Not So Easy

Hard to do

Under a recent California court ruling, it's not so easy to cut public pension promises to active employees, such as those at UC (and likely still more so for current pension recipients). There have been some rulings that chip away at the ironclad legal protections for pension promises. But the latest sets a standard that is pretty tough. From calpensions.com:

An appeals court yesterday ruled that the pensions of current employees can be cut without providing an offsetting new benefit, but only if there is “compelling evidence” that a reduction is needed for the successful operation of the retirement system...

Full story at https://calpensions.com/2018/01/09/high-hurdle-for-pension-cuts-in-new-court-ruling/

Eventually, this issue will be taken up at the state Supreme Court. It might be noted that Gov. Brown (soon to be termed out and not running for anything), has quietly sided with those who want some ability to cut pensions From "Pensions and Investments":

California Gov. Edmund G. Brown Jr. is intervening in several court cases that ultimately will be decided by the California Supreme Court, arguing that public worker pension benefits in the state can be reduced during employment. If the court agrees with the governor, it would mark a revolutionary change from a ruling it made more than 60 years ago that pension benefits are guaranteed from date of hire...

Full story at http://www.pionline.com/article/20180108/PRINT/180109900/california-governor-adds-voice-to-benefit-cases