California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Legislators Consider Alternative to Brown’s Pension Reform Plan

California lawmakers are considering an alternative to Gov. Jerry Brown's (D) pension reform proposal, using the state teachers' retirement system as a possible model, the Los Angeles Times' "PolitiCal" reports (McGreevy, "PolitiCal," Los Angeles Times, 4/9).


In February, Brown released a detailed plan that would end traditional pensions for state and local government workers hired after June 2013. The plan includes statutory language on health benefits available to retired state workers.

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

Democrats have said they are not willing to accept Brown's pension reform plan as it stands. However, Republicans support the plan and in February introduced a series of bills that closely match it.

Sen. Gloria Negrete McLeod (D-Chino) -- chair of the Legislature's Conference Committee on Public Employee Pensions -- said that pension reforms are necessary but that some parts of Brown's plan go too far, such as a proposal to raise the retirement age for most new public workers to 67 (California Healthline, 4/9).

Members of the pensions committee said they are concerned Brown's proposal could expose pension plans to considerable losses if the stock market drops significantly.

Alternative Plan

The alternative hybrid pension plan that lawmakers are considering is based on a proposal offered by the California State Teachers' Retirement System.

Assembly member Warren Furutani (D-Gardena) said the proposal would include a cap on defined benefits and provide a cash balance plan that would guarantee the principal, as well as a rate of return linked to treasury bonds.

On Monday, McLeod said that the pensions committee has not yet finalized the proposal and hopes to reach a compromise with Brown. She said, "We certainly don't want to present something to the governor that he is unwilling to sign" ("PolitiCal," Los Angeles Times, 4/9).

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