Governor Backs Bill To Cut Pension Benefits for New Public Employees
On Wednesday, Gov. Arnold Schwarzenegger (R) endorsed a bill (SB 919) by Senate Minority Leader Dennis Hollingsworth (R-Murrieta) that aims to modify the pension system for newly hired state workers, the AP/San Jose Mercury News reports (Bussewitz, AP/San Jose Mercury News, 4/21).
Retiree Health Changes
Under the bill, new public employees would be fully vested in their retiree health plans after 25 years, an increase from the 20 years required for current employees.
The bill also would reduce the state's contribution to new workers' retiree health benefits by 15% (Ortiz, Sacramento Bee, 4/22).
In addition to the health benefit reductions, the bill would:
- Increase the retirement age from 55 to 65 for most state workers and from 50 to 57 for public safety workers;
- Change benefit calculations to correspond to the average of a worker's three highest income years rather than their single highest income year (Herdt, Ventura County Star, 4/21); and
- Reclassify some public workers (AP/San Jose Mercury News, 4/21).
Some public employee unions and advocacy groups have criticized the legislation and Schwarzenegger's endorsement. The groups said the bill is unnecessary and called for pension changes to be negotiated rather than legislated (Ventura County Star, 4/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.