Thursday, February 2, 2012
We Missed the Boat on Pensions With the Governor: Time to Talk to the Legislature
A summary of the plan: The changes would kick in Jan. 1, 2013. Labor agreements that contradict the governor's plan would prevail until the pacts expire.
The statutory language includes these proposals:
• Ends additional retirement service credit purchases, or "airtime."
• Forfeits all or part of pensions for elected officials or civil servants convicted of a felony associated with their offices or jobs.
• Ends retroactive pension enhancements.
• Ends "pension holidays" for employers and employees.
• Mandates that all employees pay "at least one-half" the normal costs for defined benefit plans or the defined portion of a hybrid plan. Employers may not pick up the employee share.
• Limits the hours and wages for retirees who return to government work.
• Calculates benefits based on a 36-month average of an employees' wages.
• Narrows the definition of wages that can be included for pension calculation purposes.
• Establishes a hybrid pension system for new hires. It would replace 75 percent of an employee's income after 30 years of service and a "normal" retirement age of 57 for public safety employees or, for all other workers, 35 years of service at age 67.
• Sets 5 years and 52 years old as the minimum length of service and age that safety classes can qualify for retirement, 57 years old for all other groups.
• Eliminates seats on the CalPERS Board of Administration now occupied by a member of State Personnel Board and an insurance industry representative
• Gives CalPERS board membership to the Department of Finance director.
• Adds an independent health insurance expert and a representative from a contracting agency to the CalPERS board, both appointed by the governor.
• Adds three public representatives to CalPERS' board, two appointed by the governor and one jointly appointed by the Assembly speaker and the Senate Rules Committee.
• Sets 25 years of service as the threshold to receive 100 percent of the state's retiree health benefit. Applies to new hires only.
Full article at http://blogs.sacbee.com/the_state_worker/2012/02/jerry-brown-delivers-pension-reform-language-to-legislators.html
Some of the plan would be in a constitutional amendment which requires a 2/3 vote of the legislature if it is to be put on by the legislature. (It could be done by initiative but the governor is already putting a tax measure on the ballot by initiative and might have trouble getting the money for an additional pension initiative.)
In any event, as noted in a recent blog post, UCOP and the Regents need to be talking to the legislature.
The governor's proposal is at:
UPDATE: Union reaction http://www.sacbee.com/2012/02/03/4235853/unions-howl-at-details-of-jerry.html