New Ballot Initiatives Target Future Workers’ Pension Benefits

Supporters of California pension reform have filed two new ballot proposals targeting future workers' benefits, the Sacramento Bee's "The State Worker" reports (Ortiz, "The State Worker," Sacramento Bee, 10/5).

Former San Jose Mayor Chuck Reed (D) and former San Diego council member Carl DeMaio (R) have said the new ballot initiatives take "a totally different approach" than previous pension reform efforts (California Healthline, 10/5).

Background

The initiatives follow a recent proposal from Reed and DeMaio that, among other provisions, would have required voter approval for changes to pension benefits ("The State Worker," Sacramento Bee, 10/5).

California Attorney General Kamala Harris (D) issued a title and summary for the proposal that stated the measure "eliminates constitutional protections" for current workers and could lead to "significant effects -- savings and costs -- on state and local governments" (California Healthline, 8/12).

Details of New Proposals

According to DeMaio, the new proposals aim to avoid a similar description by reducing benefits only for future employees.

One measure would place workers who join a public pension on or after Jan. 1, 2019, into retirement savings plans similar to a 401(k). The plans would guarantee fixed contributions from employers rather than retirement payments from government agencies.

The second measure would cap the amount employers could pay for new hires' retirement benefits to certain percentages of their income. According to "The State Worker," employer payments would be capped at:

11% of base compensation for most new employees; and
13% for police, firefighters and other public safety workers.

Reed said that supporters will decide which of the two plans to put forward after Harris issues titles and summaries within the next two months. Proponents then would have about five months to collect signatures to get the measures on the November 2016 ballot ("The State Worker," Sacramento Bee, 10/5).

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