Pension reform panel looking at alternative hybrid plan
State lawmakers considering pension reform are taking their show on the road to Chino on Friday and say they are looking at a hybrid pension plan offered by the state teachers retirement system as a possible model.
Gov. Jerry Brown proposed a 12-point reform of the state pension systems in October that included providing a portion of retirement benefits to new employees through a 401(k)-style plan, but some members of the Legislature's Conference Committee on Public Employee Pensions are concerned that workers could see significant losses in such plans if the stock market tanks.
Assemblyman Warren Furutani (D-Gardena) said a concept his committee is considering would include a cap on defined benefits and, above that, provide a cash balance plan that would guarantee the principal and a rate of return tied to treasury bonds.
"That’s what we are looking at right now," said Furutani, co-chair of the committee.
The panel is holding a public hearing at 1 p.m. Friday at the Chaffey College Community Center, with the focus on local pension systems.
The alternative hybrid proposal is based on a plan already offered by the California State Teachers Retirement System. Sen. Gloria Negrete McLeod (D-Chino), the committee’s other co-chair, said Monday the committee does not yet have a concrete proposal and still hopes to work out a compromise with Brown.
"We certainly don’t want to present something to the governor that he is unwilling to sign," she said. "We certainly want to reach some kind of consensus."
--Patrick McGreevy in Sacramento
Photo: Gov. Jerry Brown proposed a pension reform plan in October. Credit: Rich Pedroncelli / Associated Press