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Governor asks for more time on California pension reform

Posted: July 3, 2012 3:00 p.m.
Updated: July 3, 2012 3:00 p.m.
 

 

SACRAMENTO, Calif. (AP) — The governor asked Tuesday for more time to negotiate public pension reform with state lawmakers, saying such a complex issue can't be resolved before lawmakers begin a monthlong recess at the end of the week.

Gov. Jerry Brown issued a comprehensive proposal last fall, but Democratic leaders did not send him their plan until last Sunday. Their proposal has not been made public.

"The governor could not agree to some of the changes in the pension counterproposal," Brown's spokesman Gil Duran said in a statement.

The governor wants to increase the retirement age from 55 to 67 for new, non-public safety employees, and have local and state government workers pay more toward their pensions and retiree health care. Newly hired public safety employees would have to work beyond the current minimum retirement age of 50 depending on their ability to perform the job.

Brown's proposal would put new workers in a hybrid plan in which guaranteed benefits are combined with a 401(k)-style plan.

Pension reform supporters are hoping to build momentum for statewide changes after voters in San Diego and San Jose overwhelmingly passed sweeping changes in those cities.

Brown's finance department has estimated that his changes would reduce the state's contributions by $4 billion to $11 billion over the next 30 years if the plan is implemented. Other aspects of government — from courts and schools to cities and counties — would see their own savings, too.

While Brown's plan deals mostly with new state hires, he also wants current employees to contribute at least half of the cost of their pension benefits because some local government workers currently put in nothing of their own.

The governor's pension proposal also seeks to end pension spiking by calculating benefits based on the highest average compensation for three years, rather than one year. And it bans counting unused vacation time, overtime and other bonuses in calculating base benefit.

Other changes include capping the amount of pension benefits employees can get and bars employees from buying service credits inflate the amount of time they worked for the state.

He also wants to require new state employees to work for 15 years to become eligible for retiree health benefits, and 25 years for maximum health care premium coverage.

Copyright 2012 The Associated Press.

 

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