Pension Reform Group Pulls Initiative/Details of Governor’s Plan Unveiled

Regional Council of Rural Counties - Pension Reform Group Pulls Initiative/Details of Governor’s Plan Unveiled

The Sacramento-based group, California Pension Reform, suspended its efforts for a ballot measure to enact sweeping public employee pension reforms, citing difficulty in raising approximately $2 million to gather signatures for a November ballot. Many of the components of California Pension Reform’s measure, however, have been incorporated into Governor Brown’s proposed 12-point pension reform plan, of which specific language proposals were released late last week.

Among the highlights of the Governor’s plan are provisions for: 1) equal share of costs for retirement benefits between employees and employers – both for new and existing employees; 2) a hybrid plan for new hires that combines a defined contribution plan with a defined benefit plan with revisions on various formulas pertaining to the defined benefit portion; 3) calculating retirement benefits based on a 3-year average of compensation for employees hired after January 1, 2013; and 4) restrictions on the use of retired annuitants. Additionally, the Governor’s plan would require the voters to adopt a constitutional amendment at the November general election.

All eyes now turn to the upcoming actions of the legislative pension reform committee, which is expected to convene at the end of February or beginning of March. At this time, it appears that aspects of pension reform will be adopted by the committee with full votes in the Assembly and Senate to occur shortly thereafter.