State Senate leader predicts pension reform next month
Despite a setback on pension reform, Senate President Pro Tem Darrell Steinberg (D-Sacramento) said Tuesday that he expected a plan to be adopted next month and that the Legislature’s proposal would save $40 billion over 30 years.
Those savings would accrue to the California Public Employment Retirement System through changes including an increase in the retirement age for new employees, a requirement that workers contribute more and a cap on the benefits possible in a defined benefit plan.
Gov. Jerry Brown announced Tuesday that he and lawmakers were divided over how to change public employee pensions, and therefore a deal would have to wait until at least after the Legislature's July recess.
"We are in common agreement with the governor on most elements of his original proposal," Steinberg told reporters, but added "There are still several issues that frankly are of sufficient complexity that they just need more time to get it right."
Steinberg refused to release the Legislature's plan but provided a few details. Non-public safety employees would get the most benefits if they waited until age 67 to retire, but they could leave earlier and receive lesser amounts.
He also confirmed that the Legislature was looking at capping the amount that can be received in a defined benefit plan by new employees. Other state officials said the cap would be about $100,000 but that employees would also be given a cash balance option above that where employees would make bigger contributions and would be guaranteed a return, albeit one lower than the defined benefit plan's.
--Patrick McGreevy in Sacramento
Photo: Senate leader Darrell Steinberg (D-Sacramento) says there is momentum in favor of pension reform. Credit: Rich Pedroncelli / AP