Brown Proposes List of Sweeping Changes to Calif. Pension System

Gov. Jerry Brown (D) has developed a 12-item proposal designed to reform public employee pensions, the Sacramento Bee reports.

The changes would affect all of California's state and local government workers, though local governments could challenge some of the changes in court, according to Michael Semler, a government professor at California State University (Ortiz, Sacramento Bee, 4/1).

Proposal Details

According to a release from the governor's office, Brown aims to reform public employee pensions "with or without" support from Republicans.

The governor's new pension proposal includes:

• Limiting new-hire pension "spiking," in which employees receive higher salaries in the last years of work to obtain larger pensions;
• Preventing retroactive benefit increases (Woolfolk, San Jose Mercury News, 3/31); and
• Changing the pension system to a hybrid between traditional plans and 401(k)-style accounts (Marois/Nash, Bloomberg, 4/1).

Brown included draft legislation language for seven of the proposal items, which he wants the state Legislature to address. The five other items on the list are under development (Sacramento Bee, 4/1).

The items written in draft bill language include an "urgency clause" that would allow them to take effect immediately through a two-thirds vote of the Legislature, Bloomberg reports (Bloomberg, 4/1).

Reaction

Republicans said that they appreciated that Brown has taken up one of their key issues but that they want more details about the plan (Sacramento Bee, 4/1).

Californians for Health Care and Retirement Security -- a union-supported coalition of 1.5 million public workers and retirees -- criticized Brown's plan.

Dave Low -- chair of the group and executive director of the California School Employees Association -- said unions already have agreed to concessions that have reduced spending for state and local governments by hundreds of millions of dollars (Bloomberg, 4/1).