Group Seeks To Place Alternative Pension Reform Plan on Ballot
On Wednesday, the group California Pension Reform released details of two pension reform proposals, the Orange County Register's "OC Watchdog" reports.
The group submitted its plans to the California Office of the Attorney General.
The group said it will seek to place one of the proposals on the November 2012 ballot after it receives financial analyses from the state Department of Finance and Legislative Analyst's Office.
The group is led by:
- Mike Genest, state finance director under former Gov. Arnold Schwarzenegger (R);Â
- Former Assembly member Roger Niello (R-Fair Oaks); and
- Dan Pellissier, a pension adviser to Schwarzenegger (Joseph, "OC Watchdog," Orange County Register, 11/2).
The governor's plan would increase how much workers pay toward their retirement and health care costs and establish a "hybrid" pension system that combines a traditional pension with a 401(k)-style account. Brown's plan also would raise the retirement age for new workers not in public safety positions from 55 to 67 and ban pension spiking, in which workers can use overtime and other benefits to boost their payouts (California Healthline, 10/27).
The governor's office has estimated that the plan would save the state between $4 billion and $11 billion over the first 30 years of its implementation.
Details of Pension Reform Group's Proposals
Pellissier said California Pension Reform's plans would "promptly" save state and local governments between $5 billion and $7 billion.
One of the group'sÂ proposals would establish a defined benefit contribution plan, while the other wouldÂ implement a hybrid plan.
Under the defined benefit contribution plan, pension contributions would be capped at 6% for most employees and 9% for public safety workers when a pension is less than 80% funded ("OC Watchdog," Orange County Register, 11/2).
The hybrid model would cap annual pension payments at $100,000 (Harmon/Woolfolk, San Jose Mercury News, 11/2).
Both measures would require current government workers to contribute higher amounts toward their retirement accounts until those pensions become solvent (Small, "KPCC News," KPCC, 11/2).
The group's proposals also call for stopping pension spiking for current employees and reining in government contributions to underfunded plans.
Pellissier said the group's proposals strengthen key aspects of the governor's plan.
Genest said, "While we would prefer to see a legislative solution to this problem, we know full well that there is little chance of that happening."
The group would needÂ 1.3 million signatures to place a pension reform initiative on the ballot, and it said it is prepared to raise about $3 million for that effort (San Jose Mercury News, 11/2).
Opposition to Group's Proposals
Public employee unions have expressed opposition to the group's proposals.
Dave Low, chair of Californians for Retirement Security, said California Pension ReformÂ has put forward "a sloppy proposal, containing provisions that have already been determined illegal by the Supreme Court" ("OC Watchdog," Orange County Register, 11/2).
The groupÂ represents 1.5 million public employees and retirees.
Low added, "We will continue to work with the governor and Legislature to craft changes in the state's complex pension system" (San Jose Mercury News, 11/2).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.