Calif. Lawmakers Weigh Pension Plan to Keep Veteran CHP Officers

With the support of public safety unions, state lawmakers are considering creating a unique retirement benefit for firefighters and California Highway Patrol officers that would pay those workers a one-time lump-sum of pension contributions made in their final years of work.

The benefit, known as a deferred retirement option program, would allow eligible public safety employees to freeze their pension benefits through the California Public Employees’ Retirement System and continue working for several years while making pension contributions. The incentive comes from the fact that when those employees do finally retire, they receive the CalPERS contributions they made during their deferment, including interest, as a single payment, on top of their monthly pensions.

Labor leaders say the program will help retain peace officers and firefighters with valuable work experience, which is particularly important given CHP’s recent hiring surge.

“We hired 2,400 people in four years … that also means that 2,400 troopers have less than four years on the job,” said Jake Johnson, the president of the California Association of Highway Patrolmen.

Assembly Bill 1054 will help the state retain CHP officers and firefighters for several more years, instead of losing those seasoned employees to retirement, Johnson said. The bill has the backing of Johnson’s union as well as Cal Fire Local 2881, which represents firefighters who work for the California Department of Forestry and Fire Protection.

The measure has been proposed repeatedly by public safety unions in past decades but failed to become law over concerns that the measure would significantly increase local governments’ retirement program costs.

Assemblymember Mike Gipson, D- Carson, said he crafted the bill to ensure the program is cost neutral to the state and requires officials to evaluate the proposal between labor groups and employers before a deferred retirement option program can go into effect.

Gipson noted that participation in the bill is entirely voluntary and that employees can only enter the program once. When they make the decision to enter the deferred retirement option program, the state stops contributing to CalPERS on the employees’ behalf. Employees’ contributions continue, which are put into an interest-bearing account. When they leave the program, they receive that total sum as a pay-out and begin receiving pension payments based on their final salary at the time they entered the program.

“There is no double-dipping,” Gipson said in a statement. “AB 1054 provides a responsible tool to retain experienced public safety professionals while protecting taxpayers.”

A longtime goal of unions

In past decades, legislators have proposed similar legislation to create these retirement programs. One of the most recent attempts was in 2009, when former lawmaker Charles Calderon introduced legislation that would have established deferred retirement option programs for CHP officers, firefighters and corrections staff.

Calderon’s bill died before it reached the governor’s desk. A handful of similar bills introduced in the 10 years prior also failed to become law.

This year, union leaders and Gipson hope they have a solution.

“This measure was developed with the guidance of the Assembly (Public Employment and Retirement) Committee and in consultation with key stakeholders, and after careful analysis to ensure the program is cost-neutral to the State of California,” Gipson wrote in a statement about the legislation.

The legislation would not immediately go into effect. Unions representing eligible employees would first have to bargain with the state to include this program in a contract. Then, CalPERS’ board of administration would have to certify that the program would not increase the state’s costs.

Despite the requirement that the bill is cost neutral to California, the program has potential significant cost to employers as a result of having to pay the higher salaries of long-term workers, instead of paying lower wages of their freshly hired replacements, according to a legislative analysis of the bill.

In other cost analyses of similar programs, the legislative report said, that “if employees act in their own best interest, (deferred retirement option programs) by design are unlikely to be cost neutral to the retirement fund.”

A 2024 letter by the California Actuarial Advisory Panel said that these programs could change retirement behaviors of some public safety employees, such as delaying retirement or timing their specific retirement date based on market conditions. The advisory panel also said that people who know they have health conditions could opt into these programs at higher rates to take advantage of the greater immediate payouts.

These programs are not new to California.

San Diego County and the city of Los Angeles both launched these programs. City officials proposed reforming the benefit after a Los Angeles Times investigation found that some employees were taking extended periods of leave after enrolling in the program.

One of several pension reform bills

CalPERS has not taken a public position on Gipson’s legislation, which is one of several bills that is proposing changes to the retirement benefits offered to state employees.

Another measure, authored by Assemblymember Tina McKinnor, D- Inglewood, would enable unions to negotiate more generous retirement benefits for newly hired police officers and firefighters, and lower the retirement age from 57 to 55. California cities and counties are opposed to the measure because it would likely result in higher retirement benefit costs for local governments.

That measure, like AB 1054, has the support of public safety unions, which often make campaign contributions to lawmakers. For example, the union representing CHP contributed $215,300 to legislators in 2025, according to CalMatter’s Digital Democracy database.

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