"Because of a dramatic decline in ridership, public transit agencies rely more than ever on these federal grants just to keep trains and buses running and their workforces employed," Mr. Newsom said in his letter. "The grants being withheld also help provide vital mobility to low-income seniors, individuals with disabilities and other transit-dependent riders."
In its Oct. 28 letter, the Labor Department reversed its 2019 decision that PEPRA did not violate federal law.
"In enacting PEPRA, California placed new and significant limits on the scope of permissible pension benefits for its public transit workers, affecting the collective bargaining relationships that its transit agencies had agreed to preserve and continue as a condition of continued receipt of federal transit assistance," the Labor Department said.
To Mr. Newsom, however, the Labor Department's "decision rests on the false premise that PEPRA has impaired collective bargaining in California. But federal and state courts alike have repeatedly rejected this argument, finding that PEPRA does not impair collective bargaining agreements or collective bargaining rights."
Ms. Feinstein and Mr. Padilla echoed those sentiments in their own letter Wednesday.
A Labor Department spokesman could not immediately be reached for comment.
Arleen Jacobius contributed to this story.
source: https://www.pionline.com/pension-funds/california-pension-law-causes-dol-cease-federal-transit-assistance
Your content is great. However, if any of the content contained herein violates any rights of yours, including those of copyright, please contact us immediately by e-mail at media[@]kissrpr.com.