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2009 Member-At-Large Certified Election Results for CalPERS Board of Administration

On December 22, 2009 the Secretary of State certified that Joseph (JJ) Jelincic, the Candidate for Position A, an Investment Officer III for the California Public Employees' Retirement System, and Mr. Kurato Shimada, Candidate for Position B, a retired operations supervisor for San Jose's Oak Grove School District, have been elected to the office of Member, Board of Administrators, CalPERS.

The new board members will serve a four-year term of office beginning January 16, 2010, and continue through January 15, 2014.

Click here to download the official circular letter from CalPERS regarding this election.

 IRS Announces 2010 Standard Mileage Rates

 WASHINGTON — The Internal Revenue Service today issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 50 cents per mile for business miles driven

• 16.5 cents per mile driven for medical or moving purposes

• 14 cents per mile driven in service of charitable organizations

The new rates for business, medical and moving purposes are slightly lower than last year’s. The mileage rates for 2010 reflect generally lower transportation costs compared to a year ago.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2009-54 contains additional details regarding the standard mileage rates.

For the past several years, your January 1st benefit payment may have included an increase to the Purchasing Power Protection Allowance (PPPA) component of your benefit. The purpose of the PPPA is to maintain the purchasing power of your initial retirement allowance when your annual cost-of-living increases (COLA) over time have not kept pace with inflation. By law, State and school retirees receive a PPPA benefit that maintains their allowances at 75 percent of original purchasing power; for local agency retirees, the threshold is 80 percent.

Most CalPERS benefit recipients receive an annual COLA increase of up to 2 percent each May. (You may receive a higher percent if your former employer contracts to provide a larger benefit.) This cost-of-living adjustment is determined by the Consumer Price Index (CPI), which measures the annual rate of inflation.

For the calendar year of 2009, our actuaries are projecting a decline in the CPI of -1.03 percent. What this means is that the cost-of-living increase you received May 1, 2009, when taken in conjunction with the projected decline in the 2009 Consumer Price Index, will cause a decrease in the amount of PPPA. The purchasing power of your retirement dollars has exceeded the 75 percent or 80 percent threshold level. Therefore, the amount of your monthly PPPA benefit for 2010 will be less than what you received in 2009.

You may note multiple deduction changes on your January 2010 warrant. Please review your January direct deposit stub or your benefit check statement and compare it to the one you received in December 2009. The figures for federal and State withholding as well as health care premiums may have changed.

Eligibility for PPPA

There is no specific timetable on when you may become eligible to receive the PPPA payment. CalPERS used to provide an approximate time (10 to 12 years) when you were generally eligible to receive PPPA; however we no longer make reference to these timelines. The lower rates of inflation our economy has experienced have rendered these generalizations obsolete.

To see how PPPA works, use this scenario as an example. When you retire, your benefit allowance buys you 10 bags of groceries. As time goes on, that same benefit will buy you only eight bags of groceries. When you get below eight bags of groceries, the PPPA steps in and allows your benefit to be brought back up to the level to purchase eight bags of groceries.

State and school retirees who are currently eligible have 1981 or earlier retirement dates. Public agency retirees receiving PPPA have 1986 or earlier retirement dates.If you are a State or school retiree with a 1982 or 1983 retirement date or a public agency retiree with a 1987 or 1988 retirement date, the projected CPI which resulted in an increase in purchasing power has eliminated your PPPA benefit until such time as you may become eligible again.  

To view the circular letter regarding 2010 PPPA Factors click here.  

 Dr. Keith Richman’s “Foundation for Fiscal Responsibility”—The latest proposal is to have a one year holiday on any contributions to pension funds. Dr. Keith Richman is recovering from a recent brain aneurysm; but his foundation Vice President, Marcia Fritz, is traveling up and down the state speaking before Chambers of Commerce and local and state taxpayer associations. For more information regarding legislative issues see our legislation page.