Gov. Brown Releases Proposal To Overhaul Public Pensions System

TOPIC ALERT:

On Thursday, Gov. Jerry Brown (D) released a detailed pension reform plan that would end traditional pensions for state and local government workers hired after June 2013, the Sacramento Bee's "The State Worker" reports.

The 12-point plan includes statutory language on health benefits available to retired state workers.

Brown delivered the proposal to the state Legislature's Conference Committee on Public Employee Pensions (Ortiz, "The State Worker," Sacramento Bee, 2/2).

Two-thirds of the Legislature would need to approve the plan for inclusion on the Nov. 6 ballot because it amends the state constitution (Ortiz, Sacramento Bee, 2/3).

If voters approve the plan, pension changes would take effect Jan. 1, 2013 ("The State Worker," Sacramento Bee, 2/2).

Proposal Details

The proposal would implement "hybrid" plans that combine typical payouts with a 401(k)-style component for workers hired July 1, 2013, or later (Sacramento Bee, 2/3)

The plan also calls for:

  • Basing pension benefits on a 36-month average of a worker's wages;
  • Adding an independent health benefit expert and a representative from a contracting agency to the CalPERS board -- both appointed by Brown; and
  • Requiring 25 years of service for new hires to receive 100% of the state's retiree health benefits ("The State Worker," Sacramento Bee, 2/2).

Reaction to Pension Proposal

The plan has drawn criticism from labor unions that said they hoped to negotiate a plan with fewer sweeping changes.

Steve Maviglio, a spokesperson for the union coalition Californians for Retirement Security, said that proposing this plan "in the early stages of the legislative season can only be counterproductive" (Sacramento Bee, 2/3).

Nurses Support Tax on High-Income Earners

In related news, the California Nurses Association/National Nurses United on Thursday announced its support for a tax initiative that would increase taxes on high-income residents. The initiative -- proposed by the California Federation of Teachers and the Courage Campaign -- is competing with Brown's tax proposal.

The initiative would increase taxes by three percentage points on people with incomes above $1 million and by five percentage points on those whose incomes are above $2 million. Supporters say the plan would generate about $4 billion to $6 billion each year (Yamamura, Sacramento Bee, 2/2).

Deborah Burger, CNA co-president, said, "It's time to end the ugly cycle of repeated cuts to the bone in vital services and education that are inflicting greater pain and suffering daily in our state ... while more and more resources are shifted to" high-income residents (CNA release, 2/2).

Nursing Board Reinstated

Meanwhile, both legislative houses recently passed a bill (SB 98) that would reinstate the Board of Registered Nursing through 2015(Sanders/Smith, "Capitol Alert," Sacramento Bee, 2/2).

In October 2011, Brown vetoed legislation (SB 538) that would have extended the board's authority because it included a provision to expand pension benefits for board investigators. He called on lawmakers to pass a revised bill (California Healthline, 10/18/11).

Susan Pfettscher
While there are documented and evident excesses in the state pension system, I beg everyone not to throw out the "baby with the bath water." As a retired state employee, I receive a SMALL pension as a retired CSU faculy member. At the time of my employment, I was advised that the salaries are low for faculty but the reward is the retirement system benefits. There are thousands of people in the system who do not have the opportunity to negotiate their employment, salary,and benefits to an excess. We cannot increase the number of poor retirees in this state and country in the name of reform. S. Pfettscher
Tom Johnson
The cuts in services that are vital to Californians, in the areas of education and health care, can be met by addressing the excesses that now exist within state government. State spending on higher education is down 5% over the past 10 years while spending on employee pay and benefits for state workers is up 65% over that same time period. Example: , the head parole psychiatrist for the California prison system made $838,706 last year. Many other similar examples exist, especially within the Department of Rehabilitation and Corrections. Last year we spent $6 billion on prisons and only $4.7 billion on our 33 campuses of higher education. But of course, Ms. Burger would not want to focus on these excesses because they represent fellow union employees. Better to go after the higher end tax-payers and hope they don't move to Nevada.

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