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AB 1054

Public employees' retirement: deferred retirement option program.

2025-2026 Regular Session Introduced by Mike Gipson

AB 1054 would create a voluntary DROP for CHP officers and CAL FIRE firefighters, funded by member contributions, only with an MOU, to boost retention and aim for cost neutrality.

In committee: Set, first hearing. Hearing canceled at the request of author.
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Bill Summary · AB 1054

AB 1054 — Deferred Retirement Option Program (DROP) for State Safety Employees

Sponsor/Author: Gipson
Introduced: February 20, 2025
Status: In committee — set for first hearing; hearing canceled at author’s request (4/23/2025). Last amended and re-referred to Personnel, Public Employment & Retirement Committee (3/24–3/25/2025).

Purpose

AB 1054 would authorize a Deferred Retirement Option Program (DROP) within the Public Employees’ Retirement System (PERS) for specified state public safety employees to improve retention of experienced personnel. The bill targets California Highway Patrol (CHP) officers and California Department of Forestry and Fire Protection (CAL FIRE) firefighters, citing recruitment and retention challenges and the operational need for experienced sworn staff.

Key provisions

  • Establishes a new Chapter 20 (commencing with Gov. Code §21717) titled “Deferred Retirement Option Program.”
  • Creates a voluntary DROP available to employees in State Bargaining Unit 5 (Highway Patrol) and Unit 8 (Firefighters), but only if the applicable bargaining unit adopts the program through a memorandum of understanding (MOU).
  • Requires State Bargaining Units 5 and 8 to bargain with the Department of Human Resources (CalHR) to implement the program.
  • Program design and administration must conform to federal tax law (Title 26, U.S. Code) and relevant state tax law (Revenue and Taxation Code).
  • Eligibility limited to members who have met minimum service requirements for service retirement.
  • Program must be cost saving or cost neutral; the findings state DROP “shall be funded entirely by the enrolled members’ contributions as well as any accrued interest.”
  • The Department of Human Resources must work with the PERS Board to develop the program.
  • Non-substantive renaming amendment clarifying the Public Employees’ Retirement Law title.

Who is affected

  • Directly: State employees in Bargaining Units 5 and 8 (CHP and CAL FIRE) who meet service-retirement eligibility and whose unit adopts an MOU.
  • Administratively: CalHR and the PERS board (development, actuarial and tax compliance), and county/state payroll/benefit administrators as needed.
  • Fiscal impact: Intended to be cost neutral or saving; actual fiscal effects would depend on final design and actuarial assumptions.

Administration, timing, and procedural notes

  • Participation is voluntary and contingent on collective bargaining and an adopted MOU for each unit.
  • The program must be designed to meet federal and state tax requirements and to maintain neutral or positive cost outcomes for the retirement system.
  • Current status: bill introduced Feb 20, 2025; amended and re-referred to committee; first scheduled hearing was canceled at author’s request (4/23/2025).

Potential implications to consider

  • If implemented, DROP could improve retention of experienced sworn personnel and shorten hiring/training needs. Fiscal and actuarial analyses will be central to ensuring required cost neutrality/savings and to avoid unintended pension liabilities or tax issues. Collective bargaining outcomes will determine the final program terms (duration, payment mechanics, participation limits).

Compiled from official sources — confirm details with the bill’s official record.

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