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Monday, September 20, 2010

The Clock is Ticking on UC Pension Reform

The clock is ticking. An interview with gubernatorial candidate Meg Whitman reported today in the online Capitol Alert service of the Sacramento Bee serves as a reminder of the need for the Regents to put together a UC pension reform plan before January. In the interview, she pushes for new hires to be under a defined-contribution plan and hints that a ballot proposition to do that might be her approach. Any such proposition might well not exclude UC if UC has no plan by January. UC might then be swept into some larger statewide change. Of course, there is no guarantee that a UC plan would exempt us from some larger change, but it would increase the odds of retaining a UC solution.

Jerry Brown, if he wins, is not likely to insist on defined contribution. But should he win, there could still be some statewide change that would sweep in UC. Excerpts:

Republican gubernatorial candidate Meg Whitman told The Sacramento Bee editorial board this morning that, if elected, she'll negotiate with the three biggest public employee unions to create 401(k)-style retirement plans for new state workers…She added that she would seek pension reforms for prison guards, while other public safety employees would be exempt from such changes…

"Part of the reason we find ourselves in the situation we now find ourselves in is we had banked on a very high investment portfolio return, which didn't materialize, and now we are on the hook for defined benefits, very generous defined benefits, to not only the prison guards but all the others," Whitman said. "We have got to renegotiate these benefits. And I will negotiate in good faith with all the different unions." …

Whitman admitted that enacting such reforms wouldn't happen overnight but said she was optimistic she could make a quick impact. She said she would consider putting pension reform on the ballot. "It's going to take some time," Whitman said. "There's no question about it. But I think we can make a lot of progress in the first 12 months... about attacking, if you will, how to run the government more efficiently, how to take on the pensions, how to reform welfare."

After hinting that her pension reforms would likely require going to the people with a ballot proposition, she criticized the existing initiative process.

…Whitman also said she wanted to change the initiative process.

"I do think it needs to be harder to get initiatives on the ballot," Whitman said. "I think we got to make it very clear to people what the trade-offs are" if voters decide to spend money on a program. She didn't specify how she would make such trade-offs clear to voters…

The full report is at http://blogs.sacbee.com/capitolalertlatest/2010/09/meg-whitman-talks-pensions-pri.html

UPDATE: A video of the pension segment of the meeting between Meg Whitman and the Sacramento Bee editorial board is at http://blogs.sacbee.com/capitolalertlatest/2010/09/video-meg-whitmans-bee-editori.html (The first clip on the menu.) Related to the pension issue is her view on public sector unions in California. The video clip on that issue is at the same URL and is the second clip.

UPDATE: On Whitman's willingness to put pensions on the ballot, see http://www.sacbee.com/2010/09/21/3044468/whitman-willing-to-take-pension.html

UPDATE: The differentiation between prison guards and other safety employees can probably be explained by the announcement today that the guards' union is endorsing Brown. See http://blogs.sacbee.com/capitolalertlatest/2010/09/ccpoa-backs-brown.html

video

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