Governor Brown Unveils Pension Reform Plan
Posted on October 29, 2011
SACRAMENTO - California Governor Edmund Brown Jr. has proposed 12 major reforms for state and local pension systems that would end system-wide abuses and reduce taxpayer costs by billions of dollars over the long term.
"It's time to fix our pension systems so that they are fair and sustainable over a long time horizon," said Governor Brown. "My plan raises the retirement age and bans abusive practices like 'spiking' and 'air time' while mandating that public employees pay an equal share of pension costs."
The Governor's 12-point plan addresses key issues affecting pensions in state and local governments. He initially outlined a pension reform plan during budget negotiations in March 2011.
When fully implemented, these reforms will cut roughly in half the cost to taxpayers for providing pension benefits for state employees. It will cut the risk to taxpayers for pension debt by more than half. Similar savings are expected across all systems.
"I look forward to working with the legislature to enact these major reforms," said Governor Brown.
Some of the Governor's proposals include
- Equal sharing of pension costs. New and current government employees will have to contribute at least 50% of their pension costs. Current state employees contribute at least 8% while some contribute none.
- Raising the retirement age to the current Social Security age of 67 to match life expectancy. Many employees can now retire at age 55, some at 50 years old.
- Calculating pensions based on regular pay -- not overtime, bonuses and unused vacation time -- which leads to spiking.
The complete Governor Brown plan on pension reform can be viewed here.